TIDMCEO
RNS Number : 9510J
Coastal Energy Company
14 August 2012
TSX: CEN August 14, 2012
AIM: CEO
Coastal Energy Announces Second Quarter 2012 Financial Results
& Operations Update
Coastal Energy Company (the "Company" or "Coastal Energy") (TSX:
CEN, AIM: CEO), an independent exploration and production company
with assets in Thailand, announces the financial results for the
three and six months ended June 30, 2012. The functional and
reporting currency of the Company is the United States dollar.
Second Quarter 2012 Highlights
- Total Company production increased to 21,713 boe/d in the
second quarter from 9,494 boe/d in the same period last year. The
Company's offshore production was 19,351 bbl/d, with the increase
due to the inclusion of production from both platforms at Bua Ban
North. Full production from Bua Ban North came on throughout
January and February. Offshore production volumes in the second
quarter were impacted by downtime for the replacement of an FSO at
Bua Ban North. Onshore production of 2,362 boe/d increased from
Q112 levels and year ago levels as natural gas demand continued to
recover following the flooding in Thailand in late 2011 and was 3%
above Q211 levels.
- EBITDAX for Q2 2012 was $130.3 million, 230% higher than the
$39.5 million recorded in Q2 2011. Revenue and EBITDAX were driven
higher by increased oil liftings and commodity prices. Crude oil
inventory was approximately 456,418 barrels at June 30, 2012 the
revenue from which will be recognized in the third quarter. The
Company reduced closing inventory levels by 112,840 barrels
(approximately 20%) during Q2.
- The Company announced successful discoveries in the Miocene
and Oligocene reservoirs at Bua Ban South. The discoveries have
been appraised and determined to be commercial. The Company
purchased production facilities for Bua Ban South and will continue
appraisal drilling once they arrive on location later in the third
quarter.
- The Company announced a Normal Course Issuer Bid to repurchase
up to 5% of its outstanding shares (5,715,972 shares). To date, the
Company has repurchased approximately 1.25 million common shares on
the open market.
- The Company announced that it had been awarded a Small Field
Risk Services Contract by PETRONAS for the development of the
Kapal, Banang & Meranti cluster of small fields offshore
Peninsular Malaysia. Coastal will operate the fields for PETRONAS
and will provide upfront development and operational capital.
Coastal will recover 100% of its invested capital and will earn a
remuneration fee which will be adjusted based on the timely
implementation of the agreed field development plan and budget.
- Following quarter end, the Company released the results of an
interim third party reserves evaluation by its reserve auditor, RPS
Energy Ltd. Total company 2P reserves increased to 149.1 mmboe from
102.1 mmboe at December 31, 2011
Operations Update
The Company drilled the Songkhla J-01 exploration well to a
total depth of 8,600 feet TVD and encountered 168 feet of high
quality sand in the Lower Oligocene reservoir with 19% porosity.
Oil shows were observed throughout this section of the Lower
Oligocene; however, MDT analysis indicates that this wellbore was
near the oil water contact in this reservoir. Oil shows were also
observed in the pre-tertiary limestone target, but porosity was
below commercial levels.
The rig is being mobilized to Songkhla A for development and
appraisal drilling.
Randy Bartley, President and CEO of Coastal Energy,
commented:
"The first half of 2012 has been an exceptional six months for
Coastal. On top of record levels of production and cash flow, the
Company has continued to deliver increases in reserves both through
new exploration discoveries and appraisal drilling as well as core
analysis on existing assets.
"We have been reinvesting our free cash flow to purchase some of
the production facilities we were previously leasing for our
offshore operations. This will reduce our fixed operating costs
across all fields. The Company also announced an exciting expansion
of our operations into Malaysia. This contract with PETRONAS is a
low risk way for Coastal to enter a new country and we are very
excited for our first new venture outside of Thailand.
"The Songkhla J-01 exploration well has very interesting
implications for the basin. This is the farthest north and east
that we've seen oil migration in the Songkhla basin to date. The
secondary Lower Oligocene target had oil shows and great reservoir
characteristics which will require further appraisal drilling to
evaluate. We believe there is significant potential in the Lower
Oligocene in updip fault blocks to the north and east of the J-01
well; however, these prospects extend beyond the boundaries of our
current 3D seismic data. We are going to wait to drill further
appraisal wells until we finish the acquisition and processing of
additional 3D seismic which is currently underway. While the
pre-tertiary target was below commercial thresholds in this
particular location, we do not feel that there is any read-through
to other pre-tertiary prospects in the basin based upon these
results.
