COMET RIDGE LIMITED — Capital/Financing Update 2007

Jan 29, 2007

ABN 59 078 012 745

Perth, Western Australia 6000

Phone: 61 8 6464 0400 Facsimile: 61 8 6464 0401 Email: strike@strikeoil.com.au www.strikeoit.com.au

30 January 2007

Australian Stock Exchange Ltd Via Electronic Lodgement

WEEKLY OPERATIONS UPDATE

Strike Oil is pleased to announce the following update on drilling activities in the USA.

Gulf Coast, Texas

Mesquite Project, Webernick 5 well

(Strike Oil, 32.3% working interest. Operator, Cypress E&P Corporation.)

The Webernick 5 well has been drilled and testing is underway of a small potentially commercial gas zone in the Frio Formation.

Flint Prospect, McGall 1 well

(Strike Oil, 25% working interest. Operator, Cypress E&P Corporation)

The McGall 1 exploration well spudded on 28 January 2007 (Texas Time). Proposed total depth is 16,500 feet (5,030 metres).

The well is currently at 751 feet (229 metres) (30 January 2007, Texas time).

The well is targeting a large gas prospect in the order of 200 billion cubic feet of gas potential in the Wilcox Formation. Refer to attachment for more details.

Rocky Mountains, Colorado

Tow Creek Prospect, Coal View Unit 31-4 well

(Strike Oil, 37.5% working interest. Operator, Comet Ridge Limited)

At the Coal View 31-4, well completion operations of the well have recommenced but operational difficulties have been experienced and the current operation is attempting to recover stuck drill pipe.

Despite the obstruction in the borehole, the order of 10 barrels of oil have been circulated from the well which continues to produce oil during this operation. This produced oil is encouraging as it confirms the existence of a productive zone.

Bear River Prospect, Peltier 11-12 well

(Strike Oil, 33.75% working interest. Operator, Comet Ridge Limited)

At the Peltier 11-12 well, 7 inch casing has been set to 5,048 feet (1539 metres) and the well is currently at a depth of 5,684 feet (1733 metres) preparing to drill ahead to a total depth of 6,400 feet (1951 metres).

Minor oil and gas shows have been recorded in the first of the three prospective horizons at 5,130 feet (1564 metres). The two remaining, more prospective, horizons are yet to be drilled.

Refer to attached more detailed release by Comet Ridge Limited concerning Tow Creek and Bear River operations.

Strike Oil will make weekly Operations reports each Friday, unless otherwise warranted, while drilling operations are in progress.

Yours faithfully

SIMON ASHTON Managing Director - Strike Oil Limited

Further information:

Strike Oil Limited Simon Ashton - Managing Director T: 08 6464 0400

E: strike@strikeoil.com.au

Flint Prospect Fort Bend County Texas Gulf Coast

Highlights

• McGall No1 well on the 200 billion cubic feet (bcf) of gas potential Flint prospect has spudded (28 January 2007- Texas time).
• Strike Oil's share of gross revenues (that is 25%) could be on the order of AUD\$400 million based upon a 200 bcf discovery and AUD\$8.50 per thousand cubic feet of gas (approximately the current gas price).
• This prospect is the first of 3 very large Gulf Coast gas prospects with similar reserve potential to Flint, to be drilled in 2007.
• The objective section of the Flint prospect is the Wilcox Formation, the same formation as Strike Oil's Mesquite production project.
• A discovery at Flint can be brought on production rapidly due to its proximity to pipeline infrastructure and access to markets.

The Flint Prospect is located in Fort Bend County, Texas and approximately 2700 acres have been leased covering the majority of the mapped prospect. The well is programmed to a total depth of 16,500 feet and is likely to take 60 to 70 days to drill and has a dry hole cost estimate of US\$ 6.1 million (AUD\$ 7.8 million). Strike Oil will be funding 33 1/3% at a cost of AUD\$2.6 million to earn a 25% working interest in the prospect. Completion cost of the well is estimated at US\$2.5 million (AUD\$3.2 million) of which Strike Oil would be required to fund 25% or AUD\$800,000.

The primary objectives of the McGall 1 well are located in the Wilcox Formation below 15,000 feet (4573 metres). The total resource potential is in the order of 200 bcf of gas.

Strike Oil considers that the prospect is relatively low risk with the order of a 25% to 30% probability of success. The structure is defined by 3-D seismic control and three nearby wells one of which has produced 7 bcf of gas from the prospective section in a separate fault block in the same mapped structure.

The prospect is located in proximity to major gas transmission pipelines and has ready access to markets providing the opportunity to sell any discovered gas in a timely manner. Based upon the current prevailing gas prices in the region of around US\$6.50 per mcf (approx. AUD\$8.50 per mcf) this could provide Strike Oil with the order of AUD\$400 million in gross revenues based upon its 25% working interest and a 200bcf discovery.

Flint is the first of three large prospects with similar reserve potential to Flint, scheduled to be drilled on the Gulf Coast during 2007.

COMET RIDGE LIMITED ASX ANNOUNCEMENT 29 JANUARY 2007

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

OPERATIONS UPDATE TOW CREEK & BEAR RIVER PROJECTS. ROUTT COUNTY, COLORADO, USA

MAIN POINTS

• Oil recovered at CVU 31-4 despite operational difficulties
• Peltier 11-12 at 5.684 feet

The directors of Comet Ridge Limited (ASX Code COI) provide the following operational update for the Tow Creek and Bear River prospects in Routt County, Colorado, USA.

TOW CREEK (Comet Ridge 37.5% and Operator)

The completion of the Coal View Unit 31-4 well re-commenced on 23 January.

As of report time (3pm, 29 January Denver time – 7am, 30 January Perth time) the Diamondback Energy work over rig was attempting to recover part of the drill string that is stuck in the hole at 5,300 feet. The "fish" is sitting above the first reservoir interval. Despite the obstruction in the hole over 10 barrels of oil have been circulated up and the well continues to produce oil during the operation. While the current operational difficulties are frustrating the presence of the produced oil is very encouraging as it confirms the presence of a productive zone or zones.

The planned operation from this point is to continue attempts to recover the fish then proceed with the completion. This entails running in to 6,600' (2,011m), conditioning the hole (i.e. make sure there are no more ledges or tight spots), circulating out the potassium formate drilling mud that is currently in the hole and replacing it with Niobrara oil and then finally running a 5-1/2" perforated liner from 4,700' to 6,600' (1,432 to $2.011m$ ).

A down hole electric submersible pump will then be installed at the bottom of the well bore and the well will be put on test.

Should the fishing attempts fail consideration will be given to temporarily suspending the well until a drilling rig can be brought in later to complete the fishing job or to sidetrack the well.

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

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

BEAR RIVER (Comet Ridge 33.75% and Operator)

As of report time Peltier 11-12 well is at a depth of 5,684' with 7" casing having been set in the inclined hole at 5.048'.

The first potential reservoir interval (the first bench of the Niobrara which is usually an inferior reservoir at Tow Creek) was encountered at 5,130'. Minor oil and gas shows have been encountered to date. These shows and the two main prospective reservoir targets (the second and third benches of the Niobrara) will be evaluated on the wire line logs when the well reaches its prognosed total depth of 6,400'.

As mentioned in previous announcements this well is the second of three "Proof of Concept" wells designed to prove up a much larger opportunity base.

Comet Ridge and partner Strike Oil Limited (ASX Code: STX) are funding the drilling of this well 50:50. Following completion of this well all earning requirements on the Tow Creek and Bear River prospects will have been completed.

Yours sincerely

Shydynd

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