SPH1 Well Holds Hopes for Increased Onshore Thailand Production

Drilling in the South Phu Horm-1 (SPH1) appraisal well has commenced in Block L15/43 in North Thailand. The well will be drilled to an approximate depth of 2,460 meters sub-sea.

The well is being drilled by the Ensign No. 16 rig and will test the southern-most extension of the Phu Horm gas field for possible reserves that would increase the field's current production of approximately 90 million cubic feet of gas per day. Currently, the most southerly producing well on the Phu Horm field is well PH-5, about three kilometers north of SPH1.

The operator of the well is APICO Ltd, who owns 100% of the Block L15/43 concession. Coastal Energy is APICO's largest shareholder with 36.1% interest, followed by Salamander Energy at 27.2%. APICO also holds a 35% interest in the Phu Horm field, which came on stream in Novemver 2006.

"South Phu Horm-1 is a key well in the APICO onshore drilling portfolio for 2008," Coastal's Chairman, Frank Inouye commented. "The well not only has the potential to confirm the extension of the Phu Horm gas field south, into acreage that is 100% owned by APICO, but more importantly, verify significant additional reserves for the field."

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