SOURCE: Coastal Energy Company

April 19, 2010 20:06 ET

Coastal Energy Announces 2009 Year End Financial Results

HOUSTON, TX--(Marketwire - April 19, 2010) - Coastal Energy Company (the "Company" or "Coastal Energy") (TSX-V: CEN) (AIM: CEO), an independent exploration and production company with assets in Thailand, announces the financial results for the year ended December 31, 2009. The functional and reporting currency of the Company is the United States dollar.

Fourth Quarter 2009 Highlights

--  Total Company production averaged 7,391 boe/d for the fourth quarter.
--  The Company's fourth quarter EBITDAX was $12.5 million.
--  The Company drilled two development wells and three water injection
    wells on the Songkhla A field.  Both development wells, Songkhla A-04
    and Songkhla A-08, encountered oil in the Lower Oligocene reservoir
    and logged 100 feet and 92 feet of net pay with 20% and 18% porosity,
    respectively.

Full Year 2009 Highlights

--  Total Company production averaged 7,362 boe/d for the full year of
    2009.
--  The Company's full year EBITDAX was $37.9 million.
--  The Company's full year net loss was $0.00 per share.
--  The Company released the results of its third-party reserve
    evaluation report prepared by Huddleston & Co. dated March 17, 2010
    (effective date December 31, 2009)

                       As of       As of
                     December    December    After-Tax   After-Tax
                     31, 2009    31, 2008    NPV 2009    NPV 2008     %
                      (mmboe)     (mmboe)     (US$MM)     (US$MM)   Change
                    ----------- ----------- ----------- ----------- ------
Proven
  Offshore              15.2        18.1     $ 345.2     $ 284.1    21.5 %
  Onshore                8.0         8.5       107.4        69.5    54.5 %
                    ----------- ----------- ----------- ----------- ------
    Total 1P            23.2        26.6       452.6       353.6    28.0 %

                    ----------- ----------- ----------- ----------- ------
Proven + Probable
  Offshore              32.9        41.5     $ 577.1     $ 497.7    16.0 %
  Onshore               22.1        20.7       203.5       112.9    80.2 %
                    ----------- ----------- ----------- ----------- ------
    Total 2P            55.0        62.2       780.6       610.6    27.8 %
                    ----------- ----------- ----------- ----------- ------

Note: Reserve figures are shown as net working interest before royalties
(Thailand royalty regime is discussed in the MD&A of the Company's Annual
Report dated December 31, 2009). After-tax NPV figures are defined as
future net revenues discounted at 10%. Reserve numbers taken from the
Company's competent person's report prepared by Huddleston & Co. dated as
of December 31, 2009 (prepared in accordance with NI 51-101 and the COGE
Handbook) which may be found on the Company's website at
www.coastalenergy.com.

Randy Bartley, President and CEO of Coastal Energy, commented:

"The Company completed the latest phase of development drilling at Songkhla A in late Q409, in which two development wells and three water injection wells were drilled. As a result, average offshore production for Q110 increased to approximately 7,100 bopd. Following workover activities during Q110 on selected wells at Songkhla A, current average offshore production rates are approximately 9,500 bopd. Coastal's current combined production is 11,500 boe/d.

"Coastal is now continuing to move forward with its offshore exploration program. Benjarong A-01 has been logged and is awaiting testing and Benjarong A-02 is currently being drilled. We expect to have results from the A-02 drilling and subsequent flow tests from both wells in the coming weeks. Following completion of work at Benjarong, the development program on the Bua Ban field will begin.

"Now that the four producing wells at Songkhla A are online the Company is in a stronger cash flow position and is conservatively leveraged.

"This was an important year in the history of the Company. Management is looking forward to another year of success and growth for Coastal Energy as we bring our second proven field onstream and further improve our cash flow profile."

The following financial statements for the Company are abbreviated versions. The Company's complete financial statements for the three and twelve months ended December 31, 2009 with the notes thereto and the related Management Discussion and Analysis can be found either on Coastal's website at www.CoastalEnergy.com or on SEDAR at www.sedar.com. All amounts are in US$ thousands, except share and per share amounts.