"We are moving the rig to Songkhla A to continue development and
appraisal drilling to add to our existing production growth. We are
also currently bidding on a second rig to begin work in the
November 2012 time frame, which would allow our development and
exploration programs to continue simultaneously. "
The following financial statements for the Company are
abbreviated versions. The Company's complete financial statements
for the three and six months ended June 30, 2012 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.
INCOME STATEMENT
Three months ended Six months ended
June 30, June 30,
-------------------- ------------------
2012 2011 2012 2011
------------------------------------ ---------- -------- -------- --------
Revenues and Other Income
Oil sales 194,639 64,628 383,718 137,184
Royalties (20,514) (5,018) (40,757) (10,863)
------------------------------------ ---------- -------- -------- --------
Oil sales, net of royalties 174,125 59,610 342,961 126,321
Other income (Note 11) 9,778 (2,027) (393) (23,111)
------------------------------------
183,903 57,583 342,568 103,210
------------------------------------ ---------- -------- -------- --------
Expenses
Production 41,164 17,124 77,374 39,342
Depreciation and depletion (Note
6) 18,590 11,698 38,634 24,984
Net profits interest (Note 12) 869 - 869 -
General and administrative 7,057 6,457 15,384 11,720
Exploration (Note 5) 286 931 286 6,484
Debt financing fees 195 31 632 265
Finance 351 1,201 1,201 2,363
------------------------------------
68,512 37,442 134,380 85,158
------------------------------------ ---------- -------- -------- --------
Net income before income taxes,
share of
net income from Apico LLC 115,391 20,141 208,188 18,052
Share of net income from Apico
LLC (Note 7) 5,497 4,272 9,504 7,528
------------------------------------ ---------- -------- -------- --------
Net income before income taxes 120,888 24,413 217,692 25,580
------------------------------------ ---------- -------- -------- --------
Income taxes (Note 14)
Current 45,289 - 81,897 -
Deferred 32,095 12,005 43,798 15,188
------------------------------------ ---------- -------- -------- --------
77,384 12,005 125,695 15,188
------------------------------------ ---------- -------- -------- --------
Net income and comprehensive income 43,504 12,408 91,997 10,392
==================================== ========== ======== ======== ========
Net income and total comprehensive income
attributable to:
Shareholders of Coastal Energy 42,150 11,816 90,285 9,454
Non-controlling interest 1,354 592 1,712 938
43,504 12,408 91,997 10,392
==================================== ========== ======== ======== ========
Net income per share:
Basic (Note 13) 0.37 0.11 0.79 0.08
Diluted (Note 13) 0.36 0.10 0.76 0.08
The accompanying notes are an integral part of these condensed
interim consolidated financial statements.
BALANCE SHEET
June 30 December
31,
As at 2012 2011
------------------------------------------------ ------- --------
$ $
Assets
Current Assets
Cash 116,646 22,995
Restricted cash (Note 3) 6,393 28,447
Accounts receivable (Note 4) 28,170 16,939
Derivative asset (Note 10) 48 59
Crude oil inventory 12,281 11,304
Marine fuel inventory 3,772 2,857
Prepaids and other current assets 1,056 1,094
------- --------
Total current assets 168,366 83,695
Non-Current Assets
Exploration and evaluation assets (Note 5) 55,101 31,881
Property, plant and equipment (Note 6) 410,420 355,052
Investment in and advances to Apico LLC (Note
7) 66,452 47,698
Deposits and other assets 274 405
------- --------
Total non-current assets 532,247 435,036
Total Assets 700,613 518,731
======= ========
Liabilities
Current Liabilities
Accounts payable and accrued liabilities (Note
8) 159,218 59,471
Current portion of long-term debt (Note 10) 17 55,662
Current portion of derivative liabilities (Note
10) 3,935 14,557
Derivative liability - Warrants (Note 9) 2,408 2,853
------- --------
Total current liabilities 165,578 132,543
Non-Current Liabilities
Long-term debt (Note 10) 47,482 22,156
Non-current portion of derivative liabilities
(Note 10) - 1,274
Deferred tax liabilities 113,565 69,767
Decommissioning liabilities 46,124 42,124
------- --------
Total Non-Current Liabilities 207,171 135,321
Shareholders' Equity (Note 13)
Common shares 211,702 211,554
Contributed surplus 18,804 16,401
Warrants -
Retained earnings 92,156 17,630
------- --------
Total Shareholders' Equity 322,662 245,585
Non-controlling interest 5,202 5,282
------- --------
Total equity 327,864 250,867
Total liabilities and equity 700,613 518,731
======= ========
Commitments and contingencies (Note 16)
The accompanying notes are an integral part of these condensed
interim consolidated financial statements.
