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Coastal Energy Announces Third Quarter 2012 Financial Results & Operations Update

Monday, November 12, 2012 8:30 AM


HOUSTON, Nov. 12, 2012 (GLOBE 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.

  Three months ended Nine months ended
  September 30, September 30,
   2012   2011   2012   2011 
         
Revenues and Other Income        
Oil sales  170,894  81,670  554,612  218,854
Royalties  (18,305)  (6,295)  (59,062)  (17,158)
Oil sales, net of royalties  152,589  75,375  495,550  201,696
Other income (Note 11)  (5,122)  10,717  (5,515)  (12,394)
   147,467  86,092  490,035  189,302
         
Expenses        
Production  32,718  27,148  110,092  66,490
Depreciation and depletion (Note 6)  14,778  13,308  53,412  38,292
Net profits interest (Note 12)  39  --   908  -- 
General and administrative  9,125  7,802  24,509  19,522
Exploration (Note 5)  7,191  345  7,477  6,829
Debt financing fees  501  258  1,133  523
Finance expenses  1,940  913  3,141  3,276
Gains on disposal, property, plant and equipment  (252)  (873)  (252)  (873)
   66,040  48,901  200,420  134,059
         
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 (Note 7)  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)        
Current  42,135  135  124,032  135
Deferred  2,778  22,493  46,576  37,681
   44,913  22,628  170,608  37,816
         
Net income and comprehensive income  41,051  18,999  133,048  29,391
         
Net income and total comprehensive income attributable to:        
Shareholders of Coastal Energy  40,100  19,013  130,385  28,467
Non-controlling interest  951  (14)  2,663  924
   41,051  18,999  133,048  29,391
         
Net income per share:        
Basic (Note 13)  0.35  0.17  1.15  0.25
Diluted (Note 13)  0.34  0.16  1.10  0.25
         
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
  September 30  December 31, 
As at 2012 2011
   $   $ 
     
Assets    
Current Assets    
Cash  29,267  22,995
Restricted cash (Note 3)  6,413  28,447
Accounts receivable (Note 4)  77,236  16,939
Derivative asset (Note 10)  167  59
Crude oil inventory  12,962  11,304
Marine fuel inventory  4,416  2,857
Prepaids and other current assets  950  1,094
Total current assets  131,411  83,695
     
Non-Current Assets    
Exploration and evaluation assets (Note 5)  82,711  31,881
Property, plant and equipment (Note 6)  511,736  355,052
Investment in and advances to Apico LLC (Note 7)  61,046  47,698
Deposits and other assets  6,274  405
Total non-current assets  661,767  435,036
Total Assets  793,178  518,731
     
Liabilities    
Current Liabilities    
Accounts payable and accrued liabilities (Note 8)  157,513  59,471
Current portion of long-term debt (Note 10)  342  55,662
Current portion of derivative liabilities (Note 10)  3,910  14,557
Derivative liability - Warrants (Note 9)  3,486  2,853
Total current liabilities  165,251  132,543
     
Non-Current Liabilities    
Long-term debt (Note 10)  94,714  22,156
Non-current portion of derivative liabilities (Note 10)  506  1,274
Deferred tax liabilities  116,343  69,767
Decommissioning liabilities  46,915  42,124
Total Non-Current Liabilities  258,478  135,321
     
Shareholders' Equity (Note 13)    
Common shares  212,500  211,554
Contributed surplus  20,116  16,401
Retained earnings  131,754  17,630
Total Shareholders' Equity  364,370  245,585
Non-controlling interest  5,079  5,282
Total equity  369,449  250,867
Total liabilities and equity  793,178  518,731
     
Commitments and contingencies (Note 16)    
     
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
  Three months ended Nine months ended
  September 30, September 30,
   2012   2011   2012   2011 
Operating activities        
Net income  41,051  18,999  133,048  29,391
Adjustments:        
Share of net income from Apico LLC  (4,537)  (4,436)  (14,041)  (11,964)
Unrealized (gain) loss on derivative instruments  362  (15,019)  (11,523)  (4,506)
Depletion and depreciation  14,778  13,308  53,412  38,292
Finance expenses  1,940  913  3,141  3,276
Amortisation of debt financing fees  147  248  779  513
Share-based compensation  5,531  1,941  10,167  7,687
Deferred income taxes  2,778  22,493  46,576  37,681
Unrealized foreign exchange (gain) loss  17  (577)  (49)  (120)
Exploration expense  7,191  345  7,477  6,829
Gains on property, plant and equipment  (252)  (873)  (252)  (873)
Income taxes paid  (63,527)  (86)  (63,656)  (86)
Interest received  2  2  5  4
Interest paid  (318)  (405)  (1,570)  (2,699)
Earnings Distributions from Apico LLC  9,943  7,588  9,943  9,756
         
Change in non-cash working capital:        
Accounts receivable  (49,066)  (4,802)  (60,297)  (6,595)
Inventory  (1,325)  840  (3,217)  (3,472)
Prepaids and other current assets  106  96  144  576
Accounts payable and accrued liabilities  6,348  5,421  (1,885)  6,311
Current income taxes payable  45,520  --  127,288  --
Cash flow provided by operating activities  16,689  45,996  235,490  110,001
         
Financing Activities        
Issuance of common shares, net of issuance costs  727  666  2,753  6,108
Repurchase of shares  (3,712)  --  (18,745)  --
Borrowings under long-term debt  50,000  --  50,000  6,275
Repayment of long-term debt  --  --  (30,000)  --
Loan arrangement fees  (2,915)  (71)  (3,883)  (419)
Distributions to non-controlling interest  (1,074)  (450)  (2,866)  --
Other  --  (131)  --  (506)
Cash flow (used in) provided by financing activities  43,026  14  (2,741)  11,458
         
Investing Activities        
Decrease (increase) in restricted cash  (20)  6,347  22,034  1,844
Expenditure on property, plant and equipment  (140,551)  (45,576)  (231,478)  (115,468)
Acquisition of increased ownership interest in Apico LLC  --  --  --  (1,446)
Advances to Apico LLC  --  --  (9,250)  250
Proceeds from disposal of property, plant and equipment  352  250  352  (125)
Deposits and other assets - Payments  (6,000)  (122)  (6,000)  (606)
Deposits and other assets - Refunds  --  --  131  --
Cash flow used in investing activities  (146,219)  (39,101)  (224,211)  (115,551)
         
Effect of exchange rate changes on cash  (875)  (501)  (2,266)  (1,198)
         
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

CONTACT: Enquiries:
         Coastal Energy Company
         Email: investor@CoastalEnergy.com
         +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

Coastal Energy Company Logo

(Source: PrimeZone )
(Source: Quotemedia)

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