SANTOS LIMITED — Capital/Financing Update 2005

Level 10. International House 26 St Georges Terrace Perth WA 6000 Email: [email protected]

Telephone: +61 8 9225 7108 Facsimile: +61 8 9225 6100 ABN 47 106 092 577 Website: www.cometridge.com.au

30 March 2005

Number of Pages 4

AUSTRALIAN STOCK EXCHANGE Via Electronic Lodgement

Significant Mahalo Gas Resources Confirmed

Key Points:

• Mahalo contingent gas resource estimates of between 181 BCF and 990 BCF provided by Santos Limited.
• Comet Ridge exercised its option to increase its project equity from 20% to 40%.
• Drilling of reserve and further validation wells is planned for May and July respectively.

Comet Ridge Limited (ASX Code: COI) ("Comet Ridge") advises that it has been provided with contingent gas resource estimates for the Mahalo Project in Queensland's Bowen Basin, by Santos Limited, the Operator of ATP 337P. The Company will commence a three well drilling program, designed to further assess the commercial viability of the project, in the second and third quarter of 2005.

Comet Ridge currently holds 20% of in the project area in northern ATP 337P (Figure 1) and has exercised its option to earn a further 20% in by funding a further two coreholes (Mira #1 and Humboldt #1) along with the twinning of Mahalo #1 to test the interpreted free gas encountered during the drilling of this well.

Upon reviewing the data obtained from the Comet Ridge funded farmin wells Mahalo #1 and Somerby #1, plus all of the available petroleum and coal exploration wells and seismic data, the Operator has determined a range of potential volumes of gas in place ranging from a minimum of 181 billion cubic feet (BCF) up to a maximum of 990 BCF (Table 1). The most likely volume is estimated to be in excess of 400 BCF. Using a conservative recovery factor of 40% infers that between 70 and nearly 400 BCF of gas might be recovered. Recovery factors of 60% to 70% have been recorded in a number of active coal seam gas developments in the USA.

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TABLE 1

See attached Figure 2

As per the Society of Petroleum Engineers guidelines the contingent gas resources were determined volumetrically using the average coal thicknesses, gas contents, coal densities, moisture and ash throughout the farmin area for the Castor and Pollux seams of the Late Permian Bandanna Formation.

Safety and Environmental pre-qualification assessment of drilling contractors has been completed. Current plans will see the Mahalo #2 test well drilled in May and the Mira #1 and Humboldt #1 core holes drilled in July 2005.

Comet Ridge Managing Director Andy Lydyard said, "Mahalo is highly encouraging, which is why we nominated to increase our project equity to 40%. Our decision to exercise our option to increase our equity reflects the confidence we have in Mahalo and its potential to host significant gas reserves that can be rapidly commercialised."

Mr Lydyard added that Mahalo #2 will be drilled and tested with the objective of assessing the productivity of the Bandanna coals and to provide initial reserves for the Project while the drilling of Mira #1 and Humboldt #1 is designed to validate the Most Likely Gas Resource volumes for the farmin area.

The Mahalo Project lies approximately 100km north along structural trend and is targeting the same productive coal seams as those being produced at the Spring Gully / Fairview CSG gas fields (Figure 1). The Spring Gully / Fairview CSG gas fields contain 1300 Pj - 1P and 1947 Pj - 2P gas reserves. The Northern Denison Trough gas pipeline, which is part of the Wallumbilla - Gladstone pipeline passes through the western edge of the ATP. Gas reserves developed within the ATP are well positioned to be transported into the significantly increasing Gladstone gas market.

For information, please contact:

General Enquiries

Andy Lydyard Managing Director Comet Ridge Limited Phone: (08) 9225 7108 Fax: (08) 9226 6100 Vic Palanvk Manager Comet Ridge Limited Phone: (07) 3357-6936 Fax: (07) 3357-6936

Media Enquiries Tony Dawe Ward Holt Ph: (08) 9221 8722 Mob: 0413 322 110

Figure 1

Figure 2