COMET RIDGE LIMITED - ASX: COI

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Description

Comet Ridge Limited is a publicly-listed Australian energy company focused on Coal Seam Gas (CSG) exploration and appraisal. Based in Brisbane, Comet has tenement interests and a suite of prospective projects in Australia and New Zealand and an investment in a joint venture company based in the United States.

Galilee Basin

Comet Ridge has two 100% owned interests in ATP 743 and ATP 744 spanning ~13,000 square kilometres in the Galilee Basin, Queensland. The Galilee Basin is approximately 500km west of Gladstone and contains large quantities of highly volatile, low rank thermal coal. Recently, the basin has gained considerable interest as it is seen to have the potential as a major gas-producing region.

Both of these permits are considered prospective for CSG with extensive coals known to be present throughout the permits. There is an extensive coal exploration data set on the eastern side of the Basin from the 1970’s and 1980’s, and there has been renewed coal exploration activity in recent years. There have been some conventional and CSG exploration wells drilled in the Galilee Basin by a variety of companies.

The most prospective coals in this part of the Galilee Basin are within the Late Permian Betts Creek Beds which are equivalent to the Bandanna Formation. Coals within the Bandanna Formation are the producing horizons in the Fairview and Spring Gully CSG fields in the Bowen Basin. The Early Permian Aramac Coal Measures are also possible targets on the Western side of the Comet Ridge permits.

The exploration program for the blocks consists of eight coreholes in 2009/10 to determine gas content and permeability in the region. If successful this would be followed by a pilot program in 2010. Success would be followed by further appraisal wells and pilot testing.

Mahalo Project

The Mahalo Block is located in the Bowen Basin, approximately 150km north of the producing Fairview CSG field. Santos Limited has a 30% working interest and is the operator of the block for the exploration phase. Australia Pacific LNG Limited (a joint venture between Origin Limited and ConocoPhillips) has a 30% working interest and Comet Ridge has a 40% working interest in the block.

Santos Limited has proposed a A$3.24m exploration program for 2009 which commences with the drilling and testing of one core-hole (Scrubber Gully-1, in the Sunlight Area). The joint venture is still finalising the details of the 2009 work program. If successful, development could commence from late 2010 or early 2011. The Company considers the permit to have good CSG prospectivity in an area with gas transmission infrastructure in place and is keen to support an accelerated work program.

Greymouth – New Zealand

Mining Permit PMP50100 (Greymouth) in the West Coast coal region of New Zealand’s South Island was awarded to Macdonald Investments Ltd (MIL) in July 2007 and covers 170km². By way of a two-stage farmin process Comet (through its merger with Chartwell) is earning a 50% interest in PMP50100.

Stage 1 has been completed earning Comet Ridge a 20% interest and operatorship. This program consisted of seismic acquisition and drilling two core holes. Stage 2 (spend of NZ$6.2m) is underway and involves further seismic (already completed), two additional core holes and a three-well production pilot scheme. This phase will take Comet Ridge’s interest to 50% with an option to increase to 60%.

Gunnedah Basin

Comet Ridge’s interest in the Gunnedah Basin permits comprises PEL427 covering 7,014km² and PEL428 covering 6,025km². Eastern Star Gas Limited, as operator of both permits, drilled two CSG exploration wells in 1Q 2009, one in each permit, to fulfil its farm-in obligations. The first well, Moree-4 in PEL 427 encountered approximately five metres of net coal. The second well, Kurrabooma-1 in PEL 428 encountered approximately four metres of net coal. The permit areas are large and north of the Eastern Star Gas Narrabri CSG Production area. Comet Ridge Limited has these tenements in good standing and will evaluate drilling results from surrounding tenements before undertaking future work programs.

Buller Block – New Zealand

PEP50279 (Buller Block) was granted on April 2008 for a period of five years to a joint venture between Chartwell NZ Pty Ltd (60%) and MIL (40%). The permit covers an area of 8,722km² over much of the onshore Westland Basin. Painkiller Creek-1C exploration core well drilled in March 2009, near Reefton in the West Coast region of the South Iisland. The well was designed to assess the development of the Eocene age Brunner coal measures. The core hole found a lack of coal development but fulfilled Year 1 exploration commitments on the permits. Further exploration will be undertaken in 2010 following the completion of further studies incorporating these results.

North Waikato Block – New Zealand

PEP50280 was also granted for a period of five years to the Chartwell Energy (60%) and MIL (40%). It covers an area of 3,667km² over much of the North Waikato coalfields and the Hauraki Gulf for the purposes of exploring for CSG. The location of PEP50280 is close to the major population centres of New Zealand’s North Island and adds to the block’s appeal. Power and pipeline infrastructure exist in the Western part of the permit. Solid Energy’s Huntly CSG project lies to the South and the large Huntly gas-fired power station is nearby. In February 2009 the Matata-1C exploration well was drilled to a total depth of 472 metres and encountered a thicker than expected sedimentary sequence, however, with poor coal development. The well was plugged and abandoned. The Matata-1C was the first exploration well drilled by Chartwell in PEP50280.

United States

In 2008, Comet Ridge completed a deal with Pine Brook Road LLC (Pine Brook) to joint venture its US assets into a new company, Comet Ridge Resources LLC. Pine Brook is a New York-based private equity firm that operates in the energy and financial services sectors. As part of the deal Pine Brook provided a line of equity of US$100m and invested cash of US$7m plus US$2m in assets in return for an initial 56.25% interest in the joint venture. Pine Brook has the opportunity to increase its interest in the venture to 80% interest after which Comet has the right to fund its 20% or be diluted down to a minimum of 5% interest. Recent drilling and appraisal activity has focused in the Florence Oil Field (Colorado), and Grays Harbour Basin Pacific Northwest). Currently the Florence Oil Field produces approximately 130 BOPD from three wells. Additional drilling is being planned over the next 6 to 12 months.

Mine For

oil, gas, coal seam gas

Location of operation(s)

USA, Australia, New Zealand

Australian Basins

Galilee, Bowen, Gunnedah

Address

Level 1, 283 Elizabeth Street
BRISBANE, QLD, AUSTRALIA

Phone

+61 7 3221 3661

Email

Website

http://www.cometridge.com.au

Last Updated

27/04/2010