corporate presentation - coastal energy...© coastal energy company 2011 | all rights reserved...

© Coastal Energy Company 2011 | All Rights Reserved Corporate Presentation November 2011

Corporate Presentation November 2011

2 Copyright Coastal Energy Company 2011 | All Rights Reserved Corporate Presentation November 2011

Forward Looking Statements This presentation 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. This

presentation does not contain all of the information contained in the preliminary prospectus of Coastal Energy

Company, which should reviewed for complete information.


Offshore Thailand

Three fields currently producing 15,500 bopd

Bua Ban North

Discovered in 2011; production began in August, currently producing 8,000 bopd

67 mmbbl of 2P reserves added; further appraisal and exploration of 63 mmbbl of

additional recoverable resources underway at Bua Ban North

Production from Bua Ban North A on course to begin in December 2011

Songkhla Field:

Currently producing approximately 6,000 bopd

Additional development wells and water injection wells planned 2012

Bua Ban Field:

Currently producing approximately 1,500 bopd

Offshore Thailand

(Oil)

Onshore Thailand

(Gas)

Onshore Thailand

EU1 / E5N contains the Sinphuhorm gas field

Currently producing 2,000 boepd

Gas sold to Nam Phong power plant under a 15-year Gas Sales Agreement

94 mmbl of 2P Reserves

15,500 bopd avg. production

24 mmboe of 2P Reserves

2,000 boe/d avg. production

Note: Reserve numbers from Huddleston & Co. evaluation of Songkhla A and Bua Ban dated 12/31/2010 and RPS Energy Ltd. evaluation of Bua Ban North dated 11/15/2011

Total Company

118 mmboe of 2P Reserves

17,500 boe/d avg. production


2011 2P Reserve Additions

*Note: 2011 reserve additions are from the RPS Energy Ltd. report dated 11/15/2011; Prospective resources figure includes 63.0 mmbbl at Bua Ban

North from the RPS Report

Offshore

(mmbbl)

Onshore (mmboe) Total (mmboe)

December 31, 2010 27.0 24.0 51.0

Bua Ban North Reserves

per RPS* 67.0 0.0 67.0

Certified 2P Reserves 94.0 24.0 118.0

Incremental Management

2P estimate 25.0 0.0 25.0

Total Management 2P

Estimate 119.0 24.0 143.0

Prospective Resources 287.7 0.0 287.7

YTD Offshore 2P reserves have risen by 250% and total

Company reserves have risen by 130%


Recoverable Resources up 180% - Stock Price is up ~100%

Note: Total 2011 recoverable resource additions are Coastal internal estimates and include the volumes certified by RPS Energy Ltd.

0

20

40

60

80

100

120

140

160

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00

$11.00

$12.00

$13.00

$14.00

$15.00

1/4/2011 2/4/2011 3/4/2011 4/4/2011 5/4/2011 6/4/2011 7/4/2011 8/4/2011 9/4/2011 10/4/2011 11/4/2011

"CEN Recoverable Resources (mmbbl)" CEN Share Price (C$)

Wyatt Share Sale Announced

First Bua Ban North A Discovery Announced

First Bua Ban North B Discovery Announced

Extension of Miocene Trend Announced at

Bua Ban North B

Ending Recoverable Resources of 144 mmboe

First Bua Ban North B Production


Drilling Program Average Daily Production

2011 Highlights

Bua Ban North: 16 of 17 exploration wells at

Bua North A & B have discovered productive

zones in the Miocene or Upper Oligocene

formations containing certified 2P reserves of

67 mmbbl

Bua Ban North B is producing approximately

8,000 bopd from seven wells

9 wells at Bua Ban North A expected to be

tied in Q411

Songkhla H exploration well discovered oil in

the central Songkhla basin

92 mmbbl of prospective resources are

targeted for the Q411/Q112 exploration

program, leaving room for further upside

Growing Production Profile

Note: 2011 reserve additions are from RPS Energy, Ltd. reserve evaluation dated 11/15/2011

0

5,000

10,000

15,000

20,000

25,000

2008 2009 2010 2011 Est. 2012 Est.

