Comet Ridge now controls the entire Mahalo Gas Hub after completing its Santos buyout, but the annual report flags a material uncertainty over funding and a potential $28.7 million CleanCo settlement. The company is targeting a final investment decision while remaining pre-production and reliant on further finance.
- 100% ownership of the Mahalo Gas Project after Santos acquisition
- 529 PJ of net 2P reserves and 2,737 PJ of 3C resources
- $27.7 million cash at 30 June 2026
- $4.37 million FY2026 loss after tax
- Potential $28.7 million CleanCo settlement by April 2027
Mahalo control comes with a funding clock
Comet Ridge Limited (ASX:COI) has secured the strategic prize it has been pursuing for years: full ownership of the Mahalo Gas Project in Queensland’s Bowen Basin. The acquisition of Santos QNT’s 42.86% interest completed on 21 August 2026, after the reporting year, giving Comet Ridge 100% control of the project and its adjacent Mahalo North and Mahalo East assets.
That control does not yet translate into production. Comet Ridge is reviewing and optimising Front End Engineering Design for the gas field, gathering system, compression and water facilities, with the stated aim of integrating the Mahalo assets towards a Final Investment Decision. Equinox Engineering has been engaged to review the existing FEED work and provide high-level cost estimates, while Jemena has completed technical FEED work for a proposed 10-inch pipeline connecting the hub to major transmission infrastructure.
The annual report’s most consequential warning sits in its going-concern note. Comet Ridge held $27.73 million in cash at 30 June 2026, but reported current liabilities of $42.73 million, including a $28.67 million CleanCo financial liability and a $7.77 million loan payable to PURE Asset Management. The directors say the group will need some combination of debt, equity, asset sell-down, farm-out or gas prepayment funding to meet its commitments and continue its development plans.
CleanCo conditions create the immediate test
The CleanCo gas supply agreement is the sharpest near-term financial issue. Under the amended terms, Comet Ridge must satisfy or extend financing and transport conditions by 31 March 2027, alongside a new requirement relating to CleanCo’s ongoing need for gas. If the relevant conditions are not met, extended or waived, the agreement may terminate and trigger a cash payment of approximately $28.67 million by 30 April 2027. The agreement also requires evidence of average production of at least 9 terajoules a day during a later testing period.
CleanCo’s contract is scheduled to begin on 1 January 2030, with an initial daily volume of 8.219 terajoules and a seven-year term, subject to options. Comet Ridge has also signed a non-binding memorandum of understanding with Highview Power targeting 3.6 petajoules a year for at least five years. Neither arrangement removes the need to fund construction, secure transport and demonstrate production.
Reserves expanded, but remain undeveloped
Comet Ridge reported 529 PJ of net 2P reserves and 2,737 PJ of net 3C contingent resources at 30 June 2026. Mahalo North contributed 43 PJ of 2P reserves and 149 PJ of 3P reserves, while Mahalo East added 51.8 PJ of 2P and 118.5 PJ of 3P reserves. The Mahalo Gas Project itself accounted for 152 PJ of 2P reserves and 262 PJ of 3P reserves on Comet Ridge’s then 57.14% interest.
Those figures are sizeable, but the report makes clear that the reserves are undeveloped and that the Mahalo Gas Project has yet to reach FID. Mahalo North’s federal environmental approval allows up to 68 coal seam gas wells in the initial development area, although the petroleum lease award remains outstanding. The company also says it is focused primarily on Queensland, with the remaining New South Wales permit fully impaired because of uncertainty around the state’s coal seam gas industry.
Capital raised, losses continue
Comet Ridge raised $40.9 million through a two-tranche placement during and after the year, supplemented by an $875,750 share purchase plan. Santos also accepted 83.78 million Comet Ridge shares as part of the acquisition consideration. At 30 June, however, the company remained loss-making, reporting a $4.37 million loss after tax compared with $2.47 million a year earlier, while operating cash outflows were $3.53 million.
The balance sheet therefore carries two competing messages: cash increased from $13.30 million to $27.73 million, but the company remains dependent on external funding before it can turn its large resource base into a producing asset. The next decisive milestones are not reserve additions but financing, FEED optimisation, the Mahalo pipeline pathway and a board-approved FID.
Bottom Line?
Full Mahalo ownership gives Comet Ridge control over development scope, but the investment case now turns on whether that control can be financed before the CleanCo obligations mature.
Questions in the middle?
- Can Comet Ridge secure project finance, a farm-out or gas prepayment arrangement before the 31 March 2027 CleanCo deadline?
- Will FEED optimisation reduce the capital requirement enough to support a Final Investment Decision?
- Can the company demonstrate production and transport readiness without further substantial equity dilution?