COMET RIDGE LIMITED — Interim / Quarterly Report 2021

Apr 29, 2021

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ASX Announcement

30 April 2021

March 2021 Quarterly Activities Report

Highlights

• of 2021, regarding the structure of the Mahalo Joint Venture and Comet Ridge’s plans for significant progress in the Mahalo Hub Area.

• Comet Ridge expects to be able to further update the market on this progress over the coming weeks.

• Comet Ridge is posi�oning the mul�-block Mahalo Gas Hub to provide meaningful gas volumes into the east coast gas market, where southern produc�on is forecast to commence declining.

• (to be ATP 2063).

• R&D tax incen�ve for FY20 expenditure of $1.961 million received in January 2021.

East Coast Gas Market

ACCC afrms looming southern gas supply clif

EnergyQuest noted in its December 2020 report, that as the months go by, southern Australia edges closer to its gas produc�on supply cliff. EnergyQuest stated “produc�on from offshore Victoria, which supplies not only Victoria but also Tasmania and a substan�al share of NSW and South Australian demand, is forecast to decline from around 2023. It might be later, like 2024, but it might also be earlier like 2022”.

According to the Commission, east coast gas supply is expected to see a shor�all of as much as 30 PJ by 2024 in the southern states. The ACCC report lists six projects approved for development and due to come online prior to the projected shor�all in supply. Of the six projects, the Gippsland Basin JV West Barracouta project operated by ExxonMobil is the largest and the only project located in the south. It is due to start produc�on this year and is already included in EnergyQuest’s forecast of a shor�all. The other five projects are located in the Bowen and Surat basins and only supply rela�vely small volumes of gas.

A compelling east coast gas play

Level 3, 410 Queen Street Brisbane Queensland 4000 GPO Box 798 Brisbane Qld 4001 Phone +61 7 3221 3661 Email: comet@cometridge.com.au cometridge.com.au

Comet Ridge Limited | ABN 47 106 092 577 | ASX: COI

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The ACCC notes that produc�on from the 2P reserves associated with these new projects has also already been factored into its long-term supply outlook when calcula�ng the poten�al shor�all in supply from 2P reserves. Addi�onal supply is likely to be required to avoid the projected shor�all in the southern states from either:

• an LNG import terminal located in the southern states; or

• domes�c sources in the north (i.e., the Cooper Basin, Northern Territory or Queensland).

The ACCC notes correctly that if more supply is to come from the north, then further investment in northsouth transporta�on capacity is likely to be required. While op�ons are being explored to expand this transporta�on capacity, there are currently no firm plans to do so.

EnergyQuest also notes in its March 2021 report that progress on east coast development projects is mixed, par�cularly in the southern states. It is possible that EnergyQuest’s produc�on forecasts and those of ACCC are op�mis�c and the supply shor�all in the southern states occurs sooner than forecast.

Implica�ons for Comet Ridge

Given the increasing need for further gas supply required into the East Coast Gas Market to replace declining southern produc�on, Comet Ridge believes the Mahalo Gas Hub is well posi�oned to come on-line and deliver meaningful volumes of gas into that market, at a cri�cal �me. Comet Ridge believes the unit cost of Mahalo Gas Hub produc�on from the shallow ini�al produc�on fairway is very compe��ve with other new addi�onal supply sources.

Mahalo Gas Hub Area, Bowen Basin, QLD

Comet Ridge holds equity in four blocks in the Mahalo Hub Area, with three of these currently held at 100% equity following recent successful Queensland Government bidding rounds. The total net area for Comet Ridge across the Mahalo Hub is substan�al at 1250 km[2] with a large part of these blocks si�ng over the highest produc�vity Mahalo shallow fairway that saw the Mira 6 well in the Mahalo Gas Project produce 1.4 MMcfd (million standard cubic feet of gas per day) from a horizontal pilot well drilled only 924 metres in coal. Development wells over the Mahalo Hub Area are planned to be drilled between 1,500 to 1,800 metres in coal, inferring development produc�on rates, based on Comet Ridge geological modelling, of 2.3 MMcfd to 2.7 MMcfd per well in similar quality coal reservoirs.

Mahalo Gas Project (PL 1082 and 1083) – (Comet Ridge currently 40%)

gas project and when in produc�on, will provide the scale and infrastructure to underpin development of Comet Ridge’s 100% owned blocks in the Mahalo Gas Hub. The Mahalo Gas Project, focussed ini�ally on the shallow fairway in PL 1082 and 1083 ( see Figure 1 ), is currently a joint venture between Comet Ridge (40%), Santos (30%) and APLNG (30%).

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in assessing the best way to take the Mahalo Gas Project forward, in order to meet the �ming and value expecta�ons of each of the par�es in the JV. Comet Ridge also needs to consider how to best maximise value from the three 100% blocks (total 885 km[2] ) that lie immediately north of the Mahalo Gas Project, that can benefit from a combined development concept to drive down unit costs and increase the total gas o�ake from the combined Mahalo Hub Area.

the Mahalo Joint Venture and plans for progress in the Mahalo Hub Area. Comet Ridge expects to be able to further update the market (in some detail) on this progress over the coming weeks.

