secures 420,000 acre, 2 year lease option

hi guys

great opportunity for Comet..well worth reading

24 March 2006 The Company Announcements Officer Australian Stock Exchange Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2000 By Electronic Lodgement Dear Sir/Madam COMET RIDGE SECURES 420,000 ACRE LEASE OPTION IN WESTERN WASHINGTON • Comet Ridge subsidiary secures 420,000 acre, 2 year lease option • Acreage covers a significant part of the Grays Harbor Basin in the State of Washington • 15 leads already identified from seismic • Proven oil and gas basin The directors of Comet Ridge Limited (ASX Code: COI) are pleased to advise that its 100% owned US subsidiary, St. Helens Energy LLC, has signed a letter of intent with a large landowner to secure a 2 year lease option on 420,000 acres covering a large part of the Grays Harbor basin in the State of Washington, USA (Figure 1). Terms The general terms of the agreement, which are subject to negotiation of the definitive agreements, have St. Helen’s paying a per acre fee for the lease option and committing to a minimum exploration work program over the term of the option agreement. The combined consideration is approximately $1,000,000. St. Helens will have the exclusive right to lease any of the 420,000 acres, (subject to 4,000 acre minimum and 10,000 acre maximum leases) for additional consideration. Further details of the transaction will be released following execution of the definitive agreements in late April. Location The Grays Harbor Basin (GHB) lies some 100 miles south west of Seattle in the State of Washington. It lies to the north west of the Chehalis Basin where St. Helens and partner, Cascadia Energy, are already exploring for coal seam gas. (Figure 1).
Oil and Gas Potential The Grays Harbor Basin is very lightly explored despite numerous and widespread oil and gas shows and flows on test. Only two out of the 45 wells drilled in the basin have been located using the grid of 2D seismic that was acquired in the early to mid 1980’s. One of those wells flowed gas at rates of 9 MMCFD for a short time on test. Virtually all of the other drilling in the basin is shallow and was located using surface geology only. The option agreement comes with an inventory of 15 mapped leads, access to an extensive database and the 600 miles of 2d seismic data. While the existing leads will be the focus of the initial technical work plus planned new seismic acquisition, additional leads and prospects will result from a detailed exploration review incorporating all of the datasets. Indicative reserve potential for the existing leads ranges between 50 and 250 BCF per lead. Infrastructure & Market Gas is currently piped into the area via an 8 inch pipeline. Timing Negotiation of the definitive agreements will commence immediately with the expectation that closing will occur before the end of April. Summary This opportunity is the largest to date for St. Helens and Comet Ridge and reflects the corporate strategy of securing control of large acreage positions over prospective yet overlooked trends or basins. This is a rare opportunity for a company of Comet Ridge’s size and it complements the company’s other holdings in the Niobrara play of northern Colorado and the coal seam gas plays at Cedar Creek (Washington) and Mahalo (Queensland). Yours sincerely Andy Lydyard Managing Director General Enquiries Andy Lydyard Vic Palanyk Managing Director General Manager Comet Ridge Limited Comet Ridge Limited 999 18th Street, Suite 3000 Level 3, Waterfront Place Denver, Colorado, USA 1 Eagle Street Phone: +1 (303) 357 4646 Brisbane, Queensland, Australia Fax: +1 (303) 357 4648 Phone: (07) 33 600 215 Mobile: +1 (303) 547 4478 Fax: (07) 33 600 222 Email: [email protected] Mobile: 0407 889 569 [email protected]