REG-Coastal Energy Co. Drilling Contract

Coastal Energy Company (the "Company" or "Coastal") (TSX-V: CEN, AIM: CEO), an independent exploration and production company with assets in Southeast Asia, announces that its wholly-owned subsidiary, NuCoastal (Thailand) Limited, has entered into a three month contract with Atwood Oceanics Pacific Limited for the charter of the Atwood Vicksburg jackup rig. The contract gives the Company the option to extend the duration of the contract by an additional three months. The Company plans to utilize the Vicksburg in developing its properties offshore Thailand. Current drilling plans include further development drilling on the Songkhla Lower Oligocene formation, development of the Songkhla B prospect and the initial development of the Bua Ban field. The program also includes the drilling of a water injector on the Songkhla Lower Oligocene and workovers of existing producing wells. The Company expects the Vicksburg to be on location in late August 2009. Randy Bartley, President and Chief Executive Officer of Coastal Energy commented: "This is the first step toward the commencement of our 2009 drilling program. Coastal is excited to return to the development of its offshore assets. We expect further development of our proven reserves at Songkhla to bolster current offshore production rates, which averaged 7,000 bopd for the second quarter with total production for the second quarter averaging approximately 9,000 boepd. The Songkhla B prospect also offers promising potential to add reserves and production in close proximity to our existing infrastructure." Additional information, including the Company's complete competent person's report may be found on the Company's website, or may be found in documents filed on SEDAR, 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. 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: Strand Partners Limited (Nominated Adviser) +44 (0) 20 7409 3494 Rory Murphy Thomas Weisel Partners (Broker) +44 (0) 20 7877 4300 Paul Colucci Tristone Capital (Broker) +44 (0) 20 7355 5800 Majid Shafiq Bell Pottinger Corporate & Financial Ann-marie Wilkinson / Nick Lambert / Rosanne Perry +44 (0) 20 7861 3232 This information is provided by RNS The company news service from the London Stock Exchange

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