Continental Energy : and HEXAS Establish Strategic Alliance and Joint Venture for Indonesia

Continental and HEXAS Establish Strategic Alliance and Joint Venture for Indonesia

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December 30, 2021

Jakarta, Indonesia and Olympia, Washington - 30 December 2021 -

Continental Energy Corporation (OTCBB: CPPXF) ("Continental"), its wholly owned Indonesian subsidiary, PT Kilang Kaltim Continental ("KKC"), and Hexas Biomass Inc. ("Hexas") are pleased to announce the establishment of an unincorporated strategic alliance and joint venture (the "Alliance") between Hexas and KKC.

The Alliance's primary objective is the production of Hexas' proprietary "XanoGrass^TM" plant varieties for use as a sustainable source of non-food and non-feed biomass feedstocks for production of clean, environmentally responsible advanced biofuels at KKC's Maloy Refinery development site in East Kalimantan, Indonesia.

XanoGrass^TM is an EPA-approved bioenergy crop that meets the US Renewable Fuel Standards. Since the plants are NOT used for food or feed purposes, commercial use of harvested XanoGrass^TM biomass for production of biofuels, biofibers, and biomaterials is not in competition with alternative uses of XanoGrass^TM as human food or animal feed. Further, XanoGrass^TM production does not displace food crop production.

Importantly, XanoGrass^TM plants are hyperaccumulator plants with the ability to remove heavy metals and other pollutants from contaminated soils and store them in plant tissues. XanoGrass^TM plants also sequester carbon both underground in the plants' roots and in harvested plant fiber. Cultivation of XanoGrass^TM restores soil microbial communities and fixes nitrogen in the soil.

The net effect of these properties of XanoGrassTM plants is that, over time, XanoGrass^TM cultivation regenerates and restores damaged and contaminated topsoil and subsoil to a condition suitable for replanting to restore its original wild condition or suitable for commercial agriculture production of food, feed, or other products.

Alliance Recognized Opportunity :

The Alliance recognizes an opportunity presented by the availability of large tracts of degraded land nearby KKC's Maloy Refinery site, upon which the original fertile topsoil, and in some cases the subsoil and the entire soil profile, has been eroded and exhausted due to insufficient agricultural or forestry soil conservation practices, or has been removed, polluted, or damaged by decades of strip-mining activity. The provincial government of East Kalimantan is looking for solutions to restore and regenerate over 2 million hectares (4.9 million acres) of degraded soil.

Cultivation of XanoGrass^TM on available damaged land near the Maloy site using Hexas' Farm-to-Fiber^TM system and business model can help 1) restore, regenerate, and reclaim barren soils, 2) provide local farmers an income opportunity and guaranteed harvest offtake, and 3) minimize renewable biofuels feedstock transport costs and reduce the overall CO2 footprint of the clean biofuels to be produced at KKC's refinery.

About XanoGrass^TM:

Hexas has developed a proprietary variety of giant grass called "XanoGrass^TM" that is perennial, fast growing, yields 50-85 dry metric tons of biomass per hectare (2.47 acres) year-over-year, is highly pest-resistant, grows in different climates and soil types, tolerates drought, and has low ecological demand.

XanoGrass^TM is an US EPA-approved bioenergy crop that meets the USA Renewable Fuel Standards. Harvested stalks, stems, and leaves of XanoGrass^TM are not intended for human or animal consumption and XanoGrass^TM production does not displace food crop production.

XanoGrass^TM is a sterile, non-seed producing grass and is therefore rendered non-invasive. Once planted, XanoGrass^TM can be harvested repeatedly for up to 20-years before re-planting is necessary.

XanoGrass^TM has been demonstrated to sequester 32.6 metric tons of carbon per hectare annually, compared to 19.2 and 6.2 metric tons respectively for Miscanthus and switchgrass, two other widely touted non-food, non-feed biomass feedstocks used to produce advanced biofuels.

The average yield in temperate climates for XanoGrass^TM is 55 dry metric tons per hectare per year compared to 37 for Miscanthus and 15 for switchgrass. Hexas and KKC expect much higher yields in the tropical climate of Indonesia where the growing season is 12 months per year instead of the 4-to-8-month season in North America or Europe.

