1. Introduction
Reference is made to the announcement dated 18 February 2021 in relation to the Joint Venture (“Earlier Announcement”). Unless otherwise defined herein, all expressions used in this announcement shall carry the same meanings as defined in the Earlier Announcement.

The Board of Directors of Coastal is pleased to announce that the joint venture company in Mexico, Coastoil Dynamic S.A. De C.V. (“CD”) has recently signed an addendum to the Contract (“the Addendum”) with Petroleos Mexicanos (“Pemex”), Mexican state-owned petroleum company.

2. Details
Under the Addendum, Pemex has agreed to increase the unit price for the gas sweetening services of the Contract to compensate CD for the expansion of plant capacity from 150 mmscfd to 180 mmscfd since November 2021. Consequently, the maximum contract value has increased to MXN1.64 billion (equivalent to RM371.8 million) from MXN1.30 billion (equivalent to RM258.7 million) representing an increase of MXN0.34 billion and RM113.1 million respectively.

3. Financial Effects
The Contract is expected to contribute positively to the earnings and net assets of the Company for the financial year ending 30 June 2023 and the financial periods thereafter.

4. Risk Associated with the Contract
The risk associated with the Contract is similar to any other business involved in the oil and gas industry, the gas sweetening operation is exposed to the risk of work interruptions caused by mechanical defects, human error, war, terrorism, political actions, strikes, bad weather and others, which are beyond control. These risks may ultimately result in personal injury, business interruptions and potential legal proceedings. Notwithstanding this, the Company via its joint venture company has put in place adequate risk management procedures and processes in mitigating these risks.

5. Directors and Substantial Shareholders Interest
None of the Directors and/or substantial shareholders of the Company and/or persons connected with them have any interest, direct or indirect, in the Contract.

6. Statement by Directors
The Board of Directors of the Company is of the opinion that the acceptance of the Contract is in the best interest of the Company.

This announcement is dated 4th January 2023.