Continental Energy Closes First Institutional Placement

Continental Energy Closes First Institutional Placement

August 30, 2007

    DALLAS, Aug. 30 /Xinhua-PRNewswire/ -- Continental
Energy Corporation (OTC Bulletin Board: CPPXF) today
announced that it has closed a private equity placement
with Macquarie Bank Limited. The placement was arranged by
the London office of Macquarie's Energy Capital Group with
Macquarie Bank Limited ("Macquarie") subscribing
the equity for its own account. 

    Continental issued 5,000,000 common shares at a price
of $ 0.65 per share for net proceeds of US$ 3,250,000. The
placement included a total of 10,000,000 attached warrants
with each having an exercise price of $ 0.90 per common
share for a term of three years. When  exercised the
warrants will provide additional net proceeds of $
9,000,000.

    In addition to the equity placement, Continental also
executed a mandate letter with Macquarie which outlines
indicative terms and conditions under which Macquarie, on
an exclusive basis and subject to technical and commercial
due diligence, will arrange additional finance of up to
US$100,000,000 for the company in the form of senior
secured credit, hedging, and equity facilities. The
proceeds from such additional funding shall be used to
support both further development of the company's
Bengara-II Block oil and gas interests and to purchase or
acquire and develop additional international oil and gas
interests.

    The placement is the first equity investment in
Continental by an institutional investor. At the close of
the placement the 5,000,000 shares owned by Macquarie
represent a position of 7.65% of Continental's issued and
outstanding share capital. Exercise by Macquarie of its
warrants would increase its ownership to 19.4% on a
partially diluted basis.

    The securities issued in the placement are subject to
applicable hold periods and trading restrictions under
regulation-S of the US Securities Act of 1933 and may only
be offered, sold or otherwise transferred outside the US or
inside the US in accordance with applicable exemptions from
registration. Continental entered an agreement granting to
Macquarie piggyback registration rights in the event of a
Continental initiated registration of any restricted
securities and demand registration rights at any time after
the second anniversary of the placement . 

    The company paid a one-time, 5% arrangement fee to
Macquarie's Energy Capital Group in the form of 250,000
common shares in lieu of cash. No additional brokerage or
finder's fees were incurred or  paid.

    The shares and warrants were acquired by Macquarie for
investment purposes and, depending on market and other
conditions, Macquarie may increase or decrease its
ownership of, or control or direction over, securities of
Continental. To contact Macquarie, please call (212) 231
1710.

    Andrew Sinclair, head of Macquarie's Energy Capital
Group in London, said of the placement, "Many years of
diligent exploration effort by Continental has identified a
very attractive drilling portfolio on the highly
prospective Bengara II block. Continental and its partners
have now commenced an aggressive drilling program to
appraise and develop Bengara II. Macquarie is excited to
join Continental at this time and looks forward to a long
and successful relationship."

    The company's President, Richard L. McAdoo, said of the
placement, "We are very pleased to have Macquarie as
our first major institutional investor. Macquarie has an
outstanding  reputation as an innovative investment banker
and a major player in international oil and gas mergers,
acquisitions and project finance. The $100,000,000
financing mandate will, if brought to fruition, provide us
the all important war chest to back up our new ventures,
acquisitions, and Bengara-II development and thereby move
Continental from an exploration to a development stage
company." 

    About Macquarie Bank Limited 

    Macquarie Bank Limited is a diversified international
provider of specialist financial and investment banking
services, with more than 10,000 people in 24 countries. 
Through its Energy Capital Group, with offices in Houston,
London and Sydney, Macquarie Bank provides a wide array of
strategic debt and equity capital for the global oil and
gas industry.

    About Continental Energy Corporation:

    Continental Energy Corporation is an international oil
and gas exploration company, focused entirely on making
major oil or gas discoveries in Indonesia. For further
information, please visit our web site at
http://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.



    For more information, please contact:

     Jim Eger, 
     Continental Energy Corporation,
     Suite 1200, 14001 Dallas Parkway, 
      Dallas, Texas, 75240
     Tel:   [phone]
     Email: [e-mail]