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

HOUSTON, TX--(Marketwire -09/06/11)- Coastal Energy Company (the "Company" or "Coastal") (TSX: CEN.TO - News) (AIM: CEO) announces the successful results of the Bua Ban North A-05 well and provides an operations update.

The Bua Ban North A-05 well was drilled to a total depth of 5,650 feet TVD.   The well encountered 81 feet of gross sand and 35 feet of net pay in the Miocene reservoir with 27 percent average porosity.   The well tested the Miocene reservoir on the eastern flank of the Bua Ban North A field.   The oil water contact in the well was seen at 3,770 feet.   The results of the A-05 well add an additional 1,200 acres to the structural closure area.   The Company is planning to drill five to six additional evaluation wells at Bua Ban North before moving the rig to G5/50.

The Bua Ban North B-02, B-03 and B-04 wells have all been completed and tied into the production facilities.   The aggregate production rate from Bua Ban North B is approximately 8,200 bopd.   Average production at Songkhla A is approximately 4,000 bopd, with production currently being constrained due to a temperature issue.   The Company is installing additional cooling units to remedy this issue and restore production to 6,500 bopd.   The installation is expected to be complete in approximately two weeks.

Aggregate offshore oil production is averaging 13,700 bopd, and total Company production is averaging 15,800 boepd.

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

"We are very pleased with the results of the Bua Ban North A-05 well.   This well was drilled as far north as possible to test the presence of hydrocarbons between Bua Ban North A & B.   We have several locations identified which are further south and up to 200 feet structurally higher which we plan to test with the upcoming wells.

"Total production from Bua Ban North B has come in above our expectations and the wells continue to perform better than expected.   We are working to resolve mechanical production issues at Songkhla and expect to restore production to previous levels in the coming weeks.

"We expect production facilities to be on location at Bua Ban North A in late October."

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.