COMET RIDGE LIMITED — Interim / Quarterly Report 2010

Jul 29, 2010

ASX ANNOUNCEMENT

Comet Ridge Limited Quarterly Report

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Quarter ended 30 June 2010

Highlights:

• Three wells drilled in Galilee Basin, central Queensland, all intersecting significant section of coal (up to 24 metres) and shale (up to 22 metres)

• Drilling in PMP50100 (Greymouth Block) intersects significant section of Paparoa Formation coal

• Completion of Phase 2 Farmin in PMP 50100 increasing Comet’s interest in the permit to 50%

• Comet Ridge Limited Management Team further strengthened with addition of Chief Commercial Officer

Australian Permits:

ATP 743P and ATP 744P, Queensland - Galilee Basin (Comet Ridge 100%):-

Three wells were drilled in the central and western section of ATP 744P during the quarter. Each of these intersected a significant section of Betts Creek Beds coal and shale, with a large volume of core recovered for laboratory analysis and a total of 8 drillstem tests (DST) conducted across these three wells. The table below summarises key results from these three wells:

Well	Coal	Shale	DSTs	Total Depth
Montani 1	24m	22m	1	938m
Hergenrother 1	16m	12m	4	929m
Gunn 1	17m	10m	3	1031m

Gunn 1 was the last in the sequence and at the conclusion of drilling this well the rig was released.

With the completion of the core well drilling campaign, Comet Ridge is now moving from a data acquisition phase to data analysis, interpretation and integration which will take a number of months to complete. The entire Galilee core well drilling programme included five wells, more than 1000 metres

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ASX CODE: COI

Level 1 283 Elizabeth Street Brisbane Qld 4000 Phone: +61 7 3221 3661 Facsimile: +61 7 3221 3668

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

ASX ANNOUNCEMENT

of core was cut and 10 DSTs were run to measure the permeability of the coals. Integration of the complete set of acquired data will include an update to Comet Ridge’s geologic model for the Galilee Basin and a general assessment of the resource potential. A decision on whether to proceed to a pilot scheme, and where that scheme should be located, will be made when the integration work is complete.

The area around the Gunn 1 and Hergenrother 1 wells, and further south, is currently thought to be the area most likely to be targeted in a pilot scheme. Technical analysis of all the DSTs is currently underway, and will require detailed core analysis to be completed before the DST analysis can be finalised. Several of the intervals tested indicate encouraging permeability from the Betts Creek Beds coal seams, however formal DST analysis will need to be completed before estimates of longer term production potential from these coals can be made.

In terms of gas content from the Betts Creek coals, desorption laboratory analysis leading to total raw gas estimates from the later wells is still ongoing given that the drilling programme has only recently finished. Results to date from the Hergenrother 1 and Gunn 1 wells show desorbed gas levels of up to approximately 4 m3/t, which is consistent with gas content levels reported by other operators in the southern portion of the Galilee Basin. The laboratory work will continue so that final corrected gas content numbers will be established for each of the wells drilled and will be adjusted for ash content and moisture, which is standard procedure.

Comet Ridge may also trade well data with other Galilee Basin operators and this additional data will be used to further improve the companies’ general level of geologic understanding in the basin.

ATP 337 (Mahalo), Queensland – Bowen Basin (Comet Ridge 40%):-

Comet Ridge views this block as having significant resource potential. The Company intends to support an expanded exploration effort, particularly in the northern section of the block where the coals exhibit the greatest thickness and potential for commercial development. Work commitments have been met and studies work by the Operator is continuing. The joint venture is expected to meet in August to receive an update on progress and to commence firming up drilling plans for this block.

PEL 427 and PEL 428 – New South Wales (Comet Ridge 25% & 20%):-

In PEL 427, the NSW Government approved the combination of work commitments from Years 2 and 3 which will require acquisition of 75km of new seismic and the drilling of one core well by May 2011. This well is likely to be drilled in the Bellata Trough area in the southeast of the permit where the key Maules Creek and Black Jack Formations are likely to be intersected. Both of these formations are prospective to the south of PEL 427.

In PEL 428, Year 1 and 2 work commitments have been met with the current licence term set to expire in September and an extension application currently being prepared for Industry and Investment NSW.

New Zealand Permits:

PMP 50100, Greymouth, West Coast (Comet Ridge Group 50% increasing to 100%):-

Two wells were drilled in the Greymouth Block during the quarter. The first well, Macdonald 4P, was drilled to target the shallower Brunner Formation coals, and this well also had a significant exploration component as it was designed to drill onwards to the deeper Paparoa Formation coals. The Paparoa Formation coals had not previously been intersected in this area of the block.

Level 1 283 Elizabeth Street Brisbane Qld 4000 Phone: +61 7 3221 3661 Facsimile: +61 7 3221 3668	ASX CODE: COI
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Comet Ridge Limited ABN 47 106 092 577 E-mail: comet@cometridge.com.au Website: www.cometridge.com.au

ASX ANNOUNCEMENT

The Macdonald 4P well intersected 5 metres of coal in the Brunner Formation and a significant 13 metres of coal in the Paparoa Formation before TD was called by the joint venture at 1263 metres. At that point, basement had not been reached and Comet Ridge expects, that based on correlation with other areas of the block, more Paparoa Formation coal is likely to have been encountered before basement.

