DALLAS, July 21, 2004 (PRIMEZONE) -- Continental Energy Corporation (OTCBB:CPPXF) today announced that it has entered into farm out and joint operating agreements involving its Yapen Block exploration concession area in Indonesia.
Under the terms of the farm out agreement, Continental's partner company in its Yapen Block production sharing contract area offshore Papua, Indonesia, Medco E&P (Yapen) Ltd. (Jakarta stock exchange:MEDC) is farming out 75% of its Yapen Block interest to Maraja (Yapen) Energy Ltd. Medco retains a 15% stake in the Yapen Block.
Maraja will also assume daily operations of the Yapen Block from Medco. Under an arrangement with Maraja, Continental will manage exploration activities on the Yapen Block, and Maraja will provide financial management.
The farm out agreement requires the drilling of at least two exploration wells prior to September 27, 2005 on the highly prospective 2.4 million acre Yapen Block, located offshore Papua (Irian Jaya). Estimated cost to drill the two exploration wells is in excess of (US) $10 million.
Continental's 60% owned subsidiary, Continental-GeoPetro (Yapen) Ltd., owns a 10% carried interest in the Yapen Block, and its share of exploration costs are carried to first discovery by Medco and Maraja. Continental-GeoPetro (Yapen) Ltd.'s interest is otherwise unaffected by the farm out and change of Yapen Block operatorship.
Maraja is a business unit of a privately owned Indonesian based company with a wide range of oil and gas production and transport businesses internationally.
About Continental Energy Corporation:
Continental Energy Corporation is a small oil and gas exploration company, focused entirely on making a major oil or gas discovery in Indonesia. There it has successfully acquired production sharing contracts granting exclusive petroleum exploration and production rights to two high potential exploration concession areas, the Bengara-II and Yapen Blocks, totaling over 3 million acres; and a third concession for the development of the Bangkudulis Oil Field. Continental concentrates its efforts in Indonesia, one of the few places in the world where large tracts of highly prospective acreage can be accumulated. Indonesia has a long and successful history of oil and gas exploration and geological conditions are proven to be excellent for petroleum accumulation. Management has long experience in-country, and solid relationships with both industry and government at all levels. A strong and growing domestic demand for both crude oil and natural gas provides expanding and nearby markets for any production Continental establishes. For further information, please visit our web site at www.continentalenergy.com.