Coastal Energy Co.
AIM : CEO
TSX VENTURE : CEO

Coastal Energy Co.

November 08, 2007 10:36 ET

Coastal Energy Issues Drilling Update for Thailand

LONDON, UNITED KINGDOM--(Marketwire - Nov. 8, 2007) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH
UNITED STATES NEWSWIRE SERVICES

Coastal Energy (the "Company" or "Coastal") (TSX VENTURE:CEO)(AIM:CEO) an independent exploration and production company with assets in South-East Asia, announces that the Dong Mun-3 ("DM3") well, the first of a two-well onshore appraisal programme, has commenced drilling in the Korat Plateau, northeast Thailand.

The DM3 well will appraise the Dong Mun gas field which was discovered by Exxon in the early 1990's and is located in Block L27/43, northeast Thailand. The primary objective of the DM3 well is to appraise the gas potential of the Permian carbonate Pha Nok Khao and Triassic clastic Huai Hin Lat formations. The well will be drilled by APICO LLC ("APICO") using the Ensign No. 16 rig and will take approximately 45 days to reach the projected total depth of 2716 metres sub sea depth. APICO has a 100 percent interest in Block L27/43 and Coastal is APICO's largest shareholder with 36.1 percent interest.

The second of the two wells, the Phu Horn South well, is located on Block L15/43 and is due to spud immediately after the completion of the Dong Mun well. The block is located approximately 60 kilometers northwest of Dong Mun and surrounds the Phu Horm gas field. The well will test the possible extension of the Phu Horm gas field further south, outside the current production area into Block L15/43 which is 100% owned by APICO. The Phu Horm field came on stream in November, 2006 and is currently producing between 90 - 105 million cubic feet of gas per day. APICO has a 35 percent interest in the Phu Horm field.

Coastal's Chief Executive Frank Inouye commented:

"I am happy to report the start of what will be a very exciting drilling programme. The DM3 well will help us evaluate the productivity and reserve potential of the Dong Mun field. However, the second well in the drilling programme, Phu Horm South, is arguably of greater significance as it could confirm the extension of the Phu Horm field south, outside the current production licenses. Confirmation of the extension of the Phu Horm field outside the current production area would put APICO in a position to negotiate a greater percentage of the Phu Horm production ultimately leading to increased production and cash flow for the Company."

Notes to Editors

- Coastal Energy is an oil and gas exploration, development and production company, with core assets onshore and offshore Thailand and Nevada, USA

- The Company specialises in identifying and developing under-exploited or "orphaned" or assets. Management has proven experience at identifying and unlocking value from overlooked, abandoned, low risk assets with proven hydrocarbon potential

- This strategy has enabled the Company to assemble an asset base in Thailand that includes production of approximately 11.5 mmcf/d of gas under long term contract and offshore oil fields currently under development

- Production growth over the next 12 - 18 months is expected to grow exponentially and proven, probable and possible reserves are 45.3 million barrels oil equivalents(i)

- The Company's current assets include:

- Offshore Thailand

-- 100% of block G5/43 - 3 successful appraisal wells drilled in 2005 / 2 additional discoveries on the block awaiting appraisal / untested exploration potential in Songkhla Basin - production expected to commence Q1 2008

- Onshore Thailand

-- 12.6% net interest in blocks EU1 and E5N which include the Phu Horm gas field currently producing between 90 and 100 mmcf/d

-- 36.1% net interest in block L15/43 surrounding the Phu Horm field

-- 36.1% net interest in block L27/43 - containing the undeveloped Dong Mun gas field

-- 21.7% net interest in block L13/48 located adjacent to blocks L15/43 and L27/43, contains Si That discovery

- For additional information, including the Company's complete competent person's report, please visit the Company website, www.coastalenergy.com.

(i) Gas converted at 6 mcf / barrel oil equivalent

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."

Contact Information

  • Coastal Energy Company
    Frank Inouye
    Chief Executive Officer
    +44 (0) 1483 549 549
    or
    Coastal Energy Company
    William C. Phelps
    Chief Financial Officer
    (713) 877-6727
    Email: investor@coastalenergy.com
    Website: www.coastalenergy.com
    or
    Bell Pottinger Corporate & Financial
    Ann-Marie Wilkinson / Nick Lambert / Rosanne Perry
    +44 (0) 20 7861 3232
    or
    KBC Peel Hunt Ltd
    (Nominated Adviser)
    Jonathan Marren / Matt Goode
    +44 (0) 20 7418 8900