Pensana Plc Regulatory News (PRE)

26 Oct 2006 11:17

Pan Andean Resources PLC26 October 2006 Pan Andean Resources plc Highlights of comments made by John Teeling, Chairman, Pan Andean Resources at the AGM held in London October 26th 2006 South America • Pan Andean has renewed its exploration interest in South America. Inaddition to Block 114 in Peru, Pan Andean, in the coming months, expects toincrease its presence in Peru and elsewhere. • The focus is on the prolific hydrocarbon belt stretching from SouthernBolivia through Peru, Ecuador, Colombia and Venezuela. The 18 years Pan Andeanexperience working this belt in Bolivia will be applied in Peru and Colombia. • Exploration activities have commenced on Block 114 in Peru. This800,000 hectare block contains 12 structures. • The first target is the Rio Caco structure which has estimate oil inplace of 300 million barrels of oil and probable recoverable reserves of 90million barrels. The required technical and environmental work together withseismic evaluation is underway with drilling of the first well expected in Q32007. A further 3 wells could follow in 2008. • Pan Andean continues to work with potential partners on thedevelopment of a small scale GTL plant suitable to process our gas discovery inEl Dorado, Bolivia. This technology is also applicable to stranded gas reservesin the Middle East. • Recent announcements by the Authorities in Bolivia indicate that theremay be opportunities for Pan Andean to continue to participate in what could bea rapid development of the Bolivian gas industry. Pan Andean is one of onlyfour non majors operating in the country. We continue to produce oil and gas atMonteagudo in Central Bolivia. North America • We are very active in developing our American assets. • A deep well is expected to be drilled within 6 months on High Island52 in the Gulf of Mexico. This well, targeting gas, is part of a new agreementbetween Pan Andean, Sterling Energy and an American Company to explore deepprospects on the block. Currently 20-35 million cubic feet of gas a day areproduced on the block. Pan Andean will hold a 2.1% royalty on the new drilling. • High Island 30 will be back on stream by year end. It is expected toproduce 300 barrels of oil daily. Work on the new pumping and pipeline system isexpected to be completed by early December. • Early stage discussions are underway with a potential farm in partnerfor the deep plays on our Danbury Dome acreage onshore Texas. • Our US gas operations, Zachary, Vrazel, North Bob West and EugeneIsland, all contribute cash each month. • The Gryphon royalty from High Island 52 contributes in excess of$100,000 each month to Pan Andean. • The company has cash reserves and generates a positive cash flow whichwill increase substantially when High Island 30 comes on stream. • Discussions on how Pan Andean might participate in the Iranian oilindustry are ongoing. • The meeting passed all resolutions. Contacts: Pan Andean Resources plcDavid Horgan + 353 1 8332833 www.panandeanresources.comCollege HillNick Elwes +44 (0) 20 7457 2020 Corporate Synergy PlcIan Rice +44 (0) 117 933 0020Craig Howie +44 (0) 207 448 4400 This information is provided by RNS The company news service from the London Stock Exchange