Coastal Energy Announces Financing Transaction


    AIM: CEO
    TSX-V: CEN

    TORONTO, Jan. 6 /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 entered into a
short-term unsecured loan agreement in the amount of $3MM ("the Debt"). The
Debt matures on June 30, 2009 and will bear interest at 15% per annum. A
company wholly owned by Oscar S. Wyatt, Jr., the Company's principal
shareholder, funded $2MM of the loan, while an associate of Mr. Wyatt funded
the remaining $1MM. The Debt was issued separately from the Company's $10MM
Senior Unsecured Note offering which was announced 22 December, 2008. The Debt
was issued in a separate transaction due to securities exchange regulations
which prohibit insiders from participating in debt offerings which include a
warrant issue as consideration. The proceeds will be used to further fund
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. Production is expected to
              average 9,000 bopd in Q1 2009.

           -  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 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, 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: 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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