Comet Ridge Ltd’s (ASX:COI) increase in gas rates at the Mira pilot scheme in the Mahalo block in Queensland is also being eagerly watched by multinational players that make up the Australia Pacific LNG venture (APLNG).
Given that bottom hole pressure at Mira 6/2 remains relatively high, there is the potential for additional flow as gas rates increase as the pressure in the pilot area is reduced.
Measured gas rates have been increasing steadily and last week passed 200,000 standard cubic feet per day.
Big players have substantial stakes in Mahalo project
From a broader perspective, management’s strategy is to enter well located exploration areas, generally taking high equity positions in large exploration permits.
Mahalo fits this profile with Comet Ridge having a 40% stake in the project, along with Australia’s largest producer of coal seam gas in Australia Pacific LNG (30%) and Santos QNT (30%).
The APLNG alliance brought Mira 6/2 online on December 10 in combination with three vertical wells, Mira’s 3, 4 and 5.
Close to infrastructure and the supply constrained east coast market
The project is close to infrastructure with pipeline connections to the Gladstone domestic and LNG market, a short distance to both the west and south of the two pilot schemes.
The other factor working in Comet Ridge’s favour is the widely reported projected shortfall in gas supply compared with demand in the east coast region which should have the impact of pushing up gas prices.