Coastal Energy Announces Third Quarter 2012 Financial Results & Operations Update

Coastal Energy Announces Third Quarter 2012 Financial Results & Operations
Update

HOUSTON, Nov. 12, 2012 (GLOBE NEWSWIRE) -- Coastal Energy Company (the
"Company" or "Coastal Energy") (TSX:CEN) (AIM:CEO), an independent exploration
and production company with assets in Thailand, announces the financial
results for the three and nine months ended September 30, 2012. The functional
and reporting currency of the Company is the United States dollar. 

Third Quarter 2012 Highlights

  * Total Company production increased to 21,798 boe/d in the third quarter
    from 12,028 boe/d in the same period last year. The Company's offshore
    production was 19,626 bbl/d compared to 10,191 bbl/d in Q3 2011, with the
    increase due to the inclusion of production from both platforms at Bua Ban
    North. Offshore production was impacted by downtime at Bua Ban North and
    Songkhla during rig moves as well as the MOPU replacement at Bua Ban
    North. Onshore production of 2,172 boe/d increased from Q3 2011 levels of
    1,837 boe/d as natural gas demand continued to recover following the
    flooding in Thailand in late 2011.
     
  * EBITDAX for Q3 2012 was $114.6 million, 157% higher than the $44.7 million
    recorded in Q3 2011. Revenue and EBITDAX were driven higher by increased
    oil liftings and commodity prices. Crude oil inventory was 577,863 barrels
    at September 30, 2012, the revenue from which will be recognized in the
    fourth quarter. The Company saw closing inventory increase by 121,445
    barrels (approximately 27%) during Q3 2012.
     
  * The Company announced successful drilling results in the Songkhla A
    field. The A-10 well, drilled in the eastern most fault block of the
    field, encountered a record amount of net pay for the basin and exhibited
    very favorable reservoir characteristics in the Lower Oligocene
    interval. In late September 2012, the well was brought on production at
    approximately 4,000 bbl/d. Subsequently, the Company drilled the A-13 well
    in the previously untested northeast fault block and encountered 67 feet
    of net pay in the Lower Oligocene. Successful results from the A-13
    provide the opportunity for an additional well (Songkhla A-19) higher up
    structure to add additional pay thickness. 
     
  * The Company completed the conversion of the Richmond mobile offshore
    production unit (MOPU). Subsequently, in October 2012, the Richmond was
    installed at the Bua Ban North B field, increasing production capabilities
    to 55,000 bbl/d. The previous MOPU in the Bua Ban North B field was
    purchased by the Company and reinstalled at Bua Ban South.
     
  * The Company signed a contract with a subsidiary of Atwood Oceanics, Inc.
    for the Manta jackup drilling rig. The rig is scheduled to be delivered by
    late November and will conduct drilling operations for the Company in the
    Gulf of Thailand and offshore Malaysia. 
     
  * The Company upsized and amended its senior secured revolving credit
    facility with BNP Paribas and Commonwealth Bank of Australia. The facility
    has been increased from $100 million to $200 million and includes two
    additional banks, Standard Bank and Standard Chartered Bank. 
     
  * The Company is approximately 60% complete with the acquisition of new 3D
    seismic data being shot over the entire Songkhla basin. Current
    expectations are for delivery of the processed data in Q1 2013.

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, 2012 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,
                                         2012      2011     2012      2011 
                                                                      
Revenues and Other Income                                             
Oil sales                                170,894   81,670   554,612   218,854
Royalties                                (18,305)  (6,295)  (59,062)  (17,158)
Oil sales, net of royalties              152,589   75,375   495,550   201,696
Other income (Note 11)                   (5,122)   10,717   (5,515)   (12,394)
                                         147,467   86,092   490,035   189,302
                                                                      
Expenses                                                              
Production                               32,718    27,148   110,092   66,490
Depreciation and depletion (Note 6)      14,778    13,308   53,412    38,292
Net profits interest (Note 12)           39        --       908       -- 
General and administrative               9,125     7,802    24,509    19,522
Exploration (Note 5)                     7,191     345      7,477     6,829
Debt financing fees                      501       258      1,133     523
Finance expenses                         1,940     913      3,141     3,276
Gains on disposal, property, plant and   (252)     (873)    (252)     (873)
equipment
                                         66,040    48,901   200,420   134,059
                                                                      
Net income before income taxes and                                    
share of
net income from Apico LLC                81,427    37,191   289,615   55,243
                                                                      
Share of net income from Apico LLC       4,537     4,436    14,041    11,964
(Note 7)
Net income before income taxes           85,964    41,627   303,656   67,207
                                                                      
Income taxes (Note 14)                                                
Current                                  42,135    135      124,032   135
Deferred                                 2,778     22,493   46,576    37,681
                                         44,913    22,628   170,608   37,816
                                                                      
Net income and comprehensive income      41,051    18,999   133,048   29,391
                                                                      
Net income and total comprehensive                                    
income attributable to:
Shareholders of Coastal Energy           40,100    19,013   130,385   28,467
Non-controlling interest                 951       (14)     2,663     924
                                         41,051    18,999   133,048   29,391
                                                                      
Net income per share:                                                 
Basic (Note 13)                          0.35      0.17     1.15      0.25
Diluted (Note 13)                        0.34      0.16     1.10      0.25
                                                                      
The accompanying notes are an integral part of these condensed interim
consolidated financial statements.

