Coastal Energy Announces First Quarter 2010 Financial Results
HOUSTON, TX --
(Marketwire) --
May 31, 2010 --
Coastal Energy Company (the "Company" or
"Coastal Energy") (
First Quarter 2010 Highlights
-- Average offshore production of 7,068 bbl/d in the first quarter;
average total Company production of 8,900 boe/d
-- EBITDAX of $34.2 million, or $0.31 per fully diluted share
-- Net income of $10.2 million, or $0.09 per fully diluted share
-- Completion of workover operations on the Songkhla A-04 well and
installation of higher capacity pumps on the Songkhla A-01 and A-03
wells
Operations Highlights
During Q1 2010, Coastal Energy continued to progress its offshore field development. Offshore oil production at Songkhla A has increased significantly since late 2009 and onshore gas production from Sinphuhorm has remained strong. Production from Songkhla A is currently averaging approximately 8,500 bbl/d. Offshore production at Songkhla A was restored to its full potential and the Company completed preparations for the development of its Bua Ban field.
Installation of the production and processing facilities at Bua Ban was completed in February. The drilling rig was mobilized to the Bua Ban platform in mid-May and the first well was spudded in late May. Surface casing has been set for the first five Bua Ban wells which will expedite the drilling process.
At Benjarong, installation of the MOPU was completed in late May and testing is anticipated to begin in the next two weeks with results expected by mid-July. Testing will be performed using a workover unit to reduce costs and allow the development of Bua Ban to proceed during testing. The Company anticipates further gains in offshore production as Bua Ban is developed.
Randy Bartley, President and CEO of Coastal Energy, commented:
"Great progress has been achieved during the three months to March, with a significant increase in offshore oil production from Songkhla A and onshore gas production from Sinphuphorm remaining strong. We have set a solid foundation for 2010, when Coastal will see further increases in offshore production as Bua Ban is developed.
"Financial results have continued to improve as we have strived to control costs and deploy capital in a conservative manner. Coastal saw record EBITDAX, net income and earnings per share in the first quarter. We expect 2010 to continue to yield improving results for the Company and our shareholders."
3 months ended March 31,
Three months ended March 31, 2010 2009
-------------- --------------
$ $
Revenues
Oil and natural gas 49,510 8,200
Royalties (3,650) (541)
Loss on derivative risk management
contracts (Note 5) (65) (1,087)
Interest income 2 11
-------------- --------------
45,797 6,583
-------------- --------------
Expenses
Production 10,137 3,320
General and administrative 3,797 3,193
Foreign exchange loss (gain) 464 (368)
Interest (Notes 4 and 5) 348 1,019
Debt financing fees 124 900
Depletion, depreciation and accretion 13,294 3,158
-------------- --------------
28,164 11,222
-------------- --------------
Net income (loss) before taxes, earnings
from significantly influenced investee
and non-controlling interest 17,633 (4,639)
Income taxes (10,225) -
-------------- --------------
Net income (loss) before earnings from
significantly influenced
investee and non-controlling interest 7,408 (4,639)
Earnings from significantly influenced
investee (Note 2) 2,805 1,410
-------------- --------------
Net income (loss) before non-controlling
interest 10,213 (3,229)
Non-controlling interest (Note 9) 5 -
-------------- --------------
Net income (loss) and comprehensive income
(loss) attributable to shareholders 10,218 (3,229)
Deficit, beginning of period (16,702) (16,587)
-------------- --------------
Deficit, end of period (6,484) (19,816)
-------------- --------------
Basic and diluted earnings (loss) per
share (Note 8) 0.09 (0.03)
============== ==============
March 31, December 31,
2010 2009
------------ ------------
$ $
Assets
Current assets
Cash and cash equivalents 6,729 21,229
Restricted cash 3,452 3,829
