COMET RIDGE LIMITED — Capital/Financing Update 2009

May 17, 2009

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 issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (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)	Ordinary fully paid shares (a) Placement shares (b) Entitlement Offer shares
	(a) 22,000,000 pursuant to a share placement. (b) 51,225,190 shares pursuant to a 1 for 5 Entitlements Offer. The total number of shares to be issued in accordance with the Entitlement Offer could increase by up to 6,573,500 in the event that all of the holders of options exercised their right to convert their securities to ordinary shares prior to the record date of 27 May 2009.
	(a) Fully Ordinary Paid Shares (b) Fully Ordinary Paid Shares

24/10/2005 Appendix 3B Page 1

Appendix 3B New issue announcement

4 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 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 7 Dates of entering+securities into uncertificated holdings or despatch of certificates 8 Number and +class of all +securities quoted on ASX (_including_the securities in clause 2 if applicable)	(a) Yes (b) Yes	(a) Yes (b) Yes
	(a) Placement shares – 34 cents each (b) Entitlement Offer shares – 27 cents each
	The funds raised by the Placement and Entitlement Offer will be used primarily to fund the exploration and appraisal of the Company’s key coal seam gas (CSG) projects being the Galilee Basin and the Mahalo Block in Queensland and the Greymouth project in New Zealand
	(a) Placement shares 22 May 2009 (b) Entitlement Offer Shares 26 June 2009
	Number	+Class
	255,851,142	Ordinary fully paid shares

• See chapter 19 for defined terms.

24/10/2005

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Appendix 3B New issue announcement

9	Number and +class of all +securities not quoted on ASX (_including_the securities in clause 2 if applicable)	Number	+Class
		Shares 51,500,000 Options 112,500 1,250,000 1,432,500 3,500,000 3,800,000 130,000 300,000 15,192,500 7,150,000	Ordinary shares subject to 12 mth restriction (29/4/2010) 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 03/12/2011 Options exercisable at 45 cents expiry 06/12/2011 Options exercisable at 20 cents expiry 30/06/2012 Options exercisable at 30 cents expiry 30/06/2012

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	N/A

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 every 5 Shares held

• See chapter 19 for defined terms.

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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 fully paid shares
	27 May 2009
	Yes
	Fractions will be rounded up
	Shareholders with addresses outside Australia and New Zealand other than countries which the Company considers it reasonable to make an offer. .
	18 June 2009
	Wilson HTM Finance Corporate Finance Limited
	3.75% on the value of all New Shares issued under the Entitlement Offer.
	N/A
	N/A
	N/A
	N/A
	29 May 2009

• See chapter 19 for defined terms.

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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	14 May 2009
	N/A
	N/A
	N/A
	N/A
	N/A
	26 June 2009

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) X 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

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

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

• 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

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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 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)

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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.

• 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.

Sign here:

==> picture [126 x 46] intentionally omitted <==

Date: 18 May 2009

(Company secretary)

Print name: STEPHEN RODGERS

== == == == ==

• See chapter 19 for defined terms.

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1/1/2003