Coastal’s exploration and production operating profits rose by20% for 1997, bolstered by a 24% increase in gas production. Infact, the company’s gas segment continued its tradition asCoastal’s largest contributor to profits. Gas segment operatingprofit for 1997, including joint venture earnings, was $487.3million, up from $378.3 million in 1996. However, as with otherpipeline companies reporting year-end results, Coastal’s pipes sawa decrease in throughput to 2,190 Bcf in 1997 from 2,246 Bcf in1996.

On the EandP side, Coastal posted 1997 operating profit of$185.6 million, compared to $154.9 million in 1996. The rise camedespite the fourth quarter curtailment of about 80 MMcf/d of gasand 5,000 barrels/d of crude and condensate due to limitedgathering and transportation and a number of fourth quarterdevelopment activities requiring shut-ins on producing blocks inthe Gulf of Mexico.

Overall, Coastal reported 1997 earnings before extraordinaryitems of $392.1 million. In 1996, excluding a gain from the sale ofUtah coal subsidiaries and before extraordinary items, earningswere $323.2 million. Net earnings, i.e. after extraordinary items,were $301.5 million in 1997, down from $402.6 million in 1996.”Since we began our program in 1993 to aggressively improveprofitability and grow shareholder value, we have increasedearnings at a compounded annual rate of 35%,” said David A.Arledge, CEO. “Our strong integrated asset base coupled with asolid capital structure positions Coastal to target earnings growthof at least 15% in 1998.”

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