Comet Ridge Ltd – Update

CometQuest’s first investment in Comet Ridge was in mid 2012 via a placement to fund gas exploration in Queensland. The company has significant experience in the development of Queensland coal seam gas via development of Sunshine Gas, which was sold to QGC in 2008 for more than $830m. Last week Comet Ridge surprised the market by negotiating a deal to reverse a 2011 agreement with Stanwell Corporation – a Queensland government energy generator – regarding development of their share of the key Mahalo gas field.

Comet Ridge has negotiated to buy back the 40% interest in this Mahalo block for either $20m or a gas supply agreement. We think this is a good deal for Comet Ridge and enhances their appeal. Queensland government entities have been instructed to cut peripheral activities and get back to the core. In Stanwell’s case that is producing cheap electricity. As a result, Comet Ridge has got the benefit of drilling since late 2011 and increased exposure to the Mahalo field’s gas potential. We continue to view the market as being short of gas and Comet Ridge well placed to deliver significant gas reserves.