COMET RIDGE LIMITED — Capital/Financing Update 2012

Jul 22, 2012

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23 July 2012

Mahalo Drilling Programme Operations Update

• Mahalo 3 achieves very positive well results with coal thickness and permeability

• Well cased and suspended to be completed as pilot production well

• Mahalo 6 spudded Sunday 22 July

Coal seam gas explorer Comet Ridge Limited (ASX:COI) is pleased to announce that the Mahalo 3 well, at its ATP 337P Mahalo asset in Queensland’s Bowen Basin, has returned very positive well results in terms of both thickness of coal intersected and permeability, across the main coal reservoir section. The well lies approximately 260km west of Gladstone in central Queensland and was drilled to target the shallow Bandanna Formation.

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The Mahalo 3 well reached a total depth (TD) of 300 metres on Friday 19 July, intersecting a total of approximately eight (8) metres of net coal, with seven (7) metres of this coal in the main CastorPollux seam. The Castor-Pollux is the target of the reserves booking plan currently being executed by the joint venture.

Analysis of flow testing in Mahalo 3, conducted over this main seam, has shown the Castor-Pollux to have sufficient permeability to enable the well to be utilised for pilot production. Accordingly, production casing has been run and cemented in place with the rig being released on Saturday 21 July.

Mahalo 4 was due to be the next well in the four pilot well drilling sequence, however due to unseasonal rainfall in the area, the well drilling sequence has been modified to drill the driest sites first.

Subsequently the rig was moved to Mahalo 6, and this well was spudded at 0530 hrs on Sunday 22 July. Mahalo 6 has a planned TD of 300 metres and is also targeting the Castor-Pollux seam in the Bandana Formation.

Comet Ridge Managing Director, Tor McCaul, said “the joint venture was pleased with the well result and it was a great start to the pilot drilling programme at Mahalo”.

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

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.

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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	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.

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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