Coastal Energy Company (the "Company" or "Coastal Energy") (TSX:CEN) (AIM:CEO), an independent exploration and production company with assets in Thailand, announces the financial results for the year ended December 31, 2011. The functional and reporting currency of the Company is the United States dollar.
Fourth Quarter 2011 Highlights
-- Total Company production increased to 14,508 boe/d in the fourth quarter
from 7,552 boe/d in the same period last year. The Company's offshore
production was bolstered by the inclusion of a full quarter of
production from the B platform at the recently discovered Bua Ban North
field. The Company began tying in production at Bua Ban North A late in
Q4 and realized production gains from that field beginning in 2012.
Average onshore production was 1,122 boe/d, impacted by decreased demand
due to the severe flooding in Thailand in Q3 and Q4 2011. Demand has
made a significant recovery in 2012.
-- EBITDAX for the fourth quarter was $75.1 million, significantly higher
than the $4.4 million recorded in Q4 2010.
-- The Company announced several successful appraisal and development wells
at the Bua Ban North A & B platforms. These wells helped to further
delineate the field and confirm that the two fields are in fact
connected. One horizontal well was drilled during the quarter and began
producing at a rate of approximately 3,000 bopd. The Company plans to
drill several more horizontal development wells at the field to increase
production and total recovery.
Full Year 2011 Highlights
-- Total Company production averaged 11,540 boe/d for the full year of
2011, 19% above 2010 levels.
-- The Company made significant discoveries at the Bua Ban North field and
was able to begin production within three months of the initial
discovery. The Company continued to appraise and develop the field
throughout the year.
-- The Company's full year 2011 EBITDAX was $201.7 million, 76% above 2010
EBITDAX of $114.3 million.
-- The Company released the results of its third-party reserve evaluation
report prepared by RPS Energy, Ltd. dated March 27, 2012 (effective date
December 31, 2011). The Company reported significant gains in its 1P and
2P reserve bases, with volumetric increases of 211% and 102%,
respectively. The Company's 1P and 2P NAVs also increased significantly,
rising by 207% and 140%, respectively.
-- As a result of its increased cash flow due to higher production and
commodity prices, the Company has repaid $30 million of its outstanding
debt balances in the first quarter of 2012. As of the date of this
release, the Company has $55 million of cash and cash equivalents and
$50 million of debt outstanding.
------------- --------- --------- --------- ------------- ----------- ---------
As of As of
December December After-Tax
31, 2011 31, 2010 After-Tax NPV NPV 2010
(mmboe) (mmboe) % Change 2011 (US$MM) (US$MM) % Change
------------- --------- --------- --------- ------------- ----------- ---------
Proven
Offshore 62.5 14.5 331% $1,491.7 $413.5 261%
Onshore 7.4 8.0 -8% 126.5 114.0 11%
------------- --------- --------- --------- ------------- ----------- ---------
Total
1P 69.9 22.5 211% 1,618.2 527.5 207%
------------- --------- --------- --------- ------------- ----------- ---------
Proven +
Probable
Offshore 80.0 27.1 195% $1,668.0 $583.6 185%
Onshore 22.9 23.9 -4% 230.7 207.0 12%
------------- --------- --------- --------- ------------- ----------- ---------
Total
2P 102.9 51.0 102% 1,898.7 790.6 140%
------------- --------- --------- --------- ------------- ----------- ---------
Note: Reserve figures are shown as net working interest before royalties (Thailand
royalty regime is discussed in the MD&A of the Company's Annual Report dated
December 31, 2011). After-tax NPV figures are defined as future net revenues
discounted at 10%. Reserve numbers taken from the Company's competent person's
report prepared by RPS Energy Ltd. dated as of December 31, 2011 (prepared in
accordance with NI 51-101 and the COGE Handbook) which may be found on the Company's
website at www.coastalenergy.com.
Randy Bartley, President and CEO of Coastal Energy, commented:
"2011 was the most successful year in Coastal's history. The Company delivered record production and cash flow. We also had a major discovery at the Bua Ban North field, which helped to increase our offshore 2P reserves by nearly 200%. We are very pleased with the results of 2011 and expect to build further on this success.
