Coastal Energy Company (the "Company" or "Coastal Energy") (TSX-V:
CEN) (AIM: CEO), an independent exploration and production company
with assets in Thailand, announces the financial results for the
year ended December 31, 2010. The functional and reporting currency
of the Company is the United States dollar.
Fourth Quarter 2010 Highlights
- Total Company production averaged 7,578 boepd in the fourth
quarter; offshore production was impacted by 23 days of downtime
(15 related to weather and 8 for processing facilities
upgrades).
- The Company drilled three exploration wells at Songkhla A and
each well discovered new reservoirs in the Lower Oligocene and
Eocene intervals. These three new fault blocks are estimated by the
Company to collectively contain approximately 80 million barrels of
oil in place. The wells have since been tied into production
facilities. Further appraisal and development work around these
three discoveries is planned for 2011.
- The Company reported EBITDAX of $2.6 million ($0.02 per basic
share) for Q410. The decline from Q310 is attributable to lower
production and lifting volumes due to downtime on the Company's
offshore operations.
Full Year 2010 Highlights
- Total Company production averaged 9,670 boepd for the full year
of 2010, 31% above 2009 levels.
- A total of 2.8 million barrels of oil and 4.3 bcf of gas net to
the Company were produced during the year. The average prices
realized were $70.47 / barrel for oil and $7.07 / mcf for gas
- The Company brought its Bua Ban field onstream in July.
- The Company's full year 2010 EBITDAX was $112.7 million, 197%
above 2009 EBITDAX of $37.9 million.
- The Company released the results of its third-party reserve
evaluation report prepared by Huddleston & Co. dated March 28,
2011 (effective date December 31, 2010)
- As of the date of this release, the Company has cash and cash
equivalents of approximately $35MM.
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After-Tax
NPV 2010
using
As of As of March 31,
December December After-Tax After-Tax 2011
31, 2010 31, 2009 NPV 2010 NPV 2009 Pricing
(mmboe) (mmboe) (US$MM) (US$MM) % Change (US$MM) % Change
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Proven
Offshore 14.5 15.2 $413.5 $345.2 19.8 % $498.2 44.3%
Onshore 8.0 8.0 114.0 107.4 6.1 % 114.0 6.1%
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Total 22.5 23.2 527.5 452.6 16.5 % 612.2 35.3%
1P
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Proven +
Probable
Offshore 27.1 32.9 $583.6 $577.1 1.1 % $716.2 24.1%
Onshore 23.9 22.1 207.0 203.5 1.7 % 207.0 1.7%
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Total 51.0 55.0 790.6 780.6 1.3 % 923.2 18.3%
2P
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Note: Reserve figures are shown as net working interest before
royalties (Thailand royalty regime is discussed in the MD&A of
the Company's Annual Report dated December 31, 2010). After-tax NPV
figures are defined as future net revenues discounted at 10%.
Reserve numbers taken from the Company's competent person's report
prepared by Huddleston & Co. dated as of December 31, 2010
(prepared in accordance with NI 51-101 and the COGE Handbook) which
may be found on the Company's website at www.coastalenergy.com.
Randy Bartley, President and CEO of Coastal Energy,
commented:
"2010 was a record year for Coastal Energy. We had record
production volumes and cash flow. The Company successfully
completed the first phase of development at the Bua Ban field and
drilled three successful exploration wells at Songkhla. We are
pleased with the results and expect to build on this foundation
with further success in 2011.
"The slight reduction in offshore reserves is attributable to a
write down at the Bua Ban field following development drilling in
Q310. Several of the wells encountered thinner pay zones than were
used previously in calculating the reserve estimates. However, we
are pleased that the exploration drilling at Songkhla in Q410 added
enough reserves to almost fully offset the decline in Bua Ban
reserves. We plan further appraisal drilling at Songkhla later in
2011 to further refine our oil in place estimates and recovery
factors for these reservoirs, which could serve to increase reserve
estimates.
"2011 is off to a terrific start. We have drilled successful
exploration wells at Bua Ban North A and have already discovered
over 50 million barrels of oil in place (per Company estimates) in
the first three and a half months of the year. Coastal has also
successfully fractured two wells at Bua Ban, which we continue to
evaluate. We are evaluating a development plan for horizontal wells
and multi-stage fracs in both the Eocene and Lower Oligocene
reservoirs at Bua Ban to increase production rates and ultimate
recoveries.
"We have a busy year ahead of us with the remainder of Bua Ban
North exploration drilling, development work on the recent
discovery at Bua Ban North, Southern Bua Ban appraisal and
exploration and further appraisal and development drilling at
Songkhla."
The following financial statements for the Company are
abbreviated versions. The Company's complete financial statements
for the three and twelve months ended December 31, 2010 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.
