Coastal's first quarter earnings per share increase 45 percent.

HOUSTON--(BUSINESS WIRE)--April 23, 1996--The Coastal Corporation said today that its results increased 45 percent in the first quarter, with net earnings of $82.5 million, or 74 cents per share, compared with $57.6 million, or 51 cents per share, during the same quarter a year earlier.

"These first quarter results represent a good start toward meeting our goal of growing Coastal's earnings more than 15 percent again this year," said Coastal Chief Executive Officer David A. Arledge. "Certainly, a return to more normal weather patterns across the United States compared with recent years helped Coastal's first quarter, but more than that, these results show that the changes we have been making in our businesses have placed Coastal on a solid foundation."

For this year, Arledge noted that energy market fundamentals should favor Coastal as the outlook for demand is good, while inventories of petroleum products and natural gas are at historically low levels.

"Coastal's Refining, Marketing and Chemicals segment, led by increased earnings from our refinery in Aruba, turned in significantly improved results compared with the same quarter in 1995, and Exploration and Production benefited from both increased production volumes and prices as it dramatically improved results compared with the same period last year," Arledge said.

"The Natural Gas group remains Coastal's largest profit contributor and is performing according to expectations as it adjusts to changing markets. Coal showed a decline in the first quarter but that should be made up in later quarters.

"Meanwhile, Coastal's power business gathered momentum by making significant progress on construction of previously announced projects in China and El Salvador and developing new opportunities elsewhere which we expect to announce later this year."

Coastal's overall operating profit for the first three months of 1996 was $198.6 million compared with $184.4 million a year earlier. On a segment basis, operating profit for the quarter in Refining, Marketing and Chemicals increased to $34.8 million, up from $24.2 million in the same period a year earlier. The segment benefited from higher throughput and improved margins at its refineries as well as increased production at its petrochemicals facility in Montreal, Quebec. Sales of refined products, including products purchased from others, averaged 941,000 barrels per day in 1996, compared with 839,000 barrels per day a year ago.

Natural Gas reported operating profit of $126.1 million in the first period, compared with $132.5 million in the same period last year. First- quarter throughput for Coastal's natural gas pipelines increased to 602.1 billion cubic feet (Bcf), up nearly 12 percent from 538.7 Bcf for the first quarter in 1995. Meanwhile, Coastal's unregulated natural gas marketing subsidiary increased sales to 311.4 Bcf, up from 289.7 Bcf for the same quarter a year earlier.

The Exploration and Production segment reported operating profit of $14.1 million compared with $2.9 million for the first quarter last year. The results reflect improved production volumes resulting from Coastal's successful drilling program in 1995 as well as better prices compared with those in the first period last year. Average production of natural gas was 271.5 million cubic feet per day during the first quarter, compared with 232.1 million cubic feet per day during the previous year's first quarter. Net production of crude oil and condensate averaged 12,705 barrels daily during the first quarter of 1996, compared with 11,391 barrels daily during the same period a year earlier.

The Coal segment's operating profit for the quarter was $18.4 million, compared with $24.3 million in the same period a year earlier. Besides somewhat lower prices, Coal's results reflected deferral of certain deliveries which will be made up later this year. In addition, improved results from brokerage activities were offset by higher costs associated with startup of certain mining facilities. Coal sales from subsidiary-owned mines were 4.1 million tons, compared with 4.3 million tons for the same quarter a year earlier.

The company's newest business segment, Power, announced its quarterly results separately for the first time, reporting a first-quarter operating profit of $2.4 million. Because Coastal's power strategy often involves equity ownership with local partners, some earnings from power projects are not included in operating profit. Therefore, Coastal views the segment on the basis of earnings before interest and taxes, that is, operating profit plus equity earnings. For the first quarter, Power reported earnings before interest and taxes of $7.5 million, compared with $4.1 million in the first period of last year. Power continued to build new plants and develop new opportunities during the first quarter, announcing an agreement to participate in a 72-megawatt power plant to be built in Nanjing, China, and reporting that subsidiaries made good progress on construction of a 76-megawatt capacity plant at Suzhou, China, and on a 53-megawatt expansion of its existing 91-megawatt power plant in Nejapa, El Salvador. All three projects are slated to begin production by year end.

Coastal also benefited during the period from its strengthened capital structure, which in the first period resulted in a reduction of interest and debt expense. Coastal said it would further benefit this year from the maturity or early retirement of higher-cost securities and has announced the company will redeem on June 15 Coastal's 11-3/4 percent Senior Debentures, of which $400 million in principal amount is presently outstanding.

Also during the first period, Coastal announced it would seek qualified buyers for its extensive coal operations, with a goal of completing the sale by the end of 1996. Proceeds are expected to be used to significantly strengthen Coastal's balance sheet through the repayment of higher-cost debt and other obligations, and to provide improved financial flexibility to pursue opportunities in the company's other lines of business.

The Coastal Corporation (NYSE:CGP) is a Houston-based energy holding company. Coastal has consolidated assets of more than $10 billion and subsidiary operations in natural gas marketing, transmission and storage, petroleum refining and marketing, oil and gas exploration and production, chemicals, independent power production, and coal. -0-

   THE COASTAL CORPORATION AND SUBSIDIARIES

                                              (millions except per share)
                                              Three months ended March 31
                                                    1996        1995
                                                  --------    --------
   Operating revenues                             $3,095.1    $2,618.3
   Operating costs and expenses
    Purchases                                     $2,360.5    $1,897.2
    Operating expenses                               435.7       442.9
    Depreciation, depletion &
     amortization                                    100.3        93.8
                                                  --------    --------
                                                  $2,896.5    $2,433.9
   Operating profit                               $  198.6    $  184.4
   Other income - net                             $   18.1    $   17.4
   Other expenses
    General and administrative                    $   14.5    $   14.2
    Interest and debt expense                         95.6       109.6
    Taxes on income                                   24.1        20.4
                                                  --------    --------
                                                  $  134.2    $  144.2
   Net earnings                                   $   82.5    $   57.6
   Dividends on preferred stock                   $    4.3    $    4.3
   Net earnings available to
    common stockholders                           $   78.2    $   53.3
   Earnings per share                             $    .74    $    .51
   Average common and common
    equivalent shares                                106.0       105.3
   Operating profit/(loss) by segment:
    Natural gas                                   $  126.1    $  132.5
    Refining, marketing and chemicals                 34.8        24.2
    Exploration and production                        14.1         2.9
    Coal                                              18.4        24.3
    Power                                              2.4         (.2)
    Other                                              2.8          .7
                                                  --------    --------
       TOTAL                                      $  198.6    $  184.4

CONTACT: The Coastal Corporation

Steve Eames, 713/877-6733