Coastal Energy Company (the "Company" or "Coastal Energy")
(TSX:CEN) (AIM:CEO) announces the results of an interim third party
evaluation of its onshore and offshore reserves in Thailand. RPS
Energy Ltd. ("RPS") prepared a report dated July 30, 2012, with an
effective date of March 31, 2012, in accordance with the guidelines
established by the Society of Petroleum Engineers ("SPE"). The
RPS report was prepared to incorporate the Company's drilling
results at Bua Ban North & South in 2012 as well as information
from core analyses which were completed subsequent to the RPS
report published on March 27, 2012, which had an effective date of
December 31, 2011. All comparisons made use the reserve
numbers from the report effective December 31, 2011 as the
base.
Offshore Proved reserves (1P) increased by 30% to 81.0 mmbbl and
offshore Proved plus Probable reserves (2P) increased by 60% to
127.7 mmbbl. Total company Proved reserves (1P) increased by
26% to 87.9 mmboe and total company Proved plus Probable reserves
(2P) increased by 45% to 149.1 mmboe.
The following table presents a summary of the recoverable oil
volumes:
(in mboe) |
Offshore
(Oil) |
Onshore
(Gas) |
Total |
Class |
Bua Ban North |
Songkhla A |
Bua Ban South |
Bua Ban Main |
Songkhla H |
Other |
Sinphuhorm |
Dong Mun |
|
1P |
72.0 |
6.0 |
2.6 |
0.4 |
0.0 |
0.0 |
6.9 |
0.0 |
87.9 |
2P |
108.3 |
11.7 |
5.3 |
1.5 |
0.9 |
0.0 |
21.4 |
0.0 |
149.1 |
3P |
122.0 |
16.3 |
20.0 |
2.7 |
0.9 |
0.0 |
24.6 |
0.0 |
186.5 |
Contingent Resources |
0.2 |
5.6 |
0.3 |
2.4 |
0.0 |
0.0 |
2.8 |
10.0 |
21.3 |
Prospective Resources |
45.2 |
69.0 |
5.2 |
3.6 |
8.0 |
122.4 |
13.7 |
17.9 |
285.0 |
The following table presents a summary of the net present values
of future cash flows (in USD millions):
Reserves Class |
Offshore Before Tax
PV10 |
Onshore Before Tax
PV10 |
Total Before Tax
PV10 |
Offshore After Tax
PV10 |
Onshore After Tax
PV10 |
Total After Tax
PV10 |
1P |
$3,456.3 |
$197.0 |
$3,653.3 |
$1,734.1 |
$135.0 |
$1,869.1 |
2P |
$5,272.2 |
$376.0 |
$5,648.2 |
$2,246.7 |
$251.0 |
$2,497.7 |
3P |
$6,543.7 |
$427.0 |
$6,970.7 |
$2,383.4 |
$285.0 |
$2,668.4 |
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, 2011). 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 RPS Energy Ltd. dated as of July 31,
2012 (prepared in accordance with NI 51-101 and the COGE Handbook)
which may be found on the Company's website at
www.coastalenergy.com. Onshore reserve and resource numbers
reflect Coastal's increased interest in APICO, which became
effective January 1, 2012.
Offshore
Bua Ban North
1P reserves increased by 29% to 72 mmbbl and 2P reserves
increased by 60% to 108.3 mmbbl. The increase in reserves was
driven by a substantial increase in the stock tank oil originally
in place (STOOIP) figure following analysis of core samples from
Bua Ban North. The core analyses indicate that the level of
water saturation in the field is approximately 25%; lower than the
40% level which was being used to calculate the original STOOIP
volumes. The STOOIP number also increased due to the
additional appraisal and development drilling which was performed
on the field in the first quarter (Bua Ban North B-12 &
B-13).
Bua Ban South
The Company booked 2.6 mmbbl of 1P reserves and 5.3 mmbbl of 2P
reserves following the exploration & appraisal program at Bua
Ban South. A further 14.7 mmbbl was placed in the Possible
reserves category, bringing the 3P reserves to 20.0 mmbbl. The
Company expects that it will be able to re-categorize much of the
Possible reserves into 1P and 2P once production testing is
performed.
