Coastal Energy Reports Results for the First Half of 2007
Coastal Energy released the results for the six months ended June 30, 2007. Interim highlights include:
- Net earnings from investment in APICO, LLC of US $3,711,000 based on net operating income of US $8,090,000
- Net loss of US $2,427,000 or US $(0.01) per share basic and diluted
- Total assets of US $130,312,000
The Company's earnings from its investment in APICO, LLC represent the Company's net 12.6% interest in the Phu Horm gas field. Aggregate gas production in the Phu Horm field was producing in excess of 90 million cubic feet of gas per day ("mmcf/d") during the second quarter.
In the six months ended June 30, 2007, the Company secured US $50 million of borrowing based credit facilities, maturing on December 31, 2013, arranged by Sumitomo Mitsui Banking Corporation Europe Limited. The closing took place in early July 2007, at which time over US $40 million was available for drawdown.
Also in the interim, the Company incurred US $2.0 million non-cash loss on its investment in its Nevada oil and gas properties. These properties were written down to nil in anticipation of formal abandonment of these properties, which was consummated in August 2007.
The Company's offshore operations in block G5/43 continue to be focused on developing and maturing the discovered assets in the Songkhla basin. Engineering work related to platform design for the Songkhla oilfield is nearing completion with fabrication of the platforms expected to commence in Q4, 2007. Technical evaluation over several of the other discovered fields in the basin continues with the interpretation of the 330 sq. km. high-resolution 3D seismic survey that was acquired earlier in the year. Included in the evaluation is the Bua Ban field, which has four appraisal wells, and is the second field the company is looking to develop over the next 12-18 months. During the second quarter the Company also acquired the Ocean 66 jack-up platform that is currently being refurbished for use in the development operations in the Gulf of Thailand.
Commenting on the results, Frank Inouye, CEO of Coastal said, "The Company has made significant progress during the second quarter of the year especially in regard to developing the offshore assets. The development of the Songkhla oilfield remains a priority for the Company and is expected to make a material impact on our production profile in 2008. Onshore production from the Phu Horm gas field continues to provide Coastal with a stable cash flow and additional funding has been secured with a US$50 million credit facility. Overall, the Company is in excellent shape to be able to meet our near term corporate objective of increasing cash flow and production."
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