Coastal Energy Company, an independent exploration and production company with assets in South-East Asia, announces the audited financial results for the year ended December 31, 2007. The functional and reporting currency of the Company is the United States dollar.
Earnings from Apico LLC increased to $7,679,000 (2006: $371,000). The company reported a net loss from continuing operations of $5,221,000 or $0.07 per share (2006: $4,054,000 or $0.08 per share).
Coastal Energy had $50 million of borrowing base credit facilities arranged by Sumitomo Mitsui Banking Corporation Europe Limited during 2007.
The company raised $57.6 million via a "bought-deal" agreement with Macquarie Capital Markets Canada Ltd. and received cash earnings from Coastal's interest in Apico LLC of $9.2 million (2006: $371,000).
Coastal Energy's increase in reserves included a 28% increase in total proven (1P) reserves to 19.0 mmboe, a 50% increase in offshore proven + probable (2P) reserves to 26.7 mmboe, a 26% increase in total contingent resources (best estimate) to 34.2 mmboe, and a 137% increase in total prospective resources (best estimate) to 170.4 mmboe.
Coastal Energy signed a twelve-month agreement to drill development wells in the offshore Songkhla and Bua Ban oil fields, appraisal wells in the Songkhla basin and exploratory wells in the Ko Kra basin in the Gulf of Thailand.
Randy Bartley, Chief Executive Officer of Coastal commented, "The Company has made great progress in 2007 towards getting its offshore Thailand properties into production. The following key objectives were achieved: obtaining debt and equity financing, enhancing our talented team, and securing the necessary drilling and service arrangements to put our recognized developments into production. We have continued this progress into 2008 with our acquisition of a tanker and construction of our wellhead and processing platforms for Songkhla.
We are on track to start our drilling program in late second quarter of this year and first offshore production from Songkhla is scheduled for the fourth quarter. The Company has already identified numerous new opportunities in our existing holdings that will be drilled as our development program schedule allows. Our focus will be on maximizing production from the two identified projects, Songkhla and Bua Ban, and then adding additional projects to maintain our growth."
The Company also announces, based on the 2007 Competent Persons Report (the "Report"), that the net present value of its Proven ("1P") and Proven + Probable ("2P") reserves increased 145% to $441.1 million and 140% to $1,411.2 million, respectively, based on constant prices.
Coastal's reserves evaluation conducted by Huddleston and Co., Inc., has been completed in accordance with the TSX-V NI 51-101 regulations and the AIM Guidance Notes for Mining, Oil & Gas companies.
Coastal anticipates drilling up to 7 wells in the Songkhla oil field and up to 5 wells in the Bua Ban oil field in the Gulf of Thailand during 2008. As a result of this drilling, the Company anticipates bringing oil production on line in the Songkhla oil field in the fourth quarter of 2008 and production on line in the Bua Ban oil field in the second quarter of 2009. In addition, the Company anticipates acquiring 2-D seismic in the northern part of Block G5/43 in the Gulf of Thailand during 2008.
Coastal anticipates Apico, LLC will test its DM3 and SPH-1 wells in 2008 and will drill 2 additional wells in its onshore Thailand properties.
The current year loss reflects the Company's earnings of $7,679,000 from its interest in the onshore Phu Horm gas field in Thailand, $10,325,000 in Coastal's operating expenses, $1,166,000 unrealized loss on derivative instruments, $1,799,000 in foreign exchange losses (primarily non-cash) and $2,012,000 loss on discontinued operations.
Coastal holds a 12.6% indirect interest in the Phu Horm gas field via its 36.1% ownership of Apico LLC. The Company's $7.7 million share of earnings represents $9.2 million (its 36.1% of Apico's audited annual net income of $25.5 million) less $1.5 million for amortization of the Company's excess basis in Apico. The Phu Horm gas field averaged over 85 million cubic feet per day ("mmcf/d") during the year.
At December 31, 2007, Coastal had total assets of $157,654,000.
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