Coastal Energy Announces Drilling and Operations Update
December 08 2010 - 7:00AM
Marketwired
Coastal Energy Company (the "Company" or "Coastal") (TSX-V: CEN)
(AIM: CEO) announces an update of its operations in the Gulf of
Thailand.
A new field discovery was made at the Songkhla area with the
third of three planned wells. The "Songkhla North" field was
discovered by the A-11 well, which was drilled to a total depth of
7,974 feet TVD. The well encountered 44 feet of net pay in the
Lower Oligocene reservoir with 18% porosity and 69 feet of net pay
in the Eocene reservoir with 21% average porosity. Pressure data
indicate that the A-11 well was drilled into a separate fault
block, north of Songkhla East and that a possible oil-water contact
in this fault block exists at 7,500 feet TVD.
As previously announced, the Songkhla A-09 well was drilled to
8,109 feet true vertical depth and encountered 140 feet of net pay
in the Lower Oligocene reservoir with average porosity of 15% and
pressures approximating the original reservoir pressure at Songkhla
Main. The well also encountered 75 feet of net pay in the
underlying Eocene reservoir. This well was tested and flowed at
approximately 2,000 bopd at two-thirds pump capacity; better than
original Company guidance of 1,000 - 2,000 bopd.
The Songkhla A-12 well was drilled into the same fault block as
the A-09 well. The main Lower Oligocene target zone and the Eocene
zone which was tested were water bearing at this location; however,
pressure data indicate that the Lower Oligocene reservoir in the
A-09 and A-12 wells is a new field discovery ("Songkhla East"). The
A-12 well establishes the oil-water water contact and indicates a
closure of approximately 287 acres and approximately 20 million
barrels of oil-in-place at Songkhla East. The Company plans to
sidetrack the A-12 well and target the Oligocene in a better
structural position.
Production at Songkhla is currently being shut-in in preparation
for the upgrade of processing equipment.
The frac boat is en route to the location at Bua Ban and is soon
expected to commence fracture stimulation of the Eocene reservoir
in the Bua Ban A-04 well, which encountered over 400 feet of oil
bearing sand with average porosity of 14%.
Randy Bartley, Chief Executive Officer of Coastal Energy,
commented:
"Drilling results at Songkhla have been successful thus far. We
have now identified two new fields in addition to the Songkhla Main
field. Production from these fields can be tied into existing
facilities at Songkhla once the upgrade of the processing
facilities is complete.
"The A-11 well will require further appraisal drilling to assess
the size of the reservoir; however, if the initial pressure data
are confirmed, the mapped closure may be approximately 1,700 acres
and the oil in place estimate would be approximately 54 million
barrels.
"Once drilling is completed at Songkhla, we will move to our
high impact exploration targets at Bua Ban North."
Huddleston & Co. assigned 5.6 million barrels of Proved +
Probable + Possible reserves to the Songkhla Eocene reservoir in
their reserve report dated December 31, 2009. The above stated net
pay and porosity figures, which are 50% and 33% higher,
respectively, than those used by Huddleston in their December 2009
evaluation, will be used in the 2010 reserves evaluation.
An updated Songkhla Lower Oligocene structure map is available
in the 'Presentation' section of the Company's website.
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 +1 (713)
877-6793 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 +44 (0) 20 7466 5000 Tim Thompson Katharine
Sutton Ben Romney
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