COMET RIDGE LIMITED — Capital/Financing Update 2008

Jan 17, 2008

18 January 2008

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Australian Securities Exchange Announcement

A$4.3 MILLION 1 FOR 4 ENTITLEMENT ISSUE OF FULLY PAID ORDINARY SHARES

Comet Ridge Limited ( Comet Ridge ) is pleased to announce a pro rata 1 for 4 nonrenounceable Entitlement Issue of approximately 26,218,988 new fully paid ordinary shares in Comet Ridge (New Shares) at A$0.165 per New Share to raise up to A$4.3 million.

The proceeds of the Entitlement Issue will be used to fund the Company’s share of the drilling of up to 5 wells on the Florence project in Colorado and to fund its ongoing activities on the Grays Harbor, Tow Creek/Bear River and Chehalis projects in the USA and on its Australian projects.

KEY TERMS

Nature of offer	Non-renounceable Entitlement Issue of up to 26,218,988 New Shares
New Share issue price	A$0.165 per New Share
Offer ratio	1 New Share for every 4 Existing Shares held on Record Date
Number of New Shares to be issued	Up to 26,218,988
Amount to be raised under the Entitlement Issue	Up to A$4.3 million

ELIGIBLE SHAREHOLDERS

Shareholders who hold ordinary shares in the Company (Existing Shares) as at 5.00pm WST on Tuesday, 29 January 2008 (Eligible Shareholders) will be entitled to participate in the Entitlement Issue.

Australia	USA
Comet Ridge Limited C/- Endeavour Corporate	Comet Ridge USA Inc 600 17thStreet
Suite 8,7 The Esplanade Mt Pleasant	Suite 800-S Denver Colorado
Western Australia 6153	80202 USA
Phone : +61 8 9316 9100 Fax:- +61 8 9315 5475	Phone : +1 303 226 1300 Fax: +1 303 226 1301

All Eligible Shareholders will be offered 1 new ordinary share in the Company (New Share) for every 4 Existing Shares held by the Eligible Shareholder, at an issue price of A$0.165 per New Share (Entitlement). This represents a discount of approximately 16% to the volume weighted average price (VWAP) of Comet Ridge’s shares for the ten trading days before the announcement (10 day VWAP is 19.626 cents).

The Entitlement Issue is not underwritten. If there is a shortfall in acceptances under the Entitlement Issue, Comet Ridge reserves the right to place the shortfall at its discretion within three months of the close of the Entitlement Issue.

There is no minimum subscription in respect of the Entitlement Issue. If the full amount of approximately A$4.3 million is not raised under the Entitlement Issue, Comet Ridge will consider other options including additional debt funding, reducing the number of wells in the drilling program or reducing its interest in some of the wells.

KEY DATES

Key dates for the Entitlement Issue are set out below. The dates are indicative only and Comet Ridge reserves the right to vary them, subject to the Corporations Act 2001 (Act) and the ASX Listing Rules.

Announcement of Entitlement Issue	18 January 2008
Record Date for determining entitlements to	5.00 pm WST on
New Shares	29 January2008
Entitlement Issue cleansing statement given to ASX	1 February 2008
Invitation to participate in Entitlement Issue
and Entitlement Acceptance Forms	1 February 2008
despatched to Shareholders
Closing Date and final time for receipt of Entitlement and Acceptance Forms and payment in full for New Shares	5.00pm WST on 19 February 2008
Issue of New Shares and on-sale cleansing	No later than
statement given to ASX	22 February 2008
Holding Statements for New Shares	No later than
despatched to Shareholders	26 February 2008

Australia

Comet Ridge Limited C/- Endeavour Corporate Suite 8,7 The Esplanade Mt Pleasant Western Australia 6153 Phone : +61 8 9316 9100 Fax:- +61 8 9315 5475

USA

Comet Ridge USA Inc 600 17[th] Street Suite 800-S Denver Colorado 80202 USA Phone : +1 303 226 1300 Fax: +1 303 226 1301

INFORMATION PROVIDED IN RELATION TO ENTITLEMENT ISSUE

The Entitlement Issue is being made without disclosure to investors under Part 6D.2 of the Act, in accordance with section 708AA of the Act.

Shareholders will not receive a prospectus in relation to the Entitlement Issue but will receive a written invitation providing details on how to take up their entitlement under the offer. Any decision to acquire New Shares should only be made after making independent enquiries and consulting relevant professional advisers, such as stockbrokers, financial advisers, accountants or solicitors. Shareholders should have regard to publicly available information about Comet Ridge before deciding whether or not to acquire New Shares.

Copies of Comet Ridge’s announcements to ASX can be obtained from its website, www.cometridge.com.au or from the ASX website, www.asx.com.au.

Comet Ridge’s ASX code is COI.

