COMET RIDGE LIMITED — Capital/Financing Update 2012

Jul 26, 2012

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27 July 2012

COMET RIDGE ENTERS STRATEGIC GALILEE BASIN FARM-IN

• Comet Ridge farms-in to additional 825 km[2] of acreage in key area of the Galilee Basin

• Farm-in area expands Comet Ridge’s interest in the Gunn Project Area further to the east

• Three Stage farm-in to earn up to 75% of the Lake Galilee Farm-in Area (within ATP 1015P)

• Comet Ridge plans to drill two exploration wells in 4[th ] quarter 2012 to complete Stage 1

Coal seam gas explorer Comet Ridge Limited (ASX:COI) has signed a three-Stage farm-in agreement with Queensland Energy Resources Pty Limited (QER) to earn up to 75% of the Lake Galilee Farm-in Area . The farm-in area is located in the south east of permit ATP 1015P, between the east and west parts of Comet Ridge’s ATP 744P, in which Comet Ridge has a 100% interest (refer to map, next page).

The Lake Galilee Farm-in Area consists of two separate areas totalling approximately 825 km[2] . These areas represent 21% of QER’s total permit area in ATP 1015P. QER will retain a 100% interest in the remaining area of ATP 1015P, while Comet Ridge will become Operator of the Lake Galilee Farm-in Area .

Comet Ridge Managing Director, Tor McCaul commented “This transaction creates a continuous acreage position across our key area in the Galilee Basin, expanding the Gunn Project Area to the east and allowing it to be appraised as a single project.

“We are very keen to commence exploration and appraisal drilling in the Lake Galilee Farm-in Area to better understand the eastern extent of our Gunn Project Area.”

The keys terms of the three-Stage Lake Galilee Farm-in Agreement are:

Step	Interest Acquired	Work Program
Stage 1	20%	Drill two wells by30 Nov 2012
Stage 2	30%	Drill additional three wells by30 Nov 2013
Stage 3	25%	Drill additional four wells and develop pilot by30 Nov 2014
Total	75%	9 wells including pilot

Upon completion of each Stage of the farm-in, Comet Ridge has the option to proceed with the subsequent Stage.

In October 2011 Comet Ridge and QER each completed significant seismic acquisition programmes in this part of the basin, with the results being shared under the terms of a data sharing agreement. When combined with the historical seismic surveys acquired in the area, the data gives a detailed understanding of the stratigraphy of the Gunn Project Area, the Lake Galilee Farm-in Area and the area extending towards the eastern boundary of ATP 744P.

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

Following this, in early 2012, Comet Ridge completed a geophysical interpretation of a major Airborne Gravity survey over the eastern part of Galilee Basin. The survey was acquired by Geoscience Australia and the Geological Survey of Queensland.

Comet Ridge has now integrated both seismic and gravity surveys into its geological models.

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Comet Ridge plans a three well exploration and appraisal drilling programme in this part of the Galilee Basin for 2012, which will further appraise the extent and characteristics of the coals in the Gunn Project Area. 3C Contingent Resources in the Gunn Project Area currently stand at 1870 PJ.

All permitting and approvals are progressing to schedule, with the first well expected to spud in September.

One pre-pilot production well (Gunn 2) is planned in ATP 744P with two core wells in the Lake Galilee Farm-in Area which will meet Stage 1 farm-in commitments. Two of these wells will provide valuable information across the Gunn Project Area, while the third and most easterly well will test a different play concept.

Mr McCaul added “Comet Ridge has entered a new phase, with appraisal drilling recently commenced at ATP 337P Mahalo, and planned to commence in the Galilee Basin, both in Queensland”.

“The team has worked very hard over the past two years on improving Comet Ridge’s technical understanding across its portfolio, including the Galilee Basin and ATP 337P Mahalo in Queensland, the Gunnedah Basin in New South Wales, and in New Zealand, where significant gas resource bookings have been made over all of these areas.

“This technical work has also led to some strategic transactions, including the farm-in we are announcing today, the recent Gunnedah Basin acquisition announced on 21 June, and the Davidson Prospecting acquisition, also in the Gunnedah Basin, in late 2010.”

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“The part divestment of ATP 337P Mahalo to the Queensland Government owned Stanwell Corporation Limited at the end of 2011, was also significant in funding the Mahalo work programme this year while also retaining substantial upside for the company,” he said.

Comet Ridge is well positioned for growth in 2012/13, with three wells planned in the Galilee Basin, and up to 12 wells (including two pilots) at Mahalo.

Comet Ridge has had discussions with several parties to examine the feasibility of developing gas fired electricity generation to supply the significant Galilee Basin coal mine province being proposed along the eastern boundary of Comet Ridge’s ATP 744P. The development of these coal mines is expected to result in the construction of high voltage power transmission infrastructure from the East Coast power network to the edge of ATP 744P, allowing locally generated electricity to be supplied directly to the coal mines or into the power network.

Supplying gas to domestic gas customers via Queensland’s gas network, and/or to the Gladstone LNG projects, are longer term commercial options that are also under consideration.

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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

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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	Contingent Resource(PJ)	Prospective Resource(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.

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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