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.comor 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
hydrocarbonreserves, 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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