Coastal Energy Announces Update of Onshore Operations



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

    AIM: CEO
    TSX-V: CEN
    

    HOUSTON, Sept. 8 /CNW/ - Coastal Energy Company (the "Company" or
"Coastal") (TSX-V: CEN, AIM: CEO), an independent exploration and production
company with assets in Thailand, announces that the Phu Kheng-1 exploration
well on Block L27/43 in north-eastern Thailand has reached total depth and has
been suspended pending a hydraulic fracturing stimulation and test. Coastal is
the largest holder of Block L27/43 with a 36.1% net working interest.
    The well was drilled to a total depth of 2,204 meters sub-sea and
encountered Jurassic and Triassic sandstones in the Phu Kradung and Nam Phong
formations. Initial log interpretation confirms that the formation is
gas-saturated with low porosity and permeability and that further evaluation
and testing is required to determine the commercial viability of the well. The
operator plans to test the well within the next four to eight weeks subject to
workover rig availability.
    The rig which drilled the well is currently being mobilized to the Si
That-3 appraisal well location in Block L13/48, which is expected to spud
later this month. The two previous wells on the Si That structure both tested
gas. Coastal owns a 21.7% net working interest in Block 13/48.
    Additional information, including the Company's complete competent
person's report may be found on the Company's website at www.CoastalEnergy.com
or may be found in documents filed on SEDAR at 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.
    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; Macquarie
Capital (Europe) Limited (Broker), Majid Shafiq, +44 (0) 20 7355 5800;
Buchanan Communications, Tim Thompson, Catherine Breen, Katharine Sutton, +44
(0) 20 7466 5000

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COASTAL ENERGY COMPANY

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