Comet Ridge has entered into an agreement to acquire Australia Pacific LNG’s (APLNG) interest in the Mahalo gas project, located in Queensland.
On completion of the acquisition, Comet Ridge’s interest will increase from 40 per cent to 70 per cent, and continue the joint venture with Santos.
As part of the binding agreement, the company will by APLNG’s shares for $20 million, with it also stepping down as development operator.
The Mahalo gas project includes the shallows strata from surface down to the base of the lower Mantuan coals, however the deeps will still be held 50:50 by Santos and APLNG.
Managing director Tor McCaul said the acquisition would be transformational for Comet Ridge.
“Built on compelling acquisition metrics, they establish a streamlined joint venture with Santos to not only progress development plans for the Mahalo gas project, but the whole Mahalo gas hub area,” McCaul says.
“The terms we have been able to agree with APLNG and Santos unlocks the potential of the entire Mahalo gas hub area to become a significant supplier of gas to the east coast market where industry dynamics have strengthened considerably as we continue to see a tightening of gas supply.”
Following completion, the streamlined Mahalo gas project joint venture will see Comet Ridge and Santos focused on moving the Mahalo gas hub area into production on a time and cost-effective basis.
Santos managing director and chief executive officer Kevin Gallagher said Santos is keen to continue to develop it Queensland resources and this transaction provides another option for addition gas reserves.
“We look forward to working collaboratively with Comet Ridge to assess the potential of the Mahalo gas project,” he said.
Comet Ridge further highlighted that work will continue at the project until the completion of the acquisition.
The Mahalo gas project is a heavily appraised and proven gas field which has demonstrated strong commercial gas rates including 1.4 MMcfd at Mira 6 from a single lateral pilot well.
In addition, Comet Ridge has also secured a $10 million loan facility to fund a final investment decision on the Mahalo project and other corporate activities.
Chief financial officer Phil Hicks said the corporate loan facility represents another milestone for the company.
The $10 million loan facially will be provided in two tranches: $6.5 million and $3.5 million.
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