Santos exercises option to up Mahalo project equity

Santos exercises option to up Mahalo project equity

Santos has informed fellow Australian energy company, Comet Ridge, that it would acquire the latter’s 12.86% option stake in the Mahalo gas project in Queensland, Comet Ridge said on September 26.

Last year, Comet Ridge acquired a 30% interest in the Mahalo gas project from Australian Pacific LNG (APLNG), taking its stake to 70%. The deal was completed in June this year. Comet Ridge paid A$12mn ($7.82mn) in cash to APLNG on the completion of the deal, and a further A$8mn will be paid in deferred tranches. Comet Ridge also executed a funding and option agreement with the Mahalo joint venture partner, Santos.

Comet Ridge is funding the consideration and associated costs via a A$13.15mn loan from Santos, which holds a 30% interest in the project. Following the completion of the Comet Ridge-APLNG deal, Santos had a six-month option to acquire an additional 12.86% interest in Mahalo from Comet Ridge.

“Comet Ridge Limited advises that it has received notice from Santos QNT Pty Ltd to purchase the 12.86% option interest in the Mahalo gas project from Comet Ridge. Santos has exercised this option prior to the option expiry date of 28 December 2022,” the company said in a statement.

Comet Ridge’s interest in Mahalo will drop to 57.14% from 70% and the loan repayable to Santos will decrease to A$8mn. Santos will move up to a 42.86% interest in Mahalo upon exercise of the option.