Coastal's Bua Ban North A-05 Encounters Net Pay

- Coastal Bua Ban North A-05 Encounters Net Pay

Wednesday, September 07, 2011
Coastal Energy Co.

Coastal Energy announced the successful results of the Bua Ban North A-05 well and provides an operations update.

The Bua Ban North A-05 well was drilled to a total depth of 5,650 feet TVD. The well encountered 81 feet of gross sand and 35 feet of net pay in the Miocene reservoir with 27 percent average porosity. The well tested the Miocene reservoir on the eastern flank of the Bua Ban North A field. The oil water contact in the well was seen at 3,770 feet. The results of the A-05 well add an additional 1,200 acres to the structural closure area. The Company is planning to drill five to six additional evaluation wells at Bua Ban North before moving the rig to G5/50.

The Bua Ban North B-02, B-03 and B-04 wells have all been completed and tied into the production facilities. The aggregate production rate from Bua Ban North B is approximately 8,200 bopd. Average production at Songkhla A is approximately 4,000 bopd, with production currently being constrained due to a temperature issue. The Company is installing additional cooling units to remedy this issue and restore production to 6,500 bopd. The installation is expected to be complete in approximately two weeks.

Aggregate offshore oil production is averaging 13,700 bopd, and total Company production is averaging 15,800 boepd.

Randy Bartley, Chief Executive Officer of Coastal Energy, commented, "We are very pleased with the results of the Bua Ban North A-05 well. This well was drilled as far north as possible to test the presence of hydrocarbons between Bua Ban North A & B. We have several locations identified which are further south and up to 200 feet structurally higher which we plan to test with the upcoming wells.

"Total production from Bua Ban North B has come in above our expectations and the wells continue to perform better than expected. We are working to resolve mechanical production issues at Songkhla and expect to restore production to previous levels in the coming weeks.

"We expect production facilities to be on location at Bua Ban North A in late October."

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Coastal Tests Additional Wells at Bua Ban North B

- Coastal Tests Additional Wells at Bua Ban North B

Friday, August 12, 2011
Coastal Energy Co.

Coastal announced the results of production testing on two additional wells at Bua Ban North B and the appraisal well at Songkhla H.

The Bua Ban North B-05 well was completed using an electric submersible pump (ESP) and is currently producing 2,500 bopd from the Miocene interval. The Bua Ban North B-01 well was completed using an ESP and is currently producing 600 bopd from the Oligocene interval. Total production from the Bua Ban North field is averaging approximately 7,100 bopd. The Company has also completed the B-07 water injection well and expects to complete the three remaining producing wells by the end of August.

The Songkhla H-01 sidetrack was drilled to a total depth of 9,140 feet TVD and downdip from the original wellbore to determine the extent of the field. The well encountered 30 feet of net water bearing sand in the Lower Oligocene interval. Pressure data confirmed the field limit is consistent with internal estimates based on seismic data.

Randy Bartley, Chief Executive Officer of Coastal Energy, commented, "Bua Ban North B continues to exceed our expectations and we are very pleased with the four currently producing wells. We continue to produce the Bua Ban North B wells at two-thirds pump capacity to monitor reservoir performance. Given the reservoir quality and well performance we have seen from the Miocene reservoir thus far, we are now planning to move the rig back to Bua Ban North and drill delineation wells to further define the extent of the Miocene trend. This success has also led us to begin further evaluation and remapping of the Miocene trend along the western side of the basin stretching from Bua Ban North to Benjarong. We expect to begin exploration drilling targeting the Miocene at Bua Ban South in the fourth quarter.

"The results of the Songkhla H-01 appraisal indicate an oil column of approximately 200 feet. We are pleased with the Songkhla H discovery as there are numerous other prospects which can be drilled nearby and, if successful, developed from a central Songkhla H production facility. We plan to apply for a production license in the Songkhla H area and begin developing the area following government approval."

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Coastal Hits 'Significant' Oil Pay at Bua Ban

- Coastal Hits 'Significant' Oil Pay at Bua Ban

Wednesday, June 15, 2011
Coastal Energy Co.

Coastal announced that the Bua Ban North B-06 well was drilled to a total depth of 6,800 feet TVD and encountered 69 feet of net pay with 28 percent porosity in the Miocene interval. MDT (Modular Dynamic Testing) pressure analysis confirms that the well is in communication with the B-02 and B-04 wells and oil samples recovered have an API gravity of 36 degrees.

The B-06 also encountered 17 feet of net pay with 22 percent porosity in the Eocene in the western upthrown fault block, which has also been referred to as the Bua Ban North Terrace. This is the highest porosity Eocene pay zone that has been encountered in the basin.

