DALLAS, July 11, 2006 (PRIMEZONE) -- Continental Energy Corporation (OTCBB:CPPXF) today announced that together with its joint venture partner, GeoPetro Resources Company, it has entered into a Letter of Intent ("LOI") with CNPC (Hong Kong) Limited ("CNPC-HK") to farm-out a 70% stake in its Continental-GeoPetro (Bengara-II) Ltd. subsidiary and its Bengara-II Production Sharing Contract.
The LOI calls for closing on July 31, 2006, subject to a definitive farm-out agreement providing for the detailed commercial terms of the deal not already agreed in the LOI and also subject to a joint operating agreement to provide for joint petroleum operations in the Bengara-II PSC. Closing is also subject to completion of remaining legal and financial due diligence and to obtaining all necessary approvals.
Principle farm-out terms, agreed in the LOI, and to be incorporated in the definitive agreements include:
1. Continental-GeoPetro (Bengara-II) Ltd. ("CGB2") owns a 100%
interest in the 3,649 square kilometer Bengara-II Production
Sharing Contract ("PSC") in East Kalimantan, Indonesia.
Continental owns 60% of CGB2 and GeoPetro owns 40%. After the
farm out of 70% to CNPC-HK, Continental will retain 18%.
2. CNPC-HK will pay an Earning Obligation in cash at closing in the
amount of US$ 18,700,000 into a jointly controlled CGB2 account
which funds shall be used exclusively to pay for work on the
Bengara-II PSC area, including the drilling four exploration wells
included in CGB2's approved 2006 work program and budget.
3. CNPC-HK will pay for and carry all of Continental and GeoPetro's
shares of exploration and development work until the earlier of 1)
an additional amount of US$ 41,300,0000 over and above the Earning
Obligation funds has been expended or 2) the month after the first
commercial lifting of crude oil from the Bengara-II PSC is
delivered and sold.
4. CNPC-HK will pay also pay directly to Continental and GeoPetro a
cash bonus in the amount of US$ 5,000,000 contingent upon the
first commercial oil or gas discovery within the Bengara-II PSC
area.
About CNPC (Hong Kong) Ltd.:
CNPC (Hong Kong) Limited is a 52% owned subsidiary of the China National Petroleum Company based in Beijing, PRC. The remaining 48% is publicly held. CNPC (Hong Kong) Limited is based in Hong Kong and its shares trade on the Hong Kong Stock Exchange under the listing number 0135.HK. For further information, please visit their web site at www.cnpc.com.hk.
About GeoPetro Resources Company:
GeoPetro Resources Company has been Continental's partner in CGB2 and the Bengara-II PSC since 2000, owning a 40% share. GeoPetro is based in San Francisco and its shares trade on the Toronto Stock Exchange under the symbol GEP.S. For further information, please visit their web site at www.geopetro.com.
About Continental Energy Corporation:
Continental Energy Corporation is a small oil and gas exploration company, focused entirely on shareholder capital appreciation through making a major oil or gas discovery in Indonesia. For further information, please visit our web site at www.continentalenergy.com.
On behalf of the Company, James D. Eger, CFO Dallas, Texas
No securities regulatory authority has either approved or disapproved the contents of this news release.
Certain matters discussed within this press release may be forward-looking statements within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Although Continental believes the expectations reflected in such forward-looking statements including reserves estimates, production forecasts, feasibility reports and economic evaluations are based on reasonable expectations and assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from expectations include financial performance, oil and gas prices, drilling program results, regulatory changes, political risk, terrorism, changes in local or national economic conditions and other risks detailed from time to time in Continental's periodic filings with the U.S. Securities Exchange Commission.
For more information please contact Jim Eger at 877-762-2366, Suite 1200, 14001 Dallas Parkway, Dallas, Texas, 75240
No securities regulatory authority has either approved or disapproved the contents of this news release.
Certain matters discussed within this press release may be forward-looking statements within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Although Continental believes the expectations reflected in such forward-looking statements including reserves estimates, production forecasts, feasibility reports and economic evaluations are based on reasonable expectations and assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from expectations include financial performance, oil and gas prices, drilling program results, regulatory changes, political risk, terrorism, changes in local or national economic conditions and other risks detailed from time to time in Continental's periodic filings with the U.S. Securities Exchange Commission.