Accounts receivable 6,150 6,111
Derivative asset (Note 5) 1 66
Inventory 3,877 5,310
Prepaids and other current assets 436 526
------------ ------------
20,645 37,071
Investment in and advances to Apico LLC
(Note 2) 57,489 55,225
Property, plant and equipment (Note 3) 270,351 233,014
Deposits and other assets 305 299
------------ ------------
Total assets 348,790 325,609
============ ============
Liabilities
Current liabilities
Accounts payable and accrued liabilities 42,769 31,325
Deferred income (Note 6) 12,876 23,060
Income taxes payable 996 38
Amounts due to shareholder (Note 4) 3,538 5,164
Current portion of long-term debt (Note 5) 7,875 10,266
------------ ------------
68,054 69,853
Long-term debt (Note 5) 21,696 24,284
Asset retirement obligations (Note 7) 6,872 2,809
Future income tax liability 37,631 27,695
------------ ------------
Total Liabilities 134,253 124,641
------------ ------------
Commitments and contingencies (Note 12)
Non-controlling interests (Note 9) 6,362 5,617
------------ ------------
Shareholders' equity
Share capital (Note 8) 200,562 198,121
Contributed surplus (Note 8) 14,018 13,779
Warrants (Note 8) 79 153
Deficit (6,484) (16,702)
------------ ------------
Shareholders' equity 208,175 195,351
------------ ------------
Total liabilities, non-controlling interests,
and shareholders' equity 348,790 325,609
============ ============
3 months ended March 31,
Three months ended March 31, 2010 2009
-------------- --------------
$ $
Operating activities
Net income (loss) for the period 10,218 (3,229)
Earnings distributions from significantly
influenced investee 541 723
Items not involving cash
Depletion, depreciation and accretion 13,294 3,158
Future income taxes 9,261 -
(Gain) applicable to non-controlling
interest (5) -
Unrealized foreign exchange (gain) loss 675 (382)
Stock based compensation 1,259 576
Issuance of warrants with notes payable - 294
Share of earnings of significantly
influenced investee, net of taxes (2,805) (1,410)
Unrealized loss on derivative instrument 65 1,526
Change in non-cash working capital
(Note 13) (7,038) 4,775
-------------- --------------
25,465 6,031
-------------- --------------
Investing activities
Decrease in restricted cash 377 1,106
Purchase of property, plant and equipment (36,332) (16,313)
Contributions from non-controlling
interest partner 750 -
Other (6) (3)
-------------- --------------
(35,211) (15,210)
-------------- --------------
Financing activities
Issuance of shares for cash 1,840 -
Repayments of long-term debt (4,979) (6,941)
Borrowings under amounts due to
shareholder - 1,000
Repayment of amounts due to shareholder (1,750) -
Proceeds from issuance of notes payable - 15,000
Repayments of notes payable - (1,000)
-------------- --------------
(4,889) 8,059
-------------- --------------
Net effect of foreign exchange on cash
held in foreign currencies 135 (48)
-------------- --------------
Change in cash and cash equivalents (14,500) (1,168)
Cash and cash equivalents, beginning of
period 21,229 6,434
-------------- --------------
Cash and cash equivalents, end of period 6,729 5,266
============== ==============
Cash and cash equivalents consists of:
Cash 6,071 5,266
Short term money market instruments 658 -
-------------- --------------
6,729 5,266
============== ==============
Supplemental cash flow information (Note 13)
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.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
This news release is not for dissemination in the United States or through United States newswire services
Contact Information: Enquiries: Coastal Energy Company Randy L. Bartley Chief Executive Officer +1 713 877 6705 William C. Phelps Chief Financial Officer +1 713 877 6727 Email: investor@CoastalEnergy.com Strand Hanson Limited (Nominated Adviser) +44 (0) 20 7409 3494 Rory Murphy Paul Cocker Thomas Weisel Partners (Broker) +44 (0) 20 7877 4300 Paul Colucci Macquarie Capital (Europe) Limited (Broker) +44 (0) 20 3037 2000 Ben Colegrave Paul Connolly Buchanan Communications Tim Thompson +44 (0) 20 7466 5000 Catherine Breen Katharine Sutton
