2008 Reserves Report
Highlights of the December 31, 2008
– 117% increase in offshore 1P (proven) Reserves to 18.1 mmbbl from 8.3 mmbbl
– 55% increase in offshore 2P (proven + probable) Reserves to 41.5 mmbbl from 26.7 mmbbl
– 40% increase in Total 1P (proven) Reserves to 26.6 mmboe from 19.0 mmboe
– 37% increase in Total 2P (proven + probable) Reserves to 62.2 mmboe from 45.5 mmboe
Total Contingent Resources (best estimate) of 50.7 mmboe
Total Prospective Resources (best estimate) of 195.9 mmboe
The upgrade of reserves is driven primarily by the results of the Company’s Q4 2008 drilling program in the Gulf of Thailand.
Coastal Energy drilled two successful development wells on the Songkhla Lower Oligocene structure during fourth quarter 2008. Resulting 1P and 2P reserves on this structure are 9.8 mmbbl and 15.7 mmbbl, increases of 320% and 220%, respectively. Coastal Energy also drilled an exploration well on the Songkhla Eocene structure. As a result of the Eocene discovery, the company added a further 1.1 mmbbl and 3.9 mmbbl of 1P and 2P reserves, respectively. Total 2P reserves at Songkhla totaled 19.7 mmbbl.
Coastal Energy’s combined onshore and offshore production is around 12,000 boepd.
Randy Bartley, chief executive officer of Coastal commented:
“Our successful three-well offshore drilling program in the fourth quarter of 2008 resulted in a substantial increase in Coastal’s proven and probable (2P) reserves. The 2P reserves of the Songkhla Oligocene structure increased by 220% after drilling two development wells as the net pay and reservoir characteristics significantly exceeded expectations.
“The addition of proven and probable reserves in the Songkhla Eocene structure is also important in proving the Eocene play in the Songkhla field and Block G5/43. The information gathered from the results of the successful exploration well in the Eocene is positive given the large amount of Contingent and Prospective Resources which are contained in Eocene structures.
“The wells at Songkhla continue to perform as expected. We have slightly decreased pump utilization on the A-01 and A-03 wells to match our optimal reservoir recovery simulations. Production from the A-07 has now been tied in. We are encouraged by the strong reserve additions realized as a result of our drilling program. The results of the reserve evaluation combined with continued strong well performance confirm our analysis of the significant resource potential of our assets. Coastal remains committed to the continued development of these assets and expects its next drilling campaign in late 2009 to further enhance shareholder value.”
