COMET RIDGE LIMITED — Interim / Quarterly Report 2011

Jan 30, 2011

ASX ANNOUNCEMENT

Comet Ridge Limited Quarterly Report

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Quarter ended 31 December 2010

Highlights:

• Advances across key Coal Seam Gas (CSG) project areas in Queensland, New South Wales and New Zealand

• Significant Contingent Resources booked in the Gunn Project Area in the 100%-owned Galilee Basin project in ATP 744P

• Contingent Resources booked at Mahalo ATP 337P (Santos-APLNG Joint Venture) in which COI has a 40% interest

• Completed stage one of integration and interpretation of NZ regional airborne and radiometric data advancing the upcoming Airborne Gravity Gradiometry survey planned for early 2011

• Binding Heads of Agreement (HOA) signed to increase interest in permit PEL 428 to 40% and licence extended for two years

• Comet Ridge Limited Management Team further strengthened with the addition of Chief Geoscientist with substantial US CSG experience

Australian Permits:

The recent flooding in eastern Australia has had no direct impact on Comet Ridge Limited as the company had no field operations underway in eastern Australia during December and January. It is expected that as 2011 progresses, seismic and drilling contractors across the industry may need to initially clear a backlog of work before undertaking new work and hence it is possible that field work planned for 2011 may start later in 2011 than initially planned. Comet Ridge will continue to evaluate this situation and adjust our operations accordingly.

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

In November, Comet Ridge announced a Contingent Resource Certification of 67 Petajoules (PJ) of 2C and 1,870 PJ of 3C Resources (recoverable) for the Gunn Project Area of ATP 744P, which is held 100% by Comet Ridge. The Gunn Project Area incorporates the south-western leg of ATP 744P where the Gunn 1 and Hergenrother 1 wells were recently drilled and tested.

In addition to the Contingent Resources detailed above, Comet Ridge has also certified 597 PJ of Prospective Resources in the Gunn Project Area.

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

The Contingent and Prospective Resources (recoverable) announced by Comet Ridge are detailed below:

ATP 744P Resources(PJ)	COI Contingent Resources	Prospective
	Interest 2C 3C	Resources
Gunn Project Area(part of ATP 744P)	100% 67 1,870	597

Isotherm testing has been completed on the two wells in the Gunn Project Area (Hergenrother 1 and Gunn 1) which have shown average saturation levels between 55 and 70%. This is consistent with data from elsewhere in the Galilee Basin.

A recent regional mapping exercise has identified a Structural Nose in the Gunn Project Area. Comet Ridge’s primary focus is now on better understanding the structural features in the Gunn Project Area ahead of the next drilling campaign.

This is likely to involve seismic acquisition in 2011 and options are currently being evaluated. Planning for a possible pilot scheme in the Galilee Basin is continuing. Locating the pilot scheme in the optimal structural position is a critical first step in achieving a positive gas production result from the pilot.

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ASX CODE: COI

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

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

ASX ANNOUNCEMENT

ATP 337P (Mahalo) - Bowen Basin, QLD (Comet Ridge 40%)

With the late October 2010 announcement of a significant Contingent Resource Certification in the ATP 337P Mahalo joint venture (442 PJ of 3C), Comet Ridge is working closely with the Joint Venture partners (Santos QNT Pty Ltd and Australia Pacific LNG Pty Ltd) to plan and progress an appraisal programme for 2011 with the first formal meeting held in January.

The objective of the appraisal programme will be to quickly mature the 2C and 3C Contingent Resources into 2P and 3P reserves. It is likely that the programme will consist of at least one pilot project and may include one or more core wells to provide better understanding over the areas of the permit where little data currently exists.

The 2011 work programme is being finalised.

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PEL 427 and PEL 428 - Gunnedah Basin, NSW (Comet Ridge 25% & 20%)

As reported in the during the quarter, Comet Ridge is increasing its stake in this key NSW Coal Seam Gas basin with the announcement on 14 October that it had signed a Binding Heads of Agreement (HOA) to acquire Greenpower Energy Limited’s (ASX:GPP) 20% interest in permit PEL 428.

The transaction will lift Comet Ridge’s stake to 40%, which has potential for both coal seam and conventional gas in the northern NSW basin. The CSG exploration is operated by Joint Venture partner Eastern Star Gas.

In late November, the license for PEL 428 was renewed for a term of two years, with expiry in September 2012.

Exploration activities in both permits are set to increase in 2011 following the Joint Venture approval of the 2011 Work Programme and Budget. In PEL 427, a seismic reprocessing project is under way. To meet permit commitments, a seismic acquisition programme is scheduled for first half of 2011, and a core hole

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

ASX CODE: COI Level 1 283 Elizabeth Street Brisbane Qld 4000 Page 3 Phone: +61 7 3221 3661 Facsimile: +61 7 3221 3668

ASX ANNOUNCEMENT

is scheduled to be drilled soon after the seismic interpretation. The seismic reprocessing and seismic acquisition programmes in PEL 427 are designed to determine an optimum well location in the south east corner of PEL 427 in the Bellata Trough area.

While not a 2011 commitment, the Joint Venture is also planning 64km of seismic acquisition in PEL 428 to benefit from the mobilisation for the seismic which will be obtained in the neighbouring PEL 427. The seismic programme will assist the Joint Venture in identifying CSG and conventional gas targets. The joint venture has a commitment to drill at least one well before September 2012.

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ASX CODE: COI Page 4

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

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

ASX ANNOUNCEMENT

New Zealand Permits:

PMP 50100 - Greymouth, West Coast (Comet Ridge 100%) PEP 50279 – Buller,West Coast (Comet Ridge 100%) PEP 50280 - North Waikato Region (Comet Ridge 100%)

During the quarter, the integration and interpretation of the regional airborne magnetic and radiometric data acquired by COI during the 2009/2010 summer season over its NZ permits was completed. The results of this work were very encouraging with significant new sub-basins being identified within known coal provinces. Mapping of the basement over the permit areas has allowed accurate identification of areas of greatest potential which in turn has enabled planning for the Airborne Gravity Gradiomentry (AGG) survey.

As reported in the last quarterly report, Comet Ridge executed the AGG contract in early October 2010 with Fugro Airborne Surveys Pty Ltd. AGG acquisition is expected to start in early February with the South Island permits surveyed first followed by the North Waikato area. Results of the AGG survey will be incorporated into the regional and prospect studies which will help to rank drilling prospects in each of the permits.

USA

Comet Ridge Resources LLC (Comet Ridge 17.257%)

Oil production from the Florence field averaged 750 barrels per day during the quarter. Technical work is continuing to identify additional targets for drilling in 2011.

Prospect mapping and seismic reprocessing continues at Grays Harbor in Washington State, with the intention of progressing to drilling.

Corporate

Chief Geoscientist

Comet Ridge Limited has appointed a USA CSG specialist, Mr. Keith Reeves, to the newly created role of Chief Geoscientist.

Mr. Reeve’s appointment was effective from the end of the quarter and he has moved from Wyoming to be based in the corporate office in Brisbane.

He brings considerable and broad experience in CSG, which will be invaluable to Comet Ridge over the next several years. Mr. Reeves holds a Bachelor of Science degree in Earth Science from the University of Arkansas and a Master of Science in Geology from Sul Ross State University (West Texas). He has almost 30 years of professional geological experience.

Mr. Reeves has worked in a number of CSG basins around the world, including the Powder River, Big Horn and Williston Basins in the US and in China, Botswana and Canada.

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

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.

Tor McCaul Managing Director

For further information please contact:

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

Media: Rhyll Cronin Principal Consultant 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

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