Coastal Energy Announces Third Quarter 2012 Financial Results & Operations Update

News provided by
Coastal Energy Company
Nov. 12, 2012 22:30
HOUSTON--(Korea Newswire)--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 three and nine months ended September 30, 2012. The functional and reporting currency of the Company is the United States dollar.

Third Quarter 2012 Highlights

- Total Company production increased to 21,798 boe/d in the third quarter from 12,028 boe/d in the same period last year. The Company's offshore production was 19,626 bbl/d compared to 10,191 bbl/d in Q3 2011, with the increase due to the inclusion of production from both platforms at Bua Ban North. Offshore production was impacted by downtime at Bua Ban North and Songkhla during rig moves as well as the MOPU replacement at Bua Ban North. Onshore production of 2,172 boe/d increased from Q3 2011 levels of 1,837 boe/d as natural gas demand continued to recover following the flooding in Thailand in late 2011.

- EBITDAX for Q3 2012 was $114.6 million, 157% higher than the $44.7 million recorded in Q3 2011. Revenue and EBITDAX were driven higher by increased oil liftings and commodity prices. Crude oil inventory was 577,863 barrels at September 30, 2012, the revenue from which will be recognized in the fourth quarter. The Company saw closing inventory increase by 121,445 barrels (approximately 27%) during Q3 2012.

- The Company announced successful drilling results in the Songkhla A field. The A-10 well, drilled in the eastern most fault block of the field, encountered a record amount of net pay for the basin and exhibited very favorable reservoir characteristics in the Lower Oligocene interval. In late September 2012, the well was brought on production at approximately 4,000 bbl/d. Subsequently, the Company drilled the A-13 well in the previously untested northeast fault block and encountered 67 feet of net pay in the Lower Oligocene. Successful results from the A-13 provide the opportunity for an additional well (Songkhla A-19) higher up structure to add additional pay thickness.

- The Company completed the conversion of the Richmond mobile offshore production unit (MOPU). Subsequently, in October 2012, the Richmond was installed at the Bua Ban North B field, increasing production capabilities to 55,000 bbl/d. The previous MOPU in the Bua Ban North B field was purchased by the Company and reinstalled at Bua Ban South.

- The Company signed a contract with a subsidiary of Atwood Oceanics, Inc. for the Manta jackup drilling rig. The rig is scheduled to be delivered by late November and will conduct drilling operations for the Company in the Gulf of Thailand and offshore Malaysia.

- The Company upsized and amended its senior secured revolving credit facility with BNP Paribas and Commonwealth Bank of Australia. The facility has been increased from $100 million to $200 million and includes two additional banks, Standard Bank and Standard Chartered Bank.

- The Company is approximately 60% complete with the acquisition of new 3D seismic data being shot over the entire Songkhla basin. Current expectations are for delivery of the processed data in Q1 2013.

The following financial statements for the Company are abbreviated versions. The Company‘s complete financial statements for the three and nine months ended September 30, 2012 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.

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                Three months ended     Nine months ended
                September 30,         September 30,
                2012   2011         2012   2011
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▶ Revenues and Other Income
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Oil sales        170,894  81,670  554,612  218,854
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Royalties        (18,305)  (6,295)  (59,062)   (17,158)
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Oil sales, net of royalties 152,589  75,375  495,550  201,696
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Other income (Note 11) (5,122)  10,717  (5,515)  (12,394)
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             147,467  86,092  490,035  189,302
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▶ Expenses
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Production  32,718  27,148  110,092  66,490
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Depreciation and depletion (Note 6)  14,778  13,308  53,412  38,292
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Net profits interest (Note 12)  39  --  908  --
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General and administrative  9,125  7,802  24,509  19,522
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Exploration (Note 5)  7,191  345  7,477  6,829
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Debt financing fees  501  258  1,133  523
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Finance expenses  1,940  913  3,141  3,276
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Gains on disposal, property, plant and equipment (252) (873) (252) (873)
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           66,040  48,901  200,420  134,059
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Net income before income taxes and share of
net income from Apico LLC   81,427   37,191   289,615   55,243

Share of net income from Apico LLC 4,537    4,436   14,041   11,964

Net income before income taxes 85,964   41,627   303,656   67,207

▶ Income taxes (Note 14)
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Current     42,135    135   124,032   135
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Deferred    2,778   22,493   46,576   37,681
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       44,913    22,628   170,608   37,816
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▶ Net income and comprehensive income 41,051  18,999   133,048   29,391

▶ Net income and total comprehensive income attributable to:
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Shareholders of Coastal Energy   40,100   19,013   130,385   28,467
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Non-controlling interest         951   (14)   2,663   924
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                  41,051   18,999   133,048   29,391
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▶ et income per share:
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Basic (Note 13)    0.35   0.17   1.15   0.25
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Diluted (Note 13)   0.34   0.16   1.10   0.25
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The accompanying notes are an integral part of these condensed interim consolidated financial statements.

