DALLAS, Oct. 2, 2006 (PRIMEZONE) -- Continental Energy Corporation (OTCBB:CPPXF) today announced that it has signed definitive agreements closing its sale of 70% of its shareholding in its Continental-GeoPetro (Bengara-II) Ltd. subsidiary and its Bengara-II Production Sharing Contract to CNPC as per the Company's July 11, 2006 press release.
Continental will retain an 18% stake in Continental-GeoPetro (Bengara-II) Ltd. ("CGB2") and its 3,649 square kilometer Bengara-II Production Sharing Contract ("PSC") in East Kalimantan, Indonesia. CNPCHK (Indonesia) Limited, ("CNPC") is a wholly owned subsidiary of CNPC (Hong Kong) Limited who is party to the agreements as guarantor.
To earn its 70% stake in CGB2, CNPC will pay an Earning Obligation in cash in the amount of US$18,700,000 into a CGB2 account jointly controlled by Continental, which funds shall be used exclusively to pay for exploration drilling on the Bengara-II PSC area.
CNPC shall also provide development loans to CGB2 and carry all of Continental's share of Bengara-II development costs on any oil or gas discoveries made in the amount of US$41,300,000 over and above the Earning Obligation.
CNPC will also pay directly to Continental a cash bonus in the amount of US$3,000,000 contingent upon the first commercial oil or gas discovery within the Bengara-II PSC area.
The Company's President & CEO, Mr. Richard L. McAdoo, has resigned as CEO of CGB2 but shall remain as a director of CGB2 and as its Chief Exploration Officer or CXO.
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 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. For further information, please visit our web site at www.continentalenergy.com.
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.