Coastal Energy Co.
AIM : CEO
TSX VENTURE : CEO

Coastal Energy Co.

January 08, 2007 02:00 ET

Coastal Energy Issues Operations Update for Thailand

LONDON, UNITED KINGDOM--(CCNMatthews - Jan. 8, 2007) -

This news release is not for dissemination in the United States or through
United States newswire services

Coastal Energy (the "Company")(TSX VENTURE:CEO)(AIM:CEO) announces a number of significant events in a trading update for the Company's operations in Thailand.

Gas production from the Phu Horm field which commenced in November, 2006 has increased to over 90 million cubic feet a day (15,840 Barrels of Oil Equivalent Per Day) from three wells on the gas field located in north east Thailand. Two additional production wells are currently being drilled and could increase deliverability above existing contract quantities with total production from the five wells having the potential to fulfill the maximum demand of the Nam Phong power plant which is currently 135 million cubic feet a day. The gas will supply the power plant with over 500 billion cubic feet of gas, plus condensate, under a 15 year Gas Sales Agreement with PTT Public Company Limited. The Company has a 12.6% net interest in the Phu Horm field and a net 36.1% interest in the surrounding block L15/43 and adjacent block L27/43 which the Company plans on drilling in the second and third quarter of 2007.

The Company also announced today it has completed the acquisition of an extensive 3D seismic survey over block G5/43 in the Gulf of Thailand. The PGS vessel M/V Nordic Explorer acquired approximately 330 square kilometers of high resolution 3D data over the western portion of the Songkhla basin in block G5/43. The area covered by the acquisition includes the Bua Ban oil field which is one of two fields the Company is looking to develop over the next 12-24 months. The second development, the Songkhla field, already has 3D seismic coverage and development plans for the field are currently being finalized with production expected to commence in late 2007.

On behalf of Coastal Energy Company

"Frank Inouye"

Chief Executive Officer & Director

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.

Frank Inouye, President, CEO and Director of the Company, and a member of the American Association of Petroleum Geologists, has reviewed the contents of this announcement.

Certain statements contained in this announcement may constitute forward-looking statements. Such statements are generally identifiable by the terminology used, such as "plan", "anticipate","expect", "budget" or other similar wording. Forward-looking statements include, but are not limited to, references to future capital and other expenditures, drilling plans or results, the submission of development plans, seismic activity, the existence and recoverability of potential hydrocarbon reserves, production amounts or revenues, operation costs, oil and gas price forecasts, results of exploration activities and dates by which certain areas may be developed or may come on-stream and environmental matters. These forward-looking statements are not guarantees of future results and are subject to known and unknown risks, uncertainties and other factors which may cause actual results, financial condition, performance and achievements to differ substantially from those express or implied by such forward-looking statements. Furthermore, the forward-looking statements contained in this announcement are made as of the date of this announcement, and Coastal Energy does not undertake any obligation to update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this release are expressly qualified by this cautionary statement.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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