Ann: Half Yearly Report and Accounts, page-16

Hi GB,
I agree with the current valuation of the company at this moment in time but you have to admit for the $100 mill that has been spent we have certified 2P reserves in excess of 100PJ (after a significant drop due to a change in reporting by the relevant governing body). I don’t believe you can draw a comparison of money spent to date with the market capitalisation. I say this as the current volume of gas is worth somewhere between $850 mill (lowest recent contracted gas) to around $3 Billion (higher spot price gas sold recently) in production, less the costs of course and spread over 10,15 or 30 years. This would be net to Comet, many times our current market cap for PART of one project. It’s also worth noting if this project makes production our 2P’s only continue to grow with more drilling in Mahalo and the northern blocks. So it’s my belief the sp will only increase when Mahalo moves forward somehow. Whenever I doubt my judgment I simply look at the fundamentals which are, we have gas that has a value of far more than the current market cap. The reserves that were taken away didn’t evaporate which means they are also still there and return with more drilling. Other companies in our sector don’t have this certainty as yet and are valued significantly higher at the moment.
My understanding is the delay is due to one our partners who thought this project could be banked until 2024 (their timeline as documented on page 41 of the ACCC gas enquiry in Feb 21), not Comet management. Additionally due to the nature of JOA (joint operating arrangement) all parties must agree before FID can take place so Comet management can only do so much. They can not pre sell the gas, do deals or enter into financing etc prior to FID. I can only assume Origin thought gaining the petroleum lease would take some years which then ties in with their above mentioned timeline or they wouldn’t have agreed to apply for the Petroleum Lease. However as stated on the QLD government website there is a window of only two years to have Mahalo IN production after the granting of the Petroleum Lease so something has to give, and quickly as approximately 8-9 months has already lapsed. Both Federal and State governments would take a dim view of a company slowing such a project down one would think, particularly as it’s one of only couple on the East coast that is production ready (page 41 ACCC gas enquiry in Feb 21).
In reference to management credibility I think you will find that they are actually held in high regard based on the fact that Tor sits on the APPEA board with many industry heavyweights (including Kevin and Frank) and James was part of the very successful Sunshine gas. The delays we’ve all experienced can’t be blamed on management.
Oil price collapses
Santos almost becomes insolvent (and as they are responsible for drilling in the JOA a massive delay in moving Mahalo forward alone here)
Global Pandemic
Floods
the list goes on and on.
lastly can you or anyone tell me what the newest directors have done or what they are currently working on? You say they are “untainted” and why I ask what they’ve achieved since taking office except a nice salary.
I hope the above facts help others.