Coastal Energy Announces 2012 Year End Financial Results & Operations Update

Coastal Energy Announces 2012 Year End Financial Results & Operations Update

HOUSTON, March 28, 2013 (GLOBE NEWSWIRE) -- Coastal Energy Company (the
"Company" or "Coastal Energy") (TSX:CEN) (AIM:CEO), an independent exploration
and production company with assets in Southeast Asia, announces the financial
results for the year ended December 31, 2012. The functional and reporting
currency of the Company is the United States dollar.

2012 Financial Highlights

  *Total Company production increased to 21,373 boe/d in the fourth quarter
    of 2012 from 14,508 boe/d in the same period last year. Year over year
    offshore production was bolstered by the inclusion of a full quarter of
    production at the Bua Ban North A platform. Sequential quarterly offshore
    production was impacted downwardly in the fourth quarter due to a
    production facilities swap out at Bua Ban North as well as downtime at the
    Bua Ban North B platform while the second rig was mobilized to that
    location in December. Average onshore production for the fourth quarter of
    2012 was 2,419 boe/d compared to 1,122 boe/d in 2011. Total company
    production for the full year 2012 increased to 21,912 boe/d, a 90%
    increase from 2011 levels of 11,540 boe/d.
  *EBITDAX for the full year of 2012 was $494.9 million, 145% higher than the
    $201.7 million recorded in 2011. Revenue and EBITDAX were driven higher by
    increased production and commodity prices. Crude oil inventory was 503,594
    barrels at year end, the revenue from which will be recognized in 2013.
  *The Company reported fully diluted EPS of $1.92, a 368% increase from 2011
    fully diluted EPS of $0.41.
  *The Company reported fully diluted CFPS of $3.27, a 101% increase from
    2011 fully diluted CFPS of $1.63.
  *Note: Per share calculations use weighted average fully diluted shares
    outstanding for the period

  *The Company released the results of its third-party reserve evaluation
    report prepared by RPS Energy, Ltd. dated March 20, 2013 (effective date
    December 31, 2012). The Company reported significant gains in its 1P, 2P
    and 3P reserve bases, with volumetric increases of 9%, 40% and 78%,
    respectively. The Company's 1P, 2P and 3P NAVs also increased
    significantly, rising by 21%, 43% and 62%, respectively.

          As of     As of                                           
          December  December  %       After-Tax  After-Tax  %       After-Tax
         31, 2012  31, 2011  Change  NPV 2012   NPV 2011   Change  NPV per
          (mmboe)   (mmboe)           (US$MM)    (US$MM)            Share 2012
Offshore  68.8      62.5      10%     $1,832.1   $1,491.7   23%     $15.64
Onshore   7.3       7.4       -1%     $120.5     $126.5     -5%     $1.03
Total 1P  76.1      69.9      9%      $1,952.6   $1,618.2   21%     $16.67
Proved +                                                      
Offshore  120.4     80.0      51%     $2,475.2   $1,668.0   48%     $21.13
Onshore   23.9      22.9      4%      $237.9     $230.7     3%      $2.03
Total 2P  144.3     102.9     40%     $2,713.1   $1,898.7   43%     $23.16
Proved +
Offshore  168.5     87.1      93%     $2,919.0   $1,742.0   68%     $24.92
Onshore   27.6      22.9      21%     $275.9     $230.7     20%     $2.36
Total 3P  196.1     110.0     78%     $3,194.9   $1,972.7   62%     $27.27

Note: Reserve figures are shown as net working interest before royalties
(Thailand royalty regime is discussed in the MD&A of the Company's Annual
Report dated December 31, 2012). After-tax NPV figures are defined as future
net revenues discounted at 10%.Reserve numbers taken from the Company's
competent person's report prepared by RPS Energy Ltd. dated as of December 31,
2012 (prepared in accordance with NI 51-101 and the COGE Handbook) which may
be found on the Company's website at share values
are based on fully diluted shares outstanding as of December 31, 2012

Q1 2013 Operations Update

The Company continued its development program at Bua Ban North and Songkhla A
and also completed its pilot hydraulic fracturing program at Bua Ban South
during the first quarter.

Bua Ban North B

The Company drilled a total of four development wells and one water injection
well at Bua Ban North B during the first quarter. The Company has completed
two horizontal wells with new "swelling packers" which are expected to
minimize water production and increase ultimate recovery. This new completion
methodology takes longer to initially come onstream than previous methods,
however, provides greater long term benefits for production. One of these
wells is currently producing and the other is expected to come onstream within
the next three weeks. Two additional vertical development wells were drilled
on the northeastern flank of Bua Ban North B.