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Figure 1 – Comet Ridge’s growing Mahalo Gas Hub Area, with initial development focus in PL 1082 and PL 1083

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A summary of each of the permits in the Mahalo Gas Hub and their current status is shown in Table 1 below.

Project name	Permit	COI % interest	Area (km2)	Status
Mahalo Gas Project (CSG)	PL 1082, 1083; PCA 302, 303, 304	40%	911	Development ready, Government approved, pending JV FID pathway
Mahalo North (CSG)	ATP 2048	100%	450	Gas resources and 2021 appraisal program being fnalised
Mahalo East (CSG)	ATP 2061	100%	97	ATP awarded, data interpreta�on and appraisal program planning ongoing
Mahalo Far East (CSG & conven�onal gas)	PLR 2020-1-2 (to become ATP 2063)	100%	338	Na�ve �tle agreement executed in early April, ATP award is fnal step

Table 1 – Comet Ridge permit and equity posi�on in the large Mahalo Gas Hub

Mahalo North (ATP 2048) – (Comet Ridge 100%)

During the quarter, Comet Ridge con�nued detailed geological modelling work for the Mahalo North project (ATP 2048) which lies over the highest produc�vity Mahalo shallow fairway to the northwest of the Mahalo Gas Project. This work con�nues to enhance Comet Ridge’s view of the high quality of the 100% block. Analysis of development op�ons indicates that maximum value for Comet Ridge is achieved via connec�on to the main Mahalo Gas Project and expanding the throughput of the Mahalo Gas plant and pipeline to accommodate the numerous produc�on well loca�ons available in Mahalo North (ATP 2048).

Galilee Basin, Qld - ATP 743, 744 & 1015 (Comet Ridge 100% in “Shallows”, 70% in “Deeps”)

Poten�al Commercial Area applica�ons

Ac�vi�es in the Galilee Basin projects in the current quarter have focused on technical work that will underpin securing the large prospec�ve CSG and conven�onal resource areas (see Figure 2 below) with Poten�al Commercial Area (PCA) tenure applica�ons to the Queensland Government.

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Figure 2 – Comet Ridge’s extensive Galilee Basin posi�on in both “Shallows” for coal targets and “Deeps” for conven�onal targets

Upda�ng and quan�fying very large CSG resource poten�al

CSG Project Area across ATP 744 and ATP 1015. This area is in excess of 2100 km[2] in total with an ini�al CSG focus area of approximately 950 km[2] . Refer to Figure 3 below.

This upgraded model will be used to iden�fy development op�ons using geological characteris�cs and concept well designs. The geological model will also underpin a revised CSG resource assessment for the Gunn CSG Project area.

During the quarter, amendments to work programmes were submited to and then approved by the Queensland Department of Resources for each of ATP 743, ATP 744 & ATP 1015. This is a first step in the process of securing Poten�al Commercial Areas (PCAs) for the Galilee Basin.

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Figure 3 – Ini�al CSG focus area of approximately 950 km[2 ] across ATP 744 and ATP 1015 in the Galilee Basin.

Corporate Activities

Cash Posi�on

As at 31 March 2021, Comet Ridge had $4.241m cash on hand (unaudited).

Payments to Related Par�es

The aggregate value of payments to related par�es and their associates of $241k for the March quarter (shown in item 6.1 of the atached Quarterly Cashflow Report) relates to the salary of the Managing Director and fees paid to Directors (including PAYG and superannua�on payments made on their behalf).

Shares and Performance Rights Posi�on

The total number of shares on issue at 31 March 2021 is 791,211,719.

The Company also has 11,580,000 performance rights on issue at 31 March 2021.

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By Authority of Board per: Tor McCaul, Managing Director

For more informa�on or photos:

Tor McCaul Phil Hicks Managing Director Chief Financial Officer Phone +61 7 3221 3661 Phone +61 7 3221 3661 tor.mccaul@cometridge.com.au phil.hicks@cometridge.com.au

About Comet Ridge

Comet Ridge Limited (ASX: COI) is a publicly-listed Australian energy company focused on the development of gas resources for the east coast Australian market. The company has tenement interests and a suite of prospec�ve projects in Queensland and New South Wales. Our flagship Mahalo Gas Hub projects are low cost, sales spec gas blocks, close to Gladstone. Our explora�on assets in the Galilee and Gunnedah basins offer further upside amid increasing domes�c and interna�onal demand for gas as a source of cleaner energy.