Songkhla A & Bua Ban Main
2P reserves at Songkhla A and Bua Ban Main increased by 18% and
20% respectively as reservoir performance in 2012 has been better
than modeled.
Onshore
Dong Mun
Following the successful test of the Dong Mun sidetrack well
(Coastal 39% working interest) in the first quarter, the Company
has recorded 59.7 bcf (10.0 mmboe of high quality contingent
resources. This will be reclassified into 1P and 2P reserves
once a gas sales agreement is secured. The Company and its
partners in the onshore assets are currently working on the
development plans for the field as well as securing a sales
agreement and evaluating pipeline construction.
Operations Update
Two horizontal development wells and two water injection wells
were drilled at Bua Ban North. The two horizontal wells are
producing approximately 1,800 bopd each. Current offshore
production is 22,500 bopd, with total company production averaging
24,500 boepd.
The lack of aquifer support on the western side of the field had
caused the Company to shut in production from three of the existing
wells (Bua Ban North A-01, A-03 and A-11). Now that water
injection has been established, the Company will begin producing
from these three wells again once pressure rebuilds (expected to be
in approximately 30 days).
The rig is currently undergoing regulatory inspections and will
spud the Songkhla J Buried Hill prospect following completion,
which is expected next week.
The Company has purchased the production facilities at Bua Ban
North A, which will reduce its lease operating costs going forward
as well as provide tax advantages. This brings the number of
owned MOPUs to three.
Randy Bartley, President and CEO of Coastal Energy,
commented:
"We are extremely pleased with the results of the interim
reserves evaluation by RPS. Bua Ban North continues to
surprise to the upside. The core analysis gave us a lot of
valuable information about the reservoir and helped us to better
formulate our field wide development plan. We are looking to
contract a second rig so we can execute the Bua Ban North
development while continuing our exploration program and expansion
into Malaysia.
"Drilling the much needed water injectors will help to bring
production from Bua Ban North back up to higher levels. We are
already seeing increased rates from the Bua Ban North A-08 well due
to the pressure reinjection. We expect to see benefits at the
remaining wells on the western flank in the coming month as the
water injection brings pressures up throughout the western side of
the reservoir and we begin producing from the remaining three
producers on that side.
"The Songkhla J exploration prospect is a pre-Tertiary objective
approximately 2.5 kilometers north of the discovery well at
Songkhla H. The well is expected to spud later this week and
will be drilled to a depth of 6,700 feet. We have also
commenced the planned 3D seismic acquisition over Block G5/43."
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.comor may be found in documents filed on SEDAR at
www.sedar.com.
The Coastal Energy Company logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=10062
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.
Glossary of Technical Terms &
Definitions
The following defined terms have the respective meanings set out
below:
1P |
Proved reserves. |
2P |
Proved reserves + probable reserves. |
3P |
Proved reserves + probable reserves +
possible reserves |
Development well |
A well drilled within the proved area of an
oil or gas reservoir to the depth of a stratigraphic horizon known
to be productive. |
Exploratory well |
A well drilled to find a new field or to find
a new reservoir in a field previously found to be productive of oil
or gas in another reservoir. |
Proved reserves |
Those reserves that can be estimated with a
high degree of certainty to be recoverable. It is likely that the
actual remaining quantities recovered will exceed the estimated
proved reserves. |
Probable reserves |
Those additional reserves that are less
certain to be recovered than proved reserves. It is equally likely
that the actual remaining quantities recovered will be greater or
less than the sum of the estimated proved + probable reserves. |
Possible reserves |
Those additional reserves that are less
certain to be recovered than probable reserves. It is equally
likely that the actual remaining quantities recovered will be
greater or less than the sum of the estimated proved + probable +
possible reserves. |
Reserves |
The estimated remaining quantities of oil and
natural gas and related substances anticipated to be recoverable
from known accumulations, as of a given date, based on the analysis
of drilling, geological, geophysical, and engineering data; the use
of established technology; and specified economic conditions, which
are generally accepted as being reasonable. Reserves are further
classified according to the level of certainty associated with the
estimates and may be subclassified based on development and
production status. |
Royalties |
A payment to the government or others,
usually expressed as a percentage of total hydrocarbon
production. |
CONTACT: Enquiries:
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 (Financial PR)
Tim Thompson
Ben Romney
Helen Chan
+44 (0) 20 7466 5000
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