CASH FLOW STATEMENT
Three months Six months ended
ended
June 30, June 30,
------------------ ------------------
2012 2011 2012 2011
--------------------------------------------- -------- -------- -------- --------
Operating activities
Net income 43,504 12,408 91,997 10,392
Adjustments:
Share of net income from Apico LLC (5,497) (4,272) (9,504) (7,528)
Unrealized (gain) loss on derivative
instruments (15,892) (7,674) (11,885) 10,513
Depletion and depreciation 18,590 11,698 38,634 24,984
Finance expense 195 1,417 1,201 2,363
Amortisation of debt financing fees 351 31 632 265
Share-based compensation 1,645 3,624 4,636 5,746
Deferred income taxes 32,095 12,005 43,798 15,188
Unrealized foreign exchange (gain) loss (158) 308 (66) 457
Exploration expense 286 931 286 6,484
Income taxes paid (129) - (129) -
Interest received 1 1 3 2
Interest paid (531) (1,982) (1,252) (2,294)
Earnings Distributions from Apico LLC - 1,265 - 2,168
-------- -------- -------- --------
74,460 29,760 158,351 68,740
Change in non-cash working capital:
Accounts receivable 4,306 13,128 (11,231) (1,793)
Inventory 3,584 (5,142) (1,892) (4,312)
Prepaids and other current assets (710) 45 38 480
Accounts payable and accrued liabilities 11,124 (5,223) (8,233) 890
Current income taxes payable 45,160 - 81,768 -
---------------------------------------------
Cash flow provided by operating activities 137,924 32,568 218,801 64,005
--------------------------------------------- -------- -------- -------- --------
Financing Activities
Issuance of common shares, net of issuance
costs 1,034 749 2,026 5,442
Repurchase of shares (15,033) - (15,033) -
Borrowings under long-term debt - - - 6,275
Repayment of long-term debt - - (30,000) -
Loan arrangement fees (222) (348) (968) (348)
Distributions to non-controlling interest (1,792) - (1,792) (156)
Other - (375) - (375)
---------------------------------------------
Cash flow (used in) provided by financing
activities (16,013) 26 (45,767) 10,838
--------------------------------------------- -------- -------- -------- --------
Investing Activities
Decrease (increase) in restricted cash 18 (11,036) 22,054 (4,503)
Expenditure on property, plant and equipment (45,698) (33,422) (90,927) (69,892)
Acquisition of increased ownership interest - - (9,250) -
in Apico LLC
Advances to Apico LLC - (1,446) - (1,446)
Deposits and other assets 131 40 131 (3)
--------------------------------------------- -------- -------- -------- --------
Cash flow used in investing activities (45,549) (45,864) (77,992) (75,844)
--------------------------------------------- -------- -------- -------- --------
Effect of exchange rate changes on cash (616) (456) (1,391) (697)
--------------------------------------------- -------- -------- -------- --------
Increase (decrease) in cash 75,746 (13,726) 93,651 (1,698)
Cash - Beginning of period 40,900 15,912 22,995 3,884
Cash - End of period 116,646 2,186 116,646 2,186
============================================= ======== ======== ======== ========
The accompanying notes are an integral part of these condensed
interim consolidated financial statements.
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.
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.
Enquiries:
Coastal Energy Company
Email: investor@CoastalEnergy.com +1 (713) 877-6793
Strand Hanson Limited (Nominated Adviser) +44 (0) 20 7409
3494
Rory Murphy / Paul Cocker / Scott McGregor
Macquarie Capital (Europe) Limited (Broker) +44 (0) 20 3037
2000
Paul Connolly / Jeffrey Auld
FirstEnergy Capital LLP(Broker)
Hugh Sanderson / Travis Inlow +44 (0) 20 7448 0200
Buchanan
Tim Thompson / Ben Romney +44 (0) 20 7466 5000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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