COMET RIDGE LIMITED — Capital/Financing Update 2004

Oct 4, 2004

ASX ANNOUNCEMENT - 4 October 2004

Tipton West Pilot Production Rapidly Rising Toward Commercial Levels

The Directors of Arrow Energy N.L. are pleased to announce that three planned additional wells on the Tipton West Field pilot (ATP 683, Dalby Block - Arrow 80%, Comet Ridge 20%) are now on production and showing rapidly increasing production rates.

The initial 4 well pilot was brought on stream in May this year and pressure responses were quickly seen in monitoring wells up to 7 km away. This proved excellent continuity in the coal seams and led to a 3P reserves certification by Netherlands Sewell and Associates Inc. (NSAI) of 1,086 PJ.

Due to the considerable size and extent of the resource (as evidenced by the 3P reserves certification), it was decided to accelerate lowering of the pressure in the coals, to enable substantial quantities of gas to escape, by drilling an additional 3 pilot wells.

The first of these wells, TWP-13, was brought online on 18 September and is now producing 141 mcfd. The second. TWP-9, was brought online on Thursday 29 September and is producing 15 mcfd and rising. The third well, TWP-11, was brought online on 30 September and is producing 55 mcfd and rising. In total the pilot is now producing approximately 286 mcfd.

Achievement of a commercial flow rate and the subsequent upgrading of reserves to 2P would allow the three existing gas sales Memoranda of Understanding (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 detailed gas sales agreements.

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

This announcement has been approved by the board of Arrow and the technical information herein has been provided by a consultant (Dr R W Day) with more than 25 years experience in petroleum exploration.

JPK Marshall Company Secretary

For further information contact: Nicholas Mather (0417 880 448) or Stephen Bizzell (0417 618 698) Ph: (07) 3303 0650 Fax: (07)3303 0651 E-Mail: info@arrowenergy.com.au Website: www.arrowenergy.com.au

Arrow Energy NL