About XanoFiber^TM and Value Added Biomaterials :

In addition to use as an advanced biofuels feedstock, XanoGrass^TM can by processed into a wide variety of specialty XanoFiber^TM biomaterials using Hexas' proprietary post-harvest processing. XanoFiber^TM is a low-cost, high-quality feedstock with consistent physical and chemical properties. XanoFiber^TM integrates directly into manufacturing systems as a replacement of, or supplement to, wood, jute, hemp, or other natural biofibers and fossil fuel-based feedstocks without sacrificing product functionality or aesthetic appeal.

XanoFiber^TM finds ready markets with producers of oriented strand boards, fiber and particle boards, pulp, paper, bioplastic, textiles, polymers, packaging, biochemicals, fiber reinforced polymer composites for automotive and other manufacturing applications; and for use in biofiber reinforced aggregates for lightweight composites.

About Hexas :

Olympia, Washington, based Hexas is a private, woman-owned biomaterials company focused on plant-based materials solutions for the planet. Hexas' regenerative biomaterials replace wood and fossil fuel-based raw materials in multiple applications.

Applications for Hexas' plant-based materials include bioenergy, composites, structural/non-structural products, bioremediation, and more. Hexas has developed a proprietary Farm-to-Fiber^TM system (patent pending) for the low-cost, carbon negative production and delivery of its biomaterials to its customers.

About KKC :

KKC is an Indonesian domiciled, wholly owned subsidiary of Continental that is fully licensed by Indonesian foreign direct investment and energy ministry authorities to build, own, and operate a 24,000 barrels per day, state of the art, digitally controlled, integrated biofuels and crude oil refinery in the Maloy special economic zone in East Kalimantan province of Indonesia.

KKC plans to refine and blend advanced biofuels that meet the Indonesian government required renewable biofuel mandate of B30 Biodiesel and E20 ethanol content in gasoline, all for sale to Indonesian domestic market. XanoGrassTM is an ideal biomass source for production of advanced biofuels that meet the government mandate as well as an ideal renewable feedstock for planned refinery expansions to add production capacity for "Green Methanol" and "Green Hydrogen".

Wendy Owens, CEO of Hexas, said after the signing: "It is an honor and a remarkable opportunity we have to work with KKC to bring XanoGrass^TM and XanoFiber^TM raw materials to Indonesia. We are more than pleased to work with Rich and the KKC team on a biomass solution to produce sustainable, advanced cellulosic biofuels to support national biofuel mandates. Our goal with our Farm-to-Fiber^TM platform is to disrupt the use of fossil fuels and food crops for fuel without interrupting existing supply chains and business while enabling our customers to use XanoGrassTM feedstock and XanoFiber^TM biomaterials to make a difference in local communities through jobs creation and ecosystem services while mitigating the impact of climate change on lives and livelihoods."

Rich McAdoo, CEO of Continental and Commissioner of KKC, added: "We are proud to be associated with Hexas. Wendy and her team have developed a great proprietary technology with XanoGrass^TM plants and the XanoFiber^TM biomaterial, plus a well thought out Farm-to-Fiber^TM business model on how to monetize them. Hexas and its technologies offer a short path to enabling our Maloy Refinery to produce enhanced and certifiably "green" and renewable fuel products, including biodiesel, fuel grade ethanol, methanol, and hydrogen. Producing special-application biomaterials derived from XanoFiber^TM is a value-added bonus. It offers our Alliance a substantial future revenue stream from the sale of such products."

On behalf of Hexas, On behalf of Continental and KKC,

Wendy Owens Richard L. McAdoo

CEO CEO and Commissioner

Media Contacts:

CEC & KKC : Ash, [phone] - [e-mail] - www.continentalenergy.com

HEXAS : Rachel, [phone] - [e-mail] - www.hexas.com

No securities regulatory authority has either approved or disapproved the contents of this news release. We assume no obligation to update its content. Any statements made herein that are not historical or factual at the date hereof are forward looking statements. Many risk factors may cause our actual performance and results to be substantially different from our plans or expectations described in any forward looking statements. In this release there is no assurance that the alliance and joint venture will successfully realize any joint projects, or that if realized, such project will yield products that are economically sustainable or profitable. Readers are encouraged to refer to the expanded discussion of recognized risks and uncertainties, many of which could detrimentally impact any forward looking statements, that Continental continuously provide in regulatory disclosures filed on, and publicly available for view or download from, www.sedar.com or from www.sec.gov/edgar.

Released December 30, 2021