Coastal Mobilizes Rig to Songkhla B in Gulf of Thailand

Coastal's Thailand Assets
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Songkhla Field Offshore Thailand
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Coastal is presently mobilizing Atwood Oceanics' Vicksburg jackup from Songkhla A to the Songkhla B exploration prospect in the Gulf of Thailand. The Songkhla B exploration prospect is expected to spud by the end of the week with initial results by late January.

Total production from Songkhla A is approximately 7,000 bopd from the A-01, 03, 07 & 08 wells. The recently completed A-04 is down due to mechanical pump issues. A hydraulic workover unit is being mobilized to remedy the A-04 well and to install larger pumps on the A-01 and A-03 wells.

Randy Bartley, Chief Executive Officer of Coastal Energy, commented, "We have had some issues with the downhole mechanical pumps and they are being appropriately addressed. The production disruptions that we have experienced are entirely mechanical in nature and do not reflect on the quality or expected performance of the reservoir.

"As a result of these disruptions and other downtime associated with drilling, we expect our fourth quarter production to average approximately 5,400 bopd. We expect production at Songkhla A to return to the approximate 10,000 bopd level once workover operations are completed on the A-04 well in late January.

"We are now looking forward to turning our focus to the Songkhla B exploration prospect."

Block L 27/43, Onshore Thailand

The Company also announced that the first hydraulic fracturing program has been completed on the Phu Kheng-1 well on Block L 27/43 onshore Thailand (Coastal 36.1% interest). Limited gas flows were seen following the completion of the frac test. The operator is now determining the forward program, which might include fracturing of shallower zones where gas shows were seen during drilling. The EMAS EE-2 hydraulic workover unit remains on-standby at zero cost ahead of conducting the second test.

The testing program on the Si That-3 well on Block L 13/48 onshore Thailand (Coastal 21.7% interest) is ongoing and awaiting the arrival of equipment.

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