Continental Energy Closes First Institutional Placement

DALLAS, August 30 /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 US$ 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 US$ 0.90
per common share for a term of three years. When exercised the warrants will
provide additional net proceeds of US$ 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 +1-212-231-1710.

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 US$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
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 at +1-877-762-2366, 
Suite 1200, 14001 Dallas Parkway, Dallas, Texas, 75240

Web site: http://www.continentalenergy.com