Continental Energy Corporation: Bengara-II Drilling Contract Awarded

DALLAS, Jan. 18, 2007 (PRIME NEWSWIRE) -- Continental Energy Corporation (OTCBB:CPPXF) today announced that its 18% owned Indonesian subsidiary Continental-GeoPetro (Bengara-II) Ltd. ("CGB2") has awarded a turn-key, integrated drilling services contract to drill and test Seberaba-1, the first of four exploration wells planned for 2007 on the 3,650 square kilometer (900,000 acre) Bengara-II Production Sharing Contract, onshore East Kalimantan, Indonesia.

Indonesian drilling contractor PT Indo Sichuan Petroleum was awarded the contract and will deploy a 1,500 horsepower land drilling rig for the job. Mobilization of the rig and equipment to the drillsite is underway with drilling to commence in March 2007.

Drilling of the 4,200 meter (13,780 foot) Seberaba-1 well is expected to take up to 70 days at a cost of over US$ 6,000,000. The four well drilling program is fully funded, as detailed in Continental's earlier press release dated October 11, 2006.

About Continental Energy Corporation:

Continental Energy Corporation is an independent 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 .

CONTACT: Continental Energy Corporation
         Jim Eger
         (877) 762-2366
         Suite 1200, 14001 Dallas Parkway
         Dallas, Texas, 75240