Coastal receives government approval to develop Songkhla field

Coastal Energy Co. has received government approval of the Production Area Application (PAA) for development of its Songkhla field in the Gulf of Thailand.

Offshore staff

SURREY, UK -- Coastal Energy Co. has received government approval of the Production Area Application (PAA) for development of its Songkhla field in the Gulf of Thailand.

The PAA was approved by the Department of Mineral Fuels, and covers an extended area of approximately 75 sq km (29 sq mi) which includes not only the Songkhla field, but several surrounding satellite features. The extended production area enables the company to fully exploit the prospects surrounding the primary Songkhla development without the need to apply for additional government approvals. As approved, the production area contains proved, probable, and possible reserves of 6.4 MMbbl of oil. It also contains eight identified oil prospects with potential oil in place of over 200 MMbbl of oil.

Songkhla field is expected to begin production in the fourth quarter of this year, with production drilling expected to begin in August 2008. Due to delays in the arrival of theSwiber Jack Up-1 (JU-1) rig, the company has revised its drilling program to ensure first production from Songkhla is not affected by the rig delay.

"We are fortunate to have been granted a production area of this size because it covers not only the proven Songkhla development, but also the eight identified prospects," says Coastal's Chief Executive, Randy Bartley. "This will allow us to expedite the exploration and development of these prospects and will significantly enhance the overall economics of the project.

"Due to the flexibility in our well scheduling, the JU-1 delay will not affect our projected fourth quarter first production from the Songkhla development. There will be sufficient time to pre-drill five to six development wells at Songkhla prior to platform arrival in late September 2008. Drilling of the Bua Ban appraisal wells is now scheduled to start in early 2009. Bua Ban has sufficient proved reserves, without additional drilling, to justify proceeding with platform and facility development. Drilling plans for the first nine Bua Ban wells will be late first and early 2Q 2009 to allow sufficient time to pre-drill the wells and to set platform and production facilities in late 2Q 2009."

06/11/2008

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