Coastal Energy Company (the "Company" or "Coastal") (TSX-V: CEN) (AIM: CEO), an independent exploration and production company with assets in Thailand, announces an update of its operations in the Gulf of Thailand.

Bua Ban

The Bua Ban A-10 well was drilled to a total depth of 7,474 feet true vertical depth (TVD). The well encountered 130 feet of net pay in the Lower Oligocene reservoir with 17% average porosity. The A-10 well was drilled into the same fault block as the A-05 and encountered the same expanded section of the Lower Oligocene as was seen in the A-05 well. The well has been tied in to production facilities and is currently producing 1,150 bopd.

The Bua Ban A-04 and A-07 wells were drilled to 7,908 feet and 8,122 feet, respectively, true vertical depth. Both wells encountered pay zones in the Lower Oligocene as well as the Eocene reservoir. The Company is currently isolating testing in the Eocene to evaluate the potential of the reservoir.

Total offshore production is currently averaging approximately 11,500 bopd, and the Company's aggregate production is approximately 13,500 boepd.

Songkhla A

Water production at Songkhla A has increased to approximately 56% from 50% in April, which is in line with modelled production curves. The Company is planning to upgrade facilities at Songkhla A from 15,000 bbl per day of liquid capacity to 30,000 bbl of total liquids per day which will increase total throughput and oil production. Approximately 10 days of downtime will be required in the fourth quarter for the upgrade.

Randy Bartley, Chief Executive Officer of Coastal Energy, commented:

"The initial results from the latest batch of wells at Bua Ban are encouraging. We have further defined the extent of the expanded section of the Lower Oligocene seen in the A-05 and A-10 wells. The A-04 and A-07 wells had some oil shows in deeper zones which are currently being evaluated.

"The A-08 well is currently being drilled to define the northern limit of the Bua Ban field. Following that, the A-11 will be drilled into an upthrown block to test the Miocene and the A-09 will be drilled off structure to be used as a water injector well.

"Once we finish this phase of drilling at Bua Ban we are planning to mobilize the rig to Songkhla A to drill development wells into the Lower Oligocene wedge and Eocene reservoirs. We expect to move to Bua Ban North and commence exploration drilling by year end."

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.

Additional information, including the Company's complete competent person's report may be found on the Company's website at www.CoastalEnergy.com or 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.

These securities have not been registered under United States Securities Act of 1933 (the "US Securities Act") or the securities laws of any state and may not be offered or sold in the United States or to US persons (as defined in Regulation S under the US Securities Act) unless an exemption from registration is available.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

This news release is not for dissemination in the United States or through United States newswire services.

Enquiries: Coastal Energy Company Randy L. Bartley Chief Executive Officer +1 713 877 6705 William C. Phelps Chief Financial Officer +1 713 877 6727 Email: Email Contact Strand Hanson Limited (Nominated Adviser) +44 (0) 20 7409 3494 Rory Murphy Paul Cocker Stifel Nicolas Weisel (Broker) +44 (0) 20 3205 3615 Paul Colucci Macquarie Capital (Europe) Limited (Broker) +44 (0) 20 3037 2000 Ben Colegrave Paul Connolly Buchanan Communications Tim Thompson +44 (0) 20 7466 5000 Katharine Sutton Ben Romney

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