Ave

rage

Dai

ly P

rod

uct

ion

(b

oe

/d)

Onshore Offshore


2012 EBITDAX Sensitivity

300,000

350,000

400,000

450,000

500,000

550,000

600,000

650,000

700,000

750,000

$80.00 $85.00 $90.00 $95.00 $100.00 $105.00

CEN

20

12

EB

ITD

AX

(0

00

s)

Realized Crude Pricing ($/bbl)

20,000 boe/d 22,000 boe/d 24,000 boe/d


Key Highlights

Material Exploration Success in 1H11

Near Term Exploration Upside

Growing Oil Focused Production Profile

Coastal has added 67 mmbbl 2P reserves in 2011 in the shallow Miocene

zone which has higher porosity and permeabilty

Continued high impact exploration drilling will target over 92 mmbbl of

prospective resources in Q411/Q112

Established production base of 17,500 boepd which is 85% offshore oil

and 15% onshore natural gas (natural gas pricing is based on oil

products)

8,000 bopd of production has been brought online less than three months

after initial discovery

Cost-effective Micoene Play

Significant Asset Base and Drilling

Inventory with substantial upside

potential

Average well cost of $2.0MM to $2.5MM for Miocene wells

1.4 million acres in the Gulf of Thailand and over 30 identified prospects

Strong Management and Shareholder

Support

70% of outstanding shares owned by management and top 4

shareholders

Investment Highlights

Note: 2011 recoverable resource additions are Coastal internal estimates; a third party certification is underway


Company Snapshot

Financial Information

Cash (as at 11/23/11) $43.0MM

Total Debt (as at 11/23/11) $80MM

Share Price (as at 11/23/11) C$13.25

Current Market Cap $1.55B

Shares Outstanding 112.6MM

Shares Outstanding, fully diluted 117.2MM


Offshore Thailand: Continued High

Impact Potential


Targeting 92 mmbbl recoverable resources in next 4 months

Bu

a B

an

G

5

/ 4

3

So

ng

kh

la H

Legend

In Progress

Planned

So

ng

kh

la A

Apply for Production License

Nov Dec Jan Feb Mar Apr May Jun

Drill development

wells and water

injection wells

Install MOPU at

BBNA and begin

production

testing

Drill Bua Ban South Miocene exploration wells

(and development wells if successful)

(67 mmbbl recoverable resources)

G

5

/ 5 0

Drill 1-2

commitment wells

2011 2012

Drill 3 Bua Ban North B

Miocene prospects (25

mmbbl recoverable

resources)


Exploration & Appraisal


Songkhla A

Extensions Bua Ban North A

Bua Ban North B

Northwest Terrace

Songkhla G

Time Structure Map Top Lower Oligocene Limestone

Songkhla H

Downthrown

Benjarong

Songkhla

South A

Songkhla

South B

Continue Delineation of Bua Ban North A and B

Reserve Additions

Production

Additional Drilling in Songhkla A Main

Reserve Additions

Production & Pressure Maintenance

Northwest Terrace

Lower Miocene

Upper and Lower Oligocene

Eocene

Songkhla G

Miocene

Lower Oligocene Development

Songkhla H Downthrown

Lower Miocene

Lower Oligocene

Songkhla A Extension

Lower Miocene

Lower Oligocene

Eocene

Songkhla South A & B

Lower Miocene

Lower Oligocene

Eocene

2012 Development & Appraisal

2012 Exploration


Songkhla Basin Prospective Resources Base (2P) Case


Bua Ban North A and B

27 Undrilled Closures

64 MMBO Potential

Reserves (Unrisked)

Reservoir Name

Number of Closures

Area (Acres)

STOOIP (bbls oil)

Potential Reserves (bbls oil)

M100 3 447 21,352,797

6,405,839

M200 4 1591 52,508,632

15,752,590

M300 3 517 28,378,910

8,513,673

M400 9 813 53,080,090

15,924,027

M500 8 1051 57,690,976

17,307,293

Totals 27 4419 213,011,406

63,903,422

Undrilled

Closures

Bua Ban

North B

Bua Ban

North A


Prospect A Prospect B

Songkhla A Extensions

Songkhla A

Top Lower Oligocene

Songkhla A

Field

Prospect Name Area (Acres) STOOIP(mmbbls oil) Potential Reserves (mmbbls oil)

A 375 22 7

B 610 35 11

C 235 14 4

Totals 1220 71 21.3 Prospect A

Prospect B

Prospect C

Arbitrary Line


Arbitrary Line

Songkhla H Area

Prospect Name

Area (Acres)

STOOIP (mmbbls oil)

Potential Reserves (mmbbls oil)