Randy Bartley, Chief Executive Officer of Coastal Energy, commented, "We are pleasantly surprised with the results of the B-06 well. The well was expected to encounter a wet section of the reservoir and be used for aquifer support; however, the fact that it encountered a significant oil pay zone in the Miocene which is connected to the other wells in the same fault block has several positive implications.

The lowest known oil in this fault block has been moved lower by 100 feet and has nearly tripled the extent of the structural closure to 425 acres. The oil water contact here is much deeper than originally anticipated. Following this discovery, we will drill an additional well (B-07), to confirm the MDT data which indicate an oil water contact at 3,825 feet. The B-07 well can be used for water injection. We then plan to drill a well (B-08) on the eastern side of the field and northeast of the B-03 well to further evaluate the full extent of this closure. If successful, this would materially increase the size of the productive field.

In addition, the high quality of the Eocene reservoir which was seen confirms our assessment that the Eocene is conventionally producible above 6,500 feet. The B-06 well supports further exploration to the north and west and reduces the risk of the Company's Eocene targets.

The mobile offshore production unit is on standby and will mobilize to Bua Ban North B to begin testing operations as soon as the drilling rig moves off location."

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Coastal Touts Success at Bua Ban North Appraisal

- Coastal Touts Success at Bua Ban North Appraisal

Monday, June 06, 2011
Coastal Energy Co.

Coastal Energy announced the successful results of the Bua Ban North B-04 appraisal well.

The Bua Ban North B-04 well was drilled to 6,000 feet TVD and encountered 64 feet of net pay in the Miocene objective with average porosity of 27%. The B-04 confirms the discovery made by the B-02 well, which encountered 62 feet of net pay in the Miocene with 26% porosity. The B-04 well is currently being cased and will then be suspended pending the arrival of production equipment. The Company plans to drill a water disposal well before mobilizing the rig to its next planned location.

Randy Bartley, Chief Executive Officer of Coastal Energy, commented, "We are pleased with the continued success in the Miocene trend at Bua Ban North B. Drilling is expected to be complete by mid-June and the Mobile Offshore Production Unit is scheduled to arrive in late June. A hydraulic unit will be used for completion operations and production testing is anticipated to begin in mid-July.

"The B-04 well further confirmed the Miocene trend at Bua Ban North B and the potential of the Miocene play across the Songkhla basin. Following Bua Ban North B, the rig will be mobilized to the Songkhla H prospect, which is in the middle of the basin between Songkhla A and Bua Ban. An exploration well will be drilled to test the Miocene and deeper zones at this location."

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Coastal Strikes Again at Bua Ban North

- Coastal Strikes Again at Bua Ban North

Wednesday, May 25, 2011
Coastal Energy Co.

Coastal announced the successful results of the Bua Ban North B-05 exploration well.

The Bua Ban North B-05 well was drilled to 7,600 feet TVD and encountered 178 feet of net pay in the Miocene objective with average porosity of 27%. The B-05 is currently being cased and will then be suspended pending the arrival of testing equipment. The Company then plans to spud the B-04 well to appraise the Miocene reservoir updip from the discovery in the B-01 well.

The Company's offshore production is currently averaging 8,500 bopd. Onshore production is averaging 2,000 boe/d, bringing total Company production to 10,500 boe/d.

Randy Bartley, Chief Executive Officer of Coastal Energy, commented, "The B-05 well was designed to encounter maximum net pay by drilling along the bounding fault plane within a single structural trap. The Bua Ban North A-03 well was drilled with a similar well design and had similar results. We plan to utilize this drilling technique in future wells to optimize pay zones.

"Given the exceptional results thus far at Bua Ban North B, we have decided to divert the MOPU from Bua Ban North A to begin testing Bua Ban North B first. We are in the process of procuring an additional MOPU for Bua Ban North A, which we expect to be on location during the third quarter.

"The results of the B-05 further validate the tremendous upside potential of the Miocene trend in the Songkhla basin. Based on recent drilling results, we believe the Miocene trend extends into the central part of the basin and becomes shallower as it moves east. Once appraisal work is completed at Bua Ban North B and testing has begun, we plan to move the rig to a new location further to the east to continue exploring the Miocene trend.

"Production at Songkhla A has fallen recently due to declining rates from the wells drilled in Q410 and Q111. These three wells discovered new reservoirs which are not in communication with the main Songkhla reservoir and consequently are not benefiting from existing water injection wells. We are planning to drill water injection wells on these reservoirs to restore aquifer support and production rates once EIA approval is received, which is expected within two months."