"2012 has also begun extremely well. We have drilled and tied in a handful of additional wells at Bua Ban North which have further boosted production. These wells were tied in during the month of February and brought average offshore production for the entire first quarter up to 21,100 bbl/d. Our current offshore production is 22,500 bopd.
"We have a very busy year ahead as we continue to develop Bua Ban North as well as perform redevelopment and injection drilling at Songhkla A. Additionally, we will continue exploring our substantial prospect inventory."
The following financial statements for the Company are abbreviated versions. The Company's complete financial statements for the three and twelve months ended December 31, 2011 with the notes thereto and the related Management Discussion and Analysis can be found either on Coastal's website at www.CoastalEnergy.com or on SEDAR at www.sedar.com. All amounts are in US$ thousands, except share and per share amounts.
Consolidated Statements of Operations
and Comprehensive Income (Loss)
US$000's except per share amounts
--------------------------------------------------
Years Ended December 31, 2011 2010
------------------------------ -------- --------(Note
29) Revenues and Other Income Oil sales, net of royalties
(Note 18) 318,670 177,207 Other income (Note 19) (21,566) (19,207) ------------------------------ -------- --------
297,104 158,000 ------------------------------ -------- --------
Production 99,263 53,326
Depreciation and depletion
(Note 8) 61,136 29,658
Impairment (Note 8) - 10,706
General and administrative 31,453 20,253
Exploration (Note 7) 8,374 72,170
Debt financing fees 796 522
Finance (Note 17) 4,825 2,295
Gains on disposal of
property, plant and
equipment (873) -
------------------------------ -------- --------
204,974 188,930 ------------------------------ -------- --------
Net income from Apico LLC 92,130 (30,930)
Share of net income from
Apico LLC (Note 9) 14,527 7,932
------------------------------ -------- --------
Net income (loss) before
income taxes 106,657 (22,998)
------------------------------ -------- --------
Income taxes (Note 24)
Current 135 (7)
Deferred 57,882 (11,768)
------------------------------ -------- --------
58,017 (11,775) ------------------------------ -------- --------
------------------------------ -------- --------
Net income (loss) and
comprehensive income (loss) 48,640 (11,223)
============================== ======== ========
Energy 47,359 (12,390) Non-controlling interest 1,281 1,167 ------------------------------ -------- --------
48,640 (11,223) ------------------------------ -------- --------
Basic (Note 22) 0.42 (0.12)
Diluted (Note 22) 0.41 (0.12)
The accompanying notes are an integral part of
these condensed interim consolidated financial
statements.
Consolidated Statements of Financial Position
US$000's
-----------------------------------------------------------------------------
December 31, December 31, January 1,
As at 2011 2010 2010
------------------------------- -------------- -------------- ------------
$ $ $(Note 29) (Note 29) Assets Current Assets
Cash 22,995 3,884 21,229
Restricted cash (Note 4) 28,447 16,369 3,829
Accounts receivable (Note 5) 16,939 10,299 6,111
Derivative asset (Note 14) 59 135 66
Inventory (Note 6) 14,161 12,783 5,310
Prepaids and other current
assets 1,094 606 526
------------------------------- -------------- -------------- ------------
Total current assets 83,695 44,076 37,071
Non-Current Assets
Exploration and evaluation
assets (Note 7) 31,881 31,068 44,907
Property, plant and equipment
(Note 8) 355,052 246,248 189,534
Investment in and advances to
Apico LLC (Note 9) 47,698 47,261 55,225
Deposits and other assets 405 289 300
------------------------------- -------------- -------------- ------------
Total non-current assets 435,036 324,866 289,966
------------------------------- -------------- -------------- ------------
Total Assets 518,731 368,942 327,037
=============================== ============== ============== ============
Liabilities
Current Liabilities
Accounts payable and accrued
liabilities (Note 10) 59,471 53,550 31,363
Deferred revenue (Note 11) - - 23,060
Current portion of long-term
debt (Note 14) 55,662 36,262 10,266
Amounts due to shareholder
(Note 13) - - 5,164
Obligations under finance
leases (Note 16) - 885 35
Current portion of derivative
liabilities (Note 14) 14,557 10,141 -
Derivative liability -
Warrants (Note 12) 2,853 2,191 3,371
------------------------------- -------------- -------------- ------------
Total current liabilities 132,543 103,029 73,259
Non-Current Liabilities
Long-term debt (Note 14) 22,156 35,081 24,284
Obligations under finance
leases (Note 16) - 579 1,439
Non-current portion of
derivative liabilities (Note
14) 1,274 6,609 -
Deferred tax liabilities 69,767 11,885 23,653
Decommissioning liabilities
(Note 15) 42,124 17,655 4,071
------------------------------- -------------- -------------- ------------
Total Non-Current
Liabilities 135,321 71,809 53,447
Shareholders' Equity (Note 22)
Common shares 211,554 201,303 198,121
Contributed surplus 16,401 15,971 13,932
Retained earnings
(accumulated deficit) 17,630 (29,729) (17,339)
------------------------------- -------------- -------------- ------------
Total Shareholders' Equity 245,585 187,545 194,714
Non-controlling interest 5,282 6,559 5,617
------------------------------- -------------- -------------- ------------
Total equity 250,867 194,104 200,331
------------------------------- -------------- -------------- ------------
Total liabilities and equity 518,731 368,942 327,037
=============================== ============== ============== ============
Commitments and contingencies
(Note 23)
The accompanying notes are an integral part of these condensed
interim consolidated financial statements.
