Coastal Energy Announces Secondary Offering of Its Common Shares

HOUSTON, TEXAS--(Marketwire - Feb. 8, 2011) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR TO UNITED STATES WIRE SERVICES

Coastal Energy Company (the "Company" or "Coastal") (TSX VENTURE:CEN)(AIM:CEO) announces that it, the Company's largest shareholder, Oscar S. Wyatt, Jr., and a director of the Company, Forrest E. Wylie, have entered into an agreement with a syndicate of underwriters led by Macquarie Capital Markets Canada Ltd. for a secondary offering on a bought deal basis of 3,500,000 common shares on Mr. Wyatt's behalf and 500,000 common shares on Mr. Wylie's behalf at a price of C$7.10 per share (the "Offering"). Coastal will not receive any of the proceeds of the Offering.

After giving effect to this Offering, Mr. Wyatt will hold 30,169,580 common shares, or 27.0%, of the Company's common shares. After giving effect to this Offering, Mr. Wylie will hold 600,000 common shares, or 0.5%, of the Company's common shares.

The Offering will be made pursuant to a short form prospectus to be filed by Coastal with securities regulators in each of the provinces of Canada, other than the Province of Quebec. Closing of the Offering is expected to occur on or about March 1, 2011. The Offering is subject to receipt of any necessary regulatory and stock exchange approvals.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

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.

Certain statements in this news release constitute "forward-looking statements" (within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended) or "forward-looking information" (within the meaning of applicable Canadian securities legislation). Such statements or information ("forward-looking statements") are generally identifiable by the terminology used such as "anticipate", "believe", "intend", "plan", "expect", "estimate", "budget", "outlook" or other similar words. More particularly, this press release contains statements concerning the closing of the Offering. Although Coastal believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Coastal can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The closing of the offering could be delayed if the Sellers or Coastal are not able to obtain the necessary regulatory and stock exchange approvals on the planned timelines. The Offering will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied. Accordingly, there is a risk that the Offering will not be completed within the anticipated time or at all.

The forward-looking statements contained in this press release are made as of the date hereof and Coastal undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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.