COMET RIDGE LIMITED — Capital/Financing Update 2004

Oct 4, 2004

5th October 2004

Number of Pages: 1

AUSTRALIAN STOCK EXCHANGE Via Electronic Lodgement

Dear Sir:

Rapid Increase in Gas Rate at Tipton West Pilot ATP 683P. Dalby Block, South Eastern Queensland

Comet Ridge Limited (ASX Code: COI) has been advised by Arrow Energy Limited (ASX Code: AOE). Operator of the Tipton West Pilot. (Arrow 80%, Comet Ridge 20%), that the pilot has shown an almost four fold increase in gas production to over 285 thousand cubic feet per day (mcfd) and that production is increasing daily.

This rapid increase has resulted from the addition of three new wells to the existing four well pilot. The first. Tipton West Pilot 13 (TWP 13) was brought on line 2 1/2 weeks ago and is now producing 141 mcfd and is increasing at around 5 to 10 mcfd per day. The second, TWP 9, was brought on stream on the 29 September and is producing 15 mcfd and rising. The third well, TWP11, commenced production on 30 September and is already producing 55 mcfd and rising. The results from the new wells exceed expectation at this early stage and provide confidence that an economic flow rate (200 mofd from one of the wells) will be achieved in the near future.

The initial 4 pilot wells were brought on stream in May of this year. Gas production was achieved immediately and pressure responses were observed in monitoring wells up to 7 km away. This information plus the data gathered from a carefully laid out core hole drilling programme, enabled our independent reserve consultants, US based Netherland Sewell and Associates Inc. (NSAI), to provide a certified "Possible" reserve estimate of 1,086 petajoules (PJ) in July of this year. (For comparative purposes, this equates to approximately 11 years of current gas consumption in the State of Queensland.) NSAI advised that the more commercially significant "Proven and Probable" (otherwise known as "2P") reserve designation would be assigned when one or more wells demonstrated economic production rates. These three new wells were added to accelerate the dewatering process and to demonstrate that the Walloon Coal Measure coals can produce gas at economically viable rates based on anticipated well costs, operating costs and revenues from sales.

Achievement of this commercial rate and the subsequent reserves certification will facilitate conditional gas sales contracts that the Joint Venture has with three customers. (Ergon Energy - 3.2) PJ p.a. for 15 years; BP - 3 PJ p.a. for 5 years; and ERM Wambo Power - 4 PJ p.a. for 15 years) to proceed to the negotiation of definitive and binding gas sales agreements.

First gas from Tipton field is scheduled for January 2006 at a rate of 10.2 PJ p.a.

For further information contact:

Andy Lydvard Comet Ridge Limited Ph: (08) 9225 7108 Fx: (08) 9225 6100 Web: www.cometridge.com.au Tony Dawe Ward Holt Ph: (08) 9221 8722 Mob: 041 3322 110