CONSOLIDATED STATEMENTS OF OPERATIONS, COMPREHENSIVE LOSS AND DEFICIT


                                                         2009         2008
                                                   ----------   ----------
                                                            $            $
Revenues
  Oil and natural gas                                  86,348        4,098
  Royalties                                            (5,878)        (214)
  (Loss) gain on derivative (Note 13)                  (2,077)       2,447
  Interest income                                          27          982
  Other income                                            110            -
                                                   ----------   ----------
                                                       78,530        7,313
                                                   ----------   ----------

Expenses and other
  Production                                           33,477        1,597
  General and administrative                           19,576       12,824
  Foreign exchange loss                                 1,941        3,869
  Interest                                              3,839        2,146
  Debt financing fees (Note 12)                         1,454            -
  Depletion, depreciation and accretion                23,695        1,893
  Settlement (Note 8)                                   2,366            -
  Loss (gain) on sale of assets                           148         (217)
                                                   ----------   ----------
                                                       86,496       22,112
                                                   ----------   ----------

Net loss before taxes, earnings from significantly
 influenced investee and non-controlling interest      (7,966)     (14,799)

Income taxes (Note 18)                                    738          666
                                                   ----------   ----------

Net loss before earnings from significantly
 influenced investee and non-controlling interests     (8,704)     (15,465)

Earnings from significantly influenced investee
 (Note 7)                                               8,462       12,904
                                                   ----------   ----------

Net loss before non-controlling interests                (242)      (2,561)

Non-controlling interest (Note 4)                         127            -
                                                   ----------   ----------

Net loss and comprehensive loss                          (115)      (2,561)
Deficit, beginning of year                            (16,587)     (14,026)
                                                   ----------   ----------
Deficit, end of year                                  (16,702)     (16,587)
                                                   ==========   ==========

Basic and diluted loss per share (Note 15)               0.00        (0.03)
                                                   ==========   ==========

Weighted average number of common shares
 outstanding                                       98,243,701   93,262,551
                                                   ==========   ==========



CONSOLIDATED BALANCE SHEETS


                                                         2009         2008
                                                   ----------   ----------
                                                            $            $
Assets
Current assets
  Cash and cash equivalents                            21,229        6,434
  Restricted cash (Note 5)                              3,829        4,146
  Accounts receivable and other (Note 6)                6,111        2,391
  Derivative asset (Note 13)                               66        2,016
  Crude oil inventory                                   5,310          308
  Prepaids and other current assets                       526          271
                                                   ----------   ----------
                                                       37,071       15,566

Investment in and advances to Apico LLC (Note 7)       55,225       50,376
Property, plant and equipment, net (Note 8)           233,014      192,224
Other long-term assets                                    299          297
                                                   ----------   ----------
Total Assets                                          325,609      258,463
                                                   ==========   ==========

Liabilities
Current liabilities
  Accounts payable and accrued liabilities (Note 9)    31,325       35,536
  Deferred income (Note 10)                            23,060            -
  Income taxes payable (Note 18)                           38        1,252
  Amounts due to shareholder (Note 11)                  5,164        6,761
  Current portion of long-term debt (Note 13)          10,266       15,249
                                                   ----------   ----------
                                                       69,853       58,798

Long-term debt (Note 13)                               24,284       28,751
Asset retirement obligations (Note 14)                  2,809        1,354
Future income tax liability (Note 18)                  27,695       25,984
                                                   ----------   ----------
Total Liabilities                                     124,641      114,887
                                                   ----------   ----------

Commitments and contingencies (Note 19)

                                                   ----------   ----------
Non-controlling interests (Note 4)                      5,617            -
                                                   ----------   ----------

Shareholders' equity
Share capital (Note 15)                               198,121      146,938
Contributed surplus (Note 15)                          13,779       13,225
Warrants (Note 15)                                        153            -
Deficit                                               (16,702)     (16,587)
                                                   ----------   ----------
                                                      195,351      143,576
                                                   ----------   ----------
                                                      325,609      258,463
                                                   ==========   ==========



CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                         2009         2008
                                                   ----------   ----------
                                                            $            $
Operating activities
  Net loss for the year                                  (115)      (2,561)
  Earnings distributions from significantly
   influenced investee                                  8,129       16,619
  Items not involving cash:
    Depletion, depreciation and accretion              23,695        1,893
    Impairment                                          1,765            -
    Future income taxes                                   700       (1,818)
    Unrealized foreign exchange loss (gain)               909         (751)
    Loss applicable to non-controlling interest          (127)           -
    Stock based compensation                            8,021        2,080
    Issuance of warrants with notes payable               294            -
    Share of earnings of significantly influenced
     investee, net of taxes                            (8,462)     (12,904)
    Unrealized (gain) loss on derivative instrument     1,950       (2,015)
    (Gain) loss on sale of assets                         148         (217)
  Change in non-cash working capital (Note 20)         17,095        2,016
                                                   ----------   ----------
  Cash provided by operating activities of
   continuing operations                               54,002        2,342

Investing activities
  Investment in and advances to Apico LLC              (4,516)        (903)
  Increase in restricted cash                             317       (2,098)
  Purchase of property, plant and equipment           (77,671)     (82,645)
  Proceeds from sale of property and equipment              -        1,053
  Proceeds from non-controlling interest                5,744            -
  Acquisition of other long-term assets                    (2)        (241)
                                                   ----------   ----------
Cash used in investing activities                     (76,128)     (84,834)
                                                   ----------   ----------
Financing activities
  Issuance of shares for cash                          52,306       55,119
  Transaction costs associated with issuance of
   shares                                              (2,984)        (245)
  Borrowings under long-term debt                       1,620       45,000
  Repayments under long-term debt                     (11,070)     (26,000)
  Borrowings under notes payable                       15,000            -
  Repayments under notes payable                      (15,000)           -
  Borrowings under amounts due to shareholder           1,000        2,000
  Repayments under amounts due to shareholder          (3,000)           -
                                                   ----------   ----------
Cash provided by financing activities                  37,872       75,874
                                                   ----------   ----------

Net effect of foreign exchange on cash held in
 foreign currencies                                      (951)         (97)
                                                   ----------   ----------

Change in cash and cash equivalents                    14,795       (6,715)
Cash and cash equivalents, beginning of year            6,434       13,149
                                                   ----------   ----------
Cash and cash equivalents, end of year                 21,229        6,434
                                                   ==========   ==========

Cash and cash equivalents consists of:
  Cash                                                 21,229        5,606
  Short-term money market instruments                       -          828
                                                   ----------   ----------
                                                       21,229        6,434
                                                   ==========   ==========

Supplemental cash flow information (Note 20)

Randy Bartley, President and Chief Executive Officer of the Company and a member of the Society of Petroleum Engineering and Jerry Moon, Vice President, Technical & Business Development, a member of the American Association of Petroleum Geologists, a Licensed Professional Geoscientist and a Certified Petroleum Geologist in the state of Texas, have reviewed the contents of this announcement.

Additional information, including the Company's complete competent person's report may be found on the Company's website at www.CoastalEnergy.com or may be found in documents filed on SEDAR at www.sedar.com.

This statement contains 'forward-looking statements' as defined by the applicable securities legislation. Statements relating to current and future drilling results, existence and recoverability of potential hydrocarbon reserves, production amounts or revenues, forward capital expenditures, operation costs, oil and gas price forecasts and similar matters are based on current data and information and should be viewed as forward-looking statements. Such statements are not guarantees of future results and are subject to risks and uncertainties beyond Coastal Energy's control. Actual results may differ substantially from the forward-looking statements.

These securities have not been registered under United States Securities Act of 1933 (the "US Securities Act") or the securities laws of any state and may not be offered or sold in the United States or to US persons (as defined in Regulation S under the US Securities Act) unless an exemption from registration is available.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

This news release is not for dissemination in the United States or through United States newswire services

Contact Information

  • Enquiries:
    Coastal Energy Company
    Randy L. Bartley, Chief Executive Officer
    +1 713 877 6705
    William C. Phelps, Chief Financial Officer
    +1 713 877 6727
    Email: Email Contact

    Strand Hanson Limited (Nominated Adviser)
    +44 (0) 20 7409 3494
    Rory Murphy
    Paul Cocker

    Thomas Weisel Partners (Broker)
    +44 (0) 20 7877 4300
    Paul Colucci

    Macquarie Capital (Europe) Limited (Broker)
    +44 (0) 20 3037 2000
    Ben Colegrave
    Paul Connolly

    Buchanan Communications
    +44 (0) 20 7466 5000
    Tim Thompson
    Catherine Breen
    Katharine Sutton