SOURCE: Coastal Energy Company

Coastal Energy Company

June 20, 2011 21:04 ET

Coastal Energy Announces First Quarter 2011 Financial Results

HOUSTON, TX--(Marketwire - Jun 20, 2011) - Coastal Energy Company (the "Company" or "Coastal Energy") (TSX-V: CEN) (AIM: CEO), the independent exploration and production company with assets in Thailand, announces the financial results for the three months ended March 31, 2011. The functional and reporting currency of the Company is the United States Dollar.

First Quarter 2011 Highlights

--  Total Company production averaged 10,125 boepd in the first quarter, up
    from 7,578 boepd in the fourth quarter of 2010, a 34% increase.
    Offshore production was impacted by downtime for workover operations on
    several wells.

--  EBITDAX for Q111 was $40.1 million, 13% above the same period in 2010.

--  The Company began its exploration program with a discovery at Bua Ban
    North A. The Bua Ban North A-01 well encountered pay zones in the
    Miocene and Upper Oligocene intervals.

--  Subsequent to quarter-end, two further successful exploration wells
    were drilled at Bua Ban North A and six successful exploration wells
    were drilled at Bua Ban North B. The Company plans to begin testing
    these discoveries in July.

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

"I'm pleased to report that the first quarter of 2011 brought further success for the Company. Production and cash flow both increased from the previous quarter. We expect to see material production gains offshore as Bua Ban North B & A are tied in beginning in July.

"Exploration results for the year to date have been outstanding. Ten exploration wells have been drilled to date and nine of them have been successful. The Miocene trend, which was first discovered at Bua Ban, has proved to be a successful play at Bua Ban North A & B. We are excited about the continued success with the Miocene given the large number of Miocene prospects on our concessions and the fact that the Miocene interval has the best reservoir characteristics that have been seen in the basin.

"We look forward to the remainder of 2011. We expect to begin testing Bua Ban North B in July following the completion of the appraisal drilling. We will then move the rig to the Songkhla H prospect, which is a potential high impact Miocene target. Songkhla H is located outside of the Company's current production areas and is a commitment well. Later in the year, we will return to Songkhla A to further develop that field and restore production rates."

The following financial statements for the Company are abbreviated versions. The Company's complete financial statements for the three months ended March 31, 2011 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.

Three Months ended March 31,                              2011      2010
                                                        --------  ---------
                                                            $         $
Revenues and Other Income
  Oil sales, net of royalties                             66,711     45,860
  Other income                                           (21,084)       148
                                                        --------  ---------
                                                          45,627     46,008
                                                        --------  ---------

Expenses
  Production                                              22,218     10,995
  Depreciation and depletion                              13,286      5,973
  General and administrative                               5,263      3,797
  Exploration                                              5,553      9,267
  Debt financing fees                                        234        124
  Finance expense                                          1,162        732
                                                        --------  ---------
                                                          47,716     30,888
                                                        --------  ---------

Net (loss) income before income taxes, share of  net
 income from Apico LLC and non-controlling interest       (2,089)    15,120

  Share of net income from Apico LLC                       3,256      2,984
                                                        --------  ---------

Net income before income taxes and non-controlling
 interest                                                  1,167     18,104
                                                        --------  ---------

Income taxes
  Current                                                      -        964
  Deferred                                                 3,183      5,577
                                                        --------  ---------
                                                           3,183      6,541
                                                        --------  ---------

Net (loss) income and comprehensive (loss) income          (2,016)
11,563
Net income attributable to non-controlling interest         (346)         5
                                                        --------  ---------
Net (loss) income and comprehensive (loss) income
 attributable to the shareholders of Coastal Energy
 Company                                                  (2,362)    11,568
                                                        ========  =========

Net income (loss) per share:
Basic                                                   $  (0.02) $    0.11
Diluted                                                 $  (0.02) $    0.10



                                    March 31,   December 31,   January 1,
As at                                 2011          2010          2010
                                  ------------  ------------  ------------
                                        $             $             $
Assets
  Current Assets
    Cash                                15,912         3,884        21,229
    Restricted cash                      9,836        16,369         3,829
    Accounts receivable                 25,220        10,299         6,111
    Derivative asset                       144           135            66
    Inventory                           11,953        12,783         5,310
    Prepaids and other current
     assets                                171           606           526
                                  ------------  ------------  ------------
      Total current assets              63,236        44,076        37,071

