Coastal Energy Announces 3rd Quarter 2007 Financial Results


    HOUSTON, TX, Nov. 21 /CNW/ - Coastal Energy Company (the "Company")
(TSX-V: CEN, AIM: CEO), the independent exploration and production company
with core assets in South-East Asia, announced today the results for the three
months ended September 30, 2007. Third quarter highlights include:

    -  Net earnings from investment in APICO, LLC of US $1,544,000 based on
       net operating income of US $5,242,000
    -  Net loss of US $3,578,000 or US $(0.05) per share basic and diluted
    -  Total assets of US $154,559,000

    The Company's earnings from its investment in APICO, LLC represent the
Company's net 12.6% interest in the Phu Horm gas field. Aggregate gas
production in the Phu Horm field averaged 80 million cubic feet of gas per day
("mmcf/d") during the third quarter.
    Included in the Company's net loss of US $3,578,000 are reserve-based
loan financing fees of US $2.1 million as well as a US $1 million (non-cash)
mark to market loss on a commodity put option purchased as a pre-requisite to
the reserve-based loan financing.
    In the third quarter, the Company borrowed US $25 million under its US
$50 million borrowing based debt Facility. The Company intends to use these
funds to facilitate the development of its Gulf of Thailand Block G5/43
    The Company's offshore operations in Block G5/43 continue to be focused
on developing and maturing the discovered assets in the Songkhla basin.
Engineering work related to platform design for the Songkhla oilfield has been
completed and fabrication of the platforms is expected to commence in Q4,
2007. Interpretation of the 330 sq. km. high resolution 3D seismic survey
acquired earlier in the year has been completed and the results are being used
to confirm the development plan for the Bua Ban field and identify drilling
targets for the upcoming drilling campaign scheduled to commence in March,
2008. As announced earlier this month, the Company signed a 12 month drilling
contact with Swiber Offshore Drilling Pte. Ltd. to drill development wells in
the Songkhla and Bua Ban oil fields and appraisal wells in the Ko Kra basin in
the Gulf of Thailand.
    Commenting on the results, Frank Inouye, CEO of Coastal said, "The third
quarter results reflect the progress that has been made on securing the
financial and operational resources required to enable the Company to deliver
our short term objectives of increasing production and cash flow from the
existing asset base. In terms of operations, the spudding of the onshore Dong
Mun - 3 well a few weeks ago marks the beginning of an extensive drilling
campaign that will see the Company drilling, on average one to two wells per
month, for the next 12 months. I am confident that the next 12 months will see
a step change in the Company's production, reserves, cash flow and shareholder
    The 3rd quarter financial statements and related Management's Discussion
and Analysis have been filed on SEDAR ( and the Company's
website (

    On behalf of Coastal Energy Company
    "Frank Inouye"
    Chief Executive Officer & Director

    The following financial statements for the Company are abbreviated
versions. The Company's complete financial statements for the three and nine
months ended September 30, 2007 with the notes thereto and the Company's
Management Discussion and Analysis can be found either on the Company's
website at or on SEDAR at All amounts are
in US$000s, except share and per share amounts

                                 Three months ended       Nine months ended
                                    September 30,            September 30,
    (US$ 000's)                   2007        2006        2007        2006
      Salaries and
       benefits           $       721  $        27  $     2,063  $        45
      Professional fees           218           17          743           20
      Office and general          250           37          660           60
      Interest expense            383            -          489            -
      Debt financing fees       2,072            -        2,072            -
      Other                       308           59          700           74
      Write-down of
       unproved oil &
       gas properties               -            -        2,034            -
                                3,952          140        8,761          199
    Other Items
      Share of Apico, LLC
       (earnings) loss, net    (1,544)         123       (5,255)         213
      Unrealized loss on
       derivative                 983            -          983            -
      (Gain) loss on sale
       of assets                  (22)           -           18            -
      Foreign exchange
       (gain) loss                209          (38)       1,498         (126)
                                 (374)          85       (2,756)          87

    Net loss and
     comprehensive loss   $    (3,578) $      (225) $    (6,005) $      (286)

    Loss per share, basic
     and dilutive         $     (0.05) $     (0.01) $     (0.08) $     (0.01)

    Weighted average
     number of common
     shares outstanding,
     basic and dilutive    76,975,070   40,010,526   76,897,828   38,624,331

                                                      September     December
    As at (US$ 000's)                                  30, 2007     31, 2006

    Cash and cash equivalents                       $    20,596  $    18,350
    Restricted cash                                       2,929            -
    Accounts receivables and other                          972          490
    Investments in and advances to Apico                 50,764       44,046
    Property, plant and equipment, net                   79,049       68,784
    Other long-term assets                                  249          394
                                                    $   154,559  $   132,064

    Accounts payable and accrued expenses           $     5,910  $     4,820
    Amounts due to shareholder                            5,084        4,724
    Long-term debt                                       25,000            -
    Future income tax liability                          26,489       25,153
                                                         62,483       34,697

    Shareholders' equity                                 92,076       97,367
                                                    $   154,559  $   132,064

    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: please visit our website:
or contact: Coastal Energy Company: Frank A. Inouye, Chief Executive Officer,
+44 (0) 148 354 9555; William C. Phelps, Chief Financial Officer, (713) 877
6727, Email:; KBC Peel Hunt, Ltd. (Nominated
Adviser): Jonathan Marren/Matt Goode, +44 (0) 20 7418 8990; Bell Pottinger
Corporate & Financial: Ann-marie Wilkinson/Nick Lambert/Rosanne Perry, +44 (0)
20 7861-3232

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