SOURCE: Coastal Energy Company

February 24, 2010 16:30 ET

Coastal Energy Announces Operational Update

HOUSTON, TX--(Marketwire - February 24, 2010) -  Coastal Energy Company (the "Company" or "Coastal") (TSX-V: CEN) (AIM: CEO), an independent exploration and production company with assets in Thailand, announces an update of its operations in Thailand.

Songkhla B

The Songkhla B-02 sidetrack reached a total depth of 11,073 feet (3,375 meters) and encountered 12 feet of net pay in the Lower Oligocene reservoir, approximately five feet more than was encountered in the original Songkhla B-02 well. Following logging it has been confirmed that the interval has a minimum oil column of approximately 300 feet; however, the estimated reserves are not sufficient to justify a standalone development. Preliminary evaluations indicate that this reservoir can be reached with a high angle well from the Songkhla A structure. The existing Songkhla B wells are being plugged and abandoned and the rig will be mobilized to the Benjarong prospect.

Songkhla A

The workover of the Songkhla A-04 was completed and the well is producing approximately 3,000 bopd. Workover operations have commenced on Songkhla A-03 to install a larger electric submersible pump and the well is expected to return to production by the end of the week. This will be followed by similar operations on Songkhla A-01. Current production from Songkhla A is approximately 8,000 bopd. Coastal's combined onshore and offshore production is approximately 10,000 boepd.

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

"The results of the Songkhla B-02 sidetrack confirm the existence of a hydrocarbon trap with good porosity and permeability. Although too thin for a standalone development, drilling from the Songkhla A structure could make this discovery commercial. We will evaluate this option at a later date when we return to Songkhla A for future development work. We expect to spud our first Benjarong exploration well within the next two weeks.

"Workover operations at Songkhla A are progressing as planned and we have restored production from the A-04 well. We have almost completed the pump replacement on the A-03 well and will then begin the workover of the A-01."

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