COMET RIDGE LIMITED — Capital/Financing Update 2011

Jul 18, 2011

==> picture [596 x 119] intentionally omitted <==

19 July 2011

Gunnedah Basin back in focus as CSG acreage consolidation continues

• Santos Limited announces plan to acquire Eastern Star Gas Limited confirming emergence of Gunnedah Basin as a significant CSG region

• Eastern Star Gas currently operates CSG activities in Comet Ridge’s permits PEL 427 & PEL 428

• Santos Limited proposed acquisition of Eastern Star Gas expected to assist Comet Ridge gas commercialisation plans in Gunnedah Basin

Santos Limited announced yesterday that it has reached a binding agreement to acquire 100% of the outstanding ordinary shares in Eastern Star Gas (ESG) and has been unanimously recommended by ESG directors, in the absence of a superior proposal. The announcement also details the subsequent sale of a 20% working level interest in ESG’s permits in the Gunnedah Basin, not including the two permit areas in which Comet Ridge holds interests, to TRUenergy for A$284 million.

ESG is the Coal Seam Gas Operator of Comet Ridge Limited’s (ASX:COI) Gunnedah Basin permits PEL 427 and PEL 428 where Comet Ridge holds 25% and 40% interests respectively. These permits are located immediately north and west of ESG’s key CSG permit PEL 238, which contains the Narrabri Gas Project and the Wilga Park Gas Fired Power Station.

This transaction represents one of the few remaining consolidation opportunities in the Gunnedah Basin, and expands Santos’ acreage holding into the very north of the basin to include PEL 427 and PEL 428.

==> picture [327 x 261] intentionally omitted <==

Figure 1 – Comet Ridge Limited’s PEL 427 & PEL 428 in northern NSW

Comet Ridge Limited T: +61 7 3221 3661 E: info@cometridge.com.au 283 Elizabeth St, Brisbane, Qld, 4000 Australia ABN 47 106 092 577 F: +61 7 3221 3668 W: www.cometridge.com.au GPO Box 798, Brisbane, Qld, 4001 Australia

ASX CODE: COI

Comet Ridge Limited

“This transaction further confirms that the Gunnedah Basin is maturing into a significant CSG region, and increases the possibility that infrastructure will be developed to take gas to Santos’ LNG project in Gladstone, as well as supplying the NSW market with gas. This is expected to increase the options for Comet Ridge to commercialise its CSG resources in PEL 427 and PEL 428,” Mr McCaul said.

Mr McCaul said this would be a positive outcome for Comet Ridge, which already has a very constructive working relationship with Santos in its ATP 337P Mahalo asset in the Bowen basin, where Santos is Operator.

He said that, in terms of appraising and building gas resources in the NSW permits, he expected PEL 427 and PEL 428 technical work to continue effectively as “business as usual”. However, from a commercialisation point of view, Mr McCaul said the inclusion of ESG’s extensive reserves and resources into the Santos portfolio, gave economies of scale and may ultimately benefit Comet Ridge in the future.

On 7 March 2011, ESG on behalf of the joint venture, announced an initial resource booking for PEL 427 and PEL 428. A seismic acquisition programme is planned for both permits in 2011, with a well scheduled for drilling in the Bellata Trough area of PEL 427 later in the year.

==> picture [326 x 281] intentionally omitted <==

Figure 2 – Northern NSW close up Figure 3 - Permian Coal Fairway in PEL 427

==> picture [145 x 44] intentionally omitted <==

Stephen Rodgers Company Secretary Comet Ridge Limited

For further information please contact:

Tor McCaul Managing Director Comet Ridge Limited tor.mccaul@cometridge.com.au +61 7 3221 3661

Media: Rhyll Cronin Associate Three Plus rhyll@threeplus.com.au +61 7 35035700

2 of 3

COMET RIDGE LIMITED - OVERVIEW

Comet Ridge Limited has significant Coal Seam Gas (CSG) projects in key regions of Queensland, northern New South Wales and New Zealand, as well as oil and gas interests in the United States. Gas resources have been independently certified at three projects. The company is listed on the Australian Securities Exchange (ASX Code: COI) and is based in Brisbane. The Board and Management are experienced in establishing and developing energy projects.

Corporate Strategy

Comet Ridge has gained early entry into well-located exploration areas, allowing shareholders to gain substantial leverage into the upside value potential associated with exploration success.

Comet Ridge conducts CSG exploration and appraisal, with the aim of maturing exploration acreage from Gas Resources into Proven and Probable Gas Reserves. This process initially involves drilling wells in order to certify Prospective and Contingent Resources and then through further appraisal via Pilot Projects, progressing into certified Reserves.

Where possible, Comet Ridge takes high equity positions in its large exploration permits, including a 100% interest in both its Galilee Basin and New Zealand assets. Comet Ridge has 40% equity in the ATP 337P Mahalo block in the Bowen Basin, and holds 25% and 40% equity respectively in PEL 427 and PEL 428 in NSW.

Certified Resources

In executing our strategy, Comet Ridge has successfully independently certified the following Prospective and Contingent Resources:

	Comet Ridge Limited – Net Recoverable Resources	Comet Ridge Limited – Net Recoverable Resources	Comet Ridge Limited – Net Recoverable Resources
	Project	Location	Contingent	Prospective
			Resource(PJ)	Resource(PJ)
	Gunn Project Area(ATP 744P)	Galilee Basin, Qld	1,870	597
	Mahalo Block(ATP 337P)	Bowen Basin, Qld	442	-
	PEL 427 and PEL 428	Northern NSW	231	1022
	Total		2,543	1,619

Work Program

Comet Ridge has an active exploration and appraisal work program for CSG projects in Queensland, northern NSW and New Zealand. The first Pilot Project for ATP 337P Mahalo is planned for 2011, with additional exploration and appraisal work planned for the Galilee Basin, northern NSW and NZ.

==> picture [446 x 139] intentionally omitted <==

Comet Ridge Limited T: +61 7 3221 3661 E: info@cometridge.com.au 283 Elizabeth St, Brisbane, Qld, 4000 Australia ABN 47 106 092 577 F: +61 7 3221 3668 W: www.cometridge.com.au GPO Box 798, Brisbane, Qld, 4001 Australia

ASX CODE: COI

Comet Ridge Limited