Coastal Energy Co.
AIM : CEO
TSX VENTURE : CEN

Coastal Energy Co.

November 13, 2007 09:30 ET

Coastal Energy Secures Drilling Rig for Offshore Thailand

LONDON, UNITED KINGDOM--(Marketwire - Nov. 13, 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-V: CEN, AIM: CEO) an independent exploration and production company with assets in South-East Asia, announces the signing of a 12 month drilling contract with Swiber Offshore Drilling Pte. Ltd. of Singapore.

The Swiber Jack Up-1 ("JU1") barge mounted rig will be used for the drilling of production, appraisal and explorations wells in the offshore G5/43 block, Gulf of Thailand which is 100% owned and operated by NuCoastal (Thailand) Ltd., a wholly owned subsidiary of Coastal. Drilling is expected to commence in March 2008 with two to three production test wells on the Bua Ban field. These wells will target what are believed to be untested fan delta sand sequences that have been interpreted from the high resolution 3-D seismic survey acquired earlier this year. After completion and testing of the Bua Ban wells the JU1 rig will move to Songkhla field where it will drill a minimum of five production wells. The rig will then commence drilling appraisal wells on several other discovered fields and exploration drilling on mapped prospects in the northern portion of the Songkhla Basin.

The JU1 rig has been specially designed to drill in shallow waters and has the capability and flexibility to accommodate Coastal's diversified well programme which includes open water appraisal, exploration drilling as well as wellhead platform production drilling.

The 12 month contract, which is extendable for an additional 12 months, will enable the Company to drill, test and complete an average of two wells per month at a rig cost of approximately US$65,000 per day which is considerably less than the jack up rates in Asia that are currently averaging US$200,000 per day.

Swiber Offshore Drilling Pte. Ltd. is a wholly owned subsidiary of Swiber Holdings Ltd. a publicly listed company based in Singapore that specialises in offshore drilling, engineering and construction.

Coastal's Chief Executive Frank Inouye commented:

"This contract with Swiber is a key milestone in the Company's offshore development plans. Due to the delays in refurbishment of the Ocean 66 rig we have sourced an alternative drilling rig and the Swiber team has worked hard to provide a solution that accommodates all our drilling requirements. I am extremely impressed with Swiber's

senior management and their ability to deliver innovative low cost offshore solutions. They, like Coastal, are focused on the Far East and provide a diverse range of marine
and engineering expertise. The contract provides flexibility and a cost effective long term drilling solution that will enable the Company to aggressively develop, appraise and explore the G5/43 block."

Notes to Editors

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

- 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(ii)

- 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 www.coastalenergy.com

(ii) 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
    Email: investor@coastalenergy.com
    or
    Coastal Energy Company
    William C. Phelps
    Chief Financial Officer
    +1 713 877 6727
    Email: investor@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