Garry O’Neill Wilson HTM Comet Ridge has five principal assets: ( 1) Bowen Basin Coal Seam Gas ( CSG) in Joint Venture ( JV) with Santos & APLNG ( ATP337P Mahalo project); ( 2) Galilee
Basin CSG ( ATP743P and ATP744P), with potential for mid to long term mining power demand and LNG supply; ( 3) Gunnedah Basin CSG in JV with ESG ( PEL427 and PEL428), likely to supply NSW power demand in the medium to longer term, with upside potential to feed proposed NSW LNG projects; ( 4) New Zealand CSG; and ( 5) a 17.3 per cent interest in small scale US oil production, which we expect will be divested to provide funding for CSG exploration and appraisal.
Comet has received independent initial 2C and 3C contingent resource estimates for its Bowen, Galilee and Gunnedah Basin projects, totalling 288 and 2543 Peta Joules ( PJ) net to Comet respectively, and total recoverable gas ( i. e. including gas expected to be identified through exploration) in excess of 4,000 PJ.
We retain our Buy recommendation and price target of $ 0.46 / share. We believe Comet is undervalued, with its Bowen Basin CSG joint venture with Santos & APLNG ( the Mahalo project) likely to be acquired to supply CSG to the Gladstone LNG projects, and its Gunnedah Basin interests with ESG and wholly owned Galilee Basin projects well placed to supply emerging mine power demand and NSW power requirements respectively in the medium term.