COMET RIDGE LIMITED — Investor Presentation 2018

Jul 16, 2018

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Galilee Basin – How big can this get? Technical Presentation to Queensland Petroleum Exploration Association (QUPEX) 17 July 2018

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Important Notice and Disclaimer

Disclaimer

This presentation (Presentation) has been prepared by Comet Ridge Limited (ABN 47 106 092 577) (Comet Ridge). The Presentation and information contained in it is being provided to shareholders and investors for information purposes only. Shareholders and investors should undertake their own evaluation of this information and otherwise contact their professional advisers in the event they wish to buy or sell shares. To the extent the information contains any projections, Comet Ridge has provided these projections based upon the information that has been provided to Comet Ridge. None of Comet Ridge or its directors, officers or employees make any representations (express or implied) as to the accuracy or otherwise of any information or opinions in the Presentation and (to the maximum extent permitted by law) no liability or responsibility is accepted by such persons.

Summary information

This Presentation contains summary information about Comet Ridge and its subsidiaries and their activities current as at the date of this Presentation. The information in this Presentation is of general background and does not purport to be complete. It should be read in conjunction with Comet Ridge’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange (ASX), which are available at www.asx.com.au.

ASX Releases

Investors are advised that by their nature as visual aids, presentations provide information in a summary form. The key information on detailed Resource statements can be found in Comet Ridge’s ASX releases. Resource statements are provided to comply with ASX guidelines but investors are urged to read supporting information in full on the website.

Past performance

Past performance information given in this Presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.

Future performance

This Presentation contains certain “forward-looking statements”. Forward looking words such as, “expect”, “should”, “could ”, “may”, “plan”, “will”, “forecast”, “estimate”, “target” and other similar expressions are intended to identify forward-looking statements within the meaning of securities laws of applicable jurisdictions. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Forward-looking statements, opinions and estimates provided in this Presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Such forward-looking statements, opinions and estimates are not guarantees of future performance.

Forward-looking statements including projections, guidance on future earnings and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. This presentation contains such statements that are subject to known and unknown risks and uncertainties and other factors, many of which are beyond the control of Comet Ridge, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a range of variables which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. Such forward-looking statements are relevant at the date of this Presentation and Comet Ridge assumes no obligation to update such information.

Investment risk

An investment in Comet Ridge shares is subject to investment and other known and unknown risks, some of which are beyond the control of Comet Ridge. Comet Ridge does not guarantee any particular rate of return or the performance of Comet Ridge. Persons should have regard to the risks outlined in this Presentation.

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Galilee Basin Background

• Large area (~250,000km[2] ) covering a big part of central western Queensland

• Land use is grazing – cattle and sheep on large stations

• Historical sandstone exploration - oil targeted and small gas flows

• Later basin-wide focus on CSG

• One operating CSG pilot in the basin (by GLL)

• One shorter term single-well production test by Comet Ridge

• Significant Potential for further exploration and appraisal for conventional and unconventional

resources

• Low seismic and well density to date

• Significant coal mine province evolving in the shallow coals in the east

• Pipeline options progressing

• Comet Ridge holds a big position at 9685 km[2]

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Stratigraphy

Oil and gas is generated in the underlying Belyando and Drummond Basins

Oil / Gas

CSG

• 600 to 1100 metres

• GLL’s Glenaras Pilot (online)

• • Small gas flows to date

• COI’s Gunn 2 production test

Lake Galilee Sandstones

• 2500 to 2800 metres

• Small Gas flows 1964 to 1995

• Oil recovered 1964

• 230,000 mcfd gas flow in June 2018

• Concept demonstrated

• Significant thickness over wide area

Marine Shales?

BELYANDO BASIN

?

?

• Indicated by Devonian typed oil in (1964) Lake Galilee 1 well

• Large potential volume

• Not yet penetrated by wells

• Seismic suggests 2500 to 4500 metres on eastern side

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Cross-section

Hydrocarbon traps/targets exist at a range of levels

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SW ENL Lake Galilee 1 MON Carmichael 1 NE
Undrilled Undrilled
Galilee Basin
Drummond Basin
Basement Basement
Belyando Basin?
After: Draper and Boreham, 2004
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Koburra Trough – Petroleum System

• 3 historic petroleum wells within ATP 743 and ATP 744

• All demonstrated moveable hydrocarbons

• recovered gas and/or oil from Lake Galilee Sandstone at base of Galilee Basin section