Bua Ban South

The Company has completed its pilot hydraulic fracturing program of two wells
at Bua Ban South. The Bua Ban South A-01 well was completed with a three stage
frac in the Lower Oligocene and produced at an initial rate of 1,200 bopd and
has stabilized at a rate of approximately 450 bopd for the past five weeks.
The Bua Ban South A-03 well was completed with a six stage frac in the Eocene
and initially produced at a rate of 1,450 bopd and has produced approximately
at that level for two weeks. Initial production from these wells was delayed
following the initial fracture stimulation due to mechanical issues with the
retrievable bridge plugs used during the stimulation and completion process.
The Company has identified an alternative completion methodology that should
eliminate similar delays in future well stimulations.

The A-04 Miocene producer has been completed and tied into production. The
Company is going to reperforate the A-05 Miocene well and bring it onstream in
the next two weeks.

Songkhla A

Two exploration wells were drilled into two previously untested fault blocks
on the western side of the Songkhla A platform. The A-15 exploration well
encountered 40 feet of net pay in the Eocene interval with 12% average
porosity and the A-16 exploration well encountered 14 feet of net pay in the
Lower Oligocene interval with 18% average porosity and 13 feet of net pay in
the Eocene interval with 14% average porosity in a separate western fault
block. The A-16 well has been fracked and will begin testing soon and the A-15
well is scheduled to be fracked once the frac equipment returns to the field
in the third quarter. Additionally, two development wells and three water
injection wells were drilled at Songkhla A during the quarter. The drilling
rig that was at Songkhla A has mobilized to the Songkhla M prospect and will
spud the M-01 exploration well by the end of this week.

The Company has determined that to fully develop the northeastern fault block
discovered by the A-13 well, an additional satellite platform will be
required. Consequently, no appraisal or development wells have been drilled in
this fault block subsequent to the A-13 discovery well. The Company's year-end
2012 2P reserves include 4.0 million barrels in this fault block.

The A-10 producer was down for the majority of the first quarter awaiting pump
replacement until the rig was moved off location.

The Company's current offshore production rate is approximately 23,000 bopd.
Total Company production, including onshore gas, is approximately 25,500

Randy Bartley, President and CEO of Coastal Energy, commented:

"Coastal delivered record production and cash flow for the fourth year in a
row. We also delivered another solid year of reserves increases with offshore
2P reserves increasing by 50% and total Company 2P reserves increasing by 40%.
The Company realized substantial additions to its 3P reserve base as well,
adding 41.0 mmbbl of offshore Possible reserves.We anticipate that some of
those offshore Possible reserves will be reclassified to 2P following
additional development drilling in 2013.In 2012 Coastal expanded its horizons
by signing a contract to develop a cluster of three oil fields offshore

"Coastal is poised for 2013 to be a solid year as well. We have added a second
drilling rig so that we can continue our development programs at our existing
fields while continuing to explore the prolific Songkhla basin. Two
high-impact exploration prospects, the Bua Ban Terrace and Benjarong South,
are scheduled to be tested in the second half of 2013.

"We are very excited by the results of the pilot hydraulic fracturing program
at Bua Ban South.Both wells have tested at stabilized production rates which
are commercial.Our post frac analysis indicates there is room for
optimization in our frac design and we believe we can improve both production
rates and reduce frac costs. Following these excellent results we plan to
move forward aggressively with our frac program to continue unlocking the
potential of this substantial resource."

The following financial statements for the Company are abbreviated versions.
The Company's complete financial statements for the three and twelve months
ended December 31, 2012 with the notes thereto and the related Management
Discussion and Analysis can be found either on Coastal's website at or on SEDAR at All amounts are in US$
thousands, except share and per share amounts.

Years Ended December 31,                              2012    2011
Revenues and Other Income                                       
Oil sales                                              746,853  347,783
Royalties                                              (79,280) (29,113)
Oil sales, net of royalties                            667,573  318,670
Reimbursement of expenses under Malaysia risk service  4,099    --
contract (Note 3)
Other income (Note 16)                                 (4,770)  (21,566)
                                                      666,902  297,104
Production                                             149,999  99,263
Malaysia risk service contract (Note 3)                4,099    --
Depreciation and depletion (Note 8)                    70,139   61,136
Net profits interest (Note 18)                         1,041    --
General and administrative                             39,696   31,453
Exploration (Note 7)                                   7,477    8,374
Debt financing fees                                    2,165    796
Finance (Note 15)                                      4,715    4,825
Gains on disposal of property, plant and equipment     (252)    (873)
                                                      279,079  204,974
Net income before income taxes and share of                     
earnings from Apico LLC                                387,823  92,130
Share of earnings from Apico LLC (Note 9)              19,110   14,527
Net income before income taxes                         406,933  106,657
Income taxes (Note 21)                                          
Current                                                150,329  135
Deferred                                               28,656   57,882
                                                      178,985  58,017
Net loss from discontinued operations (Note 18)                 
Net income and comprehensive income                    227,948  48,640
Net income and comprehensive income attributable to:            
Shareholders of Coastal Energy                         224,403  47,359
Non-controlling interests                              3,545    1,281
                                                      227,948  48,640
Net income per share:                                           
Basic (Note 19)                                        1.98     0.42
Diluted (Note 19)                                      1.92     0.41
The accompanying notes are an integral part of these consolidated
financial statements.

