SOURCE: Coastal Energy Company

Coastal Energy Company

March 22, 2011 16:33 ET

Coastal Energy Announces Bua Ban North Drilling Update

HOUSTON, TX--(Marketwire - March 22, 2011) - Coastal Energy Company (the "Company" or "Coastal") (TSX-V: CEN) (AIM: CEO) announces an update of its operations in the Gulf of Thailand.

Bua Ban North

The Bua Ban North A-02 exploration well was drilled to a depth of 8,100 feet into an upthrown fault block adjacent to the recent discovery in the Bua Ban North A-01 well. The A-02 well encountered 205 feet of net sand in the Eocene interval with 16% average porosity. The Eocene interval in the A-02 well appears to have good reservoir characteristics and formation pressure data obtained from wireline logging (MDT measurements) indicate an oil gradient. However, log results were inconclusive and fluid samples were not obtainable. The Company is uncertain of the commerciality of the well until it can be flow tested. Coastal plans to perforate and test the Eocene in the A-02 well once suitable testing facilities are installed.

Following suspension of the A-02 well, the Bua Ban North A-04 well was spudded and will test the Miocene interval in an upthrown block relative to the productive Miocene sands encountered in the A-01 well, along with a step-out of the Upper Oligocene discovery from the A-01 well. The Company plans to drill an additional two to three appraisal/development wells at Bua Ban North A following the A-04 well.

Coastal is currently mobilizing a MOPU (mobile offshore production unit) to the Bua Ban North A location which is expected to be installed in early May. Following installation of the MOPU, the Company will begin extended production tests of the wells at Bua Ban North A.

The Bua Ban A-04 and A-07 wells are continuing to clean up following the single stage fracs on each well. The A-04 and A-07 wells are flowing at 200 bopd and 220 bopd, respectively.

Randy Bartley, Chief Executive Officer of Coastal Energy, commented:

"We will be able to determine the commerciality of this new well following testing, which will begin in early May. Following the completion of this phase of appraisal and development drilling at Bua Ban North A, we plan to move the rig to Bua Ban North B, which is further north and has prospective targets in all three intervals."

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
    Email: Email Contact
    +1 (713) 877-6793

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

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

    Buchanan Communications
    Tim Thompson
    +44 (0) 20 7466 5000
    Chris McMahon
    Ben Romney