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               September 30        December 31
As at             2012             2011
                $               $
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Assets
▶ Current Assets
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Cash               29,267        22,995
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Restricted cash (Note 3)     6,413        28,447
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Accounts receivable (Note 4)  77,236        16,939
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Derivative asset (Note 10)     167           59
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Crude oil inventory        12,962        11,304
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Marine fuel inventory       4,416        2,857
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Prepaids and other current assets  950        1,094
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Total current assets        131,411       83,695
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▶ Non-Current Assets
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Exploration and evaluation assets (Note 5)     82,711      31,881
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Property, plant and equipment (Note 6)       511,736     355,052
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Investment in and advances to Apico LLC (Note 7)  61,046      47,698
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Deposits and other assets             6,274       405
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Total non-current assets             661,767      435,036
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Total Assets                   793,178      518,731
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Liabilities
▶ Current Liabilities
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Accounts payable and accrued liabilities (Note 8)  157,513  59,471
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Current portion of long-term debt (Note 10)      342   55,662
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Current portion of derivative liabilities (Note 10)    3,910  14,557
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Derivative liability - Warrants (Note 9)        3,486   2,853
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Total current liabilities               165,251  132,543
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▶ Non-Current Liabilities
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Long-term debt (Note 10)     94,714     22,156
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Non-current portion of derivative liabilities (Note 10) 506    1,274
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Deferred tax liabilities       116,343     69,767
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Decommissioning liabilities     46,915     42,124
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Total Non-Current Liabilities    258,478    135,321
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▶ Shareholders' Equity (Note 13)
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Common shares     212,500     211,554
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Contributed surplus    20,116      16,401
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Retained earnings    131,754      17,630
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Total Shareholders' Equity  364,370    245,585
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Non-controlling interest   5,079       5,282
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Total equity        369,449     250,867
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Total liabilities and equity  793,178     518,731
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Commitments and contingencies (Note 16)

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

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               Three months ended     Nine months ended
                September 30,        September 30,
                2012   2011        2012   2011
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▶ Operating activities
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Net income   41,051   18,999   133,048   29,391
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Adjustments:
Share of net income from Apico LLC (4,537) (4,436) (14,041) (11,964)
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Unrealized (gain) loss on derivative instruments 362 (15,019) (11,523) (4,506)
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Depletion and depreciation  14,778   13,308   53,412   38,292
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Finance expenses     1,940     913    3,141   3,276
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Amortisation of debt financing fees   147   248   779   513
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Share-based compensation 5,531   1,941   10,167   7,687
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Deferred income taxes 2,778   22,493   46,576   37,681
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Unrealized foreign exchange (gain) loss 17   (577)   (49)   (120)
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Exploration expense   7,191   345   7,477   6,829
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Gains on property, plant and equipment (252)   (873)   (252)   (873)
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Income taxes paid   (63,527)   (86)   (63,656)   (86)
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Interest received   2    2   5   4
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Interest paid    (318)    (405)    (1,570)   (2,699)
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Earnings Distributions from Apico LLC   9,943   7,588   9,943    9,756
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Change in non-cash working capital:
Accounts receivable   (49,066)   (4,802)   (60,297)   (6,595)
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Inventory   (1,325)   840   (3,217)   (3,472)
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Prepaids and other current assets       106   96   144   576
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Accounts payable and accrued liabilities  6,348   5,421  (1,885)   6,311
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Current income taxes payable         45,520   --   127,288    --
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Cash flow provided by operating activities 16,689  45,996  235,490  110,001
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▶ Financing Activities
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Issuance of common shares, net of issuance costs  727  666  2,753  6,108
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Repurchase of shares    (3,712)    --    (18,745)    --
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Borrowings under long-term debt 50,000   --    50,000    6,275
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Repayment of long-term debt    --   --    (30,000)    --
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Loan arrangement fees    (2,915)    (71)   (3,883)   (419)
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Distributions to non-controlling interest (1,074)    (450)    (2,866)   --
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Other    --     (131)    --    (506)
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Cash flow (used in) provided by financing activities 43,026  14  (2,741)  11,458
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▶ Investing Activities
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Decrease (increase) in restricted cash   (20)   6,347   22,034   1,844
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Expenditure on property, plant and equipment(140,551) (45,576) (231,478) (115,468)
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Acquisition of increased ownership interest in Apico LLC --    --   --    (1,446)
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Advances to Apico LLC   --   --   (9,250)   250
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Proceeds from disposal of property, plant and equipment 352  250  352  (125)
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Deposits and other assets - Payments   (6,000)   (122)   (6,000)   (606)
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Deposits and other assets - Refunds     --      --     131     --
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Cash flow used in investing activities     (146,219) (39,101) (224,211) (115,551)
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Effect of exchange rate changes on cash   (875)   (501)   (2,266)   (1,198)
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Increase (decrease) in cash   (87,379)   6,408   6,272   4,710
Cash - Beginning of period   116,646    2,186   22,995    3,884
Cash - End of period      29,267    8,594   29,267   8,594

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

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.

The Coastal Energy Company logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=10062

Website: http://www.CoastalEnergy.com

Contact

Coastal Energy Company
Email: Send Email
+1 (713) 877-6793
 
Strand Hanson Limited (Nominated Adviser)
+44 (0) 20 7409 3494
Rory Murphy / Scott McGregor
 
Macquarie Capital (Europe) Limited (Broker)
+44 (0) 20 3037 2000
Paul Connolly / Jeffrey Auld
 
FirstEnergy Capital LLP (Broker)
Hugh Sanderson / Travis Inlow
+44 (0) 20 7448 0200
 
Buchanan
Tim Thompson / Ben Romney
+44 (0) 20 7466 5000

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