Continental Energy Drilling a Success in Indonesia

Continental Energy Corporation's Indonesian subsidiary Continental-GeoPetro has completed its 2007 drilling program in the Bengara-II block in East Kalimantan, Indonesia.

Drilling of the Seberaba-3 has been completed to a total depth of 2,594 meters. An openhole drillstem test successfully flowed oil and minor gas at surface from one zone. The openhole test confirms lateral continuity of the Seberaba reservoir with at least one of the three zones from which oil was recovered during testing of the Seberaba-1 discovery well. The Seberaba-3 has been logged, casing has been set and a more comprehensive production testing program is planned.

Drilling of the Punga-1 has been completed at a total depth of 2,500 meters. The well has been logged and casing has been set. A testing program is also now planned for Punga-1 to evaluate zones with oil and gas shows.

Continental Energy's previous production testing of several zones in the Seberaba-1 was hampered by formation damage caused by invasive drilling fluids. The company is evaluating techniques and options for mitigating the effects of similar formation damage in the testing programs planned for Seberaba-3 and Punga-1.

Production testing of Seberaba-3 and Punga-1 will commence later this month upon arrival of additional testing and stimulation equipment and materials ordered for this purpose and should be completed in early 2008.

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