COMET RIDGE LIMITED — Capital/Financing Update 2009

May 17, 2009

18 May 2009

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Australian Securities Exchange Announcement

COMET RIDGE ANNOUNCES A$21 MILLION CAPITAL RAISING TO ADVANCE KEY COAL SEAM GAS PROJECTS

Comet Ridge Limited ( Comet Ridge or the Company ) is pleased to announce the successful completion of a placement to professional and sophisticated investors to raise A$7.5 million before costs ( Placement ).

The Placement was managed by Wilson HTM Corporate Finance Limited with 22,000,000 shares subscribed for at A$0.34 per share.

In conjunction with the Placement, all eligible Comet Ridge shareholders will have the opportunity to participate in a non-renounceable entitlement offer ( Entitlement Offer ) to acquire 1 new share ( New Share ) for every 5 shares held as at 5:00pm (WST) on the Record Date being 27 May 2009, at an issue price of A$0.27 per share, to raise approximately A$13.8 million.

In these volatile times the board considers it prudent to have the Offer underwritten. This will be undertaken by Wilson HTM. In pricing the Offer the board has endeavoured to set a price which will encourage strong support from existing shareholders.

On completion of the Placement and Entitlement Offer Comet Ridge will have approximately A$28 million in cash, which 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.

Tor McCaul, Managing Director of Comet Ridge said “We are extremely pleased with the level of support from domestic and offshore investors in the Placement. We would like to acknowledge those existing shareholders who participated in the Placement, for their continued support, and also welcome new shareholders to the register. The level of demand for the Placement signals the strong support for the Company’s CSG projects, directors and management team.”

The Directors wish to provide the opportunity for existing shareholders to invest in the Entitlement Offer at a discounted price. Some directors (James McKay and Chris Pieters), together with Tony Gilby a proposed Director, have also further supported the Entitlement Offer by participating as sub-underwriters.

ASX CODE: COI

Australia ASX CODE: COI Comet Ridge Limited Brisbane Office: C/- Endeavour Corporate 210 Alice Street ASX Listed: 19 April 2004 Suite 8,7 The Esplanade Mt Pleasant Brisbane QLD 4000 Shares on issue: 234 million Western Australia 6153 +61 7 3221 3661 Unlisted options: 32.8 million Phone : +61 8 9316 9100 Fax:- +61 8 9315 5475

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

Mr. McCaul said “The key rationale of the merger with Chartwell Energy was to provide Comet Ridge with additional technical and financial strength and this support should give shareholders confidence that the board believes in the potential of the Company. Following completion of the Placement and the underwritten Entitlement Offer, Comet Ridge will be in a strong financial position. The additional funds allow us to advance our key CSG projects including the Galilee Basin, and the Mahalo Block in Queensland and Greymouth in New Zealand. The proceeds of the capital raisings will satisfy funding requirements over the next 12 to 18 months, including the accelerated exploration program”.

Entitlement Offer

Key Terms

The Entitlement Offer is being made without disclosure to investors under Part6D.2 of the Act, in accordance with section 708AA of the Act.

Shareholders with registered addresses in Australia and New Zealand and other locations where the Company considers it is reasonable to make the offer, as at the Record Date are entitled to participate in the Entitlement Offer ( Eligible Shareholders ).

Full Details of the Entitlement Offer will be contained in the Offer Booklet to be lodged with the ASX and to be dispatched to Eligible Shareholders in accordance with the timetable set out below. The Offer Booklet will also be available on Comet Ridge's website www.cometridge.com.au.

Key dates for the Entitlement Offer 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 the Offer – Offer Booklet, Appendix 3B and 708AACleansing Notice lodged with ASX	18 May 2009
Shares trade ‘ex-Entitlement’ (date from which Shares commencetrading without the entitlement to participate in the Offer)	21 May 2009
Record Date to determine Entitlements	27 May 2009
Anticipated despatch of Offer Booklet and Entitlement and AcceptanceForms	29 May 2009
Offer Opening Date	29 May 2009
Offer Closing Date and last day for lodgement of Entitlement andAcceptance Forms and payment in full	18 June 2009
Allotment and expected date for despatch of holding statements	26 June 2009
Expected date for commencement of trading of New Shares on theASX	29 June 2009

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

	ASX CODE: COI
Brisbane Office:
210 Alice Street	ASX Listed: 19 April 2004
Brisbane QLD 4000	Shares on issue: 234 million
+61 7 3221 3661	Unlisted options: 32.8 million

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

Enquiries about the capital raising should be directed to Stephen Rodgers on +61 7 3221 3661. Media enquires should be directed to Richard Owen from ThreePlus on +61 7 3503 5700.

A "cleansing notice" under the Corporations Act, an investor presentation and Appendix 3B accompany this announcement. These documents are available on Comet Ridge's website www.cometridge.com.au.

Yours faithfully

COMET RIDGE LIMITED

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Stephen Rodgers 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

ASX CODE: COI

Brisbane Office: 210 Alice Street ASX Listed: 19 April 2004 Brisbane QLD 4000 Shares on issue: 234 million +61 7 3221 3661 Unlisted options: 32.8 million

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