Continental Continues Due Diligence for CNPC-HK Deal

Continental Energy Corp. said that it is continuing with the due diligence phase of its announced deal with CNPC (Hong Kong) Ltd. (CNPC-HK) and now expects the deal to close during August.

Continental and its partner, GeoPetro Resources Company, entered into a Letter of Intent (LOI) in July with CNPC-HK to farm-out a 70% stake in its Continental-GeoPetro (Bengara-II) Ltd. subsidiary and its Bengara-II Production Sharing Contract in East Kalimantan, Indonesia.

Closing is subject to a definitive farm-out agreement providing for the detailed commercial terms of the deal not already agreed in the LOI and also subject to a joint operating agreement to provide for joint petroleum operations in the Bengara-II PSC. Closing is also subject to completion of remaining legal and financial due diligence and to obtaining all necessary approvals.

CNPC (Hong Kong) Limited is a 52% owned subsidiary of the China National Petroleum Company based in Beijing, PRC. The remaining 48% is publicly held. CNPC (Hong Kong) Limited is based in Hong Kong and its shares trade on the Hong Kong Stock Exchange.

GeoPetro Resources Company has been Continental's partner in CGB2 and the Bengara-II PSC since 2000, owning a 40% share. GeoPetro is based in San Francisco.