Goldman Sachs Comments on Continental Energy in CNPC (Hong Kong) Research Report

JAKARTA, Indonesia, July 16 /PRNewswire-FirstCall/ -- In a research report on CNPC (Hong Kong) (0135.HK) dated May 28, 2007 prepared by analysts in their Beijing office, Goldman Sachs maintained their BUY rating on CNPC (Hong Kong) and commented on the Bengara II partnership with Continental as follows:

"Apart from its (CNPC-HK) attractive valuation, we expect the results for its 70%-owned Bengara II project in Indonesia will be available before the exploration period expires on December 4, 2007 (then it will decide whether to apply for the development phase), which could be a positive catalyst. We note that the share price of its partner, Continental Energy (CPPXF, not covered) -- for which its 18% stake of the project represents the vast majority of its assets -- has risen > 80% ytd. We believe this may reflect increasingly optimistic prospects of this project. Continental Energy has disclosed that at this point the existing exploration work of Bengara II indicated good potential for prospective petroleum accumulations on the order of 50 - 200 million barrel reserves size and gas fields in the 0.3 - 1.2 trillion cubic feet range."

James D. Eger, Continental's CFO said, "Although Goldman Sachs does not cover Continental Energy, this report could engender considerable interest in Continental in the Asian investment community."

Richard L. McAdoo, Continental's CEO said, "Now that our drilling program is underway, a wider audience, especially in Asia, has become aware of our activities and of the potential increase in shareholder value that would follow drilling success in Bengara II. We are pleased that Goldman Sachs recognizes the potential impact that this project could have on our much larger partner CNPC (Hong Kong)."

    On behalf of Continental Energy Corporation
    "James D. Eger"
    Secretary and CFO

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 http://www.continentalenergy.com or 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 US Securities Exchange Commission.

SOURCE Continental Energy Corporation