Songkhla H 315 7 2

Songkhla H Downthrown 538 14 4

Totals 853 21 6


G5/43 Miocene Trend is very prolific

Three Grabens Drilled

Bua Ban

Bua Ban North A

Bua Ban North B

All discovered oil

11 Wells Drilled

Seven wells currently producing 8,200

bopd

Remaining wells to be tied in Q411

No Dry Holes

7 Fault Blocks Penetrated

All Contain Oil

Songkhla A

Songkhla B

Bua Ban

Bua Ban North B

33mmbbls*

Bua Ban North B

157-323mmbbls

Northweast Terrace

Benjarong

Miocene Basin Margin

3-Way Fault Closure Trend

Songkhla G

97mmbbls

(includes

Bua Ban)

Time Structure Map Top Lower Oligocene Limestone

A

A’

Legend

Miocene Grabens

*Miocene Oil-in-place estimates in millions of barrels

- Blue discovered (190mmbbls)

- Black prospective (230mmbbls)

Areas without estimates require detailed mapping


Songkhla A

Songkhla B

Songkhla C

Songkhla D

Songkhla E

Northwest Terrace

Benjarong

Songkhla G

Songkhla B Trend Bua Ban North, Bua Ban

and Benjarong Trend

Songkhla A

Trend

3-Way Fault

Closure Trend Lower Miocene

Upper

Oligocene

L

Oligocene/Eocene

Upper Miocene

Miocene Grabens

A A’

Arbitrary Seismic Line from Merged 3d


Proposed 2012

Songkhla Basin 3D

Seismic

Approximately 4,000 Km2

Songkhla Basin 3D

Exploration

prospects are

being

developed

outside the 3D

area


Bua Ban North


Bua Ban North Discovery

Highly Successful Exploration in 2011

Discovered successful Miocene trend in the Songkhla basin

16 of 17 exploration wells have been successful and have

added 67.0 mmbbl of certified 2P reserves

Producing approximately 8,000 bopd from 7 wells

Production at Bua Ban North A expected to be tied in

December 2011

First horizontal development well was successful with 1,185

feet of net pay; future horizontal development wells are

being planned

Further drilling required to determine extent of Bua Ban

North field with exploration and appraisal upside targeting

63.0 mmbbl

Bua Ban North B

152.6 MMBO

STOIIP

in Lower

Miocene

Bua Ban North A

141.5 MMBO

STOIIP

in Lower Miocene

Total Bua Ban North A & B

Lower Miocene M075 through M500:

294 MMBO STOIIP

Discovered Oil

Oil Well

Prospect or development location M100 penetration

point

Interval wet

Interval tight or absent


Songkhla


Songkhla A: Oligocene

Songkhla drilling results (A-09 and A-12 wells) confirmed

migration east of the Songkhla Wedge

Water injection wells are required for the eastern fault blocks

due to lack of aquifer support

Awaiting EIA approval to drill 4-5 development wells and 2

water injection wells; drilling expected to begin in Q212

Further appraisal and exploration drilling will be required to

determine areal extent to the east

80 mmbbl of oil in place discovered in Oligocene and Eocene

by 2010 drilling proving up the eastern fault blocks

Songkhla


Bua Ban Main


Bua Ban Field

Additional Miocene targets similar to the Bua Ban Main A-

11 well

A-11 set up the Bua Ban South Miocene prospect

(67 mmbbl recoverable)

Plan on testing horizontal wells in the Lower Oligocene to

increase productivity and recovery

Plan to test the concept of horizontal wells and multi-stage

fracturing in the Eocene

Drill additional water injectors to enhance recovery

closing contour

results in ~ 3600

acres

Strongest amplitude

within closing contour

results in ~ 1600-2000

acres

Mid Miocene Sand

Penetration

Shows or tested

oil

Bua Ban Main


Financial Information


Improving Offshore Cash Operating Netbacks

$15.98

$29.42

$45.08

$62.76

$11.16

$20.96

$19.43

$30.87

$1.50

$3.68

$5.97

$7.97

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

2008 2009 2010 YTD2011

Cash Operating Netback Production Expense Royalties Cash Taxes


Increasing EBITDAX

Note: Includes consolidation of onshore gas

$5.9

$37.9

$112.7$126.7

$118.3

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

2008 2009 2010 2011

YTD 2011

Q4Est.


