OilVoice - Comet Ridge and Chartwell Energy in Agreed Merger

Comet Ridge and Chartwell Energy in Agreed Merger

Monday, February 09, 2009

The Directors of Comet Ridge Limited and Chartwell Energy Limited announce the merger of their companies to create a well funded coal seam gas (“CSG”) company with a diverse portfolio of exploration assets in Australia and New Zealand. The merged entity will continue to be named Comet Ridge and the headquarters will be located in Brisbane, Australia.

Chartwell Energy is an unlisted public company with prospective CSG assets in the North Island and South Island of New Zealand as well as ~A$8m in cash.

The merged entity is planning a high level of drilling activity in 2009 including in New Zealand, Australia and the United States.

Transaction Highlights
• Chartwell Energy shareholders will receive approximately 128 million Comet Ridge shares, in return for their Chartwell Energy shares, resulting in the merged entity being owned 55% by Chartwell Energy shareholders and 45% by Comet Ridge shareholders, respectively.
• The merged entity will have:
- approximately A$8 million cash;
- prospective coal seam gas assets in New Zealand (a total of ~12500 sq km) in the North Island and South Island;
- prospective coal seam gas acreage in Australia in the Mahalo Project area in the Bowen Basin, the Galilee Basin, and permits in Northern New South Wales;
- investment in Comet Ridge Resources LLC providing a high impact, low risk exploration and appraisal project in the United States;
- new board members that bring a wealth of CSG technical and business experience from their involvement in Sunshine Gas Limited (“Sunshine Gas”); and
- a Brisbane based organisation with highly experienced management and technical staff.

Further financial information on Chartwell Energy, and a profile on the merged entity, will be included in the Notice of Meeting and Explanatory Memorandum to be provided to Comet Ridge shareholders in connection with the Merger, including an Independent Expert's Report.

The Board of Chartwell Energy and the Board of Comet Ridge together believe that the new entity will be better positioned for growth than either company on a standalone basis. The Merger will provide a number of benefits to shareholders of both companies including:
- increased scale and liquidity;
- a diversified portfolio of exploration projects;
- financial strength to enhance exploration activities; and
- strong management, technical and operating skills.

The Directors of Comet Ridge unanimously recommend the Merger to its shareholders, and each Comet Ridge Director intends to vote in favour of the Merger in respect of all of the shares they own or control. Comet Ridge will convene a shareholders’ meeting to approve the Merger which is expected to be held in late March 2009.

Upon completion of the Merger, the following Chartwell Energy representatives will join the Board of Comet Ridge:
• Mr James McKay (previously Chairman of Sunshine Gas) as a non-executive Director;
• Mr Chris Pieters (previously Chief Commercial Officer of Sunshine Gas) as a non-executive Director; and
• Mr Tor McCaul (the existing Chief Executive Officer of Chartwell Energy) will be appointed Managing Director.

Ms Gill Swaby and Mr Jeff Schneider (as non-executive Chairman) will remain on the Board. Mr Andy Lydyard and Mr Gary Drobnack will resign from the board on the completion of the Merger.

Mr Anthony (Tony) Gilby, previously Managing Director of Sunshine Gas, intends to join the board after May this year.

Commenting on the Merger, Comet Ridge Executive Chairman Mr Jeff Schneider stated:
“The board of Comet Ridge is very pleased to recommend to its shareholders this Merger with Chartwell Energy. The assets of the merged entity offer shareholders substantial upside potential and with immediate access to capital, the merged entity is well placed to realise this potential.”

“What we believe is more significant however are the people associated with Chartwell Energy. They have an outstanding record of success at Sunshine Gas both technically and commercially. That they have faith in the potential of the merged entity should give shareholders of Comet Ridge every confidence in the future.”

Commenting on the Merger, Chartwell Energy Chairman Mr James McKay stated:
“We believe the Merger will provide additional value to the shareholders through a solid foundation of exploration assets, access to capital and a strong Board and management team.

“Being part of an ASX listed company will also provide Chartwell Energy shareholders with greater liquidity and access to capital markets. The merged entity will be well supported with A$8 million in cash to fund exploration programs in Australia, New Zealand and the USA.”

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