COMET RIDGE LIMITED — Investor Presentation 2007

Apr 18, 2007

Attention ASX Company Announcements Platform Lodgement of Open Briefing®

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Level 9 Wesfarmers House 40 The Esplanade, Perth 6000

Date of lodgement: 19-Apr-2007

Title: Open Briefing^®. Comet Ridge. MD Lydyard on Value Drivers

Record of interview:

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Comet Ridge Limited (ASX code: COI & market cap ~A\$30 million) plans to drill several oil and gas exploration wells in the next year, commencing shortly, across its properties in the Rockies and Pacific Northwest regions of USA and in Australia. Can you explain how and why you've acquired the permits in these areas? Why will this approach add value for shareholders?

MD Andy Lydyard

The Company's strategy is to provide maximum leverage to shareholders by focussing on generating our own opportunities, securing large land positions with meaningful interests and, where practical, operating. We have deliberately sought out over-looked areas where current industry activity is low, where there are proven hydrocarbon systems in place (i.e. we want to see oil and gas shows or historic production) and where we can access significant land positions at relatively low cost. We like to "own the play" so that we have some running room to capitalize upon success.

All of our projects are close to pipeline infrastructure or a ready market for oil. Our current project portfolio is focused, but diversified, comprising two main coal seam gas projects, one in Australia (Mahalo) and one in Washington (Vader), conventional oil and gas at Grays Harbor in Washington and unconventional oil in Colorado (Tow Creek/Bear River and Florence).

Comet is planning activity on three of its US projects this year.

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Can you outline the drilling program and the pre-drill estimates across Comet's properties?

MD Andy Lydvard

At Tow Creek, Colorado, we intend to drill the sidetrack the Coal View Unit 31-4 plus at least one other well. We have, or will soon obtain, permits on another 3 or 4 locations. Each well is targeting 200,000 to 500,000 barrels of oil.

In the Florence Field, Colorado, we are in the process of permitting an 8 sq mile 3D survey. Comet Ridge and its partners control a large part of the old field and expect to drill 3 wells this year. Each will be targeting 100,000 barrels, but will more importantly prove up the concept that this historic field (past production in excess of 15 MMBO) can be successfully redeveloped in the main pay zones and that the deeper zones can also be developed.

In southern Washington, drilling is about to commence on the Vader project where shallow coals and conventional gas sands are being targeted. We are planning to drill 4 to 5 wells commencing in the next week or two. These wells are designed to delineate a significant coal seam gas resource $-$ potentially in excess of 100 BCF on our existing acreage position - and additional acreage is being acquired.

The "crown jewel" in the portfolio is the Grays Harbor project in western Washington. We are in the process of laying out an extensive 2D seismic program to detail a number of the 39 targets we have mapped so far. A number of these structures have the potential to hold in excess of 100 BCF, so Grays Harbor is potentially a very significant project for Comet Ridge and its shareholders.

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How would you rank your projects in terms of potential value to shareholders? How do you assess the value of each project?

MD Andy Lydyard

We have undertaken economic modelling which has demonstrated that, in the event that our exploration concepts are proven correct, each of our projects offers shareholders the potential for significant returns.

Of the US projects, Grays Harbor probably offers the greatest upside. We have conducted a detailed resource assessment on the basin and have determined that the basin offers a P50 resource potential of around 1.7 TCF with a blue sky upside in excess of 6 TCF. These are extraordinary figures and Comet Ridge owns this play 100%. A potential economic value of a 100 BCF discovery at Grays Harbor is assessed to be around US\$115 million (PV10%) using reasonable assumptions for flow rates and well costs.

We have run economics on the Vader coal seam gas play assuming that a 400 well development producing around 140 BCF (46 BCF net to Comet Ridge) occurs. A project of this magnitude could be supported on our existing acreage position with our share (40%) being potentially worth in excess of US\$60 million.

Our oil plays at Tow Creek/Bear River and Florence also offer significant potential - perhaps 5 to 10 MMBO net to Comet Ridge if our concepts prove correct. Each well producing 350,000 barrels is assessed to be worth around US\$1 million net to Comet Ridge, so assuming that we do indeed prove up the 5 MMBO range over time, the fractured oil play could generate around US\$15 to \$20 million of shareholder value.

