Domicile & Securities Regulatory Compliance - The Company's home country is Canada. The Company's host countries by virtue of listing of the Company's common shares for trading purposes include the United States of America. The Company's common shares trade according to the rules and regulations of the Company's home country securities regulatory agency, the "British Columbia Securities Commission" or "BCSC" and the applicable laws, rules and regulations of its host countries. The Company's only share trading market is the NASD Electronic OTC Bulletin Board under the symbol "CPPXF". The Company is a fully reporting US Securities Exchange Commission EDGAR filer.
Fiscal Year - The Company's fiscal year ends June 30th. At the Company's 1/25/06 Annual General Meeting the shareholders approved a change in the date of the Company's fiscal year end from July 31, to June 30. Therefore the date of June 30, 2006 marks the new ending date of the Company's fiscal year and fiscal year 2006 consisted of 11 months instead of 12.
Annual Report - This US Securities and Exchange Commission ("US-SEC") Form-20F filing is made as an "Annual Report" pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934. This Annual Report includes audited financial statements as of the most recently completed fiscal year ended June 30, 2006 (6/30/06 or Fiscal 2006 in the forms commonly employed herein).
Report Date - This Annual Report was prepared in October 2007. Information contained herein is current and valid as at October 29, 2007, (10/29/07) the "Report Date" except where the context specified otherwise.
Principal Offices - The Company's head office is located at 14001 Dallas Parkway, Suite 1200, Dallas, Texas 75240, USA; the contact person is James D. Eger, Director; the telephone number is (972) 934-6774 and the facsimile number is (972) 934-6718. The internet world wide web site URL address is www.continentalenergy.com. The e-mail address is mail@continentalenergy.com. The Company's executive office is located in Premier Business Center's Dallas office suites. The Company began occupying this facility in February 2004 and considers the facility adequate for current needs.
Currency - Unless otherwise noted herein the symbol $ refers to US Dollars. The term CDN$ refers to Canadian Dollars. Rupiah or its abbreviation Rp. refers to currency of the Republic of Indonesia.
Definitions, Terminology, Abbreviations & Conversions - Information on definitions, terminology, concepts and provisions of Production Sharing Contracts is included in the Exhibits hereto. Particularly, the reader is referred to ITEM-#19 below together with the external information sources referred to therein for a glossary and definitions of many technical and contractual terms used in this report.
COMMON SHARES AND TRADING MARKETS
All references herein to common shares refer to the Company's authorized share capital of "Common Shares" without Par Value unless otherwise indicated. All references herein to common shares refer to the Company's authorized share capital of "Preferred Shares" without Par Value unless otherwise indicated. The Preferred Shares are not listed or registered for trading on any exchange or trading system. The only share trading market for the Common Shares is the NASD Electronic OTC Bulletin Board under the symbol "CPPXF".
SUBSIDIARIES
Continental Energy Corp. Prior to 1998 the Company conducted some business in the United States through its wholly-owned subsidiary, Continental Energy Corp., a Nevada Corporation, incorporated on 10/07/97 with its registered office address at Suite 260, 6121 Lakeside Drive, Reno, Nevada. At the Report Date this subsidiary is inactive. It has been dormant since 1998 and the Company has no short term plans to revive it.
Continental-GeoPetro (Bengara-II) Ltd. is a company incorporated on 09/09/97 under the British Virgin Islands International Business Corporations Act of 1988 with an authorized share capital of $50,000 consisting of 50,000 common shares having par value of $1.00 each. Pursuant to a name change certificate dated 06/05/03 the name was changed from "Apex (Bengara-II) Ltd." as originally incorporated to "Continental-Wisdom-GeoPetro (Bengara-II) Ltd." The name was changed again on 12/17/03 to "Continental-GeoPetro (Bengara-II) Ltd." ("CGB2"). CGB2 was incorporated expressly for the sole purpose of holding and operating the Bengara-II Block property pursuant to Bengara-II production sharing contract. CGB2 has no other business or assets and owns only a 100% undivided holding in the Bengara-II PSC. During Fiscal 2007, the Company sold 70% of its interest in CGB2 (See section below in this report entitled "Disposition of Interest in Principal Properties"). At the Report Date, the Company owns 9,000 common shares of CGB2 representing an 18% stake and a corresponding 18% stake in its Bengara-II Block property. GeoPetro Resources Company of San Francisco owns 6,000 common shares representing a 12% shareholding in CGB2 and CNPC (Hong Kong) Ltd. of Hong Kong owns 35,000 common shares representing a 70% shareholding.
