COMET RIDGE LIMITED — Capital/Financing Update 2007

May 15, 2007

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

OPERATIONS UPDATE FLORENCE PROJECT, FREMONT COUNTY, COLORADO, USA

COMET RIDGE LIMITED ASX ANNOUNCEMENT 16 MAY 2007

MAIN POINTS

• 3D seismic acquisition to commence next week
• Permitting virtually complete
• Successful bidder on 160 acre infill lease in May Federal lease sale
• Mountain Petroleum well drilling 2 miles west of Florence acreage

The directors of Comet Ridge Limited (ASX Code: COI) are pleased to provide the following operational update for the Florence oil field redevelopment project in Fremont County, Colorado, USA (Figure 1).

Comet Ridge Limited's wholly owned US subsidiary, Comet Ridge USA, Inc., will commence seismic acquisition operations on an eight square mile three dimensional (3D) seismic survey during the week of 21 May, 2006. Permitting of the survey is virtually complete and surveying is expected to commence immediately. The Lockhart Geophysical seismic crew is finishing up a small survey elsewhere in Colorado and will move directly to Florence.

The survey will cover a significant part of the old Florence oil field and overlaps a smaller survey shot by the Company's US partners in 2004 (Figure 2). The seismic data is expected to provide a critical subsurface view of fracture patterns that control oil production in the Pierre and Niobrara Formations.

Comet Ridge was successful bidder on a 160 acre lease at the 10 May U.S. Department of the Interior - Bureau of Land Management oil and gas lease sale. This 10 year lease fills in the southern portion of Company's acreage position (Figure 2) and has a 12.5% royalty.

Mountain Petroleum Corporation has commenced the drilling of the West Florence-1 well some 2 miles west of Comet Ridge's acreage. The well is currently at a depth of 4,248 feet (1,295 metres) drilling towards a total depth of 7,000 feet (2,134 metres). The petroleum potential of the play being tested is quoted as being 100 to 200 BCF of gas in what is known as the Muddy J Sandstone. This formation is one of the targets existing under Comet Ridge's acreage that is virtually untested. A further 15 million barrels of oil potential is quoted for the shallower Pierre, Niobrara and Codell Formation reservoirs, the main targets for Comet Ridge's program.

AUSTRALIA
Level 9, Wesfarmers House 40 The Esplanade, Perth WA 6000 Phone: 61 8 6464 0499 61 8 6464 0498 Fax:

600 17^th Street, Suite 600-S Denver, Colorado 80202 Phone: +1 (303) 226 1300 +1 (303) 226 1301 Fax:

Comet Ridge Limited ABN 47 106 092 577 Email: comet@cometridge.com.au Website: www.cometridge.com.au

Background

The Florence oil field was the second oil field discovered in the United States of America with the discovery well drilled in 1862. The field is located approximately 87 miles (140 km) south of Denver and 25 miles (40 km) west of Pueblo (Figure 1). The oil field has produced approximately 15 MMBO in its 144 year history. As is typical of many fractured reservoir oil fields. there are a modest number of excellent producers with per well recoveries ranging from 100,000 barrels to in excess of 550,000 barrels of oil and a lot of lower recovery wells and dry holes where few or no fractures were penetrated.

All of the production achieved to date has been from shallow, vertical wells drilled almost exclusively without the benefit of modern seismic data. The underlying Niobrara Formation (the same formation the Company is pursuing at Tow Creek and Bear River in northern Colorado, Figure 1) has proven productive, but is very lightly explored and the deeper potential reservoir targets such as those being drilled by Mountain Petroleum are virtually untested.

The advent of 3D seismic, directional drilling techniques and modern petrophysical logging technologies provides companies like Comet Ridge with a set of tools to apply to the redevelopment of these prolific mature oil fields. Evidence that such opportunities exist is provided by a vertical well – The Roval Gorge #1 well - drilled on a lease immediately adiacent to Comet Ridge's position at Florence (Figure 2). The well (located using the small 3D seismic survey mentioned above) is consistently producing 100 barrels of oil per day from the Pierre Shale after producing 72,000 barrels over the past two years.

Comet Ridge expects to be in the position to commence drilling on the Florence project late in the 3rd quarter of this year.

Yours sincerely

Ingdynd

ANDREW LYDYARD Managing Director Comet Ridge Limited

For further information contact: Andy Lydyard (USA) Managing Director Phone: +1 (303) 226 1303 +1 (303) 226 1301 Fax: Mobile: +1 (303) 547 4478 Email: andyl@cometridgeusa.com

Figure 1 - Location of Florence Project

Figure 2. Location Map showing Comet Ridge leasehold position over the Florence oil field, the planned 3D seismic survey, location of the Federal lease acquired in the May 10 BLM lease sale and the location of the Mountain Petroleum West Florence-1 well.