Coastal Energy Announces Second Quarter 2012 Financial Results & Operations Update
HOUSTON, Aug. 13, 2012 (GLOBE NEWSWIRE) -- Coastal Energy Company (the "Company" or "Coastal Energy") (CEN.TO) (CEO.L), an independent exploration and production company with assets in Thailand, announces the financial results for the three and six months ended June 30, 2012. The functional and reporting currency of the Company is the United States dollar.
Second Quarter 2012 Highlights
- Total Company production increased to 21,713 boe/d in the second quarter from 9,494 boe/d in the same period last year. The Company's offshore production was 19,351 bbl/d, with the increase due to the inclusion of production from both platforms at Bua Ban North. Full production from Bua Ban North came on throughout January and February. Offshore production volumes in the second quarter were impacted by downtime for the replacement of an FSO at Bua Ban North. Onshore production of 2,362 boe/d increased from Q112 levels and year ago levels as natural gas demand continued to recover following the flooding in Thailand in late 2011 and was 3% above Q211 levels.
- EBITDAX for Q2 2012 was $130.3 million, 230% higher than the $39.5 million recorded in Q2 2011. Revenue and EBITDAX were driven higher by increased oil liftings and commodity prices. Crude oil inventory was approximately 456,418 barrels at June 30, 2012 the revenue from which will be recognized in the third quarter. The Company reduced closing inventory levels by 112,840 barrels (approximately 20%) during Q2.
- 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 purchased production facilities for Bua Ban South and will continue appraisal drilling once they arrive on location later in the third quarter.
- The Company announced a Normal Course Issuer Bid to repurchase up to 5% of its outstanding shares (5,715,972 shares). To date, the Company has repurchased approximately 1.25 million common shares on the open market.
- The Company announced that it had been awarded a Small Field Risk Services Contract by PETRONAS for the development of the Kapal, Banang & Meranti cluster of small fields offshore Peninsular Malaysia. Coastal will operate the fields for PETRONAS and will provide upfront development and operational capital. Coastal will recover 100% of its invested capital and will earn a remuneration fee which will be adjusted based on the timely implementation of the agreed field development plan and budget.
- Following quarter end, the Company released the results of an interim third party reserves evaluation by its reserve auditor, RPS Energy Ltd. Total company 2P reserves increased to 149.1 mmboe from 102.1 mmboe at December 31, 2011
Operations Update
The Company drilled the Songkhla J-01 exploration well to a total depth of 8,600 feet TVD and encountered 168 feet of high quality sand in the Lower Oligocene reservoir with 19% porosity. Oil shows were observed throughout this section of the Lower Oligocene; however, MDT analysis indicates that this wellbore was near the oil water contact in this reservoir. Oil shows were also observed in the pre-tertiary limestone target, but porosity was below commercial levels.
The rig is being mobilized to Songkhla A for development and appraisal drilling.
Randy Bartley, President and CEO of Coastal Energy, commented:
"The first half of 2012 has been an exceptional six months for Coastal. On top of record levels of production and cash flow, the Company has continued to deliver increases in reserves both through new exploration discoveries and appraisal drilling as well as core analysis on existing assets.
"We have been reinvesting our free cash flow to purchase some of the production facilities we were previously leasing for our offshore operations. This will reduce our fixed operating costs across all fields. The Company also announced an exciting expansion of our operations into Malaysia. This contract with PETRONAS is a low risk way for Coastal to enter a new country and we are very excited for our first new venture outside of Thailand.
"The Songkhla J-01 exploration well has very interesting implications for the basin. This is the farthest north and east that we've seen oil migration in the Songkhla basin to date. The secondary Lower Oligocene target had oil shows and great reservoir characteristics which will require further appraisal drilling to evaluate. We believe there is significant potential in the Lower Oligocene in updip fault blocks to the north and east of the J-01 well; however, these prospects extend beyond the boundaries of our current 3D seismic data. We are going to wait to drill further appraisal wells until we finish the acquisition and processing of additional 3D seismic which is currently underway. While the pre-tertiary target was below commercial thresholds in this particular location, we do not feel that there is any read-through to other pre-tertiary prospects in the basin based upon these results.
"We are moving the rig to Songkhla A to continue development and appraisal drilling to add to our existing production growth. We are also currently bidding on a second rig to begin work in the November 2012 time frame, which would allow our development and exploration programs to continue simultaneously."
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