Coastal Energy Encounters Net Pay in Gulf of Thailand

Coastal Energy announced an update of its operations in the Gulf of Thailand.

Bua Ban

The Bua Ban A-10 well was drilled to a total depth of 7,474 feet true vertical depth (TVD). The well encountered 130 feet of net pay in the Lower Oligocene reservoir with 17% average porosity. The A-10 well was drilled into the same fault block as the A-05 and encountered the same expanded section of the Lower Oligocene as was seen in the A-05 well. The well has been tied in to production facilities and is currently producing 1,150 bopd.

The Bua Ban A-04 and A-07 wells were drilled to 7,908 feet and 8,122 feet, respectively, true vertical depth. Both wells encountered pay zones in the Lower Oligocene as well as the Eocene reservoir. The Company is currently isolating testing in the Eocene to evaluate the potential of the reservoir.

Total offshore production is currently averaging approximately 11,500 bopd, and the Company's aggregate production is approximately 13,500 boepd.

Songkhla A

Water production at Songkhla A has increased to approximately 56% from 50% in April, which is in line with modeled production curves. The Company is planning to upgrade facilities at Songkhla A from 15,000 bbl per day of liquid capacity to 30,000 bbl of total liquids per day which will increase total throughput and oil production. Approximately 10 days of downtime will be required in the fourth quarter for the upgrade.

Randy Bartley, Chief Executive Officer of Coastal Energy, commented, "The initial results from the latest batch of wells at Bua Ban are encouraging. We have further defined the extent of the expanded section of the Lower Oligocene seen in the A-05 and A-10 wells. The A-04 and A-07 wells had some oil shows in deeper zones which are currently being evaluated.

"The A-08 well is currently being drilled to define the northern limit of the Bua Ban field. Following that, the A-11 will be drilled into an upthrown block to test the Miocene and the A-09 will be drilled off structure to be used as a water injector well.

"Once we finish this phase of drilling at Bua Ban we are planning to mobilize the Vicksburg to Songkhla A to drill development wells into the Lower Oligocene wedge and Eocene reservoirs. We expect to move to Bua Ban North and commence exploration drilling by year end."

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