Testing of the deep Paparoa coals in Macdonald 4P was undertaken, indicating poor permeability at depth and the well was completed in the Brunner Formation.

The Macdonald 6P well was then drilled to a total depth of 822 metres and was tested in the Brunner Formation where 5.4 metres of coal was encountered, confirming lateral continuity of the Brunner Formation coals. Unfortunately the Brunner Formation coals in this location exhibited low permeability and the joint venture decided not to run the completion in this well and to plug and abandon.

Both Brunner and Paparoa Formation coals in Macdonald 4P and 6P were encountered at deeper levels than originally prognosed. This increased depth has contributed to the poorer than expected permeability in the Brunner Formation coals and future wells may need to focus on coals at shallower levels.

Of significance, however, in assessing the coal seam gas potential of the Greymouth Block is the significant section of Paparoa coal that was intersected in the Macdonald 4P well, giving an indication that the Paparoa Formation coal may be more extensive across the block than previously thought. Data integration and mapping work will now be undertaken to identify drilling targets where the Paparoa Formation coals section is likely to be significant at a substantially shallower depth.

During the quarter, Comet Ridge Limited announced that its wholly owned subsidiary, Chartwell NZ Pty Limited, had completed the requirements of Phase 2 of the Farm-in Agreement and subsequently earned a further 30% equity in the permit to take the Chartwell NZ Pty Limited equity in PMP 50100 to 50%.

After the end of the quarter, and prior to the new permit year commencing on 27 July, Macdonald Investments Limited advised it would withdraw from the permit. Chartwell NZ Pty Limited has accepted the assignment of this equity and is moving to 100% equity.

PEP 50279 & PEP 50280, West Coast & North Waikato Regions (Comet Ridge Group 100%):-

Airborne Geophysics:

Interpretation of the approximately 7,000 sq km of airborne magnetic and radiometric data is complete. This information is being integrated with the existing dataset to aid in the definition of the regional coal basins. The results of this work are positive with confirmation and further refinement of areas within the North Waikato, and the imaging of major sub-basins within the West Coast. Planning is underway for the airborne gravity surveying which is scheduled to be acquired during the 2010/11 summer season.

Seismic Data, West Coast:

Interpretation of the recently received seismic data from within the West Coast is underway. To date, the new data has helped a great deal with the understanding of the Reefton coalfield. Further work is underway to integrate this data with the existing knowledge of the wider West Coast coal basins.

USA - Comet Ridge Resources LLC, (Comet Ridge 17.257%)

Comet Ridge Resources LLC commenced a multi-well drilling program in the Florence area in southern Colorado as planned in May. Six wells have been completed for production and production testing is underway. Total oil production is averaging approximately 900 barrels per day from 10 producers.

Level 1 283 Elizabeth Street Brisbane Qld 4000 Phone: +61 7 3221 3661 Facsimile: +61 7 3221 3668	ASX CODE: COI
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Comet Ridge Limited ABN 47 106 092 577 E-mail: comet@cometridge.com.au Website: www.cometridge.com.au

ASX ANNOUNCEMENT

Prospect mapping continues at Grays Harbor.

During the period Comet Ridge Limited elected not to pay a substantial cash call, thereby slightly diluting equity in Comet Ridge Resources LLC to 17.257%.

Corporate

Chief Commercial Officer

Comet Ridge Limited has appointed Mr Martin Lee to the newly created role of Chief Commercial Officer as part of its strategy to pursue growth opportunities.

Mr Lee’s appointment was effective from the end of the quarter and he is based in the corporate head office in Brisbane.

He brings considerable and broad experience in LNG, domestic gas sales, mergers and acquisition and upstream exploration that will be invaluable to Comet Ridge over the next few years. Mr Lee holds degrees in both Engineering and Economics from Monash University and has 18 years’ experience in the broader oil and gas industry, primarily in commercial roles. He commenced his career with Woodside, working on the North West Shelf LNG project where he was involved in all commercial aspects of the business.

Mr Lee later spent several years working in London for Hardy Oil and Gas and Petro-Canada on projects in the North Sea, North Africa, North America, the Middle East, South East Asia and Australia. This was focussed most notably on LNG and domestic gas projects, merger and acquisition opportunities, and investment decision making for oil and gas exploration.

Immediately before joining Comet Ridge, Mr Lee worked as a consultant to Santos on their Gladstone LNG Coal Seam Gas project.

COMET RIDGE LIMITED - OVERVIEW

Comet Ridge Limited is a Brisbane based, ASX-listed (ASX Code: COI) coal seam gas (CSG) exploration and development company with a focus on Queensland, NSW and New Zealand. The Company also has exposure to prospective conventional oil and gas fields in the United States via a joint venture.

The Company has several projects in various stages of maturity. Comet Ridge Limited plans to grow shareholder value through the establishment and development of gas reserves from the significant resource potential of its projects.

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Tor McCaul Managing Director

ASX CODE: COI

Level 1 283 Elizabeth Street Brisbane Qld 4000 Phone: +61 7 3221 3661 Facsimile: +61 7 3221 3668

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

ASX ANNOUNCEMENT

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 0412 846 202

ASX CODE: COI

Level 1 283 Elizabeth Street Brisbane Qld 4000 Phone: +61 7 3221 3661 Facsimile: +61 7 3221 3668

Page 5

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