Coastal Energy Announces Signing of Small Field Risk Service Contract With PETRONAS
July 05 2012 - 4:47PM
Coastal Energy Company (the "Company" or "Coastal") (TSX:CEN)
(AIM:CEO) has entered into a Small Field Risk Service Contract
("RSC") with Petroliam Nasional Berhad ("PETRONAS") for the
development and production of petroleum from the Kapal, Banang and
Meranti cluster of small fields (the "KBM Cluster") offshore
Peninsular Malaysia.
Coastal (with 100% equity interest under the Small Field RSC)
will be the operator of the KBM Cluster fields. In accordance with
the Small Field RSC, Coastal is currently finalising an arrangement
for a Malaysian company to participate in the Small Field RSC for
30-40% equity interest.
Coastal will provide the upfront development capital,
undertaking the development drilling and production of the KBM
Cluster. PETRONAS will remain the owner of the project. Subject to
its performance, Coastal will recover its capital and operating
expenditures and will be paid a remuneration fee, which will be
adjusted by key performance indicators ("KPIs") based on the timely
implementation of the agreed field development plan and budget.
Planned Development
First oil from the Kapal field is scheduled within one year
followed by production from the Banang field a year later. Coastal
will develop the fields using Mobile Offshore Production Units
(MOPUs) and Floating Storage and Offloading Tankers (FSOs) similar
to the method used to develop its assets offshore Thailand. A total
of seventeen wells will be drilled with ten planned at Kapal, four
at Banang and three at Meranti.
The KBM Cluster
The KBM Cluster fields are located within 20 kilometers of each
other in a water depth of 60 meters. The main oil reservoirs
are Miocene aged sandstones ranging in depths from 3800 feet to
7800 feet.
Randy Bartley, President & Chief Executive Officer,
commented:
"We are proud to announce this new contract with
PETRONAS. The KBM Cluster has similar characteristics to our
existing fields offshore Thailand and we are confident that our
experience and expertise in developing smaller fields quickly and
efficiently will prove valuable. There is also appraisal and
step-out drilling potential at the KBM Cluster which we plan to
exploit during the development program. We expect that this
project will generate a rate of return approaching that of our
existing assets."
"This is a significant step for Coastal as we begin to utilize
the cash flow from our existing production to diversify our
portfolio. We are happy to have PETRONAS as a partner and are
looking forward to working with them on this and potential future
projects."
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
Certified Petroleum Geologist and a Licensed Professional
Geoscientist 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.
The Coastal Energy Company logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=10062
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.
CONTACT: Coastal Energy Company
+1 (713) 877-6793
Email: investor@CoastalEnergy.com
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
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