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COMET RIDGE LIMITED Interim / Quarterly Report 2004
64686_rns_2004-07-28_4a334acd-25b0-43cc-b3d3-f34bfb8ad774.pdf
Interim / Quarterly Report
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Level 10. International House 26 St Georges Terrace Perth WA 6000 Email: [email protected] Telephone: +61 8 9225 7108 Facsimile +61 8 9225 6100
ABN 47 106 092 577
QUARTERLY REPORT TO SHAREHOLDERS
ACTIVITIES REPORT – QUARTER ENDED 30 JUNE 2004
Highlights
Comet Ridge Limited (ASX code COI) commenced trading on the Australian Stock Exchange on 19 April 2004.
Consistent with our stated strategy of aiming to establish the commerciality of our projects by year end 2004 we have been very active and have achieved much in our short history, including the confirmation of a significant gas reserve at Tipton West. All activities described below are consistent with those presented in the Prospectus and we are on track to achieve our stated obiectives.
Progress towards our objectives can be measured in the following ways:
- Achieved preliminary reserves certification of 1086PJ of 3P reserves. 217 PJ net to Comet Ridge, at Tipton West.
- Dewatering and production testing has been initiated at the four well $\bullet$ Tipton West Pilot located south of the town of Dalby in south eastern Queensland.
- Participation in 6 wells. This brings the number of wells that Comet Ridge has participated in during 2004 to twelve.
- Confirmation of a potentially significant gas resource with a possible free $\bullet$ gas cap over our Mahalo Project in ATP 337P (Comet Ridge earning 40%) in the Bowen Basin, Queensland.
- Meenawarra 3 drilled in the Dalby South Block of ATP 683P, south of the $\bullet$ Tipton West Pilot, confirmed the presence gassy coals in the lower Walloon Coal Measures sequence.
- Comet Ridge through the ATP 683P JV has negotiated three Gas Sales Memoranda of Understanding representing future annual gas sales of in excess of 10.2 Petajoules per annum (2+ PJ p.a. net to Comet Ridge).
- All operations, operated and non-operated, were conducted with no $\bullet$ Health, Safety and Environmental incidents.
Project Review
Walloon Coal Measure Project
Tipton West
ATP683P, Dalby Block, Comet Ridge 20%, Arrow Energy 80%
A total of 4 core holes and 4 pilot producers have been drilled this year.
Production testing of the Tipton West pilot commenced in late March with 4 wells currently on production. Comet Ridge is encouraged by early gas production rates and the falling water levels in observation wells 5 to 7 kms away that show that the coals have high permeability and lateral continuity over a large area. To accelerate the dewatering (a prerequisite to economic gas production rates) three additional wells will be drilled in the vicinity of the pilot. In addition one of the observation wells (TPW 8) will be converted to a producer.
Reserve Certification
Netherland Sewell and Associates Inc., US based independent reserve consultants, have provided the Tipton West JV with a detailed volumetric assessment totaling 1,086PJ, with over 200 PJ being net to Comet Ridge. This is a very significant volume of gas. The above mentioned drilling program is designed to establish economically viable production rates from the pilot wells thereby facilitating the conversion of a percentage of the 3P (possible) reserves into 1P (Proved) and 2P (Probable) categories as quickly as possible.
Gas Sales Contracts
The Tipton West Project JV has secured three Gas Sales Memoranda of Understanding, representing total sales volumes of 10.2PJ p.a. First sales are contemplated for early 2006. This is a positive breakthrough for the company and it provides confidence that development spending will result in gas sales and revenues.
Additional gas sales MOU are under negotiation and further options are being assessed that could result in early cash flow.
Meenawarra
ATP683P, Dalby S. Block, Comet Ridge 36.67%, Arrow Energy 62.33%
Meenawarra 3 drilled in the Dalby South Block of ATP 683P (Comet Ridge 36.67%), south of the Tipton West Pilot, encountered approximately 14 metres of gas bearing coals in the lower Walloon Coal Measures sequence. The JV is assessing the merits of the area and contemplating a second Pilot to establish further gas reserves in late 2004 / early 2005.
