Continental Energy terminates farm out agreement with China Wisdom

Canadian junior oil company Continental Eenergy Corp. announced on Thursday it had terminated a March 3, 2003 farm out agreement with China Wisdom International (HK) Ltd. ('China Wisdom') in accordance with the termination provisions of that agreement.

The farm out agreement involved the Company's Bengara-II Block exploration property in East Kalimantan, Indonesia. The farm out was terminated due to China Wisdom's failure to perform drilling obligations under the agreement. Approximately US$ 630,000 cash already advanced by China Wisdom to the company's Continental-Wisdom-GeoPetro (Bengara-II) Ltd. operating unit is forfeited by China Wisdom with the termination.

In accordance with the termination provisions of the farm out agreement, from December 1, 2003 Continental's share of the Bengara-II Block property shall be restored to 60% and the share of its partner in the Bengara-II Block, GeoPetro Resources Company of San Francisco shall be restored to 40%, said the company.

Continental Energy Corporation is a small exploration company focusing its efforts on discovering major reserves in Indonesia. Continental owns interests in three oil and gas concessions covering 3 million acres in Indonesia, the Bengara-II Block and the Bangkudulis Block and the Yapen Block. (alex)