Coastal Energy Announces Third Quarter 2009 Financial Results

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

    
    AIM: CEO
    TSX-V: CEN
    

HOUSTON, Nov. 30 /CNW/ - Coastal Energy Company (the "Company" or "Coastal Energy") (TSX-V: CEN, AIM: CEO), an independent exploration and production company with assets in Thailand, announces the financial results for the quarter ended September 30, 2009. The functional and reporting currency of the Company is the United States dollar.

    
    Third Quarter Highlights

    -   EBITDAX of $6.8 million and $25.3 million for the three and nine
        months ended September 30, 2009.

    -   Resumption of the drilling campaign on the Company's Songkhla Field
        in the Gulf of Thailand.

    -   Commencement of a 2-D seismic acquisition survey on the Company's
        northern acreage in Blocks G5/43 and G5/50.

    -   Crude Oil Sales of $21.2 million and $57.4 million for the three and
        nine months ended September 30, 2009.

    -   Net Loss of $0.1 million and $2.1 million for the three and nine
        months ended September 30, 2009.
    

Randy Bartley, Chief Executive Officer of Coastal Energy commented:

"The third quarter of 2009 marked another significant milestone for Coastal Energy as the Company resumed development of its Songkhla field in the Gulf of Thailand. Thus far, the Company has drilled two additional development wells and three water injection wells. Total production from Songkhla Main has returned to over 10,000 bopd as a result of the recent drilling activity. Onshore production from Sinphuhorm is averaging approximately 2,000 boepd, bringing total Company production to over 12,000 boepd.

"We have secured an extension to the current drilling contract to keep the rig working through the first half of 2010. Once the development program at Songkhla Main is complete, we will move to the Songkhla B exploration prospect. Following drilling at Songkhla B, we plan to begin development of the Benjarong and Bua Ban fields.

"Coastal Energy is entering an exciting period and we are optimistic about our offshore development program and the potential value it could add to the Company. We expect the remainder of the fourth quarter and 2010 to bring further progress in the development of our offshore assets and further success for Coastal."

    
    Note: EBITDAX is a non-GAAP measure and is defined as earnings before
    interest, financing fees, taxes, depreciation, amortization, exploration
    costs and other one-time items adjusted for non-cash items such as
    unrealized gains and losses on risk management contracts, unrealized
    foreign exchange gains or losses and stock-based compensation.
    

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.

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, 2009 with the notes thereto and the related Management Discussion and Analysis can be found either on Coastal's website at www.CoastalEnergy.com or on SEDAR at www.sedar.com. All amounts are in US$ thousands, except share and per share amounts.

    
                                   Three months ended      Nine months ended
                                      September 30,           September 30,
    (US$ 000s)                      2009        2008        2009        2008
    -------------------------------------------------------------------------
                                                                (As restated
                                                                      Note 2)

    Revenues
      Crude oil                  $21,205           -     $57,422           -
      Royalties                   (1,430)          -      (3,851)          -
      (Loss) gain on derivative      128          13      (1,795)         32
      Gain (loss) on sale of assets    -         122           -         122
      Interest income                  6         316          22         831
    -------------------------------------------------------------------------
                                  19,909         451      51,798         985
    -------------------------------------------------------------------------

    Expenses
      Production                 $10,936           -     $23,788           -
      General and administrative   5,029       3,053      11,432       8,709
      Foreign exchange (gain) loss   240       1,440       1,637       3,049
      Interest                       796         642       3,162       1,302
      Debt financing fees            323           -       1,249           2
      Depletion, depreciation
       and accretion               5,382          42      16,238         130
      Settlement                       -           -       2,366           -
    -------------------------------------------------------------------------
                                  22,706       5,177      59,872      13,192
    -------------------------------------------------------------------------

    Net income (loss) before
     taxes and earnings from
     significantly influenced
     investee and non-controlling
     interest                     (2,797)     (4,726)     (8,074)    (12,207)

    Income tax expense                 -           -           -         666
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income (loss) from before
     earnings from significantly
     influenced investee and
     non-controlling interest     (2,797)     (4,726)     (8,074)    (12,873)

    Earnings from
     significantly influenced
     investee                      2,621       4,250       5,886      10,725
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income (loss) before
     non-controlling interest       (176)       (476)     (2,188)     (2,148)

    Non-controlling interest          65           -          65           -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income (loss) and
     comprehensive loss
     attributable to
     shareholders                   (111)       (476)     (2,123)     (2,148)

    EBITDAX(a)                     6,820       1,680      25,345       6,189

    Deficit, beginning
     of period                   (18,599)    (15,698)    (16,587)    (14,026)
    Deficit, end of period       (18,710)    (16,174)    (18,710)    (16,174)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings (loss) per share
      Basic and diluted            (0.00)      (0.00)      (0.02)      (0.02)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average number
     of common shares
     outstanding              99,380,720  93,630,722  96,208,559  93,138,478
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Note (a) EBITDAX is a non-GAAP measure and is defined as earnings before
    interest, financing fees, taxes, depreciation, amortization, exploration
    costs and other one-time items adjusted for non-cash items such as
    unrealized gains and losses on risk management contracts, unrealized
    foreign exchange gains or losses and stock-based compensation.