• Koburra 1, Carmichael 1 and Lake Galilee 1 flowed gas to surface at low rates

• Lake Galilee 1 – oil recovered

• Evidence of active petroleum system sitting over the Koburra Trough

• None appropriately tested the prospectivity due to lack of closure or heavily overbalanced drilling

• Only Carmichael-1 closure adequately defined by seismic

• Potential for significant hydrocarbon volumes

• Potential for additional oil and gas resources

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120km
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Galilee very underexplored compared to Cooper

Cooper Basin

Galilee Basin

92,990 km[2] 1140 wells

• Galilee Basin has 30 times lower well density than Qld side of Cooper Basin

270,700 km[2]

107 wells

Few wells near Koburra Trough kitchen in northeast where the Albany 1 well was drilled in June

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Target 1 – Lake Galilee Sandstone
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Lake Galilee Sst – Previous Exploration

Conventional Exploration

• 107 petroleum wells (intersecting Galilee sequence) over 70 years

• Targeted Late Carboniferous to Permian sandstones to depths of ~3000m

• 3 wells had significant hydrocarbon shows – Koburra Trough inside Comet Ridge’s current ATP 743 / 744

• 2015 – Comet Ridge achieved Galilee’s first sandstone contingent resource

Albany Structure 153 PJ (2C)[1] (ATP 744) 417 PJ (3C)[1]

*wells intersecting Galilee Basin sequence

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1Chapter 5 ASX Listing Rules disclosure Page 27

Lake Galilee Sst – Results to Date

Lake Galilee 1 – by Exoil NL in 1964

• First deep petroleum well in Koburra Trough

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• Targeted poorly defined 4-way dip closure

• 260m gross sandstone over Lake Galilee Sandstone

• GTS and oil recovered from DST-5

• 3m light green oil @ 43.1°API gravity (Source: likely Devonian marine)

• High mud overbalance

• Untested sandstone section with hydrocarbon bearing zones

  • Lower Sw suggests hydrocarbon recovery is possible

• Gas analysis indicates slightly wet gas composition

• Indicated active hydrocarbon system in Koburra Trough

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Lake Galilee Sst – Results to Date

Koburra 1 – by Flinders Petroleum in 1970

• First deep petroleum well in northern Koburra Trough

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• Drilled one-line rollover defined by 1966 6-fold seismic data grid

• Trap poorly defined – (not a valid structural test?)

• Results:

• 120m gross sst in Lake Galilee Sst

• 160 units gas at 2948m over tight sandstone – 15 “(4.6m) flare from blooie line, loaded with water in later test

• Volcanic derived sandstone (different source to south)

• Confirmed hydrocarbons in basal section of Galilee Basin in northern Koburra Trough

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Lake Galilee Sst – Results to Date

Carmichael 1 – by Maple Oil in 1995

• First well based on modern seismic - 27km NE of Lake Galilee 1

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• Robust NW plunging anticlinal structure on western flank of Koburra Trough

• Targeted oil with high mud overbalance

• Three drill stem tests flowed gas to surface at low rates – two other tests over better reservoir quality, but did not flow

• 150m gross sandstone with >30m net pay showing hydrocarbon saturation and porosities up to 13%.

• Discovered large gas accumulation deemed uneconomic then (1995)

• Productivity of reservoir not optimally tested or assessed due to well design

• Well confirmed sandstone prospectivity in Koburra Trough

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Lake Galilee Sst - Gas Composition

Gas Composition – High Quality

Lake Galilee 1

Carmichael 1

• 88% CH 4 in Carmichael

• Larger proportion of C2+ in Lake Galilee 1

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▪ <1% CO 2

• 3-5% N 2

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Lake Galilee Sst - Albany 1 well flowed gas - late June 2018

• < Initial 13 metre section of Sandstone produces stabilised gas flow of 230,000 scf/d

• < Most significant hydrocarbon flow recorded from Galilee Basin to date

Vintage Energy recently farmed-in as part of Sandstone “Deeps” project

• < Approximately 100 metres of sandstone yet to be penetrated in Albany 1

• < Drilling suspended due to wellbore difficulties

• < Pre-drill objectives of improving flow through underbalanced drilling and confirming the reservoir as an excellent stimulation candidate have been met

• < Hydrocarbon analysis from rig indicates approx

• < 94.23% C1

• < 3.92% C2

• < 1.24% C3

• < 0.45% C4

• < 0.16% C5+

• < From Carmichael 1 in 1995, expectation is

• < no H2S,

• < very little to no CO2

• < 5% N2

Refer ASX announcement 28/06/2018

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Sandstone Targets - Drilling Opportunities

