CPPXF: OTCBB

Continental Energy Corporation is a small and aggressive oil and gas exploration company focusing its efforts on making large commercial discoveries and establishing petroleum production in low to medium risk, but high potential reward, international properties.

Indonesian Oil Focus

Indonesia holds proven oil reserves of 4.2 billion barrels and ranks twenty first among world oil producers, accounting for approximately 1.2% of world oil production . Declining oil production and increased consumption resulted in Indonesia becoming a net oil importer inlate 2004. This factor, along with high oil prices in 2004-2008, led the Government to substantially scale back the domestic fuel subsidyin 2008 and to decide to temporarily withdraw from the Organization of Petroleum Exporting Countries –an organization representing approximately 45% of world oil production. As the only Asian member of OPEC since 1962, the Government has indicated it will consider rejoining OPEC if the country’s oil production can be increased and it can becomea net exporter again.

Indonesia is ranked eighth in world gas production, with proven reserves of 108 trillion cubic feet in year 2010. This ranks eleventh largest in the world and the largest in the Asia Pacific region.

Management has long experience in-country and solid relationships with both industry and government at all levels; there is a well established history of positive relationships between the international oil industry and the Government of Indonesia; there is strong and growing regional demand for both crude oil and natural gas provides expanding and near-by I-C-I (India-China-Indonesia) markets for any production Continental establishes.

Bengara II Block

Field shooting and recording operations on the 3D portion of the Bengara-II block seismic acquisition program are now completed. The full original 3D program of 178 square kilometers (120 km(2) full fold) has been recorded. Computer processing of the entire 3D program is also now completed.

Original plans called for a total of 920 line kilometers of new 2D seismic data to also be shot and recorded. Repositioning of some lines and abandonment of others due to the prawn farm issues has resulted in a reduction of the planned 2D program. CGB2 now expects to complete a total of 685 line kilometers of new 2D seismic recording.

CGB2 is currently finalizing its 2012 work program and budget and the Company will update 2012 drilling plans when the budget is finalized.

Geothermal Energy Project

• A Milestone Event for Continental
• First Malaysian Power Plant Fired By A Geothermal Source
• $328,000,000 Revenue From Malaysia Alone

Continental Energy announced that it has purchased a 10% stake in Tawau Green Energy Sdn. Bhd. ("TGE"), a privately held company based in Kota Kinabalu, Sabah, Malaysia.

TGE is a geothermal energy developer. On November 29, 2011, TGE entered into a Renewable Energy Power Purchase Agreement (the "PPA") with Sabah Electricity Sdn. Bhd. ("SESB") to supply a capacity of 30 megawatts of electrical power to SESB's East Coast Sabah power grid. SESB is a utility owned 80% by Tenaga Nasional Berhad, the federally owned electrical generation authority and utility of Malaysia and 20% by the State Government of Sabah. TGE is developing a volcano related geothermal resource known as "Apas Kiri" which is located in southern Sabah near the city of Tawau approximately 100 miles north of Continental's Bengara-II oil and gas PSC in Indonesia.

Continental is purchasing its 10% stake in TGE from an existing TGE shareholder (the "Seller"). Pursuant to a share sale and purchase agreement, Continental will make a combination of cash payments on behalf of or directly to TGE in the form of shareholder loans repayable by TGE to the Seller. The payments will include set amounts per month plus other cash payments from time to time over a 12 month period to a cumulative and maximum amount of 6 Million Malaysian Ringgit (approximately US$ 2 Million). Continental's payments are to be administered jointly by Continental and the Seller and utilized solely to provide financing for pre-agreed, front-end geothermal resource development costs incurred by, or on behalf of, TGE. In addition, the share sale and purchase agreement provides Continental with the right to appoint one person to TGE's Board of Directors and the right to designate TGE's Geotechnical Director. Continental's Chief Executive Officer, Richard L. McAdoo has accepted the role of Director and he will also act as TGE's Geotechnical Director for geosciences and geothermal resource exploration, development and exploitation.