DALLAS, Aug. 10, 2004 (PRIMEZONE) -- Continental Energy Corporation (OTCBB:CPPXF) today announced that it has received a summary judgment in favor of Continental Energy and its partners and against its former Bengara-II Block farm in partner, China Wisdom International (HK) Ltd.
Continental Energy, together with its partner GeoPetro Resources Company and its jointly owned subsidiary Continental-GeoPetro (Bengara-II) Ltd., were claimants in a civil suit brought against China Wisdom International (HK) Ltd. The suit charged that China Wisdom had defaulted and breached contract by failing to fulfill its drilling obligations under a March 3, 2003 farm out agreement regarding the Bengara-II Block production sharing contract area in Indonesia. The farm out agreement clearly stated that the consequence for China Wisdom's failure to timely perform its drilling obligations was termination of the farm out.
In a ruling handed down by the Eastern Caribbean Supreme Court in the High Court of Justice in the British Virgin Islands, the court agreed with Continental's petition and declared that the farm out agreement between the claimants and China Wisdom dated March 3, 2003 is terminated.
The court ordered China Wisdom to re-transfer 20,000 common shares of joint venture subsidiary Continental-GeoPetro (Bengara-II) Ltd., a British Virgin Islands (BVI) company, 12,000 shares to Continental Energy Corporation and 8,000 shares to its partner, GeoPetro Resources Company. The shares were transferred to China Wisdom by Continental and GeoPetro on the condition that China Wisdom would perform its drilling obligations under the farm out agreement. Should China Wisdom fail to voluntarily make the re-transfer by August 31, 2004, the court has ordered the BVI Registrar of Companies to sign transfers on behalf of China Wisdom, concluding the re-transfer of these shares to Continental Energy and GeoPetro Resources. Additionally, the court ordered China Wisdom to pay the claimants' legal costs in the amount of US$7,700.00.
In a statement issued from Continental's Dallas office, VP & CIO James D. Eger said: "We are pleased with the court's decision. It puts an official end to any involvement China Wisdom and its agents, officers and directors might claim to have in the Bengara-II PSC, or with Continental Energy or GeoPetro Resources. We initiated the action in the BVI Courts against China Wisdom to clear title to shares of our joint venture subsidiary Continental-GeoPetro (Bengara-II) Ltd. We are currently in serious discussions with two new prospective farm in partners, and the court's decision and order have removed a possible obstacle to concluding a new farm out."
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. There it has successfully acquired production sharing contracts granting exclusive petroleum exploration and production rights to two high potential exploration concession areas, the Bengara-II and Yapen Blocks, totaling over 3 million acres; and a third concession for the development of the Bangkudulis Oil Field. Continental concentrates its efforts in Indonesia, one of the few places in the world where large tracts of highly prospective acreage can be accumulated. Indonesia has a long and successful history of oil and gas exploration and geological conditions are proven to be excellent for petroleum accumulation. Management has long experience in-country, and solid relationships with both industry and government at all levels. A strong and growing domestic demand for both crude oil and natural gas provides expanding and nearby markets for any production Continental establishes. For further information, please visit our web site at www.continentalenergy.com .
Safe Harbor Statement:
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 and Exchange Commission.