2012 Projected Tax

Assumes average production of 20,000 bbl/d offshore

Assumes $250MM of capex

Tax calculation includes Petroleum Income Tax and Special Remuneratory Benefit

Realized Offshore

Crude Price ($/bbl) Offshore EBITDAX

Offshore Tax

Rate

$80.00 464,900.0 23.0%

$85.00 497,740.0 26.3%

$90.00 530,580.0 29.2%

$95.00 563,420.0 31.9%

$100.00 596,260.0 34.3%

$105.00 629,100.0 36.5%

Note: Tax rate expressed as a percentage of EBITDAX


Appendix


Bua Ban Lower Miocene Trend

Bua Ban Lower Miocene Trend:

Bua Ban North A & B Lower Miocene : 294 MMBO OOIP

Bua Ban South Lower Miocene: 97 MMBO OOIP

Unrisked

Total Lower Miocene Trend: 391 MMBO OOIP

Bua Ban South Lower Miocene Prospects 97 MMBO OOIP Unrisked

Lower Miocene M100 Depth Structure

oil prospect or development location M100 penetration point interval wet interval tight or absent

Bua Ban North B 152.6 MMBO OOIP in Lower Miocene

Bua Ban North A 141.5 MMBO OOIP in Lower Miocene


Further Exploration Potential

The richest source facies in the Songkhla basin are found within the

lower Oligocene balanced-fill lake phase, an extensive carbonate‐rich

interval with analogies to the Qingshankou and Nenjiang source

strata in the Songliao Basin of China

Reservoirs associated with this lake type include lake marginal

carbonate strata, lake marginal beach deposits, and deltaic facies

that would tend to be restricted to the lake margin

Source rock is currently sitting in oil window. Start of oil window is

estimated to be between 6,250 - 10,000 feet

Thickness of source rock ranges from 77 feet to 300 feet in the

center of the basin.

Total petroleum system evaluation:

Contour (ft)

Acres Barrels of Oil

(possible)

Barrels Recoverable (assuming 10% recovery factor)

10,000.00 17,078.73 19,877,199,359.56 1,987,719,935.96

8,000.00 96,577.08 14,499,833,844.09 1,449,983,384.41

6,250.00 88,006.43 13,213,058,545.69 1,321,305,854.57 10,000 & 8,000

Total 3,437,703,320.37

Total 4,759,009,174.94


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

4,0005,0006,0007,0008,0009,00010,00011,000

Av

era

ge

Po

rosi

ty (

Eo

cen

e R

ese

rvo

ir)

True Vertical Depth

Observed Projected

Benjarong A-02

Benjarong A-01

Benjarong A-01ST1

Bua Ban #1

Bua Ban A-07

Bua Ban A-04 Songkhla SW 1

Songkhla # 1Songkhla A-03

Songkhla South 1

Songkhla A-07

Terrace

Bua Ban North B

Bua Ban North A

Benjarong South

Songkhla A-09

Porosity vs. Depth in Eocene Reservoir

Drilled to date

Depth of Burial is Key for Eocene Productivity


“Thai III” regime

Royalty payable on a sliding scale determined by monthly production volume (5 – 15%)

Current monthly production volume results in 7% effective royalty rate; monthly

production of 20,000 bopd results in 10% effective royalty rate

Petroleum Income Tax (“PIT”) payable on net income after deductions

Allowable deductions: Royalty, Operating Expenses, Depreciation Allowance, Special

Remuneratory Benefit, Loss Carryforward

Tangibles depreciated straight-line over 5 years

Pre-production intangibles depreciated straight-line over 10 years

Post-production intangibles expensed as incurred

Resulting net income taxed at 50% rate

Thailand Fiscal Terms – G5/43


Designed as a “Windfall Profits Tax” for high oil price environments

Assessed on a sliding scale basis determined by “Revenue per Meter Drilled”

Petroleum Revenue applied to sliding scale is adjusted for inflation and exchange rate

fluctuations (0 – 75%)

Coastal’s offshore concessions provide a 600,000 meter “allowance” to be added to actual

drilling footage

Tax assessed on “Petroleum Profit”

Allowable deductions: Royalty, Capital Expenditures, Operating Expenses, Loss

Carryforward

All Capex is expensed as incurred, with a special 35% “uplift” on facilities capex

