Bengara-II drilling program fully funded, Continental Energy says

Continental Energy Corporation announced Wednesday that CNPCHK (Indonesia) Limited (CNPC) had placed the entire US$18.7 million earning obligation following CNPC's move to acquire Continental-GeoPetro (Bengara-II) Ltd (CGB2), the operator of Bengara-II PSC area in East Kalimantan.

Continental said the funds are to be used exclusively to pay for 2006 and 2007 exploration drilling activities in the 3,649 square kilometer Block.

CNPC has recently closed a deal to buy a 70-percent shares of Continental-GeoPetro. Following the completion of the deal, Continental's interest in the PSC will be reduced to 18 percent from 60 percent, while GeoPetro?s share will drop to 12 percent from 40 percent.

According to Continental, CGB2 has four exploration wells planned, permitted and approved by Indonesian oil and gas regulatory authorities for drilling in 2006 and 2007.

The company is now finalizing plans to conduct drilling activities and is preparing to import a drilling rig from China to conduct the drilling, Continental added. (Robert)