Coastal Energy Announces 2nd Quarter 2008 Financial Results



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

    AIM: CEO
    TSX-V: CEN
    

    HOUSTON, Sept. 1 /CNW/ - Coastal Energy Company (the "Company" or
"Coastal") (TSX-V: CEN, AIM: CEO), an independent exploration and production
company with assets in South-East Asia, announces today the financial results
for its second quarter ended June 30, 2008. The functional and reporting
currency of the Company is the United States dollar.

    
    Financial Highlights

    -   $3,607,000 of earnings from Coastal's 36.1% investment in Apico LLC,
        whose primary asset is the Phu Horm gas field (2Q '07: $2,148,000).
        Coastal received a cash distribution of $5,239,000 from Apico

    -   Net income of $471,000 or $0.00 per share (2Q '07 loss: $1,688,000 or
        $0.02 per share)

    -   Total assets increased to $210.3 million from $157.7 million at
        December 31, 2007

    Operational Highlights

    -   The Phu Horm gas field, in which the Company has a net 12.6% indirect
        interest, was producing in excess of 100 mmcf/day of gas at the end
        of the second quarter.

    -   The Company received Thai Government approval on the Production Area
        Application for the development of its Songkhla field in the Gulf of
        Thailand. The approval covers an extended area of 75 square km which
        includes not only the Songkhla field but numerous surrounding
        satellite structures. The extended production area is significant
        because it will allow the Company to fully exploit the prospects
        without the need to apply for additional Government approvals.

    Randy Bartley, Chief Executive Officer of Coastal Energy commented: "We
continue to be excited about the near term offshore development program which
will commence in September as well as the longer term appraisal and
exploration upside within the Company's existing asset portfolio."

    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 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 equivalents(*)

    -   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 first 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.

    
    -   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: 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.
    

    The following financial statements for the Company are abbreviated
versions. The Company's complete financial statements for the three and six
months ended June 30, 2008 with the notes thereto and the related Management
Discussion and Analysis can be found either on Coastal's website
www.CoastalEnergy.com or on SEDAR www.sedar.com. All amounts are in US$
thousands, except share and per share amounts.

    
                        Three months ended June 30, Six months ended June 30,
    (US$ 000's)                  2008         2007         2008         2007
    -------------------------------------------------------------------------
    Expenses
      Salaries and
       benefits             $   1,017    $     744    $   3,334    $   1,342
      Professional fees           414          232          850          525
      Office and general          382          393          655          659
      Travel and
       entertainment              256           60          530          160
      Regulatory and
       transfer agent             140          128          287          200
      Interest expense            433           55          662          106
      Depreciation and
       amortization                45           16           88           32
                            -------------------------------------------------
                                2,687        1,628        6,406        3,024
                            -------------------------------------------------
    Other (income)
     expense Items
      Share of Apico, LLC
       (earnings) loss, net    (3,607)      (2,148)      (6,475)      (3,711)
      Interest income            (270)        (126)        (515)        (227)
      Foreign exchange
       (gain) loss             (1,773)         282        1,609        1,289
      Unrealized (gain)
       loss on derivative           8            -          (19)           -
      Loss on sale of assets        -           40            -           40
                            -------------------------------------------------
                               (5,642)      (1,952)      (5,400)      (2,609)

    Income tax expense          2,484            -        2,484            -
                            -------------------------------------------------

    Net income (loss) from
     continuing operations        471          324       (3,490)        (415)

    Net loss from
     discontinued operations        -       (2,012)           -       (2,012)
                            -------------------------------------------------

    Net income (loss) and
     comprehensive income
     (loss)                 $     471    $  (1,688)   $  (3,490)   $  (2,427)
                            -------------------------------------------------
                            -------------------------------------------------
    Earnings (loss) per
     share, basic and
     dilutive
      From continuing
       operations                   -         0.01        (0.04)           -
      From discontinued
       operations                   -        (0.03)           -        (0.03)
                            -------------------------------------------------
                                    -        (0.02)       (0.04)       (0.03)
                            -------------------------------------------------
                            -------------------------------------------------

    Weighted average
     number of common
     shares outstanding,
     basic and dilutive    93,573,249   76,858,909   92,888,277   76,858,567



    -------------------------------------------------------------------------
                                                        June 30, December 31,
    (US$ 000's)                                            2008         2007
    -------------------------------------------------------------------------
    Current Assets
      Cash and cash equivalents                       $  32,355    $  13,149
      Restricted cash                                     1,535        2,048
      Accounts receivable and other                       1,126          450
                                                     -----------  -----------
                                                         35,016       15,647
                                                     -----------  -----------

      Investments in and advances to Apico, LLC          55,327       53,188
      Property, plant and equipment, net                119,888       88,762
      Other long-term assets                                 75           57
                                                     -----------  -----------

                                                      $ 210,306    $ 157,654
                                                     -----------  -----------
                                                     -----------  -----------

    Current liabilities
      Accounts payable and accrued liabilities        $   7,007    $   9,793
      Current income tax expense                          2,484            -
      Amounts due to shareholder                          5,052        4,940
                                                     -----------  -----------
                                                         14,543       14,733
                                                     -----------  -----------

      Long-term debt                                     25,000       25,000
      Future income tax liability                        27,071       26,876
                                                     -----------  -----------
                                                         66,614       66,609
                                                     -----------  -----------

    Shareholders' equity
      Share capital                                       3,746        3,079
      Contributed surplus                               155,600      100,130
      Retained deficit                                  (15,654)     (12,164)
                                                     -----------  -----------
                                                        143,692       91,045
                                                     -----------  -----------

                                                      $ 210,306    $ 157,654
                                                     -----------  -----------
                                                     -----------  -----------


    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"
    





For further information:

For further information: Enquiries: Coastal Energy Company, Frank
Inouye, Chairman, +44 (0) 1483 549 549; Randy L. Bartley, Chief Executive
Officer, (713) 877-6705; William C. Phelps, Chief Financial Officer, (713)
877-6727; Email: investor@CoastalEnergy.com; Bell Pottinger Corporate &
Financial, Nick Lambert, Rosanne Perry, +44 (0) 20 7861 3232; KBC Peel Hunt
Ltd (Nominated Adviser), Jonathan Marren, Matt Goode, +44 (0) 20 7418 8900

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COASTAL ENERGY COMPANY

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