                                               December 31,  December 31,
As at                                           2012            2011
                                               $             $
Current Assets                                                 
Cash                                            63,897         22,995
Restricted cash (Note 4)                        6,452          28,447
Accounts receivable (Note 5)                    56,848         16,939
Derivative asset (Note 12)                      132            59
Inventories (Note 6)                            20,856         14,161
Prepaids and other current assets               628            1,094
Total current assets                            148,813        83,695
Non-Current Assets                                             
Exploration and evaluation assets (Note 7)      123,574        31,881
Property, plant and equipment (Note 8)          555,269        355,052
Investment in and advances to Apico LLC (Note   60,266         47,698
Deposits and other assets                       6,271          405
Total non-current assets                        745,380        435,036
Total Assets                                    894,193        518,731
Current Liabilities                                            
Accounts payable and accrued liabilities (Note  131,005        59,392
Income taxes payable (Note 21)                  86,752         79
Current portion of long-term debt (Note 12)     34             55,662
Current portion of derivative liabilities (Note 1,372          14,557
Total current liabilities                       219,163        129,690
Non-Current Liabilities                                        
Long-term debt (Note 12)                        95,066         22,156
Derivative liabilities (Note 12)                502            1,274
Derivative liability - Warrants (Note 11)       3,784          2,853
Deferred tax liabilities                        98,423         69,767
Decommissioning liabilities (Note 13)           46,726         42,124
Total Non-Current Liabilities                   244,501        138,174
Shareholders' Equity (Note 19)                                 
Common shares                                   213,260        211,554
Contributed surplus                             18,940         16,401
Warrants                                                       --
Retained earnings                               193,877        17,630
Total Shareholders' Equity                      426,077        245,585
Non-controlling interests                       4,452          5,282
Total equity                                    430,529        250,867
Total liabilities and equity                    894,193        518,731
Commitments and contingencies (Note 20)                        
The accompanying notes are an integral part of these consolidated financial

Years Ended December 31,                              2012      2011
Operating activities                                              
Net income                                            227,948    48,640
Share of earnings from Apico LLC                       (19,110)   (14,527)
Unrealized gain on derivative financial instruments    (14,030)   (843)
Depletion and depreciation                             70,139     61,136
Finance expense                                        4,715      4,825
Amortisation of debt financing fees                    1,322      786
Share-based compensation                               14,190     15,185
Deferred income taxes                                  28,656     57,882
Unrealized foreign exchange (gain) loss                (885)      388
Exploration expense                                    7,477      8,374
Gains on disposal of property, plant and equipment     (252)      (873)
Income taxes paid                                      (63,656)   (86)
Interest received                                      39         6
Interest paid                                          (2,994)    (4,022)
Dividends received from Apico LLC                      15,792     15,536
Change in non-cash working capital:                               
Accounts receivable                                    (39,909)   (6,640)
Inventory                                              (6,695)    (1,378)
Prepaids and other curent assets                       466        (488)
Accounts payable and accrued liabilities               71,574     4,899
Current income taxes payable                           86,673     48
Cash flow provided by operating activities             381,460    188,848
Financing Activities                                              
Issuance of common shares, net of issuance costs       3,314      7,907
Repurchase of common shares                            (18,753)   --
Cash settlement of stock options                       (31,136)   --
Cash settlement of restricted stock units              (663)      --
Borrowings under long-term debt                        50,000     6,275
Repayment of long-term debt                            (30,000)   --
Debt financing fees                                    (4,074)    (594)
Payments to non-controlling interest                   (4,375)    (2,558)
Other                                                  --         (506)
Cash flow (used) provided by financing activities      (35,687)   10,524
Investing Activities                                              
Decrease (increase) in restricted cash                 21,995     (12,078)
Purchase of property, plant and equipment              (309,599)  (165,099)
Acquisition of increased ownership interest in Apico   (9,250)    --
Advances to Apico LLC                                  --         (1,446)
Proceeds from disposal of property, plant and          352        250
Deposits and other assets - Payments                   (6,000)    (116)
Deposits and other assets - Refunds                    134        --
Cash flow used in investing activities                 (302,368)  (178,489)
Effect of exchange rate changes on cash                (2,503)    (1,772)
Increase in cash                                       40,902     19,111
Cash - Beginning of year                               22,995     3,884
Cash - End of year                                     63,897     22,995
The accompanying notes are an integral part of these consolidated financial

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

Additional information, including the Company's complete competent person's
report may be found on the Company's website at or may
be found in documents filed on SEDAR at

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

Coastal Energy Company                      
Email:             +1 (713) 877-6793
Strand Hanson Limited (Nominated Adviser)   +44 (0) 20 7409 3494
Rory Murphy / Andrew Emmott                  
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
Tim Thompson / Ben Romney                    +44 (0) 20 7466 5000

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