Coastal Energy Co.
AIM : CEO
TSX VENTURE : CEO

Coastal Energy Co.

September 21, 2007 02:02 ET

Coastal Energy Issues Phu Horm Gas Field Update

LONDON, UNITED KINGDOM--(Marketwire - Sept. 21, 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 the successful drilling, testing and completion of the Phu Horm-10 well ("PH-10") located on the Phu Horm gas field, northeast Thailand.

PH-10 which has been completed as a production support well, sustained an average flow of 10 million cubic feet per day and was directionally drilled from the PH-4 production well location. The well was drilled to a total depth of 2343 metres sub-sea and encountered the primary reservoir, the Pha Nok Khao ("PNK"), at 2068 metres sub-sea. The primary objective of the well was to confirm reserves in a previously untested part of the gas field and provide additional production capability in the event of future production increases.

Coastal's interest in the field is held indirectly through APICO LLC which retains a 35% equity share in the gas field. Coastal is APICO's largest shareholder with 36.1% interest.

Frank Inouye, Chief Executive of Coastal Energy commented:

"The results of the PH-10 well are extremely encouraging and reaffirm the fact that Phu Horm is a major gas field. We know the fractured carbonate reservoir is extremely complex and with each new well we gain a better understanding of the field geology. The information from the recent drilling will certainly help APICO in the forthcoming drilling campaign which is expected to commence in the next month. The two well programme includes the appraisal of the Dong Mun gas discovery in block L27/43 and a test to verify the possible southern extension of the Phu Horm gas field outside the current production licence."

The information contained in this announcement has been reviewed and verified by Frank Inouye, President, CEO and Director of the Company, and a member of the American Association of Petroleum Geologists.

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.

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.

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" or 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 net production of approximately 12 mmcfd of gas under long term contract and offshore oil fields currently under development

- Production over the next 12 -18 months is expected to grow exponentially and proven, probable and possible reserves are 45.3 million barrels oil equivalents(ii)

- The Company's current assets include:

- Offshore Thailand

-- 100% of block G5/43 - 3 successful appraisal wells drilled in 2005 / 2 additional discoveries on the block awaiting appraisal / untested exploration potential in Songkhla Basin

- Onshore Thailand

-- 12.6% interest in blocks EU1 and E5N which include the Phu Horm gas field currently producing 90 mmcfd

-- 36.1% interest in block L15/43 surrounding the Phu Horm field

-- 36.1% interest in block L27/43 - containing the undeveloped Dong Mun gas field

-- 21.7% interest in block L13/48 located adjacent to blocks L15/43 and L27/43, contains Si That discovery

- For additional information, including the Company's complete competent person's report, please visit the Company website, www.coastalenergy.com

(ii) Gas converted at 6 mcf / barrel oil equivalent

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

Contact Information

  • Coastal Energy Company
    Frank Inouye
    Chief Executive Officer
    +44 (0) 20 7569 9000
    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 - Nominated Adviser and Broker
    Jonathan Marren / Matt Goode
    +44 (0) 20 7418 8900