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Press release from GlobeNewswire (a Nasdaq OMX company)

Coastal Energy Announces Third Quarter 2011 Financial Results

Tuesday, November 15, 2011

Coastal Energy Announces Third Quarter 2011 Financial Results13:20 EST Tuesday, November 15, 2011HOUSTON, Nov. 15, 2011 (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 and nine months ended September 30, 2011. The functional and reporting currency of the Company is the United States dollar.Third Quarter 2011 Highlights Total Company production in Q3 was 12,028 boe/d (10,191 bbl/d offshore and 1,837 boe/d onshore). The Company's offshore production was bolstered by the discovery at Bua Ban North B, which averaged 4,830 bbld/ for the quarter. Production at Bua Ban North B exited Q3 at over 8,000 bbl/d. Production gains at Bua Ban North B were slightly offset by lower rates at Songkhla A due to process equipment temperature restrictions. Production at Songkhla A was restored to 6,000 bbl/d by the end of Q3 following installation of additional cooling units. At September 30, offshore production was approximately 15,500 bbl/d and onshore production was approximately 2,000 boe/d.     EBITDAX for the nine months ending September 30, 2011 was $126.6 million, 15% above the same period in 2010. Revenue and EBITDAX were negatively impacted by lower lifting volumes during the period, which resulted in inventory of approximately 380,000 barrels at the end of Q3. Crude oil inventory was approximately 255,000 barrels higher than in the same period in 2010.  This inventory balance will be recognized in Q4.   The Company announced several successful exploration and appraisal wells at Bua Ban North A. The results of these wells confirm that Bua Ban North A & B are in communication on the western side of the structure. Completion and flow testing is expected to begin at Bua Ban North A in mid-Q4 2011.      The Company received approval to list its shares on the main board of the Toronto Stock Exchange. Its Common Shares began trading on the TSX on July 5, 2011 under the ticker symbol "CEN".    As of today, the Company has $42MM of cash and equivalents. Randy Bartley, President and CEO of Coastal Energy, commented: "I'm pleased to report that in the third quarter Coastal continued to build on the progress made in the first half of 2011. The exploration program at Bua Ban North A & B experienced further success during the quarter with recent drilling results confirming that the two fields are connected on the western side of the structure.  Production facilities are on location at Bua Ban North A and we will begin bringing production online in the coming weeks.  "Coastal has also enjoyed continuing financial success in 2011. We expect to post significant production and EBITDAX increases in the coming quarters driven by our recent discoveries. We expect to exit the year with over 20,000 bbl/d of offshore production and over 22,000 boe/d of total Company production. "We plan to continue building on this success as we appraise these Miocene discoveries. The Miocene trend is proving to be prolific in the Songkhla basin and we have several Miocene exploration prospects that we plan to drill beginning at the first of the year." The following financial statements for the Company are abbreviated versions. The Company's complete financial statements for the three and nine months ended September 30, 2011 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 USD thousands, except share and per share amounts.  Three months endedNine months ended  September 30,September 30,   2011   2010  2011   2010           Revenues and Other Income         Oil sales, net of royalties (Note 16) 75,375  61,860 201,696  146,730 Other income (Note 17) 10,717  (295) (12,394)  (114)   86,092  61,565 189,302  146,616          Expenses         Production 27,148  16,124 66,490  35,330 Depreciation and depletion (Note 7) 13,308  8,343 38,292  18,000 General and administrative 7,802  4,334 19,522  12,226 Exploration (Note 6) 345  26 6,829  9,384 Debt financing fees 258  23 523  266 Finance (Note 15) 913  722 3,276  2,203 Gains on disposal of property, plant and equipment (873)  -- (873)  --    48,901  29,572 134,059  77,409          Net income before income taxes, share of net income from Apico LLC and non-controlling interest 37,191  31,993 55,243  69,207           Share of net income from Apico LLC (Note 8) 4,436  2,709 11,964  8,849          Net income before income taxes and non-controlling interest 41,627  34,702 67,207  78,056          Income taxes (Note 21)         Current 135  --  135  --  Deferred 22,493  9,872 37,681  29,082  22,628  9,872 37,816  29,082           Net loss from discontinued operations (Note 18)               Net income and comprehensive income 18,999  24,830 29,391  48,974 Net (income) loss and comprehensive (income) loss attributable to non-controlling interest 14  247 (924)  197Net income and comprehensive income attributable to the shareholders of Coastal Energy Company 19,013  25,077 28,467  49,171           Net income per share:         Basic (Note 19)  0.17  0.23  0.25  0.45 Diluted (Note 19)  0.16  0.22  0.25  0.44           The accompanying notes are an integral part of these condensed interim consolidated financial statements.   