Coastal Energy Ups Gas Production from Phu Horm

Coastal Energy reported a number of significant events in a trading update for the Company's operations in Thailand.

Gas production from the Phu Horm field which commenced in November, 2006 has increased to over 90 million cubic feet a day (15,840 Barrels of Oil Equivalent Per Day) from three wells on the gas field located in northeast Thailand. Two additional production wells are currently being drilled and could increase deliverability above existing contract quantities with total production from the five wells having the potential to fulfill the maximum demand of the Nam Phong power plant, which is currently 135 million cubic feet a day. The gas will supply the power plant with over 500 billion cubic feet of gas, plus condensate, under a 15 year Gas Sales Agreement with PTT Public Company Limited.

Coastal has a 12.6% net interest in the Phu Horm field and a net 36.1% interest in the surrounding block L15/43 and adjacent block L27/43 which the Company plans on drilling in the second and third quarter of 2007.

The Company also said that it has completed the acquisition of an extensive 3D seismic survey over block G5/43 in the Gulf of Thailand. The PGS vessel M/V Nordic Explorer acquired approximately 330 square kilometers of high-resolution 3D data over the western portion of the Songkhla basin in block G5/43. The area covered by the acquisition includes the Bua Ban oil field, which is one of two fields the Company is looking to develop over the next 12-24 months. The second development, the Songkhla field, already has 3D seismic coverage and development plans for the field are currently being finalized with production expected to commence in late 2007.

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