Seismic Line CAR82-25R

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Betts A Seam
Lake Galilee Sst
Base Galilee Unc
Intra-
Drummond Mk2
Belyando Basin
Basement
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• Closures exist near Lake Galilee 1 as a result of basement involved faults

• Onlap plays exist to the west of Lake Galilee 1 in the Intra-Drummond Basin at reasonable depths

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Lake Galilee Sst – Drilling Opportunities

• Opportunities require additional seismic to firm up – planning for 2H 2018

Two Way Time Structure (secs) – Lake Galilee Sandstone

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• Lake Galilee Sandstone Targets

• Preliminary review identifies 20+ opportunities

  • From small up to 75 km[2]

  • From small up to 300 PJ recoverable

• Structural and stratigraphic targets are being mapped in the Drummond Basin sequence

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Galilee Basin – Summary

Summary

▪ Nearly 100 years of exploration yet basin remains under explored ▪ Large area with significant CSG and sandstone contingent resources ▪ CSG development progressing in two key areas with one working pilot and lateral well underway ▪ Cost effective exploration, appraisal and development ▪ Strong community engagement and understanding of critical nature of gas to any economy ▪ Multiple market segments requiring gas ▪ Potential to be key supplier to frustrated east coast gas market

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Galilee Basin – CSG Exploration

• Glenaras 1 drilled 51 years ago highlighted CSG potential of Galilee Basin “no significant hydrocarbon shows were encountered. Observed methane gas associated with coals”

• 1993-1995: Enron drilled early CSG wells with potential at Rodney Creek and Crossmore

• 2000: Rodney Creek CSG Pilot by Enron

• 2008: Glenaras CSG Pilot – by Galilee Energy - some gas produced

• 2008-2014: Major CSG exploration phase – definition of Gunn Project Area and Gunn 2 production test

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• 2016: First lateral well drilled at Glenaras Pilot by Galilee Energy

• 2018: Multi-lateral pilot scheme added by Galilee Energy and now online

• ASX Code : COI *wells intersecting Galilee Basin sequence

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Galilee Coals – recoverable gas over 1,865 km[2]

Gunn Project area and ATP 1015 area (COI 100%) coals contain recoverable gas over an estimated 1,865 km[2]

• 6 individual coal seams

• Depth to coal 700 - 1,000m

• 16 to 24m net coal deposited over large area

• Average gas content 4.3 m[3] /t (high 7.3 m[3] /t)

• Good to excellent permeability within target coals

• Significant CSG resource independently certified

• COI working towards CSG pilot drilling 2H 2018

Gunn Project 67 PJ (2C)[1] (ATP 744) 1,870 PJ (3C)[1]

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*see listing rule disclosure on Page 27 of this presentation

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CSG – Gunn Project Area

C1 Reservoir - Gunn wells

• Avg. gas content 4.74m3/t

• 99% CH 4

• 40-50mD perm

• 91% saturation

• 4.30m net coal

• Seam isolated above and below by impermeable mudstone

• Excellent master cleat development (roof to floor)

• Key risks:

• Gas Saturation

• Isolation from sst

Master Gunn-2: Image log – C1 seam cleats

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CSG – Gunn 2 Extended Production Test

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• Perforated over 4m interval - C1 coal seam only

• First well in the basin to test whether case and perforation provided sufficient connection to coal permeability without stimulation

• Seam isolated above and below by impermeable mudstone

• Designed to ensure water only produced from coal and not adjacent sandstones

• Highly successful test – achieved 400 bwpd (from coal at 952m )

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CSG – C1 Reservoir – Schmitt 1 well

▪ Avg. gas content 4.73m[3] /t

▪ >99% CH 4

• 76% saturation

• 6.5mD perm

▪ 7.55m net coal

• Excellent master cleat development

• Suspended as an appraisal well for production testing

• Strong pilot candidate for 2H 2018

Schmitt-1: Image log – C1 seam Master cleats

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Target 3 – Shale Gas & Oil
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Galilee Basin – Potential Marine Shale Targets

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Seismic Line CAR82-23R
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Betts Creek A Seam
Lake Galilee Sst
Top Drummond
Basin
Top Belyando
Basin
Basement
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▪ basal Drummond Basin & Belyando Basin Marine Shale targets shallow on eastern side of permits

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This basin could become a significant producer

• Galilee is a massive onshore basin not yet connected into the east coast market, with a very large contingent resource in sandstone and CSG, and (as yet) no 2P and 3P reserves

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• Overlies an active petroleum system sourced from the Drummond and Belyando basins with potential for additional sandstone and shale targets ranging from 2500m to 4000+m

