COMET RIDGE LIMITED — Capital/Financing Update 2007

Aug 6, 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

• Drilling operations on Tow Creek to resume next week

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

• First data from Florence 3D seismic survey received

• Drilling operations in the Chehalis Basin to start early September

• Permitting of Grays Harbor seismic underway

• Denver team strengthened

The directors of Comet Ridge Limited are pleased to provide the following update for the Company’s projects:

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

ROCKY MOUNTAINS

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

Drilling operations on the Coal View Unit 31-4 sidetrack are due to commence this week. A Diamondback Drilling service rig is expected on location by the middle to latter part of the week to prepare the existing well bore for the sidetrack. Badger Drilling Rig #2 will move onto location during the week of August 13[th] to drill and complete the sidetrack hole. The operation is expected to take less than two weeks with only the last 1,800 feet (550m) needing to be redrilled.

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 a key calibration test for the prospect. Figure 2 is a schematic showing the prospect concept.

Florence, Fremont County, Colorado (Comet Ridge Operator with 39%)

The first volume of interpretable data from the 8 square mile (21 sq km) Florence 3D seismic survey has been received from the processors one month ahead of schedule. The data will be loaded onto a computer work station and prospect generation initiated immediately. Initial inspection of the data reveals it to be good quality.

USA

Pacific Northwest

• Grays Harbor (COI: 100%)

• Cedar Creek/Vader (40%)

Rocky Mountains

• 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: ………. 104 million Unlisted options: ……….8 million Top 20: ………………….. 44% Directors: …………….… 12%

The survey covers a significant part of the old Florence oil field and overlaps, and has been integrated into a smaller survey shot by the Company’s US partners in 2004 for a total 3D coverage area of approximately ten square miles (26 sq km). A key calibration point for the survey is provided by the Royal Gorge -1 well which our US partners drilled in 2005 (Figure 2). That well has consistently produced at 100BOPD for the past 2 years and is forecasted to produce around 200,000 barrels.

Comet Ridge has commenced pre-drill engineering and is already sourcing rig equipment for drilling later in the year.

Bear River, Routt County Colorado (Comet Ridge Operator with 33.75%)

A remedial treatment of the Niobrara reservoir in the Peltier 11-12 well failed to result in an appreciable increase in productivity suggesting reservoir quality in this specific location is poor. Comet Ridge is evaluating additional options for the existing wellbore and the possibility of sidetracking to areas of better fracturing. The application of 3D seismic to potentially help identify such areas is also being explored

PACIFIC NORTHWEST (See Figure 3 for project locations)

Grays Harbor, Washington State (Comet Ridge Operator with 100%)

Permitting of up to 173 miles (280 km) of new 2D seismic over a number of identified leads and prospects in the Grays Harbor project area is progressing well. Seismic acquisition is expected to commence before the end of the 3rd quarter of 2007.

Two of the prospects that will be further delineated by the new seismic, have previously drilled wells on them that have interpreted by-passed gas zones in them.

One well, drilled in the mid 1980’s, encountered strong gas shows over a 1,100 foot (335m) thick interval on the flanks of a large anticline. The structure, as currently mapped, is assessed to offer potential for over 100 BCF of recoverable gas (P50) with an upside of around 250 BCF (P90). The prospect lies within 6 miles (10 km) of existing gas pipeline infrastructure.

Chehalis Basin, Washington State (Comet Ridge 40% - non operator)

Surface casing has been set on two core holes in preparation for coring in early September. The operator, Cascadia Energy, has secured a new coring rig to resume the coal seam gas resource drilling program that was terminated after one well due to drilling rig related problems. An additional (4th) core hole will be drilled in a newly identified prospect area to the north of Vader.

Denver Team

The Denver based management team has been strengthened with the appointment of Mr. Pat Jackson as Vice President- Exploration. Mr. Jackson brings considerable worldwide exploration and development experience to the Company. Prior to forming his own consulting and prospect generation company in 2005, Mr. Jackson was Regional Manager for Stone Energy, Vice President of Onshore Exploration for Basin Exploration and a held a variety of both managerial and technical positions at Amoco Production Company.

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ANDREW LYDYARD Managing Director Comet Ridge Limited

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Figure 1. Location Map – Tow Creek/Bear River

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Figure 2 – Location map showing Florence Project, the 3D seismic program areas and the Royal Gorge #1

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Comet Ridge Limited
ABN 47 106 092 577
Grays Harbor
Project
Chehalis Basin Project
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