Comet Ridge to hike stake in Mahalo gas project
Sydney-listed Comet Ridge has entered into binding agreements to acquire Australia Pacific LNG’s (APLNG) 30% interest in the Mahalo gas project in Queensland for A$20mn ($14.8mn), it said on August 3. The acquisition will take its interest in the project from 40% to 70%.
The company will pay A$12mn in cash to APLNG on the completion of the deal, and a further A$8mn post-completion in deferred tranches. Comet Ridge has also executed a funding and option agreement with the Mahalo joint venture partner, Santos.
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Santos will provide a loan package to fund the upfront consideration in exchange for an option for increased equity to 42.86% in the Mahalo project pro-rata on APLNG acquisition terms. Santos also has a right to negotiate with Comet Ridge to increase its equity to 50% in the project and acquire 50% equity in the latter’s 100% Mahalo North and Mahalo East assets.
“These transactions are transformational for Comet Ridge,” managing director, Tor McCaul, said. “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.”
“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,” McCaul added.
Santos CEO Kevin Gallagher said his company is keen to continue to develop its Queensland resources and this transaction provides another option for additional gas reserves.
Meanwhile, Comet Ridge in a separate statement said it had entered into a binding agreement with Pure Asset Management to access a term loan facility for up to A$10mn to provide funding to progress its Mahalo gas hub assets.