In addition, we maintain a 40% interest in the Mahalo project in Oueensland. The Operator, Santos, has assessed the in-ground resource potential of this project to be between 180 BCF and 990 BCF with a P50 case of 400 BCF. Assuming only a 50% recovery, our share of the P50 potentially recoverable gas is around 80 BCF and that could be worth around A\$40 million to shareholders based on an in-situ value of A\$0.50 per MCF.

I think you can see that our stated objective of providing shareholders significant leverage is being vigorously pursued. If all of the above exploration concepts were to work we'd add very significant value for shareholders.

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In broad terms, when might Comet book reserves for these projects and potentially move into oil and gas production?

MD Andy Lydvard

We are optimistic and are planning on seeing production and reserves at Tow Creek and Florence this year. There is also a good chance that we can establish a significant gas resource at Vader this year.

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What underpins your pre-drill estimates?

MD Andy Lydvard

We generate pre-drill estimates in a number of ways, but usually they are based on analogues and detailed geological, geophysical analysis. In the US we can access vast amounts of digital data which we can quickly map using our geological mapping systems. When we have it, we typically integrate available seismic and other geophysical data such as magnetics and gravity. For Grays Harbor we have conducted detailed resource (volume) and risk assessments using a widely used industry risk analysis program.

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You have moved to Denver, Colorado which underscores your commitment to Comet's US properties. What are some of the advantages and disadvantages in operating in the US oil and gas industry?

MD Andy Lydvard

The US oil and gas business is ferociously competitive, but the rich oil and gas endowment, diversity of productive basins and plays, strong product prices, availability of services country-wide and extensive infrastructure make it a favourable environment in which to compete. After spending half my career in the US and having been fortunate to be part of building a couple of significant oil and gas businesses in America, I have seen how rapidly shareholder wealth can be created. The US compares favourably with Australia on virtually all fronts.

The main disadvantage is the competition for people and services and the phenomenal capital resources of many of our peers. Given our current financial position, we cannot compete in the hot plays. As a very small company in US terms we have to compete through pursuing ideas slightly off the radar of our competitors. Our job then is to be successful in moving those opportunities onto their radar while maintaining a controlling interest.

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Can you outline Comet's balance sheet, capital structure and major shareholders?

MD Andy Lydvard

As at 31 December 2006, we had A\$6.7 million in cash. Comet Ridge has just less than 104 million fully paid ordinary shares on issue along with 14.2 million listed options exercisable at 40 cents and expiring 29 June 2007. There are another 9 million unlisted options with varying exercise dates and prices.

We have approximately 830 shareholders. The top 20 hold around 45% of the stock, and Directors own around 11.6%. Strike Oil Limited is our largest shareholder with $8.75$ million shares or $8.43\%$ .

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What are your expenditure commitments? How might you finance your exploration programs in the future? What cash flow do you expect from the Tipton West royalty?

MD Andy Lydvard

Our capital spending commitments are minimal – which is not to say that our planned spending is! At this point our firm commitments (including another unit well on Tow Creek) are around US\$3.0 million. We expect to spend substantially more than this, particularly at Grays Harbor, so we are focused on bringing in a significant promoted industry partner(s) for that project to further leverage shareholder value. We are also looking at other means of accessing capital in North America. We intend to become a much more largely capitalized company in the future, generating substantial cash flows for continuing growth.

We expect to start seeing modest revenues of up to A\$0.25 million per year from Tipton West, marking our transition from a pre-production company to one that has successfully found production and cash flow from exploration.

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Can you give more detail on the play types you are pursuing across the projects? From a geological perspective, why are you encouraged to drill for oil and gas in these areas?

MD Andy Lydvard

At Tow Creek/Bear River and Florence we are using directional drilling (and 3D) seismic at Florence) to assess the potential for significant additional oil production from historic oil fields that produce from shales that have been broken and fractured. Wells drilled into these reservoirs can be very prolific producers. The Florence field has produced 15 million barrels of oil and is capable of much more judging by a recently drilled well on an adjacent lease. Almost all wells drilled on Florence and Tow Creek were drilled vertically – our concept is that many more fractures can be intersected with deviated wells and, by imaging the fractures using 3D seismic, we can orient the wells optimally.

At Vader, potentially economic gas flows have been recorded from sands in the same interval at depths as shallow as 700 feet. So we have both coal seam gas and conventional sandstone reservoir targets. The main thing about this area and our other plays $-$ is that an active hydrocarbon (oil and gas) system has already been proven to exist.