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Bua Ban Delivers Additional Pay for Coastal Energy

Bua Ban Delivers Additional Pay for Coastal Energy

Monday, May 16, 2011
Coastal Energy Co.

Coastal Energy announced the successful results of the Bua Ban North B-03 exploration well.

The Bua Ban North B-03 well was drilled to 4,420 feet TVD and encountered 48 feet of net pay in the Miocene objective with average porosity and water saturations of 28% and 33%, respectively. The water saturations are the lowest seen thus far in the Miocene trend. The B-03 is currently being cased and will then be suspended pending the arrival of testing equipment. The Company then plans to spud the B-05 well to appraise the Lower Oligocene reservoir updip from the discovery in the B-01 well.

Randy Bartley, Chief Executive Officer of Coastal Energy, commented, "The B-03 discovery is significant as it proves that all Miocene fault block configurations along the western edge of the basin are capable of trapping hydrocarbons. This well also continues to highlight the high reservoir quality in the Lower Miocene and Upper Oligocene intervals on the western side of the basin. Based on this discovery we plan to begin evaluating any potential Miocene targets in the central part of the basin between Songkhla and Bua Ban.

"Our 2011 exploration program has been successful thus far with 6 of the 7 wells being successful and adding new reserves."

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 announcement.

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Coastal Energy Hits Net Pay at Bua Ban North

Coastal Energy Hits Net Pay at Bua Ban North

Friday, April 29, 2011
Coastal Energy Co.

Coastal Energy announced the successful results of the Bua Ban North B-01 exploration well.

The Bua Ban North B-01 well was drilled to 7,960 feet TVD and encountered 28 feet of net pay in the Upper Oligocene with 23% average porosity and 29 feet of net pay in the Lower Oligocene with 16% average porosity. Net pay estimates are based on log analysis, shows and MDT analysis; the well has not been flow tested. The Company estimates that this fault block contains a total of 13 million barrels of oil in place across these two intervals.

The B-01 well also encountered good oil shows in three zones in the Miocene; however, this interval was not targeted in this well and the Miocene was not encountered in an optimal structural position. There was also an oil show in the Eocene interval.

The Company has spudded the Bua Ban North B-02 well, which will test two Miocene intervals in an optimal structural position. The B-02 well will also test Oligocene and Eocene targets. Although high gas readings were encountered throughout the Eocene and an oil show was observed, the top of the Eocene reservoir was penetrated at 7170 feet, below our interpreted threshold for development of reservoir quality sands.

Randy Bartley, Chief Executive Officer of Coastal Energy, commented, "The B-01 well delivered positive results for the Bua Ban North B prospect. We saw good oil shows throughout all of our targeted intervals which support further drilling to test the Miocene and Eocene intervals at this location. The shallow shows continue to support the potential for shallower Miocene and Upper Oligocene targets along the entire western margin of the Songkhla basin. The Eocene interval is predicted to be of reservoir quality at 6,500 feet and shallower; it was encountered in this well at 7,170 feet. We plan to test Eocene targets further up the terrace at shallower depths.

"The drilling results from Bua Ban North continue to be positive. We also remain on target to begin production testing of the multiple discoveries at Bua Ban North A in mid-May."

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 announcement.

Coastal Strikes Oil Pay at Bua Ban North

Coastal Strikes Oil Pay at Bua Ban North

Monday, April 11, 2011
Coastal Energy Co.

Coastal announced the successful results of the Bua Ban North A-03 exploration well.

The Bua Ban North A-03 well was drilled to 5,346 feet TVD and made a discovery in the Miocene interval. The well encountered 125 feet of net pay with 28% average porosity. The A-03 tested a fault block which is south of and deeper than the Miocene discoveries in the A-01 and A-04 wells. The Company estimates that this fault block contains approximately 20 million barrels of oil in place.

The Company plans to suspend the well and then complete it with a workover rig once the MOPU arrives on location in mid-May to begin production testing.

Randy Bartley, Chief Executive Officer of Coastal Energy, commented, "The A-03 well not only significantly increases the oil in place at Bua Ban North A, but reinforces the prospectivity of this part of the basin. Coastal has now discovered an estimated 55 million barrels of oil in place with four wells in less than two months.

"We are moving the rig to Bua Ban North B while the MOPU is being mobilized to Bua Ban North A. Not only will we begin testing further Miocene targets, but we will also test the highly prospective Oligocene and Eocene targets in the northern part of the basin. During this time, we will also be able to fully evaluate the data from the first four Bua Ban North A wells and formulate a larger scale field development plan, including horizontal wells."