Comet Ridge (ASX: COI) has amended its agreement to acquire a 42.86% interest in the Mahalo Gas Project from Santos (ASX: STO) subsidiary Santos QNT, originally announced on 17 December 2025.
The upfront cash consideration has been reduced to $18 million, with a further $10 million to be paid via the issuance of fully paid ordinary shares to Santos, subject to shareholder approval.
Contingent payments of up to an additional $30 million will be linked to specific gas sales milestones triggered after 10 PJ, 20 PJ, and 30 PJ of gas sales.
Transaction timing has also been adjusted, with the satisfaction date for arranging funding extended to 14 August 2026.
The fulfilment of all remaining conditions precedent, including any shareholder approvals, has been extended to 30 September 2026.
Policy Uncertainty Drives Changes
The amendment to the acquisition terms was driven by recent uncertainty from Federal Government announcements regarding a gas reservation policy.
This policy was not yet fully released, creating sub-optimal funding conditions for the original acquisition structure.
Comet Ridge expects to gain more clarity on the proposed gas reservation policy during the extended period, and intends to use this additional time to execute a funding mechanism that best preserves value for its shareholders.
Once completed, Comet Ridge expects the acquisition to deliver 100% ownership of the Mahalo Gas Hub, encompassing the Mahalo Gas Project plus Mahalo North and Mahalo East.
This consolidation is anticipated to unlock commercial and practical benefits, including increased 2P/2C resource totals.
Deal Outlook Amid Uncertainty
Comet Ridge has successfully negotiated revised terms for its Mahalo Gas Project acquisition, reducing immediate cash outflow and extending timelines to mitigate policy uncertainty.
The news indicates a step forward, but the deal's ultimate success remains contingent on securing funding and the finalisation of the gas reservation policy.
Comet Ridge managing director Tor McCaul thanked Santos for their "collaborative approach with Comet".
"While 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 oil and gas company be supportive of the endeavour of a junior gas company like Comet, which is committed to bringing the project into production at a time when Australia needs it,” he added.
