Coastal Energy Company: Coastal Energy Announces First Quarter 2012 Financial Results

HOUSTON, 2012-05-14 22:15 CEST (GLOBE NEWSWIRE) -- Coastal Energy Company (the "Company" or "Coastal Energy") (TSX:CEN) (AIM:CEO), an independent exploration and production company with assets in Thailand, announces the financial results for the three months ended March 31, 2012. The functional and reporting currency of the Company is the United States dollar.

First Quarter 2012 Highlights

-- The Company reported record levels of production, cash flow and earnings in the first quarter of 2012. Total Company production increased by 125% to 22,773 boe/d in the first quarter from 10,125 boe/d in the same period last year. The Company's offshore production was 21,031 bbl/d, with the increase due to the inclusion of production from both platforms at Bua Ban North. Onshore production of 1,742 boe/d increased from Q4 '11 levels as natural gas demand recovered following the flooding in Thailand in late 2011. Onshore production was below Q1 '11 due to the aftermath of the 2011 flooding as well as the power plant at Nam Phong being shut down for maintenance for approximately 5 days during the quarter. -- EBITDAX for Q1 2012 was $128.4 million, 202% higher than the $42.5 million recorded in Q1 2011. Revenue and EBITDAX were driven higher by increased production and commodity prices. Crude oil inventory was approximately 569,258 barrels at March 31, 2012, the revenue from which will be recognized in the second quarter. The Company added 232,924 barrels (approximately 41%) during the current quarter. -- The Company announced successful discoveries in the Miocene and Oligocene reservoirs at Bua Ban South. The discoveries have been appraised and determined to be commercial. -- The Company acquired an additional 2.9% of Apico LLC, which holds its onshore oil & gas concessions. This brings its working interest in the Sinphuhorm field to 13.7%.

Randy Bartley, President and CEO of Coastal Energy, commented:

"The first quarter of 2012 built upon the Company's success in 2011. The Company recorded record levels of production, cash flow and profits. We also delivered another successful exploration discovery at Bua Ban South in both the Miocene and Lower Oligocene reservoirs. We plan to drill further appraisal wells to delineate the discovery once production facilities arrive on location in the third quarter.

"We purchased two production facilities in the first quarter, one at Songkhla A and one for Bua Ban South. We plan to continue using a portion of our free cash flow to acquire currently leased production facilities to reduce our operating costs. We are also evaluating bringing in an additional drilling rig to accelerate our exploration and development program.

"2012 is off to a great start. We all look forward to another successful year with Coastal."

The following financial statements for the Company are abbreviated versions. The Company's complete financial statements for the three months ended March 31, 2012 with the notes thereto and the related Management Discussion and Analysis can be found either on Coastal's website at www.CoastalEnergy.com or on SEDAR at www.sedar.com. All amounts are in US$ thousands, except share and per share amounts.

Three Months Ended March 31, 2012 2011 --------------------------------------------------------------------------------

Revenues and Other Income Oil sales, net of royalties (Note 12) 168,836 66,711 Other income (Note 13) (10,171) (21,084) -------------------------------------------------------------------------------- 158,665 45,627 --------------------------------------------------------------------------------

Expenses Production 36,210 22,218 Depreciation and depletion (Note 7) 20,044 13,286 General and administrative 8,327 5,263 Exploration (Note 6) -- 5,553 Debt financing fees 281 234 Finance 1,006 1,162 -------------------------------------------------------------------------------- 65,868 47,716 --------------------------------------------------------------------------------

Net income (loss) before income taxes and share of Net income from Apico LLC 92,797 (2,089)

Share of net income from Apico LLC (Note 8) 4,007 3,256 --------------------------------------------------------------------------------

Net income before income taxes 96,804 1,167 --------------------------------------------------------------------------------

Income taxes (Note 17) Current 36,608 -- Deferred 11,703 3,183 -------------------------------------------------------------------------------- 48,311 3,183 --------------------------------------------------------------------------------

Net loss from discontinued operations (Note 18) -------------------------------------------------------------

-------------------------------------------------------------------------------- Net income (loss) and comprehensive income (loss) 48,493 (2,016) ================================================================================

Net income (loss) and comprehensive income (loss) attributable to: Shareholders of Coastal Energy 48,135 (2,362) Non-controlling interest 358 346 -------------------------------------------------------------------------------- 48,493 (2,016) --------------------------------------------------------------------------------

Net income (loss) per share: Basic (Note 15) 0.42 (0.02) Diluted (Note 15) 0.40 (0.02)

The accompanying notes are an integral part of these condensed interim consolidated financial statements (unaudited).

