Coastal Energy Announces Successful Drilling Results at Bua Ban North A and Operations Update

Coastal Energy Company (the "Company" or "Coastal") (TSX: CEN) (AIM: CEO) announces the successful results of the Bua Ban North A-06 well and provides an operations update.

The Bua Ban North A-06 well was drilled to a total depth of 5,950 feet TVD. The well encountered 63 feet of net pay in the Miocene with average porosity of 28 percent. The A-06 well was drilled into the western bounding fault block originally discovered by the A-01 well and encountered the main Miocene objective 50 feet downdip from the original discovery well. The reservoir quality seen in the A-06 is superior to that in the A-01 well, which encountered 32 feet of net pay with 26 percent porosity.

Production is being restored at Songkhla A following the facilities upgrade and is currently producing at approximately 5,600 bopd. Aggregate offshore production is approximately 15,000 bopd and total Company production is approximately 17,000 boepd.

Randy Bartley, Chief Executive Officer of Coastal Energy, commented:

"We are very pleased with the results of the Bua Ban North A-06 well. Based on log and pressure data, the areal coverage of this western fault block has increased from 160 acres to over 500 acres. The better than expected reservoir quality indicates the A-06 should make an excellent producing well. We plan to drill an additional well further north in this fault block to further test the area between Bua Ban North A & B in the western fault block.

"The mobile offshore production unit is expected to be on location at Bua Ban North A in late October, at which time we will begin production testing at the field."

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.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.

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.

This news release is not for dissemination in the United States or through United States newswire services


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