Coastal Energy announced that the Kingdom of Thailand has approved a 282 square kilometer production license surrounding its Bua Ban field in the shallow waters of the Gulf of Thailand. The effective date for the production licence is January 12, 2009. The license is in effect for 20 years, or until production ceases. The Bua Ban field contains an estimated 21.8MM barrels of proven plus probable reserves based on the Company's 2007 year-end reserves report compiled by Huddleston & Co. Coastal Energy is the operator and owns 100% of the field, contained within its 2.2 million acre G5/43 block.
The Company plans to develop Bua Ban field beginning in the second quarter of 2009. Production is projected to commence in the third quarter through temporary storage and offloading facilities and is expected to average 9,500 barrels of oil per day by the end of the fourth quarter. This is in addition to the 10,000 barrels of oil per day planned for the Songkhla field, also located in Block G5/43, which was developed in late 2008. The Company is currently installing a MOPU and storage tanker at Songkhla and plans to restart production at Songkhla by the end of February 2009. Installation of permanent production facilities at Songkhla is planned for the second quarter of 2009.
The Bua Ban field is located along a major north-south structural trend which extends through much of the southern half of the G5/43 block. Coastal Energy owns a 3D seismic survey covering this trend and has thus far identified nine additional prospects which look similar to the Bua Ban field. All of these prospects are located within the Bua Ban production license. One of these structures, Benjarong Main, was penetrated by the Benjarong-1 well, which encountered 105 feet of net pay between 9,954 feet and 10,379 feet.
Five of the nine prospects are located near the Bua Ban field and the other three prospects are located nearer to the Benjarong Main structure. The high resource case for the Bua Ban area prospects is approximately 312 million barrels based on the Company's 2007 year-end reserves report. The prospects in the Benjarong area, including Benjarong Main, are estimated by the Company to contain potential high case resources of 39 mmbbls.
Randy Bartley, Chief Executive Officer of Coastal Energy commented,"The Bua Ban production licence is a continuing major step forward for Coastal in the development of our offshore Thailand properties. Not only does it allow us to move forward with the early development and production of Bua Ban, it also secures the upside potential of the area for the long term."
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