Coastal Says Gulf of Mexico Production Levels Tripledin 1996.

HOUSTON--(BUSINESS WIRE)--Jan. 28, 1997--The Coastal Corporation announced today that its exploration and production subsidiaries more than tripled the company's daily production levels of oil and gas from the Gulf of Mexico during 1996, increasing from a net 47 million cubic feet of gas per day

This production increase resulted from exploration and development drilling of blocks in its previously existing inventory as well as exploitation drilling of additional producing blocks acquired over the last two years, the company said.

With development continuing in the Main Pass area, Coastal's net production from the Main Pass 223 and 225 fields today stands at 35 million cubic feet of gas and 660 barrels of condensate daily. Plans call for drilling four additional wells in the 223 Field, which is operated by Coastal. During 1996, Coastal also acquired interests in Main Pass Blocks 248 and 249.

Coastal also significantly expanded its operations during 1996 in the High Island and West Cameron areas of the Gulf, where net production increased from 23 million cubic feet to 66 million cubic feet of gas per day and from 13 barrels to 858 barrels of condensate per day. During the year, Coastal added various interests in the High Island and West Cameron areas through acquisitions from other companies in 11 blocks and through successful bids at the federal Minerals Management Service (MMS) Gulf of Mexico Sales for two other blocks.

Especially notable successes in the High Island/West Cameron area include the High Island 519A No. C-3 Well, which was drilled as a horizontal well with current daily production of 7 million cubic feet of gas per day. The well has a lateral extension penetration of 850 feet and is producing from a depth of 1,850 feet from the Trim "A-2" sand. Coastal owns a 100 percent working interest in the block.

Coastal announced today another gas discovery on the same High Island 519A block in the Sar "H" formation. The High Island 519A No. 5 Well logged approximately 52 feet of net pay sand in an untested fault block at a depth of 8,050 feet. Coastal's current production in the complex of High Island Blocks 496A, 497A, 518A and 519A is 29 million cubic feet of gas and 800 barrels of condensate per day.

Coastal has seen similar success on its complex at Vermilion Blocks 274 and 289, where company subsidiaries own a 100 percent working interest in the production. At the beginning of the year, production from the complex was only 100,000 cubic feet of gas per day from one well. Through two recompleted wells, one sidetrack well, and three new wells, Coastal has increased production to 24 million cubic feet of gas and 420 barrels of condensate per day from depths at approximately 10,000 feet.

In 1996, Coastal set two platforms in the Gulf of Mexico, and plans call for the construction of an additional eight structures in 1997. Coastal added a total of 27 offshore blocks to its inventory in 1996 and increased its interest in an additional three blocks. Of the 27 blocks added, 14 were acquired through the MMS Gulf of Mexico lease sales in April and September. Coastal's working interest in these blocks ranges from 25 percent to 100 percent. The remaining blocks were acquired through acquisitions and property trades.

The Coastal Corporation (NYSE: CGP) is a Houston-based energy holding company with consolidated assets of more than $10 billion and subsidiary operations in natural gas marketing, transmission, storage, gathering and processing; petroleum refining and marketing; oil and gas exploration and production; chemicals; power production; and coal.

CONTACT: Steve Eames, 713/877-6733,

or Brian Mitchell, 713/877-3993,

both of The Coastal Corporation.