Consolidated Statements of Cash
Flow
US$000's
------------------------------------------------------
Years Ended December 31, 2011 2010
-------------------------------- --------- ---------(Note 29) Operating activities
Net income (loss) 48,640 (11,223)
Adjustments:
Share of net income from Apico
LLC (14,527) (7,932)
Unrealized (gain) loss on
derivative instruments (843) 16,681
Depletion and depreciation 61,136 29,658
Impairment - 10,706
Finance expense 4,825 2,295
Amortisation of debt financing
fees 786 132
Stock-based compensation 15,185 7,827
Deferred income taxes 57,882 (11,768)
Unrealized foreign exchange
loss (gain) 388 (639)
Exploration expense 8,374 72,170
Gains on disposal of property,
plant and equipment (873) -
Income taxes paid (86) -
Interest received 6 5
Interest paid (4,022) (3,203)
Earnings distributions from
Apico LLC 15,536 15,896
Change in non-cash working
capital (Note 25) (3,559) (25,629)
-------------------------------- --------- ---------
Cash flow provided by operating
activities 188,848 94,976
Financing Activities
Issuance of common shares, net
of issuance costs 7,907 2,409
Borrowings under long-term debt 6,275 73,725
Repayment of long-term debt - (34,550)
Loan arrangement fees (594) (2,514)
Repayment of amounts due to
shareholder - (5,164)
Payments to non-controlling
interest (2,558) (225)
Other (506) -
-------------------------------- --------- ---------
Cash flow provided by financing
activities 10,524 33,681
-------------------------------- --------- ---------
Investing Activities
Increase in restricted cash (12,078) (12,540)
Purchase of property, plant and
equipment (165,099) (133,375)
Advances to Apico LLC (1,446) -
Proceeds from disposal of
property, plant and equipment 250 -
Deposits and other assets (116) -
-------------------------------- --------- ---------
Cash flow used in investing
activities (178,489) (145,915)
-------------------------------- --------- ---------
Effect of exchange rate changes
on cash (1,772) (87)
Increase (decrease) in cash 19,111 (17,345)
Cash - Beginning of year 3,884 21,229
-------------------------------- --------- ---------
Cash - End of year 22,995 3,884
================================ ========= =========
The accompanying notes are an integral part of these
condensed interim consolidated financial statements.
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.
The Coastal Energy Company logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=10062
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 adequacyor accuracy of this release.
through United States newswire services
Coastal Energy Company
Email: investor@CoastalEnergy.com
+1 (713) 877-6793
Strand Hanson Limited (Nominated Adviser)
Rory Murphy / Paul Cocker / Scott McGregor
+44 (0) 20 7409 3494
Macquarie Capital (Europe) Limited (Broker)
Paul Connolly / Jeffrey Auld
+44 (0) 20 3037 2000
FirstEnergy Capital LLP (Broker)
Hugh Sanderson / Travis Inlow
+44 (0) 20 7448 0200
Buchanan
Tim Thompson / Ben Romney
+44 (0) 20 7466 5000