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Highlights:
- Comet Ridge initiates pilot production at the Mahalo East gas project in Queensland.
- Successful drilling and well development supported by Queensland Government's $5 million grant.
- Potential to significantly increase proved and probable reserves at Mahalo East and associated projects.
Comet Ridge (ASX:COI) is on the verge of gaining valuable insights into the commercial viability of its fully-owned Mahalo East project in Queensland, following the initiation of pilot production. The project's progress was bolstered by a $5 million grant from the Queensland Government’s Frontier Gas Exploration Grants Program, aiding in the drilling and development of key wells. The company aims to convert its (2C) contingent resource of 31 petajoules into more definite reserves, leveraging the insights and results from the pilot production phase.
Project Overview
In October 2024, Comet Ridge completed drilling the Mahalo East-1 vertical well and the Mahalo East-2 lateral well. The latter intersected an impressive 1338 meters of targeted Aries coal within its horizontal section. Supported by government grants totaling $5 million, the drilling program marks a significant milestone in exploiting the project's full potential. Subsequently, the company installed production tubing and a downhole progressive cavity pump to facilitate water removal from the Mahalo East-1 well in November. This strategic setup allows for seamless integration of existing infrastructure, including production separators, flare, and metering skids relocated from the Mahalo North pilot area.
Assessment Phase
During pilot production, water and natural gas from the Mahalo East-2 lateral well's natural coal fractures will flow into the Mahalo East-1 vertical well. The downhole pump will lift water out, facilitating the upward flow of gas and water to the surface. Observations of strong gas volumes desorbing from core samples at Mahalo East-1 reinforce the project's potential to yield significant quantities of gas.
Future Implications
If pilot production proves successful, the likelihood of converting the 2C contingent resource of 31 petajoules into proved and probable reserves increases significantly. This addition would build on Comet Ridge's current assets in the Mahalo Joint Venture Project, where it holds a 57.14% stake, and the Mahalo North Project, which is fully owned. Furthermore, ongoing laboratory analysis of gas desorption is nearing completion, promising further insights into the resource's commercial potential.
Conclusion
The pilot production at Mahalo East signals a critical step forward for Comet Ridge's expansion efforts in the Queensland region. By harnessing innovative drilling techniques backed by financial support, the company is well-positioned to capitalize on its comprehensive understanding of the area's gas resources, paving the way for future growth and reserve development.
