Coastal Energy Announces Production Update



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

    AIM: CEO
    TSX-V: CEN
    

    HOUSTON, May 20 /CNW/ - Coastal Energy Company (the "Company" or "Coastal
Energy") (TSX-V: CEN, AIM: CEO), an independent exploration and production
company with assets in Southeast Asia, announces an update of its operations
offshore Thailand. The Company is currently producing 7,500 barrels of oil per
day from its three wells on the Songkhla field with a 24% water cut. The
current water cut level is consistent with the Huddleston & Co. production
profile and with that of similar fields in the region. At this stage, water
production is confirmation of the initial prognosis of a strong water drive
which supports higher percentage primary recovery rates with additional
development. Oil production remains in-line with the Company's independent
party reserves auditor, Huddleston & Co., Inc.'s, average production rates for
ten months of production in 2009 as reflected in their NI 51-101 reserve
evaluation effective December 31, 2008 (the "Huddleston Report"). The
Huddleston Report has been filed on SEDAR.
    The Company plans drilling and further development of the Songkhla field
area in late third quarter 2009. An additional development well was included
in the Company's field development plans as well as in the Huddleston Report.
    Preliminary evaluations by Huddleston & Co. indicate that the water
production will not have an effect on proven, probable, and possible reserves
from either the Songkhla Lower Oligocene or Eocene reservoirs nor on the net
asset value as calculated in the Huddleston Report.

    Randy Bartley, President and Chief Executive Officer of the Company and a
member of the Society of Petroleum Engineering and Jerry Moon, Vice President,
Technical & Business Development, a member of the American Association of
Petroleum Geologists, a Licensed Professional Geoscientist and a Certified
Petroleum Geologist in the state of Texas, have reviewed the contents of this
announcement.
    Additional information may be found on the Company's website,
www.CoastalEnergy.com or may be found in documents filed on SEDAR,
www.sedar.com.

    This press release contains 'forward-looking statements' as defined by
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 should be
viewed as forward-looking statements. Such statements reflect the Company's
current views with respect to future events and are subject to risks and
uncertainties and are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by the Company, are inherently
subject to significant business, economic, competitive, political and social
uncertainties and contingencies. The estimates and assumptions used by the
Company in making these statements which may prove to be incorrect, include,
but are not limited to: (1) there being no significant disruptions affecting
operations, whether due to labour disruptions, supply disruptions, damage to
equipment, inclement weather or otherwise; (2) permitting and development
proceeding on a basis consistent with the Company's current expectations; (3)
the exchange rate between the Thai baht and the U.S. dollar being
approximately consistent with current levels; (4) certain price assumptions
for oil and gas; (5) prices for and availability of natural gas, fuel oil,
electricity, parts and equipment and other key supplies remaining consistent
with current levels; (6) production forecasts meeting expectations; (7) the
accuracy of the Company's current resource and reserve estimates; and (8)
labour and material costs increasing on a basis consistent with the Company's
current expectations. Should one or more of these risks or uncertainties
materialize, or should assumptions underlying those forward-looking statements
prove incorrect, actual results may vary materially from those anticipated in
such forward-looking statements. Coastal disclaims any obligation to update
any forward-looking statements, whether as a result of new information, future
events or results or otherwise, except as required by applicable law.

    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, Randy L.
Bartley, Chief Executive Officer, (713) 877-6705; William C. Phelps, Chief
Financial Officer, (713) 877-6727, Email: investor@CoastalEnergy.com; Strand
Partners Limited (Nominated Adviser), Rory Murphy, +44 (0) 20 7409 3494;
Thomas Weisel Partners (Broker), Paul Colucci, +44 (0) 20 7877 4300; Tristone
Capital (Broker), Majid Shafiq, +44 (0) 20 7355 5800; Bell Pottinger Corporate
& Financial, Nick Lambert, Rosanne Perry, +44 (0) 20 7861 3232

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COASTAL ENERGY COMPANY

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