COMET RIDGE LIMITED — Capital/Financing Update 2007

Jan 18, 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

• Completion of CVU 31-4 to recommence 22 January
• Peltier 11-12 running casing at 3,750 feet

The directors of Comet Ridge Limited (ASX Code COI) are pleased to 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 is expected to recommence next Mondav subject to weather. The Rockies region continues to experience extremely cold weather conditions resulting in a number of drilling and completion rigs in the region being shut down.

Cold weather heaters and a hot oil trailer have been secured and will be on location Monday. The planned operation is to run in to the hole to 6,600', condition the hole (i.e. make sure there are no ledges or tight spots), circulate out the potassium formate drilling mud that is in the hole currently with Niobrara oil and then run a 5-1/2" liner from 4,700' to 6,600'. 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.

BEAR RIVER (Comet Ridge 33.75% and Operator)

At the Peltier 11-12 well, as of 3pm January 18^th, Denver time (7am January 19^th, Perth time) the rig was pulling out of the hole in preparation of running 9 5/8" casing to 3,750 feet. Drilling is expected to recommence Saturday. The next part of the hole will be directionally drilled with the angle of the well being built to 40° from vertical. Another string of steel casing will be set at 5,000 feet prior to drilling the objective Niobrara section down to 6,540 feet (see Figure 1).

The Peltier 11-12 is targeting up to 500,000 barrels. As mentioned in previous announcements it is the second of three "Proof of Concept" wells designed to prove up a much larger opportunity base.

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

USA 600 17^th 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

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

ANDREW LYDYARD Managing Director Comet Ridge Limited

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

Figure 1 - Peltier well design

Diamond Back workover rig on the CVU 31-4 well location