Continental Energy Updates Progress on Seberaba-1 Exploration Well

DALLAS, Aug. 21 /PRNewswire-FirstCall/ -- Continental Energy Corporation (OTC Bulletin Board: CPPXF) today announced that its 18% owned Indonesian subsidiary Continental-GeoPetro (Bengara-II) Ltd. ("CGB2") is continuing to drill the Company's Seberaba-1 exploration well.

As previously announced in the Company's press release dated June 13, 2007, promising oil shows in the drill cuttings have been encountered in sandstones below 2,000 meters depth. Shows were encountered in several zones. Nine and five eights inch casing was set at 2,778 meters, and these promising zones will be tested upon completion of drilling.

Drilling on Seberaba-1 resumed, but was delayed due to a stuck drill pipe below 2,940 meters depth. Attempts to free the drill pipe were unsuccessful and the drill string was intentionally parted leaving approximately 100 meters of drill pipe "fish" in the hole. Prior to the drill pipe becoming stuck, a new zone with oil shows was encountered. An attempt to conduct an open hole drill stem test on this zone failed to achieve any results due to apparent collapse of the hole and plugging of the test tool.

A cement plug has been set on top of the fish and the well was successfully sidetracked on the second attempt at a depth of approximately 2,800 meters, and drilling has resumed. The company plans to re-drill the lost section of hole to approximately 3,000 meters and revaluate at that time as to whether to continue this wellbore to original target total depth of 4,000 meters or whether to set liner and conduct drill stem tests on zones already penetrated.

About Continental Energy Corporation:

Continental Energy Corporation is an international oil and gas exploration company focused entirely on making major oil or gas discoveries 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 US Securities Exchange Commission.

SOURCE Continental Energy Corporation