SOURCE: Coastal Holdings, Inc.

October 12, 2005 13:37 ET

Coastal Holdings, Inc. Provides Update on Purchase Agreement With BDT Energy Producers, Inc. to Acquire Interest in Development Oil Well

HOUSTON, TX -- (MARKET WIRE) -- October 12, 2005 -- Coastal Holdings, Inc. (OTC: CSJJ), today announced that it anticipates to sign the Purchase Agreement with BDT Energy Producers Inc. (BDT) by the middle of next week. As per the Purchase Agreement, Coastal Holdings will invest $475,000 in cash to fund the developmental drilling of an oil well, designated as NO. 2 HONEY and located in Jasper County, Illinois, that is wholly owned by BDT. In consideration for its investment, Coastal Holdings will receive a 75% working interest in the oil well.

The financial terms and tax advantages of this investment are very favorable for Coastal Holdings. First of all, this investment can be completely written off by Coastal Holdings in the year of investment and save the Company approximately $200,000 in Federal Income tax. In addition, BDT will guarantee Coastal Holdings a selling price of $50 per barrel of oil for the first 3,600 barrels of oil produced by the well, once it is drilled and becomes a producing well. This guarantees a base price for the oil produced, and if the market price is higher then Coastal Holdings' return on investment will correspondingly rise and provide the Company with a quicker payback. Based on a current market price of $60 per barrel of oil and a minimum annual production of 5,210 barrels of oil, within one year Coastal Holdings will receive a total return of its investment in the well and generate a profit.

About NO. 2 HONEY Oil Well

This well will be drilled into the Salem Limestone at a depth of 3350 feet and will be 3/8th of a mile southeast of a well which produced 650 barrels of oil per day (BOPD) from the Salem Limestone. This well, with the many producing zones nearby, is a very conservative drilling venture for oil and gas. It is located in the largest oil field in the State of Illinois and near the crest of the Clay City Anticline, which is the structure responsible for the oil accumulation in the field. With nearby wells producing for 30 years, the NO. 2 HONEY is an excellent opportunity for the production of oil. In addition, with the current price of oil near $60.00 per barrel, the economics of this well is exceptional. Moreover, due to the fact that in this immediate area exists a team of oil producers with over 45 years of experience and with one of the members being a Registered Petroleum Engineer, only enhances the opportunity for success by drilling this well at this location.

About BDT Energy Producers, Inc.

BDT Energy Producers, Inc. (BDT) is a subsidiary of Britton Oil Properties, a well-established 42-year old firm that owns 14 producing oil wells on 480 leased acres in Southern Illinois, approximately 125 miles east of St. Louis, Mo. and 75 miles northwest of Evansville, Indiana. These wells have a total production capacity of 15 BOPD and an accumulated reserve of 330,000 barrels of oil. Since 1976, Britton Oil has sold $3.5 million worth of oil from these wells. BDT has been formed solely for the purpose of developmental drilling of new oil wells and has selected 5 prime drilling locations from Britton Oil Properties that it is now in the process of funding.

For more information please contact CEO Andrea Cortellazzi at (514) 288-9699 or visit the Company website at www.coastalholdings.com.

Forward-Looking Statements

Please be advised that statements made herein, other than historical data, constitute forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those stated or implied by such forward-looking statements. The potential risks and uncertainties include, among others, potential volatility in the company's stock price, increased competition, customer acceptance of new products and services offered by the company, and uncertainty of future revenue and profitability and fluctuations in its quarterly operating results. Please also be advised that the company's stock is not currently registered with the Securities and Exchange Commission.

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