• Conventional exploration was largely oil focused

• Then 20 years ago focus moved towards CSG

• Recent focus on sandstones, but for gas, not oil

• Historic small gas flows have been ignored due to distance to market and very low gas prices

• The recent Albany 1 well was drilled into the top of the Lake Galilee Sandstone reservoir - Comet Ridge and Vintage Energy have demonstrated a change in drilling methods can generate measurable gas flows with more than 100m sandstone yet to drill

• The Galilee Basin could be the supply solution for the east coast gas market

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Contact Telephone: +61 7 3221 3661 Facsimile: +61 7 3221 3668 Email

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ASX Listing Rule 5 Disclosure

Competent Person Statement and ASX Listing Rules Chapter 5 - Reporting on Oil and Gas Activities

The Contingent Resource for the Albany Structure located ATP 744 are taken from an independent report by Dr Bruce McConachie of SRK Consulting (Australasia) Pty Ltd, an independent petroleum reserve and resource evaluation company. The Contingent Resources information has been issued with the prior written consent of Dr McConachie in the form and context in which they appear in this Annual Reserves Statement for 2016. His qualifications and experience meet the requirements to act as a qualified petroleum reserves and resource evaluator as defined under the ASX Listing Rule 5.42 to report petroleum reserves in accordance with the Society of Petroleum Engineers (“SPE”) 2007 Petroleum Resource Management System (“PRMS”) Guidelines as well as the 2011 Guidelines for Application.

The estimate of Reserves and Contingent Resources for the Mahalo Project as part of ATP 1191P provided in this presentation, is based on, and fairly represents, information and supporting documentation determined by Mr Timothy L. Hower of MHA Petroleum Consultants LLC Inc (MHA) in accordance with Petroleum Resource Management System guidelines. Mr Hower is a full-time employee of MHA, and is a qualified person as defined under the ASX Listing Rule 5.42. Mr Hower is a Licensed Professional Engineer in the States of Colorado and Wyoming as well as being a member of The Society of Petroleum Engineers. Mr Hower has consented to the publication of the Reserve and Contingent Resource estimates for Mahalo in the form and context in which they appear in this presentation.

The reserve and contingent gas resource estimates for ATP 1191P provided in this presentation were originally released to the Market in the Company’s announcement of 28 August 2014, updated in an announcement dated 2 December 2015, and further upgraded in an announcement dated 6 March 2018 and were estimated using the deterministic method with the estimate of contingent resources not having been adjusted for commercial risk.

The contingent resource estimates for the unconventional gas located in ATP 744 provided in this presentation are based on and fairly represent, information and supporting documentation determined by Mr John Hattner of Netherland, Sewell and Associates Inc, Dallas, Texas, USA, in accordance with Petroleum Resource Management System guidelines. Mr Hattner is a full-time employee of NSAI, and is considered to be a qualified person as defined under the ASX Listing Rule 5.42 and has given his consent to the use of the resource figures in the form and context in which they appear in this presentation.

The contingent gas resource estimates for ATP 744 provided in this statement were originally released to the Market in the Company’s announcement of 25 November 2010, and were estimated using the deterministic method with the estimate of contingent resources for ATP 744 not having been adjusted for commercial risk.

COI confirms that it is not aware of any new information or data that materially affects the information included in any of the announcements relating to either ATP 1191P or ATP 744P referred to above and that all of the material assumptions and technical parameters underpinning the estimates in the announcements continue to apply and have not materially changed.

The contingent resource estimates for PEL 6, PEL 427 and PEL 428 referred to in this presentation were determined by Mr Timothy L. Hower of MHA Petroleum Consultants LLC in accordance with Petroleum Resource Management System guidelines. Mr Hower is a full-time employee of MHA, and is a qualified person as defined under the ASX Listing Rule 5.42. Mr Hower consented to the publication of the resource figures which appeared in the announcement of 7 March 2011 made by Eastern Star Gas Limited (ASX:ESG) and any reference and reliance on the resource figures for PEL 6, PEL 427 & PEL 428 in this presentation is only a restatement of the information contained in the ESG announcement.

The contingent resource estimates for PEL 6, PEL 427 and PEL 428 were estimated using the deterministic method with the estimate of contingent resources for PEL 6, PEL 427 and PEL 428 not having been adjusted for commercial risk.

COI confirms that it is not aware of any new information or data that materially affects the information included in the ESG announcement of 7 March 2011 and that all of the material assumptions and technical parameters underpinning the estimates in the announcements continue to apply and have not materially changed.

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