COMET RIDGE LIMITED — Capital/Financing Update 2012

Jul 29, 2012

==> picture [596 x 120] intentionally omitted <==

30 July 2012

Mahalo Drilling Programme Weekly Operations Update

 Mahalo 6 & Mahalo 4 intersect main Castor-Pollux coal seam - wells cased  Mahalo 5 spudded Sunday 29 July

Coal seam gas explorer Comet Ridge Limited (ASX:COI) is pleased to provide a drilling update on its Mahalo pilot project in ATP 337P, north of Rolleston in the Bowen Basin in central Queensland.

During the week, both the Mahalo 6 and Mahalo 4 wells have been cased and suspended and the rig moved to the next pilot well at Mahalo 5. The Mahalo field is located approximately 260km west of Gladstone. Mahalo 6 is 300m southeast of the recently drilled Mahalo 3 well, while Mahalo 4 is 275m to the north of Mahalo 3. The pilot wells are being drilled to target the shallow Bandanna Formation, with Mahalo 6 and Mahalo 4 the second and third wells of a four-well pilot scheme.

==> picture [398 x 313] intentionally omitted <==

The Mahalo 6 well reached a total depth (TD) of 310 metres on Tuesday 24 July, intersecting a total of approximately nine (9) metres of net coal, with seven and a half (7.5) metres of this coal in the main

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

Castor-Pollux seam. The Castor-Pollux is the target of the reserves booking plan currently being executed by the joint venture. Production casing has been run and cemented in place.

The Mahalo 4 well spudded on Wednesday 25 July, reaching a TD of 300m on Friday 27 July. This well intersected a total of approximately eight (8) metres of net coal, with seven (7) metres of this coal in the main Castor-Pollux seam. Production casing was also run and cemented in place in this well.

The final well in the current programme, Mahalo 5, which lies 280m to the southwest of Mahalo 3, spudded on Sunday 29 July with surface casing just set and the main hole section about to be drilled.

Comet Ridge Limited Managing Director, Tor McCaul, said he was very pleased with the results of drilling at Mahalo to date. He said “The first three wells have shown good continuity and thickness of coal and two of the wells have very good to excellent permeability across the main reservoir section”.

Comet Ridge has a 35% interest in ATP 337P Mahalo, having divested a 5% interest in the asset in late 2011. Under the terms of that divestment, Stanwell Corporation Limited will fund Comet Ridge’s future expenditure at ATP 337P Mahalo up to A$8 million. Stanwell Corporation has an option to purchase Comet Ridge’s equity in the Mahalo block, based on 2P reserves booked, under an agreement initially announced in September 2011.

Equity participants in ATP 337P Mahalo are Comet Ridge 35%, Stanwell Corporation 5% (with an option to increase), Australia Pacific LNG 30% and Santos 30%.

==> picture [139 x 41] 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: Dianne Monopoli Principal Consultant Three Plus dianne@threeplus.com.au +61 7 3503 5700

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 four 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 35% 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	ContingentResource(PJ)	ProspectiveResource(PJ)
Gunn Project Area(ATP 744P)	Galilee Basin, Qld	1,870	597*
Mahalo Block(ATP 337P)	Bowen Basin, Qld	387	-
PEL 427 and PEL 428	Northern NSW	231	1,022
PMP 50100 and PEP 50279	West Coast,Sth Island,NZ	244	-
Total		2,732	1,619

*Where the auditor has detailed Prospective Resources in a range (low, middle and high) the mid-range case has been listed in the table.

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 2012, with additional exploration and appraisal work planned for the Galilee Basin and northern NSW.

==> picture [443 x 138] 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