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Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Rule 5.5

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Name of entity

COMET RIDGE LIMITED

ABN

Quarter ended (“current quarter”)

47 106 092 577 31 March 2021

Consolidated statement of cash flows	Current quarter $A’000	Year to date (9 months) $A’000
1. Cash flows from operating activities
1.1 1.2 (a) (b) development (c) production (d) staff costs (e) 1.3 1.4 1.5 1.6 1.7 Government grants and tax incentives (refer to note 6) 1.8 1.9 Net cash from / (used in) operating activities Income taxes paid Other - JV recoveries Receipts from customers Payments for: Dividends received (see note 3) administration and corporate costs Interest received Interest and other costs of finance paid exploration & evaluation	- (5) - - (120) (346) - 1 - - - (35)	- (8) - - (614) (1,048) - 17 - - - 21
	(505)	(1,632)
2. Cash flows from investing activities
2.1 (a) entities (b) tenements (c) property, plant and equipment (d) exploration & evaluation (refer to note 6) (e) investments (f) other non-current assets 2.2 (a) entities (b) tenements (c) property, plant and equipment (d) investments (e) other non-current assets 2.3 2.4 Dividends received (see note 3) 2.5 2.6 Net cash from / (used in) investing activities Payments to acquire or for: Proceeds from the disposal of: Cash flows from loans to other entities Other (Restricted cash term deposits)	- - - 1,601 - - - - - - - - - -	- - (1) 1,412 - - - - - - - - - (172)
	1 601	1 239

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms

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Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter $A’000	Year to date (9 months) $A’000
3.	Cash flows from financing activities
3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10	Proceeds from exercise of options Transaction costs related to issues of equity securities or convertible debt securities Proceeds from borrowings Proceeds from issues of equity securities (excluding convertible debt securities) Proceeds from issue of convertible debt securities Repayment of borrowings Transaction costs related to loans and borrowings Dividends paid Other (provide details if material) Net cash from / (used in) financing activities	- - - - - - - - -	- - - (2) - - - - -
		-	(2)
4.	Net increase / (decrease) in cash and cash equivalents for the period
4.1 4.2 4.3 4.4 4.5 4.6	Net cash from / (used in) financing activities (item 3.10 above) Effect of movement in exchange rates on cash held Cash and cash equivalents at end of period - refer to end note regarding post quarter cash Cash and cash equivalents at beginning of period Net cash from / (used in) operating activities (item 1.9 above) Net cash from / (used in) investing activities (item 2.6 above)	3,145 (505) 1,601 - -	4,636 (1,632) 1,239 (2) -
		4,241	4,241
5.	Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 5.2 5.3 5.4	Bank balances Call Deposits Bank overdrafts Other (provide details)	4,241	3,145
		-	-
		-	-
		-	-
5.5	Cash and cash equivalents at end of quarter (should equal item 4.6 above) - refer to end note regarding post quarter cash	4,241	3,145
6.	Payments to related parties of the entity and their associates	Current quarter $A’000
6.1 6.2 Note: if	Aggregate amount of payments to related parties and their associates included in item 1 241 Aggregate amount of payments to related parties and their associates included in item 2 - any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments.	241
		-
7.	Note: the term "facility" includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the source of finance available to the entity. Financing facilities	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
7.1 7.2 7.3 7.4 7.5 7.6	Total financing facilities Unused financing facilities available at quarter end Loan facilities Credit standby arrangements Other (please specify) Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have not been enterested into or are proposed to be entered into after the quarter end, include a note providing details of those facilities as well.

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms

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Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report

8.	Estimated cash available for future operating activities	$A’000
8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8	- Estimated quarters of funding available (item 8.6 divided by item 8.3) If item 8.7 is less than 2 quarters, please provide answers to the following questions: 4,241 N/A Net cash from / (used in) operating activities (item 1.9) (505) Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as "N/A". Otherwise a figure for the estimated quarters of funding available must be included in item 8.7. Total available funding (item 8.4 + item 8.5) 8.8.1 Does the entity expect that it will continue to have the current level of net operating cash flows from the time being and, if not, why not? (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) 1,601 Total relevant outgoings (item 8.1 + item 8.2) 1,096 Cash and cash equivalents at quarter end (item 4.6) 4,241 Unused finance facilities available at quarter end (item 7.5)	(505)
		1,601
		1,096
		4,241
		-
		4,241
		N/A
	Answer:
	8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?
	Answer:
	8.8.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?
	Answer:
	Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered.

Compliance statement

1. This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

2.

This statement gives a true and fair view of the matters disclosed.

Date: 30/04/2021 Authorised by: ________ By the Authority of the Board

Print Name: Stephen Rodgers Company Secretary

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [name of board committee – eg Audit and Risk Committee] ”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”.

5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations , the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

6. R&D tax incentives received by Comet Ridge were previously noted in item 1.7 and have been restated to item 2.1(d) consistent with the accounting treatment in the FY2020 financial statements. For the March 2021 quarter, item 2.1(d) includes $1.961m of R&D tax incentive receipts and $360k of exploration and evaluation expenditure. For year-to-date, item 2.1(d) includes $3.254m of R&D tax incentive receipts and $1.842m of exploration and evaluation expenditure.

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms

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