Continental Energy Spuds Second Seberaba Appraisal Well

DALLAS, Sept. 26 /PRNewswire-FirstCall/ -- Continental Energy Corporation (OTC Bulletin Board: CPPXF) today announced that its 18% owned Indonesian subsidiary Continental-GeoPetro (Bengara-II) Ltd. ("CGB2") has spudded the Seberaba-3 appraisal well.

The Seberaba-3 is the second of 3 planned appraisal wells to further evaluate the Seberaba structure in the Bengara-II Block, onshore East Kalimantan, Indonesia. Drilling of the Seberaba-3 to a planned total depth of 2,800 meters (9,186 feet) is expected to take up to 49 days at a cost of over $5,400,000.

The Seberaba-3 will test an updip structural culmination of the large Seberaba structure at a position on the same structure approximately 2.3 kilometers northwest of the Seberaba-1 exploration well location, and approximately 5.0 kilometers northwest of the Seberaba-4 appraisal well location.

The Seberaba-3 appraisal well is being drilled with the same drilling rig used to drill the Seberaba-1 wildcat exploration well.

Drilling on Seberaba-1 was terminated short of the planned 4,000m total depth after having reached a total depth of 2,946m. A 7" liner was set at 2,917m in the third sidetrack after the original hole and first two sidetrack holes were lost due to encountering a zone of overpressure below 2,930m.

A smaller workover rig has been moved onto the Seberaba-1 to conduct a series of drill stem tests.

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.

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.

  For more information please contact Jim Eger at 877-762-2366, Suite 1200,
                  14001 Dallas Parkway, Dallas, Texas, 75240

SOURCE Continental Energy Corporation