September 30,   December 31,   January 1, As at2011 2010 2010   $   $   $ Assets      Current Assets       Cash 8,594  3,884  21,229 Restricted cash 14,525  16,369  3,829 Accounts receivable (Note 4) 16,894  10,299  6,111 Derivative asset (Note 12) 207  135  66 Inventory (Note 5) 16,255  12,783  5,310 Prepaids and other current assets 30  606  526 Total current assets 56,505  44,076  37,071        Non-Current Assets       Exploration and evaluation assets (Note 6) 67,689  31,068  44,907 Property, plant and equipment (Note 7) 279,564  246,248  189,534 Investment in and advances to Apico LLC (Note 8) 50,915  47,261  55,225 Deposits and other assets 414  289  300 Total non-current assets 398,582  324,866  289,966Total Assets 455,087  368,942  327,037        Liabilities      Current Liabilities       Accounts payable and accrued liabilities (Note 9) 57,526  53,550  31,363 Deferred income (Note 10) --   --   23,060 Current portion of long-term debt (Note 12) 29,208  36,262  10,266 Amounts due to shareholder (Note 11) --   --   5,164 Obligations under finance leases --   885  35 Current portion of derivative liabilities (Note 12) 11,612  10,141  --  Total current liabilities 98,346  100,838  69,888        Non-Current Liabilities       Long-term debt (Note 12) 48,918  35,081  24,284 Obligations under finance leases  --   579  1,439 Non-current portion of derivative liabilities (Note 12) 704  6,609  --  Deferred tax liabilities 49,566  11,885  23,653 Decommissioning liabilities (Note 13) 24,347  17,655  4,071 Total Non-Current Liabilities 123,535  71,809  53,447        Shareholders' Equity (Note 19)       Common shares 209,279  201,303  198,121 Contributed surplus 16,092  15,892  13,779 Warrants 29  79  153 Retained earnings (accumulated deficit) 929  (27,538)  (13,968) Total Coastal Energy Company Shareholders' Equity 226,329  189,736  198,085 Non-Controlling Interest 6,877  6,559  5,617Total equity 233,206  196,295  203,702Total liabilities and equity 455,087  368,942  327,037         Commitments and contingencies (Note 20)               The accompanying notes are an integral part of these condensed interim consolidated financial statements.  Three months endedNine months ended  September 30,September 30,   2011   2010  2011   2010 Operating activities         Net income attributable to the shareholders of Coastal Energy Company 19,013  25,077 28,467  49,171 Adjustments:         Share of net income from Apico LLC (4,436)  (2,709) (11,964)  (8,849) Non controlling interest (14)  (247) 924  (197) Unrealized (gain) loss on derivative instruments (15,019)  -- (4,506)  66 Depletion and depreciation 13,308  8,343 38,292  18,000 Finance expense 913  722 3,276  2,203 Amortisation of debt financing fees 248  -- 513  -- Stock-based compensation 1,941  720 7,687  3,871 Deferred income taxes 22,493  9,872 37,681  29,082 Unrealized foreign exchange loss (577)  -- (120)  144 Exploration expense 345  26 6,829  9,384 Gains on disposal of property, plant and equipment (873)  -- (873)  -- Income taxes paid (86)  -- (86)  (6) Interest income 2  1 4  4 Interest paid (405)  (864) (2,699)  (1,907) Earnings distributions from Apico LLC 7,588  6,142 9,756  10,296 Change in non-cash working capital (Note 22) 1,555  (41,167) (3,180)  (27,523)   45,996  5,916 110,001  83,739          Financing Activities         Issuance of common shares, net of issuance costs 666  166 6,108  2,052 Borrowings under long-term debt --  58,727 6,275  58,727 Repayment of long-term debt --  (28,571) --  (34,550) Loan arrangement fees (71)  (2,521) (419)  (2,521) Repayment of amounts due to shareholder --  (3,161) --  (5,164) Other (131)  -- (506)  --   464  24,640 11,458  18,544          Investing Activities         Decrease (increase) in restricted cash 6,347  (4,342) 1,844  (3,550) Purchase of property, plant and equipment (45,576)  (10,970) (115,468)  (100,834) Advances to Apico LLC --  -- (1,446)  -- Proceeds from disposal of property, plant and equipment 250  -- 250  -- Deposits and other assets (122)  -- (125)  (6) (Payments to) deposits from non-controlling interest (450)  -- (606)  750   (39,551)  (15,312) (115,551)  (103,640)           Effect of exchange rate changes on cash (501)  (26) (1,198)  (7)                     Increase (decrease) in cash 6,408  15,218 4,710  (1,364)           Cash - Beginning of period 2,186  4,647 3,884  21,229          Cash - End of period 8,594  19,865 8,594  19,865           The accompanying notes are an integral part of these condensed interim consolidated financial statements. Randy Bartley, President and Chief Executive Officer of the Company and a member of the Society of Petroleum Engineering and Jerry Moon, Vice President, Technical & Business Development, a member of the American Association of Petroleum Geologists, a Licensed Professional Geoscientist and a Certified Petroleum Geologist in the state of Texas, have reviewed the contents of this announcement. The Coastal Energy Company logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=10062 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. CONTACT: Coastal Energy Company Email: investor@CoastalEnergy.com +1 (713) 877-6793 Strand Hanson Limited (Nominated Adviser) Rory Murphy Paul Cocker +44 (0) 20 7409 3494 Macquarie Capital (Europe) Limited (Broker) Paul Connolly Jeffrey Auld +44 (0) 20 3037 2000 FirstEnergy Capital LLP (Broker) Hugh Sanderson Travis Inlow +44 (0) 20 7448 0200 Buchanan Communications Tim Thompson Ben Romney +44 (0) 20 7466 5000