  Non-Current Assets
    Exploration and evaluation
     assets                             42,114        31,068        44,907
    Property, plant and equipment      244,182       246,248       189,534
    Investment in and advances to
     Apico LLC                          49,614        47,261        55,225
    Deposits and other assets              332           289           300
                                  ------------  ------------  ------------
      Total non-current assets         336,242       324,866       289,966
                                  ------------  ------------  ------------
Total Assets                           399,478       368,942       327,037
                                  ============  ============  ============

Liabilities
  Current Liabilities
    Accounts payable and accrued
     liabilities                        51,592        53,550        31,363
    Deferred income                          -             -        23,060
    Current portion of long-term
     debt                               38,172        36,262        10,266
    Amounts due to shareholder               -             -         5,164
    Obligations under finance
     leases                                755           885            35
    Current portion of derivative
     liabilities                        23,985        10,141             -
                                  ------------  ------------  ------------
      Total current liabilities        114,504       100,838        69,888

  Non-Current Liabilities
    Long-term debt                      40,412        35,081        24,284
    Obligations under finance
     leases                                709           579         1,439
    Non-current portion of
     derivative liabilities             11,031         6,609             -
    Deferred tax liabilities            15,068        11,885        23,653
    Decommissioning liabilities         18,250        17,655         4,071
                                  ------------  ------------  ------------
      Total Non-Current
       Liabilities                      85,470        71,809        53,447

Shareholders' Equity
    Common shares                      207,388       201,303       198,121
    Contributed surplus                 15,238        15,892        13,779
    Warrants                                29            79           153
    Accumulated deficit                (29,900)      (27,538)      (13,968)
                                  ------------  ------------  ------------
  Total Coastal Energy Company
   Shareholders' Equity                192,755       189,736       198,085
    Non-Controlling Interest             6,749         6,559         5,617
                                  ------------  ------------  ------------
  Total equity                         199,504       196,295       203,702
                                  ------------  ------------  ------------
Total liabilities and equity           399,478       368,942       327,037
                                  ============  ============  ============



Three Months ended March 31,                              2011      2010
                                                        --------  --------
                                                            $         $
Operating Activities
  Net (loss) income attributable to the shareholders of
   Coastal Energy Company                                 (2,362)   11,568
Adjustments:
    Share of net income from Apico LLC                    (3,256)   (2,984)
    Non-controlling interest                                 346        (5)
    Unrealized loss on derivative instruments             18,257        65
    Depletion and depreciation                            13,286     5,973
    Finance expense                                          946       384
    Amortization of debt financing fees                      234         -
    Stock-based compensation                               2,122     1,259
    Deferred income taxes                                  3,183     5,577
    Unrealized foreign exchange (gain) loss                 (149)        -
    Exploration expense                                    5,553     9,267
  Income Taxes Paid                                            -        (6)
  Interest income                                              1         2
  Interest Paid                                             (312)     (510)
  Earnings distributions from Apico LLC                      903       541
  Changes in Non-Cash Working Capital (Note 21)           (7,315)   (5,666)
                                                        --------  --------
                                                          31,437    25,465

Financing Activities
  Issuance of common shares, net of issuance costs         4,693     1,840
  Borrowings under long-term debt                          6,275         -
  Repayment of long-term debt                                  -    (4,979)
  Repayment of amounts due to shareholder                      -    (1,750)
                                                        --------  --------
                                                          10,968    (4,889)

Investing Activities
  Increase in restricted cash                              6,533       377
  Purchase of property, plant and equipment              (36,470)  (36,332)
  Deposits and other assets                                  (43)       (6)
  (Payments to) contributions from non-controlling
   interest                                                 (156)      750
                                                        --------  --------
                                                         (30,136)  (35,211)

Effect of exchange rate changes on cash                     (241)      135


Increase (decrease) in cash                               12,028   (14,500)

Cash - Beginning of period                                 3,884    21,229

                                                        --------  --------
Cash - End of period                                      15,912     6,729
                                                        ========  ========

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

    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

    FirstEnergy Capital LLP (Broker)
    +44 (0) 20 7448 0200
    Hugh Sanderson
    Travis Inlow

    Buchanan Communications
    +44 (0) 20 7466 5000
    Tim Thompson
    Ben Romney
    Jonathan Rivlin