    -------------------------------------------------------------------------
                                                       September    December
                                                              30,         31,
    (US$ 000s)                                              2009        2008
    -------------------------------------------------------------------------

    Assets
    Current Assets
      Cash and cash equivalents                          $20,196      $6,434
      Restricted cash                                      3,825       4,146
      Accounts receivable                                  3,489       2,391
      Derivative risk management contract                    348       2,016
      Crude oil inventory                                  4,290         308
       Prepaids and other current assets                     675         271
    -------------------------------------------------------------------------
                                                          32,823      15,566

    Investments in and advances to Apico, LLC             56,262      50,376
    Property, plant and equipment, net                   206,681     192,224
    Deposits and other assets                                383         297
    -------------------------------------------------------------------------
                                                        $296,149    $258,463
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities
    Current liabilities
      Accounts payable and accrued liabilities           $27,591     $35,536
      Deferred Income                                     28,502           -
      Income taxes payable                                     -       1,252
      Amounts due to shareholder                           6,011       6,761
      Notes payable                                        8,642           -
      Current portion of long-term debt                    8,888      15,249
    -------------------------------------------------------------------------
                                                          79,634      58,798

    Long-term debt                                        26,525      28,751
    Asset retirement obligations                           1,813       1,354
    Future income tax liability                           26,851      25,984
    -------------------------------------------------------------------------
                                                         134,823     114,887
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Non-controlling interest                               2,570           -

    Shareholders' equity
    Share capital                                        162,307     146,938
    Contributed surplus                                   14,865      13,225
    Warrants                                                 294           -
    Retained deficit                                     (18,710)    (16,587)
    -------------------------------------------------------------------------
                                                         158,756     143,576
    -------------------------------------------------------------------------
                                                        $296,149    $258,463
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                                   Three months ended      Nine months ended
                                      September 30,           September 30,
    (US$ 000s)                      2009        2008        2009        2008
    -------------------------------------------------------------------------
                                                                (As restated
                                                                      Note 2)

    Operating Activities
      Net income (loss) for
       the period                  $(111)       (476)    $(2,123)     (2,148)
      Distributions from
       significantly
       influenced investee         2,710       3,612       4,516       8,851
      Items not involving cash
        Depletion,
         depreciation and
         accretion                 5,382          42      16,238         130
        Impairment                     -           -       1,765           -
        Interest expense               -         211           -         428
        Non-controlling
         interest                    (65)          -         (65)          -
        Unrealized foreign
         exchange (gain)
         loss                        165         646         867         792
        Stock based
         compensation              2,809         442       4,955       1,704
        Issuance of warrants
         with notes payable            -           -         294           -
        Share of earnings
         of significantly
         influenced investee,
         net of taxes             (2,621)     (4,250)     (5,886)    (10,725)
        Unrealized (gain)
         loss on risk
         management contract        (128)        (13)      1,668         (32)
        (Gain) loss on
         sale of assets                -        (122)          -        (122)
      Change in non-cash
       working capital
        Accounts receivable       (1,262)       (288)     (1,098)       (964)
        Crude oil inventory          243           -      (3,982)          -
        Prepaids and other
         current assets              145           -        (404)          -
        Accounts payable
         and accrued liabilities    (232)       (143)      3,867         234
        Deferred Income           22,706           -      28,502           -
        Income Taxes Payable           -      (1,232)     (1,252)       (566)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                  29,741      (1,571)     47,862      (2,418)
    -------------------------------------------------------------------------

    Investing Activities
      Investment in and
       advances to Apico LLC           -           -      (4,516)       (903)
      Decrease (increase) in
       restricted cash              (349)     (2,774)        321      (2,261)
      Purchase of property,
       plant and equipment       (12,631)    (20,212)    (45,979)    (54,694)
      Proceeds from disposal
       of property, plant
       and equipment                   -         540           -         540
      Proceeds from non-
       controlling interest        2,635           -       2,635           -
      Other                            -        (239)        (86)       (238)
    -------------------------------------------------------------------------
                                 (10,345)    (22,685)    (47,625)    (57,556)
    -------------------------------------------------------------------------

    Financing Activities
      Issuance of shares
       for cash                      (49)          -      15,369      54,875
      Borrowings under
       long-term debt                  -      20,000       1,620      45,000
      Repayments of
       long-term debt             (2,371)          -     (10,207)    (25,000)
      Borrowings under
       amounts due to
       shareholder                     -        (411)      1,000        (411)
      Repayment of amounts
       due to shareholder         (1,157)          -      (2,278)          -
      Proceeds from issuance
       of notes payable                -           -      15,000           -
      Repayments of notes
       payable                    (2,949)          -      (7,021)          -
    -------------------------------------------------------------------------
                                  (6,526)     19,589      13,483      74,464
    -------------------------------------------------------------------------

    Net effect of foreign
     exchange on cash held in
     foreign currencies               27      (1,895)         42      (1,846)
    -------------------------------------------------------------------------

    Change in cash and
     cash equivalents             12,897      (6,562)     13,762      12,644
    Cash and cash equivalents,
     beginning of period          7,299       32,355       6,434      13,149
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period               20,196       25,793      20,196      25,793
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cash and cash equivalents
     consists of:
      Cash                       20,196       11,094      20,196      11,094
      Short-term money market
       instruments                    -       14,699           -      14,699
    -------------------------------------------------------------------------
                                 20,196       25,793      20,196      25,793
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

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 responsibilityfor the adequacy
    or accuracy of this release
    

SOURCE COASTAL ENERGY COMPANY

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 Hanson Limited (Nominated Adviser), Rory Murphy, Paul Cocker, +44 (0) 20 7409 3494; Thomas Weisel Partners (Broker), Paul Colucci, +44 (0) 20 7877 4300; Macquarie Capital (Europe) Limited (Broker), Ben Colegrave, Paul Connolly, +44 (0) 20 3037 2000; Buchanan Communications, Tim Thompson, Catherine Breen, Katharine Sutton, +44 (0) 20 7466 5000

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COASTAL ENERGY COMPANY

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