Comet Ridge hopes to raise $13 million to start CSG production at its main north Queensland project

A Brisbane-based resources player is seeking to raise $13 million in funding to kickstart coal seam gas production at its flagship project in the state’s north by 2021.

A BRISBANE-based junior resources player hopes to generate up to $13 million to help it transition from just exploration into actual production.

Comet Ridge announced the capital raising yesterday as it aims to start coal seam gas production at its flagship north Queensland project by late 2021.

Boss Tor McCaulsaid the fresh infusion of dough will spur progress at the Mahalo Gas Project, located about 240km west of Gladstone.

McCaul described it as Comet Ridge’s “highest priority’’ and a move he believes will ultimately help relieve pressure on Australia’s tightening east coast gas market.

The company will also channel some of the funds to progress production opportunities and the certification of gas reserves at its Mahalo North site and Galilee “Deeps’’ Project.

A typical coal seam gas production well

Under the two-part capital raising, Comet Ridge said it had already received binding commitments for a $10 million placement and it hopes to rustle up another $3 million from a share purchase plan.

Eligible shareholders will be able acquire up to $30,000 worth of stock at 19 cents a piece, with trading set to kick off on December 19. That was just shy of its closing price yesterday of 19.5 cents.

SWEET SPOT

Fifteen long years after floating on the ASX and amassing plenty of red ink along the way, it looks like Comet Ridge may finally be reaching a sweet spot.

Last month, it was one of only six outfits which won highly competitive rights to explore parts of a 3450 sq km area opened up by the State Government in one of its largest such land releases.

McCaul described it then as arguably the most significant development for the company in the past decade.

Company chairman James McKay echoed that sentiment at the AGM last week, calling it “the biggest thing to happen to Comet Ridge in many years’’.

“The Queensland Government selected Comet Ridge ahead of a long list of gas industry players to deliver gas in to the domestic market which I take as a message that we are well regarded as a fast, efficient and competent gas operator,’’ McKay told investors.

Indeed, just two days later, Comet Ridge struck a non-binding deal with rival Denison Gas to explore potential options for processing and transport services at Mahalo North.

But the company is still not out of the woods, with auditors warning in the latest annual report that a “material uncertainty’’ continues to hang over its ability to survive.

It reported a $4 million net loss in the last financial year and a $2.2 million loss in 2018.

COURT WIN

Speaking of the gas industry, Richard Cottee, Greg Baynton and the rest of the crew at State Gas chalked up an important legal win yesterday.

The way is now clear for the Brisbane junior explorer to continue work on one of Queensland’s largest untapped gas fields without one heck of an annoying distraction.

City Beat: State Gas secures full ownership of the Reid’s Dome Gas Project in the Bowen Basin

The Queensland Court of Appeal threw out an application by State’s former joint venture partner, UK-based Dome Petroleum Resources, and ordered it to pay costs estimated at $550,000-plus.

Greg Baynton.

Dome had sought to overturn a court ruling handed down in September which allowed State to take full control of the Reid’s Dome Gas Project in the Bowen Basin.

The two camps have been in dispute for about a year, with State taking legal action after Dome refused to sell its remaining 20 per cent stake in the project for $233,333.

That was below a 25 per cent threshold which allowed for compulsory acquisition by State.

State has kept on drilling and production testing on the site while waiting for the Court of Appeal ruling but Baynton, the company’s CEO, was still enthused about the decision yesterday.

“Good outcome for east coast gas shortage. The “sea-anchor” has been released!,’’ he told us.