CEO Coastal Eng

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 nine months ended September 30, 2012. The functional and reporting currency of the Company is the United States dollar. 

Third Quarter 2012 Highlights

• Total Company production increased to 21,798 boe/d in the third quarter from 12,028 boe/d in the same period last year. The Company's offshore production was 19,626 bbl/d compared to 10,191 bbl/d in Q3 2011, with the increase due to the inclusion of production from both platforms at Bua Ban North. Offshore production was impacted by downtime at Bua Ban North and Songkhla during rig moves as well as the MOPU replacement at Bua Ban North. Onshore production of 2,172 boe/d increased from Q3 2011 levels of 1,837 boe/d as natural gas demand continued to recover following the flooding in Thailand in late 2011.  
• EBITDAX for Q3 2012 was $114.6 million, 157% higher than the $44.7 million recorded in Q3 2011. Revenue and EBITDAX were driven higher by increased oil liftings and commodity prices. Crude oil inventory was 577,863 barrels at September 30, 2012, the revenue from which will be recognized in the fourth quarter. The Company saw closing inventory increase by 121,445 barrels (approximately 27%) during Q3 2012.  
• The Company announced successful drilling results in the Songkhla A field. The A-10 well, drilled in the eastern most fault block of the field, encountered a record amount of net pay for the basin and exhibited very favorable reservoir characteristics in the Lower Oligocene interval. In late September 2012, the well was brought on production at approximately 4,000 bbl/d. Subsequently, the Company drilled the A-13 well in the previously untested northeast fault block and encountered 67 feet of net pay in the Lower Oligocene. Successful results from the A-13 provide the opportunity for an additional well (Songkhla A-19) higher up structure to add additional pay thickness.   
• The Company completed the conversion of the Richmond mobile offshore production unit (MOPU). Subsequently, in October 2012, the Richmond was installed at the Bua Ban North B field, increasing production capabilities to 55,000 bbl/d. The previous MOPU in the Bua Ban North B field was purchased by the Company and reinstalled at Bua Ban South.  
• The Company signed a contract with a subsidiary of Atwood Oceanics, Inc. for the Manta jackup drilling rig. The rig is scheduled to be delivered by late November and will conduct drilling operations for the Company in the Gulf of Thailand and offshore Malaysia.   
• The Company upsized and amended its senior secured revolving credit facility with BNP Paribas and Commonwealth Bank of Australia. The facility has been increased from $100 million to $200 million and includes two additional banks, Standard Bank and Standard Chartered Bank.   
• The Company is approximately 60% complete with the acquisition of new 3D seismic data being shot over the entire Songkhla basin. Current expectations are for delivery of the processed data in Q1 2013.

The following financial statements for the Company are abbreviated versions. The Company's complete financial statements for the three and nine months ended September 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.

	Three months ended		Nine months ended
	September 30,		September 30,
	2012	2011	2012	2011
Revenues and Other Income
Oil sales	170,894	81,670	554,612	218,854
Royalties	(18,305)	(6,295)	(59,062)	(17,158)
Oil sales, net of royalties	152,589	75,375	495,550	201,696
Other income (Note 11)	(5,122)	10,717	(5,515)	(12,394)
	147,467	86,092	490,035	189,302
Expenses
Production	32,718	27,148	110,092	66,490
Depreciation and depletion (Note 6)	14,778	13,308	53,412	38,292
Net profits interest (Note 12)	39	--	908	--
General and administrative	9,125	7,802	24,509	19,522
Exploration (Note 5)	7,191	345	7,477	6,829
Debt financing fees	501	258	1,133	523
Finance expenses	1,940	913	3,141	3,276
Gains on disposal, property, plant and equipment	(252)	(873)	(252)	(873)
	66,040	48,901	200,420	134,059
Net income before income taxes and share of
net income from Apico LLC	81,427	37,191	289,615	55,243
Share of net income from Apico LLC (Note 7)	4,537	4,436	14,041	11,964
Net income before income taxes	85,964	41,627	303,656	67,207
Income taxes (Note 14)
Current	42,135	135	124,032	135
Deferred	2,778	22,493	46,576	37,681
	44,913	22,628	170,608	37,816
Net income and comprehensive income	41,051	18,999	133,048	29,391
Net income and total comprehensive income attributable to:
Shareholders of Coastal Energy	40,100	19,013	130,385	28,467
Non-controlling interest	951	(14)	2,663	924
	41,051	18,999	133,048	29,391
Net income per share:
Basic (Note 13)	0.35	0.17	1.15	0.25
Diluted (Note 13)	0.34	0.16	1.10	0.25
The accompanying notes are an integral part of these condensed interim consolidated financial statements.

