Coastal Energy's Bua Ban A-08 Well Encountered Oil Shows

Coastal Energy updated of its operations in the Gulf of Thailand.

The Bua Ban A-11 well was drilled to 4,500 feet true vertical depth and encountered 50 feet of net pay across two intervals in the Miocene reservoir with average porosity of 25%. The A-11 was an exploration well drilled to further establish productivity and potential trapping mechanisms in the Miocene. The A-11 is currently producing approximately 300 bopd with zero water cut.

The Bua Ban A-08 exploration well was drilled to test the northern limit of the Bua Ban field and encountered quality sands with some oil shows; however the sands were wet, suggesting that the well is at the down dip limit on the northern part of the structure. The well was subsequently completed as a water injection well.

A further water injection well, the Bua Ban A-09, was drilled and completed prior to the departure of the rig from the Bua Ban location. During drilling of the A-09, 135 feet of the main source rock in the Lacustrine Shale was cored for continued evaluation of a non-conventional play. Initial core results are promising and final core analysis is expected in 8 to 10 weeks.

The rig has been mobilized to Songkhla A where two appraisal wells will be drilled into the Songkhla Oligocene Wedge and two appraisal wells will be drilled into the Eocene reservoir. The upgrade of the processing equipment at Songkhla A is expected to begin in mid-November.

Offshore production is currently 10,500 bopd and total combined production is approximately 12,500 boepd.

Randy Bartley, Chief Executive Officer of Coastal Energy, commented, "We are pleased with the results of the A-11 well. Although the size of the Miocene closure at Bua Ban is small, establishing production from a 3-way closure in the Miocene is encouraging because we have nine other similar Miocene structures, several of which are lower risk 4-way traps, identified in the basin with combined recoverability estimates of over 50 mmbbl.

"We are currently rigging up at Songkhla A and expect to spud the first Oligocene Wedge well early next week. Upgrades to facilities at Songkhla A should begin in November, and should stabilize production at Songkhla. Production at Songkhla A continues to perform better than currently modeled. Following development drilling at Songkhla A, we plan to mobilize to Bua Ban North and begin exploration drilling in early December."