Coastal Energy Announces Closing of Senior Unsecured Financing


    AIM: CEO
    TSX-V: CEN

    TORONTO, Jan. 23 /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 that it has
completed its offering of 100 senior unsecured notes raising gross proceeds of
US$10MM ("the Notes" or "the Offering").
    Canaccord Capital Corporation and Macquarie Capital Markets Canada Inc.
acted as joint lead agents in a syndicate that also included Thomas Weisel
Partners Canada Inc. The agents were paid a commission of US$410,000 in
connection with the sale of the Notes, and Canaccord received an additional
financial advisory fee of US$70,000.
    The Notes will bear interest at 15% per annum and will mature on January
23, 2010. Each US$100,000 note was issued together with a warrant entitling
the holder thereof to acquire 20,000 shares of the Company's common shares at
a strike price of C$1.136. The warrants will expire on January 23, 2014. The
Notes, the warrants and the common shares issuable upon exercise of the
warrants are subject to applicable US federal and state securities laws which
may impose a hold period of not less than 12 months. In addition, unless
permitted under applicable Canadian securities legislation, the securities may
not be traded in Canada before May 24, 2009.
    Proceeds from the Offering will be used to fund further development of
the Company's assets offshore Thailand and for general corporate purposes.

    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" 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

    -  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 equivalent(*)

    -  The Company's current assets include:

       -  Offshore Thailand

            -  100% of block G5/43 - two oil fields currently under
               development with several other similar appraisal and
               exploration opportunities. The Company expects to exit Q1
               2009 with average production of 9,000 bopd from Songkhla.

            -  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 had average daily production of 94
               mmcf/d for the quarter ended September 30, 2008.

            -  36.1% net interest in block L15/43 surrounding the Phu Horm

            -  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, or may
be found in documents filed on SEDAR,
    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 to
        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.

    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:; 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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