March 31 December 31, As at 2011 2011 -------------------------------------------------------------------------------- $ $

Assets Current Assets Cash 40,900 22,995 Restricted cash (Note 3) 6,411 28,447 Accounts receivable (Note 4) 32,476 16,939 Derivative asset (Note 11) 83 59 Inventory (Note 5) 19,637 14,161 Prepaids and other current assets 346 1,094 -------------------------------------------------------------------------------- Total current assets 99,853 83,695

Non-Current Assets Exploration and evaluation assets (Note 6) 43,392 31,881 Property, plant and equipment (Note 7) 379,736 355,052 Investment in and advances to Apico LLC (Note 8) 60,955 47,698 Deposits and other assets 405 405 -------------------------------------------------------------------------------- Total non-current assets 484,488 435,036 -------------------------------------------------------------------------------- Total Assets 584,341 518,731 ================================================================================

Liabilities Current Liabilities Accounts payable and accrued liabilities (Note 9) 90,832 59,471 Current portion of long-term debt (Note 11) 16 55,662 Current portion of derivative liabilities (Note 11) 19,192 14,557 Derivative liability - Warrants (Note 10) 2,899 2,853 -------------------------------------------------------------------------------- Total current liabilities 112,939 132,543

Non-Current Liabilities Long-term debt (Note 11) 47,353 22,156 Non-current portion of derivative liabilities (Note 670 1,274 11) Deferred tax liabilities 81,470 69,767 Decommissioning liabilities 39,899 42,124 -------------------------------------------------------------------------------- Total Non-Current Liabilities 169,392 135,321

Shareholders' Equity (Note 15) Common shares 213,491 211,554 Contributed surplus 17,453 16,401 Warrants -- -- Retained earnings 65,238 17,630 -------------------------------------------------------------------------------- Total Shareholders' Equity 296,182 245,585 Non-controlling interest 5,828 5,282 -------------------------------------------------------------------------------- Total equity 302,010 250,867 -------------------------------------------------------------------------------- Total liabilities and equity 584,341 518,731 ================================================================================

Commitments and contingencies (Note 16)

The accompanying notes are an integral part of these condensed interim consolidated financial statements (unaudited).

Three Months Ended March 31, 2012 2011 --------------------------------------------------------------------------------

Operating activities Net income (loss) 48,493 (2,016) Adjustments: Share of net income from Apico LLC (4,007) (3,256) Unrealized loss on derivative instruments 4,007 18,257 Depletion and depreciation 20,044 13,286 Finance expense 1,006 946 Amortisation of debt financing fees 281 234 Stock-based compensation 2,991 2,122 Deferred income taxes 11,703 3,183 Unrealized foreign exchange loss (gain) 92 (149) Exploration expense -- 5,553 Interest received 2 1 Interest paid (721) (312) Earnings distributions from Apico LLC -- 903 Change in non-cash working capital (Note 18) (3,014) (7,315) -------------------------------------------------------------------------------- Cash flow provided by operating activities 80,877 31,437

Financing Activities Issuance of common shares, net of issuance costs 992 4,693 Borrowings under long-term debt -- 6,275 Repayment of long-term debt (30,000) -- Loan arrangement fees (746) -- Payments to non-controlling interest -- (156) -------------------------------------------------------------------------------- Cash flow provided by financing activities (29,754) 10,812 --------------------------------------------------------------------------------

Investing Activities Increase in restricted cash 22,036 6,533 Purchase of property, plant and equipment (45,229) (36,470) Acquisition of increased stake in Apico LLC (9,250) -- Deposits and other assets -- (43) -------------------------------------------------------------------------------- Cash flow used in investing activities (32,443) (29,980) --------------------------------------------------------------------------------

Effect of exchange rate changes on cash (775) (241)

Increase in cash 17,905 12,028

Cash - Beginning of period 22,995 3,884

-------------------------------------------------------------------------------- Cash - End of Period 40,900 15,912 ================================================================================

The accompanying notes are an integral part of these condensed interim consolidated financial statements (unaudited).

Additional information, including the Company's complete competent person's report may be found on the Company's website at www.CoastalEnergy.comor may be found in documents filed on SEDAR at www.sedar.com.

This statement contains 'forward-looking statements' as defined by the applicable securities legislation. Statements relating to current and future drilling results, existence and recoverability of potential hydrocarbon reserves, production amounts or revenues, forward capital expenditures, operation costs, oil and gas price forecasts and similar matters are based on current data and information and should be viewed as forward-looking statements. Such statements are not guarantees of future results and are subject to risks and uncertainties beyond Coastal Energy's control. Actual results may differ substantially from the forward-looking statements.

The Coastal Energy Company logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=10062

CONTACT: Coastal Energy Company Email: [e-mail] [phone]

Strand Hanson Limited (Nominated Adviser) [phone] Rory Murphy / Paul Cocker / Scott McGregor

Macquarie Capital (Europe) Limited (Broker) [phone] Paul Connolly / Jeffrey Auld

FirstEnergy Capital LLP (Broker) Hugh Sanderson / Travis Inlow [phone]

Buchanan Tim Thompson / Ben Romney [phone]