As I said before, the crown jewel in our portfolio is Grays Harbor. Here we control a very extensive lease and lease option position (around 1800 sq km) over a significant number of seismically defined structures. The presence of numerous strong oil and gas shows in the few wells drilled in the basin provides us with the evidence that an active hydrocarbon system is in place. All of the criteria we seek: source, migration, reservoir and traps are present, so while this is a "frontier basin" in USA terms it is a very attractive play for Comet Ridge to pursue.

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No gas inflow was recorded from the Mahalo 2 well after you encountered strong gas shows from Mahalo 1. What is your assessment of the results so far? What are the next steps to advance the Mahalo field? Why are you still confident of adding shareholder value from this field?

MD Andy Lydvard

Mahalo needs more work. We found all the ingredients we were looking for: reasonable gas contents, good permeabilities (in 3 of the wells Comet funded) and good gas shows at Mahalo 1. Santos assessed there to be an attractive "contingent" gas resource" of between 180 BCF and 990 BCF of gas. Mahalo 2 came in low (possibly due to a fault) and saw very little gas. Did that one well destroy the play? Not in our opinion. We are in the process of mapping out a way forward. Comet Ridge is committed to the play and intends to conduct further work. With recent trends in the Eastern Australian gas market, particularly the demise of the PNG pipeline, and the intense interest in coal seam gas projects in QLD and NSW we're confident that with some hard work we can add significant shareholder value.

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You experienced some cost overruns at Tow Creek and the drill results were also disappointing. What's the motivation for continuing to drill this property? Do you expect the Peltier well – currently on production test – to eventually reach a commercial rate of production?

MD Andy Lydvard

Despite the cost overruns at Tow Creek. I am not prepared to concede that the drill results are disappointing (at least from a potential production point of view). There were some frustrating operational issues that have precluded completing the Coal View Unit well, but all of the data we have gathered suggests that we found what we were looking for; oil filled fractures and lots of them. We plan to sidetrack the well in the summer and complete it for production.

The motivation to continue drilling on the prospect lies in the considerable oil resource trapped in this huge structure. Also, proving up a combination of technologies that work at Tow Creek is a stepping stone to pursuing the play across the Rockies. We know where the opportunities are - what we are developing is the tool kit to exploit them. So far we have two technical successes and two potential commercial wells.

I am optimistic that Peltier will end up being a producer. I'm cognizant of shareholders being frustrated, as we are, with the performance of the well. We have adopted a methodical evaluation process to identify the key issues and will soon implement a disciplined work program in an effort to increase well productivity. This well may have actually uncovered a critical aspect of this reservoir and we may have to adjust the set up of the pump to get the well going. Unfortunately complex reservoirs require patience and science to crack, but the reward in this case could be immense. We assess there to be 200 MMBO in place on the Tow Creek anticline. 6 MMBO have been produced to date. We think there's a lot more to find.

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Looking longer term, what is your drill target inventory beyond the wells already discussed? How are you adding to that target inventory? Can you summarise your longer term growth strategy?

MD Andy Lydvard

We have a significant contingent well inventory that will result from success. We continue to generate locations and are advancing the permitting thereof for a number of wells at Tow Creek. It is too early to be picking locations at Florence (pre-3D), but expect to drill 3 wells this year. At Vader there are many locations to drill and potentially a number of pilots will proceed based on success with the resource evaluation wells.

In the long term Comet Ridge intends to continue to identify and capture large scale, high potential projects where the cost of entry is modest. We have developed a unique position with a large land owner in the US that we intend to strengthen. As we continue to deliver on our commitments in the form of activity and exploration spending on their properties we anticipate gaining access to other plays around the USA. Our business model has necessarily evolved to one of identifying, capturing and proving concepts. Our strategy necessarily means we need to be creative in our deals and we need to be nimble. We have assembled a portfolio of attractive projects and have material interests in all for a modest investment.

As we advance our strategy, our capital needs will expand significantly and we will seek partners, but our goal is to maintain as much leverage as possible for as long as possible.

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Thank you Andy.

For further information on Comet Ridge please call Andy Lydyard in Denver, Colorado on 0011 1 303 226 1303 or email andyl@cometridgeusa.com

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