Coastal Energy announces update
Tuesday, Dec 11, 2012

Coastal Energy Company (the "Company" or "Coastal Energy") (TSX:CEN) (AIM:CEO), an independent exploration and production company with assets in Thailand, today provided an update of its operations.

Second Rig Arrives on Location

The Atwood Manta has arrived on location at the Bua Ban North B field and is currently rigging up. The Company plans to drill eight development and appraisal wells at Bua Ban North with the Manta. Following completion of these eight wells, the Company plans to mobilize the Manta to the KBM cluster offshore Malaysia in early Q213 to begin appraisal drilling there.

Pilot Offshore Fracturing Program

The Company has recently tested hydraulic fracturing ("fraccing") with a three stage fracturing program in the Lower Oligocene in the Bua Ban South A-01 well. All three zones which were fracced have flowed back oil naturally during cleanup. The well will be completed with an electric submersible pump (ESP) for longer term production testing. The fraccing program will now continue on the Bua Ban South A-03ST#1.

Randy Bartley, President & CEO of Coastal Energy, commented:

"We continue to be pleased with our operational results and achievements during the year. We are now looking forward to accelerating the 2013 development and appraisal drilling campaign with our second rig. The addition of this second rig will permit us to grow production while continuing to exploit our substantial prospect inventory in parallel. The company's production currently is averaging over 24,000 boepd (22,000 bopd offshore and 2,300 boepd onshore).

"Additionally, the initial results from the pilot fraccing program are very encouraging. The initial natural flowback rates during cleanup exceeded 800 bbl/d in aggregate. We expect that we will be able to further refine the fraccing methodology to be able to unlock the full resource potential in the lower porosity and permeability sands in the Songkhla basin."

Source: Coastal Energy

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