Coastal Energy Announces Significant Reserves Upgrade: 2P Reserves Increase to 62.2 mmboe


    AIM: CEO
    TSX-V: CEN

    HOUSTON, April 27 /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 a significant
upgrade to the Company's reserve and resource base in Thailand and provides a
current production update.

    2008 Reserves Report

    The Company's 2008 Competent Person's Report ("the Report") prepared by
Huddleston & Co, Inc. has been completed in accordance with TSX-V NI 51-101
regulations and the AIM Guidance Notes for Mining, Oil & Gas companies.

    Highlights of the December 31, 2008 Report include(*):

    -   117% increase in Offshore 1P (proven) Reserves to 18.1 mmbbl from
        8.3 mmbbl

    -   55% increase in Offshore 2P (proven + probable) Reserves to
        41.5 mmbbl from 26.7 mmbbl

    -   40% increase in Total 1P (proven) Reserves to 26.6 mmboe from
        19.0 mmboe

    -   37% increase in Total 2P (proven + probable) Reserves to 62.2 mmboe
        from 45.5 mmboe

    -   Total Contingent Resources (best estimate) of 50.7 mmboe

    -   Total Prospective Resources (best estimate) of 195.9 mmboe

        (*) Reserves and Resources are stated at gross working interest
            before royalties

    The upgrade of reserves is driven primarily by the results of the
Company's Q4 2008 drilling program in the Gulf of Thailand. The Company
drilled two successful development wells on the Songkhla Lower Oligocene
structure during Q4 2008. Resulting 1P and 2P reserves on this structure are
9.8 mmbbl and 15.7 mmbbl, increases of 320% and 220%, respectively. The
Company also drilled an exploration well on the Songkhla Eocene structure. As
a result of the Eocene discovery, the Company added a further 1.1 mmbbl and
3.9 mmbbl of 1P and 2P reserves, respectively. Total 2P reserves at Songkhla
totaled 19.7 mmbbl.

    Production Update

    The Company announces that production from the Songkhla A-07 Eocene
exploration well commenced in mid-April. The well is producing approximately
600 bopd using an electric submersible pump. Combined production from the
three wells at Songkhla is approximately 10,000 bopd. Electric submersible
pump utilization has been set to 80% to 85% to maximize reserve recoveries
from the Songkhla Lower Oligocene reservoir. Coastal's combined onshore and
offshore production is approximately 12,000 boepd.
    Randy Bartley, Chief Executive Officer of Coastal commented:
    "Our successful three-well offshore drilling program in the fourth
quarter of 2008 resulted in a substantial increase in Coastal's proven and
probable (2P) reserves. The 2P reserves of the Songkhla Oligocene structure
increased by 220% after drilling two development wells as the net pay and
reservoir characteristics significantly exceeded expectations.
    "The addition of proven and probable reserves in the Songkhla Eocene
structure is also important in proving the Eocene play in the Songkhla field
and Block G5/43. The information gathered from the results of the successful
exploration well in the Eocene is positive given the large amount of
Contingent and Prospective Resources which are contained in Eocene structures.
    "The wells at Songkhla continue to perform as expected. We have slightly
decreased pump utilization on the A-01 and A-03 wells to match our optimal
reservoir recovery simulations. Production from the A-07 has now been tied in.
We are encouraged by the strong reserve additions realized as a result of our
drilling program. The results of the reserve evaluation combined with
continued strong well performance confirm our analysis of the significant
resource potential of our assets. Coastal remains committed to the continued
development of these assets and expects its next drilling campaign in late
2009 to further enhance shareholder value."
    The following tables provide a consolidated summary of Coastal Energy's
Reserves and Resources (Reserves and Resources are stated at gross working
interest before royalties):

                              As of December 31,   As of December 31,
                                     2008                 2007
                                                                       % In-
    Reserves in mmboe                                                 crease
     (million barrels          On-   Off-           On-   Off-            in
     of oil equivalent)      shore  shore  Total  shore  shore  Total  Total
    Proven (1P)                8.5   18.1   26.6   10.7    8.3   19.0    40%

    Proven + Probable (2P)    20.7   41.5   62.2   18.8   26.7   45.5    37%

    Proven + Probable +
     Possible (3P)            20.7   55.1   75.8   18.8   34.8   53.6    41%

    Offshore Reserves by Field in mmboe
     (million barrels of oil equivalent)    Songkhla    Songkhla
     as of December 31, 2008               Oligocene      Eocene     Bua Ban
    Proven (1P)                                  9.8         1.1         7.2

    Proven + Probable (2P)                      15.7         3.9        21.8

    Proven + Probable + Possible (3P)           19.7         7.6        27.8

    Resources in mmboe (million barrels
     of oil equivalent)                      Onshore    Offshore       Total
    Contingent Resources
    Low Estimate                                11.3         3.4        14.7

    Best Estimate                               43.1         7.6        50.7

    High Estimate                              245.4        17.5       262.9
    Prospective Resources
    Low Estimate                                52.6        30.0        82.6

    Best Estimate                               87.8       108.1       195.9

    High Estimate                              159.6       346.3       505.9

    Note: Resources are in addition to the 3P Reserves reported.

    The Company's 2008 annual consolidated financial statements are expected
    to be released on April 27, 2009.

    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

    Notes to Editors

    -   Coastal Energy is an oil and gas exploration 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

    -   The Company has current production of approximately 10,000 barrels of
        oil per day and 12.6 mmcf/d of gas.

    -   Production growth over the next 12 - 18 months is expected to be
        substantial. Proven and probable reserves are 62.2 million barrels
        oil equivalent in the Company's reserve report prepared by Huddleston
        & Co. dated 14 April, 2009 (effective date of 31 December, 2008)(*)

    -   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. Current production from the Songkhla
              field is approximately 10,000 bbl/d.

           -  100% of block G5/50 - within the boundaries of block G5/43 in
              the Ko Kra basin

        -  Onshore Thailand

           -  12.6% net interest in the Phu Horm gas field, which has average
              daily production of 100 mmcf/d as of March 31, 2009.

    Additional information 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:; 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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