Ann: Mahalo North Initial Reserves Certification, page-11

Comet Ridge Limited (COI) - Maiden Reserves at Mahalo North ( Petra 3/11/22 )

STO has declared a maiden 2P Reserve of 43PJ for Mahalo North (MN; Figure 1). This initial Reserve is consistent with our expectation and adds to the existing 266PJ (100% basis) from the Mahalo Gas Project JV with STO. The 3P Reserve estimate of 110PJ leaves considerable scope for 2P upside as appraisal activities continue to the north of the existing Pilot area. We model a Mahalo development with a 90TJ/d production rate (100% basis) for 15 years producing c.350PJ, with MN capable of accelerating first production at a smaller c.10TJ/d scale. These results further cement our view that Mahalo is capable of these production volumes. Data obtained will be used to estimate a Mahalo East Resource (due Dec.Q’22) ahead of an appraisal campaign designed to convert Resources to Reserves.
We maintain BUY with TP A$0.42/sh (unchanged).

Mahalo is a strategic asset

• COI’s Mahalo partner STO is short gas. STO operates the US$20bn GLNG facility in Gladstone which is currently, and consistently, 20-25% shy of nameplate capacity (Figure 4). STO needs production of ~250TJ/d to fill this void.

• STO maintains an option, on terms to be agreed, to purchase an extra 7.14% interest in the Mahalo Gas Project (equalising STO’s and COI’s interest at 50% each) as well as 50% interests in Mahalo North and Mahalo East. We view this as the likely path forward.

Key Dates Ahead

• Dec. Q’22 – Mahalo East Resource estimate

• Dec. Q’22 – Mahalo East appraisal drilling

• Mar. Q’23 – Gas marketing