Coastal Energy sees initial success

         "The recent results from both drilling and production testing have exceeded our expectations. We are pleased with the initial testing results from our first horizontal well and we are currently planning two additional horizontal development wells at Bua Ban North B based on these successful results. Following the completion of the three most recent wells and the additional drilling at Bua Ban North, the rig will be moved to Bua Ban South to begin exploration of this highly prospective asset," said Randy Bartley, president and CEO of Coastal Energy.
     In a statement, Coastal Energy said that for offshore drilling, the first Bua Ban North A wells have been completed and are undergoing production testing. The Bua Ban North A-10 well, which is the first horizontal development well in the field, came fully online on December 28 and has been steadily producing approximately 3,000 barrels of oil per day (bopd). The Bua Ban North A-06 well has been completed and is producing approximately 1,000 bopd. The Company expects to have the remaining eight Bua Ban North A wells online by the middle of February.
         The Bua Ban North B-10 well was drilled as a step-out well into a previously untested central graben fault block. The well was drilled to a depth of 5,000 feet.
         The Bua Ban North B-12 well was drilled as an appraisal well on the western flank of the northern structure of the Bua Ban North field. The well was drilled to a depth of 4,000 feet and encountered 75 feet of net pay in the primary M100 Miocene sand with 26 per cent average porosity. An additional 5 feet of net pay was encountered in a shallow zone in the Middle Miocene.
         The company has extended its crude oil sales agreement for an additional two years and has secured a discount of US$1.70 per barrel to the Dubai benchmark crude price, which is at a premium to the previous discount to Dubai of $4.25 a barrel.