Allows for full capital recovery plus uplift

SRB is deductible for PIT purposes

Special Remuneratory Benefit


Legal Disclaimer The information contained in this presentation (“Presentation”) has been prepared by Coastal Energy Company (“Company”) and is being delivered for informational purposes only to a limited

number of persons to assist them in deciding whether or not they have an interest in investing in the Company. The Presentation has not been independently verified and the information contained in

it is subject to updating, completion, revision, verification and further amendment. The Presentation does not purport to contain all information that a prospective investor may require. While the

information contained in it has been prepared in good faith, neither the Company nor its shareholders, directors, officers, agents, employees, or advisors give, has given or has authority to give, any

representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written

or oral information made or to be made available to any interested party or its advisers (all such information being referred to as “information”) and liability therefore is expressly disclaimed.

Accordingly, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct, express or implied,

contractual, torturous, statutory or otherwise, in respect of the accuracy or completeness of the information or for any of the opinions contained in, or for any errors, omissions or misstatements or for

any loss, howsoever arising from the use of this Presentation. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the recipient with access to any

additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation which may become apparent.

Information contained in this Presentation is confidential information and the property of the Company. It is made available strictly for the purposes referred to above.

The Presentation and any further confidential information made available to any recipient must be held in complete confidence and documents containing such information may not be reproduced,

used or disclosed without the prior written consent of the Company. This Presentation must not be copied, published, reproduced or distributed in whole or in part at any time without the prior written

consent of the Company and by accepting the delivery or making to it of this Presentation, the recipient agrees not to do so and to return any written copy of this Presentation to the Company at the

request of the Company.

This Presentation should not be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisors. Each party to whom this

Presentation is delivered or made must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. In particular,

any estimates or projections or opinions contained in this Presentation necessarily involve significant elements of subjective judgement, analysis and assumption and each recipient should satisfy

itself in relation to such matters. Neither the delivery or making of this Presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with

any transaction and the right is reserved to terminate any discussions or negotiations with any prospective investors. In no circumstances will the Company be responsible for any costs, losses or

expenses incurred in connection with any appraisal or investigation of the Company.

This Presentation does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to subscribe for or purchase any securities in the Company, nor shall it, or

the fact of its delivery, making or distribution, form the basis of, or be relied upon in connection with, or act as any inducement to enter into, an contract or commitment whatsoever with respect to

such securities. Any such solicitation or offer will be made by means of a prospectus to be issued by the Company in due course and any decision to subscribe for securities in the Company should

be made solely on the basis of the information contained in such prospectus.

The delivery, making or distribution of this Presentation in or to persons in certain jurisdictions may be restricted by law and persons who receive this Presentation should inform themselves about,

and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of the relevant jurisdiction. In particular, this Presentation has not been

approved by an authorised person pursuant to Section 21 of the Financial Services and Markets Act 2000 (“FSMA”) and accordingly, it is being communicated in the United Kingdom only to persons

to whom this Presentation may be communicated without contravening the financial promotion prohibition in Section 21 of the FSMA. Those persons are described in the Financial Services and

Markets Act 2000 (Financial Promotion) Order 2005 (“Order”) and include persons who fall within the category of person set out in Articles 19 and 49 of the Order. Any investment activity to which

this Presentation relates in the United Kingdom is available to, and will only be engaged with such persons and this Presentation should not be acted or relied upon in the United Kingdom by persons

of any other description. This Presentation has not been approved as a prospectus by the UK Financial Services Authority (“FSA”) under Section 87A of the FSMA and has not been filed with the

FSA pursuant to the United Kingdom Prospectus Rules. No offer of securities in the Company is being or will be made in the United Kingdom in circumstances which would require such a prospectus

to be prepared.

The securities proposed to be issued by the Company (the "Common Shares") have not and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and may

not be offered or sold in the United States except pursuant to an exemption from, or transactions not subject to, the registration requirements of the Securities Act. In addition, other than to a limited

number of persons reasonably believed to be qualified institutional buyers (as defined in Rule 144A under the Securities Act), neither this Presentation nor any copy of it may be taken or transmitted

into the United States or America or distributed directly or indirectly, in the United States of America or to any resident thereof except in compliance with the applicable U.S. securities laws. Any

failure to comply with these restrictions may constitute a violation of applicable U.S. securities laws.

By accepting this Presentation, the recipient represents and warrants that it is a person to whom this Presentation may be delivered or distributed without a violation of the laws of any relevant

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