Information about use of proceeds

It is intended to utilise the monies raised under the Entitlement Issue to fund the drilling of 3 to 5 wells on the Florence oil field redevelopment project in Fremont County, Colorado plus the acquisition of 2D and 3D seismic data on the Grays Harbor project in western Washington.

The first three wells to be drilled at Florence are expected to commence late in the first quarter and will be targeting around 3.5 million barrels of oil (~1 MMBO net to Comet Ridge) from a number of reservoirs including the Pierre Formation – the main productive zone in the Florence field.

The seismic at Grays Harbor will comprise of 10 sq miles of 3D over the Company’s Caldwell Creek prospect (P50: 100 BCF) and 60 miles of 2D seismic to be shot over the similarly sized Black Creek prospect. The seismic is intended to develop well locations for drilling later in the year.

The raising will provide additional working capital for the Company’s Australian projects and to fund its ongoing share of expenditures on the Tow Creek/Bear River and Chehalis projects in the USA.

Comet Ridge’s capital structure on completion of the Entitlement Issue

The following table shows the proposed capital structure of Comet Ridge on completion of the Entitlement Issue. The exact number of New Shares to be issued may vary and will be dependant on the level of eligible shareholders and their entitlements and the level of acceptances under the Entitlement Issue. Comet Ridge has the right to place any shares comprising the shortfall within three months after the close of the Entitlement Issue.

Australia Comet Ridge Limited C/- Endeavour Corporate Suite 8,7 The Esplanade Mt Pleasant Western Australia 6153 Phone : +61 8 9316 9100 Fax:- +61 8 9315 5475

USA

Comet Ridge USA Inc 600 17[th] Street Suite 800-S Denver Colorado 80202 USA Phone : +1 303 226 1300 Fax: +1 303 226 1301

Shares	Number
Existing Shares on issue at the date of this announcement	104,875,950
Maximum number of New Shares proposed to be issued under
the Entitlement Issue	26,218,988
Proposed total shares on issue after the Entitlement Issue*	131,094,938
Existing options to acquire shares on issue at the date of this
announcement	10,275,000

*assuming maximum New Shares issued.

ADDITIONAL INFORMATION

New shares

New Shares, once issued, will rank equally with Comet Ridge’s Existing Shares on issue.

The rights and obligations attached to shares in Comet Ridge are set out in Comet Ridge’s Constitution which may be examined free of charge by appointment between 9.00 am and 5.00 pm on normal business days at the registered office of Comet Ridge at Unit 8, 7 The Esplanade, Mt Pleasant WA 6153; and in certain circumstances, regulated by the Act, the ASX Listing Rules and the general law.

Foreign shareholders

Shareholders with registered addresses outside of Australia and New Zealand are not eligible to participate in the Entitlement Issue.

Enclosure

An Appendix 3B and a Notice pursuant to s708AA (2)(f) of the Corporations Act (Cth) are enclosed.

Enquiries

Enquiries about the Entitlements Issue should be directed to Gillian Swaby on 08 9316 9100 or Comet Ridge’s share registry, Computershare Investor Services Pty Limited on 1300 557 010 (within Australia) or +61 8 9415 4000 (outside Australia).

Yours faithfully COMET RIDGE LIMITED

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GILLIAN SWABY Company Secretary

Australia

Comet Ridge Limited C/- Endeavour Corporate Suite 8,7 The Esplanade Mt Pleasant Western Australia 6153 Phone : +61 8 9316 9100 Fax:- +61 8 9315 5475

USA

Comet Ridge USA Inc 600 17[th] Street Suite 800-S Denver Colorado 80202 USA Phone : +1 303 226 1300 Fax: +1 303 226 1301

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003, 24/10/2005.

Name of entity

Comet Ridge Limited

ABN 47 106 092 577

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be Ordinary Shares issued 2 Number of[+] securities issued or to 26,218,988 be issued (if known) or maximum number which may be issued 3 Principal terms of the[+] securities N/A (eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

• See chapter 19 for defined terms.

24/10/2005 Appendix 3B Page 1

Appendix 3B New issue announcement

4 Do the[+] securities rank equally in all Issued shares will rank equally with the existing respects from the date of allotment shares on issue. with an existing[+] class of quoted +securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 16.5 cents per share 6 Purpose of the issue Funds raised will be used to fund the (If issued as consideration for the Companies planned exploration budget for the acquisition of assets, clearly identify 2008 year including: drilling of up to 5 wells on those assets) the Florence project in Colorado and ongoing activities on the Grays Harbour, Tow Creek/Bear River and Chehalis projects in the USA and other Australian projects. 7 Dates of entering[+] securities into No later than 26 February 2008 uncertificated holdings or despatch of certificates Number +Class 8 Number and +class of all 131,094,938 Fully Paid Shares +securities quoted on ASX ( to be confirmed ( including the securities in clause depending on 2 if applicable) acceptances)

• See chapter 19 for defined terms.

