COMET RIDGE LIMITED — Capital/Financing Update 2007

Aug 21, 2007

ASX CODE: COI

ABOUT COMET RIDGE

The Company Announcement Officer Australian Stock Exchange Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2000 By Electronic Lodgement

Operations Update - USA Activities

Highlights

• Badger Rig 2 on location and being rigged up

Comet Ridge is an Australian-listed oil and gas explorer transitioning to producer with projects in the USA & Australia.

The Company’s strategy is to capture meaningful interests and, via operatorship, control of large acreage positions covering high potential impact oil and gas opportunities, in both mature fields and in proven, but overlooked, basins.

• Operations on Coal View Unit 31-4 sidetrack due to commence by Thursday

• Sidetrack is targeting 200,00 to 500,000 barrels of oil

The directors of Comet Ridge Limited are pleased to provide the following operational update:

ROCKY MOUNTAINS

Tow Creek, Routt County, Colorado (Comet Ridge Operator with 37.5%)

Drilling operations on the Coal View Unit 31-4 sidetrack commenced on 8 August. The open hole part of original hole below 4,795 feet (1,461.5m) has been successfully plugged with a service rig and the wellbore is ready for the sidetrack operation. Badger Drilling Rig #2 has moved onto location and is being rigged up. Drilling operations are due to commence late Wednesday – early Thursday (Denver time). The operation is expected to take less than 10 days with only the last 1,800 feet (550m) needing to be re-drilled.

Comet Ridge is capitalising on its local experience in the USA through development of its Pacific Northwest & Rocky Mountain projects.

Comet Ridge is also advancing a number of key projects in Australia.

USA

Pacific Northwest

• Grays Harbor (COI: 100%)

• Cedar Creek/Vader (40%)

Rocky Mountains

The original CVU 31-4 well was drilled in the winter of 2006. Oil and gas shows were encountered across the target Niobrara Formation and wire line logs revealed the section to be moderately to heavily fractured (the fractures provide the storage mechanism and the flow path for the oil and gas). During an attempt to complete the zone for production a work string became irretrievably stuck. Despite the drill bit and 30 feet (10m) of drill pipe being lodged in the wellbore, oil and gas were circulated out of the hole during the fishing operation.

The re-drill is targeting 200,000 to 500,000 barrels of recoverable oil on the southeastern flank of the large Tow Creek anticline and is an important calibration test for the prospect and the overall exploration concept the Company is evaluating.

==> picture [91 x 39] intentionally omitted <==

ANDREW LYDYARD Managing Director Comet Ridge Limited

• Tow Creek (37.5%)

• Bear River (33.75%)

• Florence (39%)

AUSTRALIA

Queensland

• Mahalo (40%)

• Galilee Basin (100%)

New South Wales

• Gunnedah Basin (20 – 25 %)

ASX Listed: …………… 19 April 04 Shares on issue: ……….105 million Unlisted options: ……….10 million Top 20: ………………….. 45% Directors: …………….… 12%

==> picture [384 x 74] intentionally omitted <==

==> picture [384 x 74] intentionally omitted <==

==> picture [384 x 74] intentionally omitted <==

==> picture [384 x 73] intentionally omitted <==

==> picture [384 x 74] intentionally omitted <==

==> picture [384 x 74] intentionally omitted <==

==> picture [384 x 73] intentionally omitted <==

Location Map – Tow Creek/Bear River Prospects, Northern Colorado