CG Xploration Inc. On 11/18/05 the Company incorporated a new jointly owned and jointly controlled special purpose joint venture subsidiary domiciled in Delaware named CG Xploration Inc. ("CGX"). CGX is incorporated with an authorized share capital of 1,000 common shares having a par value of $0.01 each. The Company owns 500 shares representing a 50% stake in CGX and GeoPetro Resources Company of San Francisco also owns 50%. At the Report Date CGX has no properties but through it the Company continues to create, review, and evaluate new venture oil and gas exploration and production opportunities in Indonesia in accordance with a CGX shareholders agreement dated 1/1/07. CGX is accounted for as a joint venture in the Company's financial statements and further discussion of CGX is made in the following section entitled "Joint Ventures".
TXX Energy Corporation On 1/16/06 the Company incorporated a new wholly owned special purpose subsidiary in Texas named TXX Energy Corporation ("TXX"). The registered office address of TXX is Suite 1200, 14001 Dallas Parkway, Dallas, Texas, 75240. TXX was formed for the purposes of pursuing oil and gas exploration and production opportunities in the USA. At the Report Date TXX has no properties but through it the Company continues to review USA oil and gas exploration and production opportunities from time to time.
Continental Biofuels Corporation On 8/30/07 the Company incorporated, as a cofounder, a new partially owned, special purpose joint venture subsidiary domiciled in Delaware named Continental Biofuels Corporation ("CBC"). The registered offices of CBC are located at 16192 Coastal Highway, Lewes, Delaware, 19958. CBC is incorporated with an authorized share capital of 3,000 common shares having a par value of $0.01. The Company subscribed and purchased 1,000 shares of the 2,500 issued and fully paid share capital of CBC representing a 40% stake in CBC. The remaining 60% stake in CBC is held by a cofounder group of five private investors led by Casimir Capital LP of New York which includes two Directors of the Company, each holding a 10% stake. At the Report Date the Company exerts significant management control of CBC because the two sole directors of CBC area also officers and directors of the Company. The Company expects this management control to be relinquished and the Company's shareholding stake to be diluted in the short term as new investors enter CBC as contemplated in the cofounders' CBC shareholders agreement dated 10/17/07. At the Report Date CBC has no properties but is planning new joint venture palm oil to biodiesel projects in SE Asia with existing palm oil plantation owners.
JOINT VENTURES
At the Report Date the Company does not participate in any active joint ventures pursuant to joint operating agreements. However, the Company does participate in certain jointly owned and jointly controlled special purpose joint venture subsidiaries.
Bengara-II Block Exploration: Joint Venture During Fiscal 2007, in a letter agreement dated 09/29/06 the Company and GeoPetro Resources Company agreed to terminate in its entirety the Bengara-II joint operating agreement. This terminations coincided with the sale by the Company and by GeoPetro of 70% of each of their respective shares of Bengara to CNPCHK (See disposition to CNPCHK in the section entitled "Disposition of Interest in Principal Properties" below).
CG Xploration Inc.: Joint Venture Subsidiary On 11/18/05 the Company incorporated a new jointly owned and jointly controlled special purpose joint venture subsidiary domiciled in Delaware named CG Xploration Inc. ("CGX"). The Company owns 50% of CGX and GeoPetro Resources Company ("GeoPetro") of San Francisco owns 50%. CGX was formed for the express purpose of identifying, evaluating, and acquiring new oil and gas production sharing contracts with the Indonesian government in new areas limited to the Indonesian portions of the islands of Borneo and New Guinea. CGX is accounted for as a joint venture in the Company's financial statements. The Company and GeoPetro jointly control the operations of CGX in the proportions 50/50 in accordance with a CGX shareholders agreement dated 1/1/07.
