Oil and Gas News

Mahalo acquisition agreement with APLNG unconditional

Mahalo gas project

Comet Ridge’s acquisition of Australia Pacific LNG (APLNG) has officially become unconditional.

Completion of the remaining $11 million of the total $12 million upfront consideration will occur by 28 June 2022. Upon completion of the acquisition, Comet Ridge will increase its existing 40 per cent interest in Mahalo to 70 per cent.

Comet Ridge will fund the consideration and associated costs via a $13.15 million loan from Santos, which holds 30 per cent.

Following completion of the acquisition, Santos has a six-month option to acquire an additional 12.86 per cent interest in Mahalo from Comet Ridge. If Santos exercises this option, Comet Ridge’s interest in Mahalo will drop to 57.14 per cent and the loan repayable to Santos will decrease to $8 million.

Santos will move up to a 42.86 per cent interest in Mahalo upon exercise of the option.

Comet Ridge Managing Direct, Tor McCaul, expressed excitement over the acquisition becoming unconditional.

“It’s pleasing to have finally met all conditions precedent, to have significantly increased our equity in the project and to be now be looking to the future with Santos to take Mahalo to FID and move into producing reliable, competitive energy for Australia’s east coast gas market,” he said.

Previously, McCaul has stated that 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 said.

“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.”

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