COMET RIDGE LIMITED — Capital/Financing Update 2008

Feb 5, 2008

ASX Announcement

Comet Ridge Limited | ABN 47 106 092 078

Comet Ridge

6 February 2008 ASX CODE: COI Operations Update

COMET RIDGE SECURES PARTNER FOR CHEHALIS BASIN IN USA

I Broadens exposure in Chehalis Basin to 140,000 acres

I Receives cash payment and 5 free carry wells

I Drilling anticipated in the second quarter of 2008

The Board of Directors of Comet Ridge Limited (ASX Code: COI) is pleased to announce the execution of a definitive lease purchase and exchange agreement between its 100% owned US subsidiary, St. Helens Energy, LLC (St. Helens), and a consortium of US based coal seam gas exploration companies headed up by Oklahoma based Oklaco Holding, LLC (Oklaco).

The transaction will accelerate further delineation and development of the Chehalis Basin coal seam gas project in Lewis and Cowlitz counties, southern Washington (Figure 1).

Comet Ridge will divest 75% of its 40% working interest (retaining 10% interest) in its existing acreage position (~75,000 acres) but gain a 10% working interest in another 65,000 acres resulting in a 10% project-wide interest. In addition, Comet Ridge will receive an upfront cash payment of $463,064, payable on 15 February, 2008, and a free carry through the drilling of 5 holes. Four will be coal seam gas resource delineation wells and one will target interpreted oil pay in a shallow sandstone reservoir.

This transaction provides Comet Ridge with additional working capital for use on its other operated projects such as Florence and Grays Harbor, and at the same time facilitates increased drilling activity aimed at delineating a potentially significant gas resource in the Chehalis Basin.

The combined 140,000 acre (567 sq km) lease position is largely contiguous and covers the vast majority of the western flank of the

coal bearing Chehalis Basin and provides the joint venture partners with a commanding position in a highly prospective area.

The coals have been drilled extensively by coal exploration companies and numerous gas shows and flows have been reported in coal holes and water wells. One notable well, drilled in the early 2000, tested gas a rate of 700 mcfd from a sandstone reservoir lying between 729 and 741 feet (222 to 225m) and encountered good gas shows in a number of other sands.

The presence of extensive gas shows in shallow coals and sandstones were noted in the Power River Basin of Wyoming and Montana prior to the extensive coal seam gas development in that Basin. Over 1 billion cubic feet of gas per day (approximately 365 PJ/year) is produced from that Basin now.

Oklaco and its partners are experienced coal seam gas and shale gas developers with projects in Eastern Oklahoma and North Texas. They have developed and expect to apply horizontal drilling techniques to the Chehalis Basin play.

The Company is advancing marketing efforts and negotiations concerning the Tow Creek/Bear River and Grays Harbor projects and expects to make further announcements in the coming weeks.

==> picture [75 x 39] intentionally omitted <==

Andrew Lydyard Managing Director Comet Ridge Limited

COMET RIDGE OPERATIONS & PROJECTS

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

The Company’s strategy is to control large acreage positions covering oil and gas opportunities in mature fields and in proven, but overlooked basins. As much as possible, it operates these projects in order to directly control desired outcomes.

USA Pacific NW | Grays Harbor (100%); Chehalis Basin (40%) USA Rocky Mountains | Florence (39%); Tow Creek (37.5%); Bear River (33.75%) AUSTRALIA Queensland | Mahalo (40%); Galilee Basin (100%) AUSTRALIA New South Wales | Gunnedah Basin (60-70%)

Comet Ridge Limited | E-mail: comet@cometridge.com.au Website: www.cometridge.com.au USA Phone: 1-303-226-1300

- 2 -

==> picture [468 x 620] intentionally omitted <==

Figure 1 – Location of Chehalis (Vader/Cedar Creek)

AUSTRALIA

C/- Endeavor Corporate Suite 8, 7 The Esplanade Mt Pleasant, West Australia 6153 Phone: +61 8 9316 9100 Fax: +61 8 9315 5475

UNITED STATES

ASX CODE: COI

600 17th Street ASX Listed: 19 April 04 Suite 800-S Shares on Issue: 105 million Denver, Colorado 80202 USA Unlisted Options: 10.25 million Phone: +1 (303) 226.1300 Top 20: 44% Fax: +1 (303) 226.1301 Directors: 12%

Comet Ridge Limited | E-mail: comet@cometridge.com.au Website: www.cometridge.com.au USA Phone: 1-303-226-1300