Coastal Energy Co.
AIM : CEO
TSX VENTURE : CEN

Coastal Energy Co.

October 09, 2008 09:30 ET

Coastal Energy Announces Spudding of Songkhla A-01 Well

LONDON, UNITED KINGDOM--(Marketwire - Oct. 9, 2008) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH UNITED STATES NEWSWIRE SERVICES

Coastal Energy Company ("the Company" or "Coastal Energy") (TSX VENTURE:CEN)(AIM:CEO), an independent exploration and production company with assets in Southeast Asia, announces that the Songkhla A-01 well was spudded on Wednesday, 8 October, 2008. Songkhla A-01 is the first well in the Company's development program of the Songkhla field located in Block G5/43 offshore Thailand.

The Company plans to drill Songkhla A-01 to a total depth of approximately 8,500 feet (2,590 meters) true vertical depth. The well is a direct offset to the original Songkhla #1 well which was drilled in 1988 and tested at 1,500 barrels of oil per day from 80 feet of net oil pay in the Lower Oligocene formation. A Competent Persons Report ("CPR") prepared by Huddleston and Co., Inc. estimates the Proven and Probable reserves in the main Songkhla feature to be 4.9 mmbbls. The Company plans to drill four (4) wells on the main Songkhla field and conduct production testing using natural flow and Electric Submersible Pumps ("ESPs"). Testing of the initial Songkhla A-01 well is expected to begin prior to the end of October.

Randy Bartley, Chief Executive Officer of Coastal Energy commented: "We are excited to begin our development of the Songkhla field. We continue to anticipate completion and testing of Songkhla A-01 by late October and an extended production test while continuing simultaneous drilling operations. This is an important step in the Company's multi-well development of Block G5/43 and toward commencing production at Songkhla by year end 2008."

Randy Bartley, President and Chief Executive Officer of the Company and a member of the Society of Petroleum Engineering, and Frank Inouye, Chairman of the Company and a member of the American Association of Petroleum Geologists, have reviewed the contents of this announcement.

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" 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 45.5 million barrels oil equivalent(i)

- The Company's current assets include:

-- Offshore Thailand

--- 100% of block G5/43 - two oil fields currently under development with several other appraisal and exploration opportunities. Production is expected to commence Q4 2008

--- 100% of block G5/50 - within the boundaries of block G5/43 in the Ko Kra basin

-- Onshore Thailand

--- 12.6% net interest in blocks EU1 and E5N which include the Phu Horm gas field, which was producing in excess of 100 mmcf/d at the end of the second quarter 2008.

--- 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

Additional information, including the Company's complete competent person's may be found on the Company's website, www.CoastalEnergy.com or may be found in documents filed on SEDAR, 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.

(i) Per barrel of oil equivalent ("boe") amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil equivalent (6:1). The term boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6mcf to 1bbl of oil is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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
    Chairman
    +44 (0) 1483 549 549
    or
    Coastal Energy Company
    Randy L. Bartley
    Chief Executive Officer
    (713) 877-6705
    or
    Coastal Energy Company
    William C. Phelps
    Chief Financial Officer
    (713) 877-6727
    Email: investor@CoastalEnergy.com
    Website: www.CoastalEnergy.com
    or
    Bell Pottinger Corporate & Financial
    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