Mahalo Project - Bowen Basin, Queensland
ATP 337P, Comet Ridge earning 40%, Santos 30%, Origin CSG 30%
Comet Ridge funded the drilling of two core holes on the renamed Mahalo Project (previously referred to as the Comet Ridge Project) and by doing so has earned 20% equity in the farmin area.
The core holes confirmed the presence of gas in the shallower of two coal targets and identified a potential free gas cap as evidenced by strong gas shows in the drilling mud, over a structural closure at Mahalo.
Comet Ridge has elected to increase its interests to 40% in the project and will, subject to final Joint Venture partner approval, fund two additional wells to further delineate the extent and permeability of the gas bearing coals and to evaluate the potential for early gas production at Mahalo. Timing of these new holes is dependent on the availability of drilling equipment which is, due to high levels of coal and coal seam gas exploration and development activity in Queensland, becoming an issue for all operators. The JV is optimistic that they will be able to secure a rig for drilling in the Q4 2004.
Shallow Gas Play - Surat Basin, New South Wales
PEL 427, Comet Ridge 100%
Comet Ridge drilled its first operated well. Bellata 2, in PEL 427 in New South Wales. This well was drilled as a commitment well to follow up gas shows encountered in shallow sandstone reservoirs in a core hole drilled by the New South Wales Dept of Mineral Resources. Only minor gas shows were observed and the well was plugged and abandoned at 656 metres. Comet Ridge has applied for the renewal of this permit.
PEL 428, Comet Ridge 80%, Davidson Prospecting 20%
No activity to report.
Galilee Basin Play - Galilee Basin, Queensland
No activities to report. The two permit applications are still being processed by the Queensland Government.
PSPA 9. Comet Ridge 50%. ACM 50%
No activity to report.
Financial
At the end of the quarter the Company had \$3.139 million in cash reserves.
Planned Activities
A significant level of drilling activity (as many as 5 wells) is planned for the third quarter, with three wells at Tipton West and two at Meenawarra. Expenditure for the quarter is estimated at \$600,000.
For further information contact:
Andy Lydyard Managing Director Tel: (08) 9225 7108 Fax: (08) 9225 4448 Web: www.cometridge.com.au
Tony Dawe Ward Holt Corporate Communication Tel: (08) 9221 8722 Fax: (08) 9221 8733
The reserves estimates used in this statement were compiled by Mr. John Hattner of Netherland, Sewell & Associates, Inc., Dallas, and are consistent with the definitions of proved, probable, and possible hydrocarbon reserves that appear in the Australian Stock Exchange (ASX) Listing Rules. Mr. Hattner consents to the use of the reserves figures in this announcement.
$Rule 5.3$
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.
Name of entity
COMET RIDGE LTD
Current quarter
ABN
L,
47 106 092 577
Quarter ended ("current quarter") 30 June 2004
Year to date
Consolidated statement of cash flows
| Cash flows related to operating activities | \$A'000 | $\binom{1}{1}, \ldots$ months) \$A'000 |
|||
|---|---|---|---|---|---|
| 1.1 | Receipts from product sales and related debtors | ||||
| 1.2 | Payments for (a) evaluation (b) development (c) production |
exploration | and | (1335) | (1335) |
| (d) administration | (243) | (243) | |||
| 1.3 | Dividends received | ||||
| 1.4 | Interest and other items of a similar nature received. |
51 | 51 | ||
| 1.5 | Interest and other costs of finance paid | ||||
| 1.6 | Income taxes paid | ||||
| 1.7 | Other (provide details if material) | ||||
| Net Operating Cash Flows | (1527) | (1527) | |||
| 1.8 | Cash flows related to investing activities Payment for purchases of: (a)prospects |
(b)equity | |||
| investments | other (c) |
fixed | |||
| 1.9 | assets Proceeds from sale of: |
(a)prospects (b)equity |
|||
| investments | (c)other | fixed | |||
| 1.10 | assets Loans to other entities |
||||
| 1.11 | Loans repaid by other entities | ||||
| 1.12 | Other (provide details if material) | ||||
| u, | u, | ||||
| Net investing cash flows | |||||
| 1.13 | Total operating and investing cash flows (carried forward) |
(1527) | (1527) |
| 1.13 | Total operating and investing cash flows (brought forward) |
(1527) | (1527) |
|---|---|---|---|
| 1.14 1.15 1.16 |
Cash flows related to financing activities Proceeds from issues of shares, options, etc. Proceeds from sale of forfeited shares Proceeds from borrowings |
5000. | 5000 |
| 1.17 1.18 1.19 |
Repayment of borrowings Dividends paid Other (provide details if material) Fundraising Costs |
(458) 4542 |
(458) 4542 |
| Net financing cash flows | |||
| $1.20^{\circ}$ | Net increase (decrease) in cash held | 3015 124 |
3015 124 |
| 1.21 | Cash at beginning of quarter/year to date Exchange rate adjustments to item 1.20 |
||
| 1.22 | Cash at end of quarter | 3139 | 3139 |
Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities
- 1.23 Aggregate amount of payments to the parties included in item 1.2
- Current quarter \$A'000 98
- 1.24 Aggregate amount of loans to the parties included in item 1.10
- 1.25 Explanation necessary for an understanding of the transactions
Report only relates to quarter ended 30 June 2004 as Comet Ridge Ltd listed on ASX on 19 April 2004.