	September 30	December 31,
As at	2012	2011
	$	$
Assets
Current Assets
Cash	29,267	22,995
Restricted cash (Note 3)	6,413	28,447
Accounts receivable (Note 4)	77,236	16,939
Derivative asset (Note 10)	167	59
Crude oil inventory	12,962	11,304
Marine fuel inventory	4,416	2,857
Prepaids and other current assets	950	1,094
Total current assets	131,411	83,695
Non-Current Assets
Exploration and evaluation assets (Note 5)	82,711	31,881
Property, plant and equipment (Note 6)	511,736	355,052
Investment in and advances to Apico LLC (Note 7)	61,046	47,698
Deposits and other assets	6,274	405
Total non-current assets	661,767	435,036
Total Assets	793,178	518,731
Liabilities
Current Liabilities
Accounts payable and accrued liabilities (Note 8)	157,513	59,471
Current portion of long-term debt (Note 10)	342	55,662
Current portion of derivative liabilities (Note 10)	3,910	14,557
Derivative liability - Warrants (Note 9)	3,486	2,853
Total current liabilities	165,251	132,543
Non-Current Liabilities
Long-term debt (Note 10)	94,714	22,156
Non-current portion of derivative liabilities (Note 10)	506	1,274
Deferred tax liabilities	116,343	69,767
Decommissioning liabilities	46,915	42,124
Total Non-Current Liabilities	258,478	135,321
Shareholders' Equity (Note 13)
Common shares	212,500	211,554
Contributed surplus	20,116	16,401
Retained earnings	131,754	17,630
Total Shareholders' Equity	364,370	245,585
Non-controlling interest	5,079	5,282
Total equity	369,449	250,867
Total liabilities and equity	793,178	518,731
Commitments and contingencies (Note 16)
The accompanying notes are an integral part of these condensed interim consolidated financial statements.

	Three months ended		Nine months ended
	September 30,		September 30,
	2012	2011	2012	2011
Operating activities
Net income	41,051	18,999	133,048	29,391
Adjustments:
Share of net income from Apico LLC	(4,537)	(4,436)	(14,041)	(11,964)
Unrealized (gain) loss on derivative instruments	362	(15,019)	(11,523)	(4,506)
Depletion and depreciation	14,778	13,308	53,412	38,292
Finance expenses	1,940	913	3,141	3,276
Amortisation of debt financing fees	147	248	779	513
Share-based compensation	5,531	1,941	10,167	7,687
Deferred income taxes	2,778	22,493	46,576	37,681
Unrealized foreign exchange (gain) loss	17	(577)	(49)	(120)
Exploration expense	7,191	345	7,477	6,829
Gains on property, plant and equipment	(252)	(873)	(252)	(873)
Income taxes paid	(63,527)	(86)	(63,656)	(86)
Interest received	2	2	5	4
Interest paid	(318)	(405)	(1,570)	(2,699)
Earnings Distributions from Apico LLC	9,943	7,588	9,943	9,756
Change in non-cash working capital:
Accounts receivable	(49,066)	(4,802)	(60,297)	(6,595)
Inventory	(1,325)	840	(3,217)	(3,472)
Prepaids and other current assets	106	96	144	576
Accounts payable and accrued liabilities	6,348	5,421	(1,885)	6,311
Current income taxes payable	45,520	--	127,288	--
Cash flow provided by operating activities	16,689	45,996	235,490	110,001
Financing Activities
Issuance of common shares, net of issuance costs	727	666	2,753	6,108
Repurchase of shares	(3,712)	--	(18,745)	--
Borrowings under long-term debt	50,000	--	50,000	6,275
Repayment of long-term debt	--	--	(30,000)	--
Loan arrangement fees	(2,915)	(71)	(3,883)	(419)
Distributions to non-controlling interest	(1,074)	(450)	(2,866)	--
Other	--	(131)	--	(506)
Cash flow (used in) provided by financing activities	43,026	14	(2,741)	11,458
Investing Activities
Decrease (increase) in restricted cash	(20)	6,347	22,034	1,844
Expenditure on property, plant and equipment	(140,551)	(45,576)	(231,478)	(115,468)
Acquisition of increased ownership interest in Apico LLC	--	--	--	(1,446)
Advances to Apico LLC	--	--	(9,250)	250
Proceeds from disposal of property, plant and equipment	352	250	352	(125)
Deposits and other assets - Payments	(6,000)	(122)	(6,000)	(606)
Deposits and other assets - Refunds	--	--	131	--
Cash flow used in investing activities	(146,219)	(39,101)	(224,211)	(115,551)
Effect of exchange rate changes on cash	(875)	(501)	(2,266)	(1,198)
Increase (decrease) in cash	(87,379)	6,408	6,272	4,710
Cash - Beginning of period	116,646	2,186	22,995	3,884
Cash - End of period	29,267	8,594	29,267	8,594
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.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

CONTACT: Enquiries:
         Coastal Energy Company
         Email: investor@CoastalEnergy.com
         +1 (713) 877-6793
         
         Strand Hanson Limited (Nominated Adviser)
         +44 (0) 20 7409 3494
         Rory Murphy / 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