                                               September 30    December 31, 
As at                                          2012           2011
                                                $              $ 
                                                               
Assets                                                         
Current Assets                                                 
Cash                                            29,267         22,995
Restricted cash (Note 3)                        6,413          28,447
Accounts receivable (Note 4)                    77,236         16,939
Derivative asset (Note 10)                      167            59
Crude oil inventory                             12,962         11,304
Marine fuel inventory                           4,416          2,857
Prepaids and other current assets               950            1,094
Total current assets                            131,411        83,695
                                                               
Non-Current Assets                                             
Exploration and evaluation assets (Note 5)      82,711         31,881
Property, plant and equipment (Note 6)          511,736        355,052
Investment in and advances to Apico LLC (Note   61,046         47,698
7)
Deposits and other assets                       6,274          405
Total non-current assets                        661,767        435,036
Total Assets                                    793,178        518,731
                                                               
Liabilities                                                    
Current Liabilities                                            
Accounts payable and accrued liabilities (Note  157,513        59,471
8)
Current portion of long-term debt (Note 10)     342            55,662
Current portion of derivative liabilities       3,910          14,557
(Note 10)
Derivative liability - Warrants (Note 9)        3,486          2,853
Total current liabilities                       165,251        132,543
                                                               
Non-Current Liabilities                                        
Long-term debt (Note 10)                        94,714         22,156
Non-current portion of derivative liabilities   506            1,274
(Note 10)
Deferred tax liabilities                        116,343        69,767
Decommissioning liabilities                     46,915         42,124
Total Non-Current Liabilities                   258,478        135,321
                                                               
Shareholders' Equity (Note 13)                                 
Common shares                                   212,500        211,554
Contributed surplus                             20,116         16,401
Retained earnings                               131,754        17,630
Total Shareholders' Equity                      364,370        245,585
Non-controlling interest                        5,079          5,282
Total equity                                    369,449        250,867
Total liabilities and equity                    793,178        518,731
                                                               
Commitments and contingencies (Note 16)                        
                                                               
The accompanying notes are an integral part of these condensed interim
consolidated financial statements.

                                Three months ended      Nine months ended
                                September 30,           September 30,
                                 2012         2011       2012        2011 
Operating activities                                                 
Net income                       41,051       18,999     133,048     29,391
Adjustments:                                                         
Share of net income from Apico   (4,537)      (4,436)    (14,041)    (11,964)
LLC
Unrealized (gain) loss on        362          (15,019)   (11,523)    (4,506)
derivative instruments
Depletion and depreciation       14,778       13,308     53,412      38,292
Finance expenses                 1,940        913        3,141       3,276
Amortisation of debt financing   147          248        779         513
fees
Share-based compensation         5,531        1,941      10,167      7,687
Deferred income taxes            2,778        22,493     46,576      37,681
Unrealized foreign exchange      17           (577)      (49)        (120)
(gain) loss
Exploration expense              7,191        345        7,477       6,829
Gains on property, plant and     (252)        (873)      (252)       (873)
equipment
Income taxes paid                (63,527)     (86)       (63,656)    (86)
Interest received                2            2          5           4
Interest paid                    (318)        (405)      (1,570)     (2,699)
Earnings Distributions from      9,943        7,588      9,943       9,756
Apico LLC
                                                                     
Change in non-cash working                                           
capital:
Accounts receivable              (49,066)     (4,802)    (60,297)    (6,595)
Inventory                        (1,325)      840        (3,217)     (3,472)
Prepaids and other current       106          96         144         576
assets
Accounts payable and accrued     6,348        5,421      (1,885)     6,311
liabilities
Current income taxes payable     45,520       --         127,288     --
Cash flow provided by operating  16,689       45,996     235,490     110,001
activities
                                                                     
Financing Activities                                                 
Issuance of common shares, net   727          666        2,753       6,108
of issuance costs
Repurchase of shares             (3,712)      --         (18,745)    --
Borrowings under long-term debt  50,000       --         50,000      6,275
Repayment of long-term debt      --           --         (30,000)    --
Loan arrangement fees            (2,915)      (71)       (3,883)     (419)
Distributions to                 (1,074)      (450)      (2,866)     --
non-controlling interest
Other                            --           (131)      --          (506)
Cash flow (used in) provided by  43,026       14         (2,741)     11,458
financing activities
                                                                     
Investing Activities                                                 
Decrease (increase) in           (20)         6,347      22,034      1,844
restricted cash
Expenditure on property, plant   (140,551)    (45,576)   (231,478)   (115,468)
and equipment
Acquisition of increased         --           --         --          (1,446)
ownership interest in Apico LLC
Advances to Apico LLC            --           --         (9,250)     250
Proceeds from disposal of        352          250        352         (125)
property, plant and equipment
Deposits and other assets -      (6,000)      (122)      (6,000)     (606)
Payments
Deposits and other assets -      --           --         131         --
Refunds
Cash flow used in investing      (146,219)    (39,101)   (224,211)   (115,551)
activities
                                                                     
Effect of exchange rate changes  (875)        (501)      (2,266)     (1,198)
on cash
                                                                     
Increase (decrease) in cash      (87,379)     6,408      6,272       4,710
Cash - Beginning of period       116,646      2,186      22,995      3,884
Cash - End of period             29,267       8,594      29,267      8,594
                                                                     
The accompanying notes are an integral part of these condensed       
interim consolidated financial statements.

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 Coastal Energy Company logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=10062

CONTACT: Enquiries:
         Coastal Energy Company
         Email: investor@CoastalEnergy.com
         +1 (713) 877-6793
        
         Strand Hanson Limited (Nominated Adviser)
         +44 (0) 20 7409 3494
         Rory Murphy / Scott McGregor
        
         Macquarie Capital (Europe) Limited (Broker)
         +44 (0) 20 3037 2000
         Paul Connolly / Jeffrey Auld
        
         FirstEnergy Capital LLP (Broker)
         Hugh Sanderson / Travis Inlow
         +44 (0) 20 7448 0200
        
         Buchanan
         Tim Thompson / Ben Romney
         +44 (0) 20 7466 5000

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