Coastal Energy Company (the "Company" or "Coastal Energy") (TSX-V:
CEN) (AIM: CEO), an independent exploration and production company
with assets in Thailand, announces the financial results for the
quarter ended June 30, 2010. The functional and reporting currency
of the Company is the United States dollar.
Second Quarter 2010 Highlights
-- Average total Company production of 9,814 boe/d; including average
offshore production of 7,914 bbl/d
-- EBITDAX of $29.9 million, or $0.27 per fully diluted share
-- Net income of $8.6 million, or $0.08 per fully diluted share
-- Drilling of the first three development wells at the Bua Ban field
Operational Highlights
During the second quarter Coastal Energy began developing its
second proven offshore field in the Gulf of Thailand. The first
three wells, Bua Ban A-01, A-02 and A-05, were drilled and logged
during June. All three encountered oil in the Lower Oligocene
reservoir, and the Bua Ban A-05 well encountered two additional
productive pay zones in the Lower Oligocene reservoir. These
reservoirs had not been seen in previous wells. An appraisal well
has been scheduled for September to determine the extent of these
reservoirs.
To date two additional wells, Bua Ban A-03 and A-06, have been
drilled and completed in the third quarter and have both
encountered oil in the Lower Oligocene reservoir. The Bua Ban A-03
well also encountered oil in the Miocene reservoir. This is the
first time productive Miocene sands have been encountered in Block
G5/43. All five Bua Ban wells have been completed and tied in to
production facilities. Our current offshore production rate is
approximately 11,800 bopd and total production is approximately
13,800 boe/d.
Randy Bartley, President and CEO of Coastal Energy,
commented:
"As we pass the midway point of 2010, I am pleased to report the
great strides the Company has made this year. Production at
Songkhla A in the second quarter was 18% higher than the year ago
period. Our EBITDAX has doubled from the same period a year ago and
net income is over seven times what it was in the second quarter of
2009."
"There is further potential at Bua Ban that we will be
evaluating in the coming months which could bring additional upside
for the Company. Following several additional development and
exploration wells at Bua Ban, we have exploration prospects at Bua
Ban North that we will begin drilling in the fourth quarter. As we
move forward through the remainder of 2010, we will continue to
strive for further success in the development of our offshore
assets."
The following financial statements for the Company are
abbreviated versions. The Company's complete financial statements
for the three and six months ended June 30, 2010 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, COMPREHENSIVE LOSS AND DEFICIT
Three months ended Six months ended
June 30, June 30,
(US$ 000s) 2010 2009 2010 2009
----------- ----------- ----------- -----------
Revenues
Oil and natural gas $ 42,164 $ 28,017 $ 91,674 $ 36,217
Royalties (3,154) (1,880) (6,804) (2,421)
Loss on derivative (1) (836) (66) (1,923)
Interest Income 1 5 3 16
----------- ----------- ----------- -----------
39,010 25,306 84,807 31,889
----------- ----------- ----------- -----------
Expenses
Production 8,499 9,532 18,636 12,852
General and
administrative 4,095 3,210 7,892 6,403
Foreign exchange loss
(gain) (11) 1,765 453 1,397
Interest 349 1,347 697 2,366
Debt financing fees 119 26 243 926
Depletion,
depreciation and
accretion 11,612 7,698 24,906 10,856
Settlement - 2,365 - 2,365
----------- ----------- ----------- -----------
24,663 25,943 52,827 37,165
----------- ----------- ----------- -----------
Net income (loss)
before taxes and
earnings from
significantly
influenced investee
and non-controlling
interest 14,347 (637) 31,980 (5,276)
Income tax 8,642 - 18,867 -
----------- ----------- ----------- -----------
Net income (loss) from
before earnings from
significantly
influenced investee
and non-controlling
interest 5,705 (637) 13,113 (5,276)
Earnings from
significantly
influenced investee 2,927 1,854 5,732 3,264
Net income (loss)
before non-controlling
interest 8,632 1,217 18,845 (2,012)
Non-controlling
interest (55) - (50) -
----------- ----------- ----------- -----------
Net income (loss) and
comprehensive income
(loss) 8,577 1,217 18,795 (2,012)
Deficit, beginning of
period (6,484) (19,816) (16,702) (16,587)
----------- ----------- ----------- -----------
Retained earnings
(deficit), end of
period $ 2,093 $ (18,559) $ 2,093 $ (18,599)
----------- ----------- ----------- -----------
Basic and diluted
earnings (loss) per
share $ 0.08 $ 0.01 $ 0.17 $ (0.02)
