Coastal Energy (the “Company” or “Coastal”) (TSX VENTURE:CEN)(AIM:CEO) an independent exploration and production company with assets in South-East Asia, announces that drilling of the South Phu Horm-1 (“SPH1″) has now commenced. The well is located in Block L15/43 which surrounds the Phu Horm gas field and will be drilled to a total estimated depth of 2462 metres, sub-sea.
SPH1 is the second of a two well drilling programme operated by APICO (Korat) Limited who have a 100% interest in the concession. Coastal is APICO’s largest shareholder with 36.1% interest. The well, which is being drilled by the Ensign 16 rig, will test the possible extension of the Phu Horm gas field further south, outside the current production area into Block L15/43 which is 100% owned by APICO.
The Phu Horm field came on stream in November, 2006 and is currently producing between 90 -105 million cubic feet of gas per day. APICO has a 35% interest in the Phu Horm field.
Coastal’s Chair, Frank Inouye commented, “South Phu Horm-1 is a key well in the APICO onshore drilling portfolio for 2008. The well not only has the potential to confirm the extension of the Phu Horm gas field south, into acreage that is 100% owned by APICO, but more importantly, verify significant additional reserves for the field.”
Notes to Editors
-Coastal Energy is an oil and gas exploration, development and production company, with core assets onshore and offshore Thailand.
-The Co 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 Co 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 development
-Production growth over the next 12 -18 months is expected to grow exponentially and proven, probable and possible reserves are 45.3 million barrels oil equivalents(i)
-The Company’s current assets include:
– 100% of block G5/43 -two oil fields currently under development with several other appraisal and exploration opportunities. Production is expected to commence Q3 2008
– 12.6% net interest in blocks EU1 and E5N which include the Phu Horm gas field currently producing between 90 and 100 mmcf/d
– 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
-For additional information, including the Company’s complete competent person’s may be found on the Company’s website, www.coastalenergy.com or may be found in documents filed on SEDAR, www.sedar.com.
(i) BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Frank Inouye, President, CEO and director of the Company, and a member of the American Association of Petroleum Geologists, has reviewed the contents of this announcement.
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.”