Oz Comet Ridge Approves Mahalo JV Work Programme
Australian Comet Ridge has approved the work programme and budget for the Mahalo joint venture project in Central Queensland for the remainder of the year, the company said July 30.
The key elements of the programme on the joint venture -- which along with Comet (40%), Santos (30%) and Australia Pacific LNG (30%) also have interests in – will include studies to support a petroleum lease and pipeline licence application, seven well bores and production testing for gas and water, Comet said.
RBC Capital Markets analyst Ben Wilson said RBC views the work programme as the last appraisal work ahead of a 100+ TJ (94.3mn feet3) per day development project approval next year.
“We see Comet Ridge as a catalyst rich pure play on East Coast gas markets,” he said.
Comet announced on June 26 that the Mahalo Mira 6/2 well exceeded previous production expectations of around 1.2mn ft3 per day to 1.3mn ft3 per day by registering a flow reach breaching 1.4mn ft3 per day.
“To get a flowrate of over 1.4mn ft3 per day from a very shallow, single seam well like this, is a tremendous result, but to get it from a well that is only about 900 metres in coal is particularly pleasing, given that development well lengths on a number of other fields are in the 1500 to 800 metre range, Comet’s managing director Tor McCaul said at the time.
“The outstanding flow rates demonstrated by Mira 6 should result in a reduction in the number of wells and the amount of associated surface infrastructure required to drain the project area, thereby reducing capital requirements,” Comet said July 30.
Wilson said RBC estimates the gross programme at roughly A$12mn ($8.89mn) of which Comet’s net interest is about A$5mn.
“Comet ended the FY18 financial year end with a cash position of A$11.5mn which was consistent with our standing A$11.5mn estimate. Our current modelling assumes an equity raise of [roughly] A$10mn over FY19 to facilitate the ongoing appraisal of Mahalo, Galilee Basin exploration and appraisal work and a development decision for Mahalo,” he said.