----------- ----------- ----------- -----------
Weighted average number
of common shares
outstanding, fully
diluted 112,633,874 97,739,424 112,889,135 94,596,190
----------- ----------- ----------- -----------
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
(US$ 000s) 2010 2009
------------- ------------
Assets
Current Assets
Cash and cash equivalents $ 4,647 $ 21,229
Restricted cash 3,037 3,829
Accounts receivable 6,706 6,111
Derivative asset - 66
Inventory 8,768 5,310
Prepaids and other current assets 299 526
------------- ------------
23,457 37,071
Investments in and advances to Apico, LLC 56,803 55,225
Property, plant and equipment, net 300,203 233,014
Deposits and other assets 296 299
------------- ------------
Total Assets $ 380,759 $ 325,609
------------- ------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 51,554 $ 31,325
Deferred Income 17,533 23,060
Income taxes payable 49 38
Amounts due to shareholder 3,388 5,164
Current portion of long-term debt 8,183 10,266
------------- ------------
80,707 69,853
Long-term debt 20,388 24,284
Asset retirement obligations 8,442 2,809
Future income tax liability 47,242 27,695
------------- ------------
Total Liabilities 156,779 124,641
------------- ------------
Commitments and contingencies
Non-controlling interests 6,418 5,617
Shareholders' equity
Share capital 200,619 198,121
Contributed surplus 14,771 13,779
Warrants 79 153
Retained earnings (deficit) 2,093 (16,702)
------------- ------------
Shareholders' equity 217,562 195,351
------------- ------------
Total liabilities, non-controlling interest and
shareholder's equity $ 380,759 $ 325,609
------------- ------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended Six months ended
June 30, June 30,
(US$ 000s) 2010 2009 2010 2009
-------- -------- -------- --------
Operating Activities
Net income (loss) for the period $ 8,577 $ 1,217 $ 18,795 $ (2,012)
Earnings distributions from
significantly influenced
investee 3,613 1,083 4,154 1,806
Items not involving cash
Depletion, depreciation and
accretion 11,612 7,698 24,906 10,856
Impairment - 1,765 - 1,765
Future income taxes 9,588 - 18,849 -
Income applicable to
non-controlling interest 55 - 50 -
Unrealized foreign exchange loss 167 1,295 842 909
Stock based compensation 1,892 1,570 3,151 2,146
Issuance of warrants with notes
payable - - - 294
Share of earnings of
significantly influenced
investee, net of taxes (2,927) (1,854) (5,732) (3,264)
Unrealized loss on derivative
instrument 1 836 66 2,362
Change in non-cash working
capital 19,780 (909) 12,742 3,870
-------- -------- -------- --------
Cash provided by operating
activities of continuing
operations 52,358 12,701 77,823 18,732
-------- -------- -------- --------
Investing Activities
Investment in and advances to
Apico LLC - (4,516) - (4,516)
Decrease in restricted cash 415 (436) 792 670
Purchase of property, plant and
equipment (53,532) (17,035) (89,864) (33,348)
Contributions from non-controlling
interest partner - - 750 -
Other - (694) (6) (697)
-------- -------- -------- --------
Cash used in investing activities (53,117) (22,681) (88,328) (37,891)
-------- -------- -------- --------
Financing Activities
Issuance of shares for cash 46 15,418 1,886 15,418
Borrowings under long-term debt - 1,620 - 1,620
Repayments of long-term debt (1,000) (895) (5,979) (7,836)
Borrowings under amounts due to
shareholder - - - 1,000
Repayments under amounts due to
shareholder (253) (1,121) (2,003) (1,121)
Proceeds from issuance of notes
payable - - - 15,000
Repayments of notes payable - (3,072) - (4,072)
-------- -------- -------- --------
Cash (used) provided by financing
activities (1,207) 11,950 (6,096) 20,009
-------- -------- -------- --------
Net effect of foreign exchange on
cash held in foreign currencies (116) 63 19 15
-------- -------- -------- --------
Change in cash and cash equivalents (2,082) 2,033 (16,582) 865
Cash and cash equivalents,
beginning of period 6,729 5,266 21,229 6,434
-------- -------- -------- --------
Cash and cash equivalents, end of
period 4,647 7,299 4,647 7,299
-------- -------- -------- --------
Cash and cash equivalents
consists of:
Cash 4,647 3,823 4,647 3,823
Short-term money market
instruments - 3,476 - 3,476
-------- -------- -------- --------
4,647 7,299 4,647 7,299
-------- -------- -------- --------
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
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: Email Contact Strand Hanson Limited
(Nominated Adviser) +44 (0) 20 7409 3494 Rory Murphy Paul Cocker
Stifel Nicolaus Weisel (Broker) +44 (0) 20 3205 3615 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
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