2010 2009
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$ $
Revenues
Oil and natural gas 193,608 86,348
Royalties (16,401) (5,878)
Loss on derivative risk management contracts
(Note 13) (18,247) (2,077)
Interest income 5 27
Other income 99 110
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159,064 78,530
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Expenses and other
Production 53,368 33,477
General and administrative 20,253 19,576
Foreign exchange loss 4,600 1,941
Interest 2,007 3,839
Debt financing fees (Note 13) 522 1,454
Depletion, depreciation and accretion 56,599 23,695
Impairment (Note 9) 10,706 2,366
Loss on sale of assets - 148
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148,055 86,496
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Net income (loss) before taxes, earnings from
significantly influenced investee and non-
controlling interest 11,009 (7,966)
Income taxes (Note 18) 15,947 738
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Net loss before earnings from significantly
influenced investee and non-controlling
interests (4,938) (8,704)
Earnings from significantly influenced investee
(Note 8) 10,959 8,462
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Net income (loss) before non-controlling
interests 6,021 (242)
Non-controlling interest (Note 4) (1,167) 127
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Net income (loss) and comprehensive income
(loss) 4,854 (115)
Deficit, beginning of year (16,702) (16,587)
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Deficit, end of year (11,848) (16,702)
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Basic and diluted earnings per share (Note 15) 0.04 0.00
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As at December 31,
2010 2009
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$ $
Assets
Current assets
Cash 3,884 21,229
Restricted cash (Note 5) 16,369 3,829
Accounts receivable (Note 6) 10,299 6,111
Derivative asset (Note 13) 135 66
Inventory (Note 7) 12,846 5,310
Prepaids and other current assets 606 526
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44,139 37,071
Investment in and advances to Apico LLC (Note 8) 50,288 55,225
Property, plant and equipment (Note 9) 318,374 233,014
Deposits and other assets 289 299
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Total Assets 413,090 325,609
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Liabilities
Current liabilities
Accounts payable and accrued liabilities (Note
10) 53,519 31,325
Current portion of derivative liabilities
(Note 13) 10,141 -
Deferred income (Note 11) - 23,060
Income taxes payable (Note 18) 31 38
Amounts due to shareholder (Note 12) - 5,164
Current portion of long-term debt (Note 13) 36,262 10,266
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99,953 69,853
Long-term debt (Note 13) 35,081 24,284
Non-current portion of derivative liabilities
(Note 13) 6,609 -
Asset retirement obligations (Note 14) 12,277 2,809
Future income tax liability (Note 18) 47,185 27,695
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Total Liabilities 201,105 124,641
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Commitments and contingencies (Note 19)
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Non-controlling interest (Note 4) 6,559 5,617
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Shareholders' equity
Share capital (Note 15) 201,303 198,121
Contributed surplus (Note 15) 15,892 13,779
Warrants (Note 15) 79 153
Retained deficit (11,848) (16,702)
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205,426 195,351
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413,090 325,609
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2010 2009
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$ $
Operating activities
Net income (loss) for the year 4,854 (115)
Distributions from significantly influenced
investee (note 8) 15,896 8,129
Items not involving cash:
Depletion, depreciation and accretion 56,599 23,695
Impairment 10,706 1,765
Future income taxes (note 19) 15,954 700
Unrealized foreign exchange loss 2,890 909
Income (loss) applicable to non-controlling
interest 1,167 (127)
Stock based compensation 7,827 8,021
Amortisation of debt financing fees 132 -
Issuance of warrants with notes payable - 294
Share of earnings of significantly
influenced investee, net of taxes (10,959) (8,462)
Unrealized loss on derivative instrument 16,681 1,950
Loss on sale of assets - 148
Change in non-cash working capital (Note 20) (26,771) 17,095
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Cash provided by operating activities of
continuing operations 94,976 54,002
Investing activities
Investment in and advances to Apico LLC - (4,516)
Increase in restricted cash (12,540) 317
Purchase of property, plant and equipment (133,375) (77,671)
(Payments to) contributions from non-
controlling interest partner (225) 5,744
Other (2)
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Cash used in investing activities (146,140) (76,128)
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Financing activities
Issuance of shares for cash 2,409 52,306
Transaction costs associated with issuance of
shares - (2,984)
Borrowings under long-term debt 73,725 1,620
Credit facility transaction costs (2,514) -
Repayments under long-term debt (34,550) (11,070)
Borrowings under notes payable - 15,000
Repayments under notes payable - (15,000)
Borrowings under amounts due to shareholder - 1,000
Repayments under amounts due to shareholder (5,164) (3,000)
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Cash provided by financing activities 33,906 37,872
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Net effect of foreign exchange on cash held in
foreign currencies (87) (951)
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Change in cash (17,345) 14,795
Cash, beginning of year 21,229 6,434
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Cash, end of year 3,884 21,229
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Supplemental cash flow information (Note 20)
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 Email: Email
Contact +1 (713) 877-6793 Strand Hanson Limited (Nominated
Adviser) Rory Murphy Paul Cocker +44 (0) 20 7409 3494 Macquarie
Capital (Europe) Limited (Broker) + Ben Colegrave Paul Connolly
44 (0) 20 3037 2000 FirstEnergy Capital LLP (Broker) Hugh
Sanderson Travis Inlow +44 (0) 20 7448 0200 Buchanan
Communications Tim Thompson Chris McMahon Ben Romney +44 (0) 20
7466 5000
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