JAKARTA, Indonesia, May 4, 2005 (PRIMEZONE) -- Continental Energy Corporation (OTCBB:CPPXF) today announced that it has commissioned a group of independent geologists and engineers from the highly regarded LAPI INSTITUTE at Indonesia's prestigious Bandung Institute of Technology to prepare a Feasibility Study, Conceptual Design and Preliminary Plan of Development (POD) for its Makapan Gas Field, located within the Bengara-II Block, East Kalimantan, Indonesia.
"The POD is intended to justify and demonstrate the economic viability of commercial development and exploitation of natural gas, condensate and extractable Liquefied Petroleum Gas ('LPG') reserves in the Makapan Gas Field. It is required of all Indonesian oil and gas Production Sharing Contract (PSC) holders immediately prior to implementation of a field development program. We expect it to be completed within the next 3 to 4 months after which time we will present it to Indonesian oil and gas authorities. With the booming appetite of the East Asia gas markets we have been asked by Indonesian authorities to fast-track the Makapan Gas Field development," said Continental Energy's President & CEO, Richard L. McAdoo. He noted that the key goals of the POD are:
-- To determine and estimate the volume of the Makapan Field gas
and condensate reserves, utilizing industry accepted methods
and computer reservoir simulation.
-- To create a conceptual design and recommend an appropriate
plan for drilling, construction and exploitation to achieve
an optimal, cost effective development of the Makapan Field
to recover the maximum amount of gas and condensate reserves.
-- To design surface production and pipeline facilities required
to sustain cost effective field exploitation and determine
processing equipment required to economically extract LPG
from the wellhead gas.
-- To evaluate the economic merits of commercial development of
the Makapan Field based on the determined reserves,
identified markets and recommended development plan from the
perspective of each of the three stakeholders. 1) BPMIGAS,
the Indonesian Central Government's oil and gas directorate,
2) Continental's Continental-GeoPetro (Bengara-II) Ltd.
(CGB2) subsidiary, and 3) the regional Indonesian government
of Bulungan Regency.
Continental's CGB2 subsidiary commenced petroleum exploration operations in the Bengara-II Block in 1998 pursuant to a PSC agreement with BPMIGAS, the state oil authority of the Republic of Indonesia, covering the 1,500,000 acre Bengara-II Block, which includes the Makapan Field and surrounding area.
"CGB2 owns a 100% interest in the Bengara-II PSC," noted B. Dorpi Parlindungan, CGB2's local director. "Continental owns a 60% stake in CGB2 and our partner GeoPetro Resources Inc. of San Francisco owns 40%. Under the terms of the Bengara-II PSC, CGB2 is entitled to recover 100% of its exploration, development and production costs 'off the top' from Makapan Field gas, condensate and LPG sales revenues. After recovery of costs the remaining revenue is shared with the Indonesian government on a 37.5% / 62.5% basis. We have specified that the POD study team consider local and regional gas markets including gas-fired electric power generation in the cities of Tarakan, Selor, Malinau and Redeb, Indonesia as well as Tawau, Malaysia. A nearby methanol plant requiring up to 65 MMCFD is also a principal market."
Continental's CFO, James D. Eger, pointed out, "The Makapan Gas Field was originally discovered in 1988 and at the time of its discovery low gas prices precluded its development. The discovery well tested an accumulated flow of more than 19.6 million cubic feet of gas per day plus 600 barrels of 54 degree API condensate from a 33 feet thick sandstone section near 6,000 feet. Several other gas zones indicated on logs were not tested. The Makapan Field gas is a 'Wet' gas with a high LPG fraction which will most likely be commercial to extract at the wellhead for a third revenue source in addition to the gas and condensate. The Makapan Field lies mostly offshore in very shallow water, less than 10 feet, amidst numerous islands of the Bulungan River delta."
The team of independent engineers and geologists from the highly regarded LAPI INSTITUTE at Indonesia's prestigious Bandung Institute of Technology is led by Ir. Doddy Abdassah, who received his masters and doctorate degrees in petroleum engineering from the University of Southern California, and has more than 27 years of oil industry experience. The same LAPI Team also prepared Continental's POD for its nearby Bangkudulis Oil Field which was accepted last year by Indonesian authorities without request for modification.
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. 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.