Non-cash financing and investing activities
$2.1$ Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
\$1,550,000 in tenement acquisition costs settled by the issue of 7,750,000 fully paid shares at 20 cents per share pursuant to IPO Prospectus.
$2.2$ Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest
Financing facilities available
Add notes as necessary for an understanding of the position.
| Amount available \$A'000 |
Amount used \$A'000 |
||
|---|---|---|---|
| 3.1 | Loan facilities | ||
| 3.2 | Credit standby arrangements | ||
Estimated cash outflows for next quarter
| Total | 600 | |
|---|---|---|
| 4.2 | Development | |
| 4.1 | Exploration and evaluation | 600 |
| \$A'000 |
Reconciliation of cash
| Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. |
Current quarter \$A'000 |
Previous quarter \$A'000 |
|
|---|---|---|---|
| 5.1 | Cash on hand and at bank | 377 | |
| 5.2 | Deposits at call | 2762 | |
| 5.3 | Bank overdraft | ||
| 5.4 | Other (provide details) | ||
| Total: cash at end of quarter (item 1.22) | 3039 |
Changes in interests in mining tenements
| Tenement reference | Nature of interest (note(2)) |
Interest at beginning of quarter |
Interest at end of quarter |
||
|---|---|---|---|---|---|
| -6.1 | Interests in mining tenements relinquished, reduced or lapsed |
N/A | |||
| 6.2 | Interests in mining tenements acquired or increased |
ATP 689P ATP 683P Dalby ATP 683P Millmerran ATP 337P |
Working Interest | 20 30 20 $\left($ |
30. 36.67 30. 20 |
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.
| Total number | Number quoted | Issue price per security (see note $3)$ (cents) |
Amount paid up per security (see note 3) (cents) |
||
|---|---|---|---|---|---|
| 7.1 | Preference + securities |
||||
| 7.2 | (description) Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, |
||||
| 7.3 | redemptions | 61,158,240 | 35,015,356 | ||
| + Ordinary securities |
|||||
| 7.4 | Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs |
32,750,000 | 25,000,000 | $20\mathcal{C}$ | |
| 7.5 | + Convertible debt securities (description) |
||||
| 7.6 | Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted |
||||
| 7.7 | Options | Exercise price | Expiry date | ||
| (description and conversion factor) |
5,350,000 | 20 0 | 1.12.06 | ||
| 7.8 | Issued during quarter |
5,350,000 | 20 0 | 1.12.06 | |
| 7.9 | Exercised during quarter |
||||
| 7.10 | Expired during quarter |
||||
| 7.11 | Debentures (totals only) |
||||
| 7.12 | Unsecured notes (totals only) |
Compliance statement
This statement has been prepared under accounting policies which comply with $\mathbf{1}$ accounting standards as defined in the Corporations Act or other standards acceptable to $\text{ASX}$ (see note 4).
....................................
$\overline{2}$ This statement does give a true and fair view of the matters disclosed.
Jespet
(Director/Company secretary)
Date.29 July 2004.
GILLIAN SWABY Print name:
Notes
Sign here: ....
The quarterly report provides a basis for informing the market how the entity's $\mathbf{1}$ activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
$\overline{2}$ The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and $6.2$ .
$\overline{3}$ Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
$\overline{4}$ The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.