--Earnings from investment in APICO, LLC of US$3,044,000 --Net income of US$742,000 (compared to US$ 23,000 the previous first quarter) --Total assets of US$130,884,000
The Company's earnings from its investment in APICO, LLC represent the Company's net 12.6% interest in the Phu Horm gas field. Gas production in the Phu Horm field was averaging between 90 and 100 million cubic feet of per day ('mmfc/d') at the end of the first quarter. Phu Horm operations during the second quarter include the recent spudding of PH-10, a development well in the gas field.
The Company is continuing to conduct technical and development work on its assets in the G5/43 block, Gulf of Thailand, including the interpretation of the 330 square kilometer 3-D seismic recently acquired over the western half of the Songkhla basin. The area covered by the seismic acquisition includes the Bua Ban oil field, one of the two fields the Company is looking to develop over the next 12-24 months. The seismic will supplement existing 3-D over the Songkhla field. During the second quarter, the Company has acquired the Ocean 66 jack-up platform for use in the Gulf of Thailand.
Commenting on the results, Frank Inouye, CEO of Coastal said:
"The first quarter of 2007 represents a significant milestone for the Company in terms of delivering on the strategic objectives that were developed around last years' merger. With respect to the Company's operations, the Phu Horm field, despite the disappointment of the recent wells, continues to perform as expected. I am confident that the information provided by these wells will enhance the joint venture's understanding of the field and a third well which has recently started drilling should add support to the existing producing wells. We believe there is a significant amount of gas potential not only in the Phu Horm field but surrounding acreage and additional drilling in the next few months should provide a more accurate picture of the potential reserves. Offshore in the Gulf of Thailand we are continuing our efforts to develop the Songkhla and Bua Ban fields with first production anticipated for Q1, 2008."
Coastal Energy is an oil and gas exploration, development and production company, with core assets onshore and offshore Thailand and Nevada, USA.
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