Coastal Eng Share Price (CEO)

Coastal Energy: Investec downgrades from buy to hold, while maintaining a target price of 1406p.

Broker comment Investec Analyst, Jerry Ho, has reiterated his 'buy' recommendation on Coastal Energy with a price target of 1406p. "Our sum of the parts-based target price is largely supported by a core and appraisal NAV [net asset value] of 1,277p per share consisting of Coastal's certified reserves and contingent resources. In addition, we give credit for its portfolio of high-impact, low exploration risk prospect inventory, which we carry at 129p per share arriving at a total RENAV [risked exploration net asset value] of 1,406p per share.

Following media reports in Canada, Coastal Energy has given credence to reports that it is talks with Indonesia's state-owned oil company Pertamina. In an announcement made today, Coastal Energy said that "it it continuously evaluates strategic alternatives, including but not limited to the potential sale of the company, to maximize shareholder value". The Financial Post had earlier reported that it had obtained a letter dated October 2012 in which "Pertamina states it is interested in pursuing Coastal Energy on its own and is prepared to pay a 15% premium to Coastal's share price or around $23 per share, which equates to approximately $2.6-bn." Any proposed deal will likely need the support of Texas oil tycoon Oscar Wyatt Jr, who holds a 27.5% stake in Coastal Energy. A decorated WWII pilot by the age of 21, he made his fortune trading Iraqi oil. He was jailed for a year in 2008 at the age of 83, for conspiring to make illegal payments for Iraqi oil under the United Nations Oil-for-Food programme.

Coastal Energy has contracted the Manta jackup drilling rig for its operations in the Gulf of Thailand and offshore Malaysia. The oil and gas firm will pay a $145,000 a day for use of the rig over a period of 12 months. The company anticipates delivery of the Manta by late November. "The addition of a second drilling rig is an important milestone for Coastal, as it will allow us to conduct our development and exploration programs simultaneously," explained Randy Bartley, President and Chief Executive of Coastal Energy. "Given the active drilling programme that we have outlined, we believe a two rig programme is an appropriate step toward unlocking the value of our highly prospective asset base," Bartley added. Shares in the company tumbled 27.5p to 1,065p on the morning of the contract announcement.

coastal Energy Company, an oil and gas firm, has cheered its investors with news of an 'outstanding' result at the Songkhla A-10 well in Thailand. The well was drilled to a depth of 7,400 feet and encountered 213 feet of net pay in the Lower Oligocene with 20% porosity. The gross oil column in the well was approximately 550 feet thick. Randy Bartley, President & Chief Executive Officer, said: "The A-10 well result is outstanding. This well encountered a record amount of net pay for the Songkhla basin with some of the best reservoir characteristics we've seen in the Lower Oligocene interval. "We estimate that this doubles the volumetric estimates for this particular fault block. Production will be tied in from this well shortly. The next well will test the fault block immediately to the north and, if successful, could warrant an additional production facility in this location to develop these two fault blocks

Randy Bartley, President & Chief Executive Officer, commented: "The A-10 well result is outstanding. This well encountered a record amount of net pay for the Songkhla basin with some of the best reservoir characteristics we've seen in the Lower Oligocene interval. We estimate that this doubles the volumetric estimates for this particular fault block. Production will be tied in from this well shortly. The next well will test the fault block immediately to the north and, if successful, could warrant an additional production facility in this location to develop these two fault blocks."