24/10/2005

Appendix 3B Page 2

Appendix 3B New issue announcement

9 Number and +class of all +securities not quoted on ASX (_including_the securities in clause 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	500,000 1,500,000 450,000 75,000 1,000,000 955,000 3,500,000 1,900,000 30,000 65,000 300,000	Options exercisable at 20 cents expiry 18/8/08 Options exercisable at 20 cents expiry 31/12/08 Options exercisable at 40 cents expiry 11/5/09 Options exercisable at 45 cents expiry 26/6/09 Options exercisable at 45 cents expiry 31/7/09 Options exercisable at 45 cents expiry 10/11/09 Options exercisable at 45 cents expiry 31/12/09 Options exercisable at 45 cents expiry 01/08/2011 Options exercisable at 45 cents expiry 04/09/2011 Options exercisable at 45 cents expiry 03/12/2011 Options exercisable at 45 cents expiry 06/12/2011
	N/A (Dividends not yet paid)

Part 2 - Bonus issue or pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered	No
	Non-renounceable
	1 new share for each 4 existing shares

• See chapter 19 for defined terms.

24/10/2005 Appendix 3B Page 3

Appendix 3B New issue announcement

14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has+security holders who will not be sent new issue documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of+security holders 25 If the issue is contingent on +security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled	Ordinary shares
	29 January 2008
	Yes
	Fractions will be rounded down
	Shareholders with registered addresses outside of Australia and New Zealand are not eligible to participate in the Entitlement Issue
	5.00pm WST on 19 February 2008
	N/A
	N/A
	Tolhurst Limited
	5%
	N/A
	No
	1 February 2008

• See chapter 19 for defined terms.

Appendix 3B Page 4

1/1/2003

Appendix 3B New issue announcement

27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do+security holders sell their entitlements_in full_through a broker? 31 How do+security holders sell_part_ of their entitlements through a broker and accept for the balance? 32 How do+security holders dispose of their entitlements (except by sale through a broker)? 33 +Despatch date	1 February 2008
	N/A
	N/A
	N/A
	N/A
	N/A
	1 February 2008

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of securities ( tick one )

• (a)[Securities described in Part 1 ]

• (b)[All other securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

• See chapter 19 for defined terms.

24/10/2005 Appendix 3B Page 5

Appendix 3B New issue announcement

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

38 Number of securities for which +quotation is sought 39 Class of +securities for which quotation is sought 40 Do the[+] securities rank equally in all respects from the date of allotment with an existing[+] class of quoted +securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

• See chapter 19 for defined terms.

Appendix 3B Page 6

1/1/2003

Appendix 3B New issue announcement

41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security)

Number +Class

42 Number and[+] class of all[+] securities quoted on ASX ( including the securities in clause 38)

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• See chapter 19 for defined terms.

24/10/2005 Appendix 3B Page 7

Appendix 3B New issue announcement

• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before[+] quotation of the[+] securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

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Sign here:

Date: 18 January 2008

(Director/Company secretary)

Print name: GILLIAN SWABY

== == == == ==

• See chapter 19 for defined terms.

Appendix 3B Page 8

1/1/2003

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18 January 2008

The Manager Company Announcements Office ASX Limited 20 Bridge Street Sydney NSW 2000

Dear Sir/Madam,

Comet Ridge Limited (ASX Code: COI) Notification under section 708AA(2)(f) of the Corporations Act 2001 (Cth)

Comet Ridge Limited (Comet Ridge) gives notice under section 708AA(2)(f) of the Corporations Act 2001 (Cth) (Corporations Act) that:

1. Comet Ridge will offer approximately 26,218,988 fully paid ordinary shares for issue without disclosure to investors under Part 6D.2 of the Corporations Act pursuant to a non-renounceable entitlement offer announced to ASX on 18 January 2008.

2. As at today's date:

3. (a) Comet Ridge has complied with the provisions of Chapter 2M of the Corporations Act as they apply to Comet Ridge;

4. (b) Comet Ridge has complied with sections 674 of the Corporations Act; and

5. (c) there is no "excluded information" within the meaning of sections 708AA(8) and 708AA(9) of the Corporations Act which is required to be disclosed under section 708AA(7)(d) of the Corporations Act.

6. As the offer is a pro rata non-renounceable entitlement offer to all Comet Ridge shareholders with a registered address in Australia and New Zealand, Comet Ridge expects that the potential effect of the issue of ordinary shares on the control of Comet Ridge will be minimal and that there is not likely to be any consequence of that effect.

Yours faithfully

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Gillian Swaby Company Secretary

Australia

Comet Ridge Limited C/- Endeavour Corporate Suite 8,7 The Esplanade Mt Pleasant Western Australia 6153 Phone : +61 8 9316 9100 Fax:- +61 8 9315 5475

USA

Comet Ridge USA Inc 600 17[th] Street Suite 800-S Denver Colorado 80202 USA Phone : +1 303 226 1300 Fax: +1 303 226 1301