Coastal Energy Company Grants Stock Options

  Coastal Energy Company (the "

Company

") (TSX-V: CEN) (AIM: CEO) announces that it granted a total of 1,570,922 incentive stock options to directors, officers, employees and contractors of the Company, pursuant to the Company's Stock Option Plan on December 28, 2010. These options are exercisable at a price of Cdn $5.75 per share, vest over a period of three (3) years and expire five (5) years from the date of award. The following director and officers were granted the following options.

                          Number of Options  Total Options Outstanding After
Director / Officer            This Grant                This Grant
----------------------------------------------------------------------------
Randy L. Bartley                    549,567                        3,430,504
William C. Phelps                   187,047                        1,421,578
John Griffith                       146,890                          816,084
Stephen M. Holder                    28,364                          486,991
Jerry A. Moon, Jr.                   94,488                          409,279
                          --------------------------------------------------
   Subtotal directors and         1,006,356                        6,564,436
   officers

All other directors and               7,874                        2,052,632
officers
All others                          556,692                        2,250,338
                          --------------------------------------------------

   Total all options              1,570,922                       10,867,406
                          ==================================================

As at December 28, 2010 the Company had 109,645,091 shares of common stock issued and outstanding.

On behalf of Coastal Energy Company "Randy Bartley" President, Chief Executive Officer and Director

These securities have not been registered under United States Securities Act of 1933 (the "US Securities Act") or the securities laws of any state and may not be offered or sold in the United States or to US persons (as defined in Regulation S under the US Securities Act) unless an exemption from registration is available.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

This news release is not for dissemination in the United States or through United States newswire services

Enquiries: Coastal Energy Company [phone] Email: Email Contact Strand Hanson Limited (Nominated Adviser) [phone] Rory Murphy Paul Cocker Stifel Nicolas Weisel (Broker) [phone] Paul Colucci Macquarie Capital (Europe) Limited (Broker) [phone] Ben Colegrave Paul Connolly Buchanan Communications [phone] Tim Thompson Katharine Sutton Ben Romney