Drilling Ops Commence Offshore Thailand at 4.9MM Barrel Songkhla Field

Coastal Energy Co.

Coastal Energy Company announced that the Songkhla A-01 well was spudded on Wednesday, October 8, 2008. Songkhla A-01 is the first well in the Company's development program of the Songkhla field located in Block G5/43 offshore Thailand.

The Company plans to drill Songkhla A-01 to a total depth of approximately 8,500 feet (2,590 meters) true
vertical depth. The well is a direct offset to the original Songkhla-1 well which was drilled in 1988 and
tested at 1,500 barrels of oil per day from 80 feet of net oil pay in the Lower Oligocene formation.

A Competent Persons Report ('CPR') prepared by Huddleston and Co., Inc. estimates the Proven and Probable
reserves in the main Songkhla feature to be 4.9 mmbbls. The Company plans to drill four (4) wells on the main
Songkhla field and conduct production testing using natural flow and Electric Submersible Pumps ('ESPs').
Testing of the initial Songkhla A-01 well is expected to begin prior to the end of October.

In August 2008, Coastal's wholly owned subsidiary signed a LOI with Deep Drilling 7 Pte. Ltd. for a three-month charter of the newbuild jackup rig Deep Driller 7, which is being used to drill several wells in the Songkhla block.

In addition to the undeveloped discovered fields, the Company has also identified numerous undrilled prospects along the northwest margin of the Songkhla basin.

Randy Bartley, Chief Executive Officer of Coastal Energy commented, "We are excited to begin our development of the Songkhla field. We continue to anticipate completion and testing of Songkhla A-01 by late October and an
extended production test while continuing simultaneous drilling operations. This is an important step in the
Company's multi-well development of Block G5/43 and toward commencing production at Songkhla by year end 2008."