Comet Ridge Ltd. has restructured its agreement to buy out Santos’s remaining stake in the Mahalo gas project, slashing immediate cash demands and extending the completion date.
The revised deal relates to Comet Ridge’s planned acquisition of Santos QNT Pty Ltd.’s 42.86 per cent interest in the central Queensland asset.
Comet said there was strong initial funding interest after first announcing the buyout in late 2025, however, recent federal government commentary regarding an unreleased domestic gas reservation policy severely disrupted the capital-raising landscape.
In response, Comet Ridge and Santos collaborated to reshape the transaction parameters. The firm consideration due at completion has been reduced to AU$28 million, comprising AU$18 million in upfront cash and AU$10 million in fully paid ordinary Comet Ridge shares.
An additional AU$30 million has been structured as contingent payments, which will only trigger in three sequential tranches as the project hits cumulative sales gas milestones of 10, 20, and 30 petajoules (PJ).
In addition, the timeline to lock in capital funding has been pushed out to August 14, while the deadline to satisfy remaining conditions precedent, including required shareholder approval for the share placement, has been extended to September 30.
The extension buys Comet Ridge time to secure an optimal funding mechanism while the industry awaits policy clarity from the government.
Once finalised, the acquisition will grant Comet Ridge 100 per cent ownership of the entire Mahalo Gas Hub.
This footprint consolidates the core field with the company’s wholly owned Mahalo North and Mahalo East permits, bumping its total 2P reserves and 2C resources to 677 PJ.
Comet Ridge Managing Director Tor McCaul said: “Whilst Mahalo is not of a scale to be a priority within the portfolio of a large producer like Santos, it is good to see a leading company support a junior like Comet, which is committed to bringing the project into production at a time when Australia needs it.”
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