Pensana Regulatory News (PRE)

12 Sep 2007 07:01

Pan Andean Resources PLC12 September 2007 Gas Discovery in Gulf of Mexico Highlights €160 ft net of natural gas column in High Island 52 well•Production to commence shortly at 5 million cubic feet per day•Pan Andean to receive 2.15% revenue royalty on this well•Phoenix take over platform and related abandonment liabilities Pan Andean Resources Plc (AIM:PRE) is very pleased to announce that theexploration well drilled on High Island 52 is a commercial discovery. The wellwas drilled to the target depth of 8,700 feet and encountered over 160 ft netpay of hydrocarbon column in three separate sections. Production casing has been set and flowlines are being prepared for productionwhich is expected to commence at an initial level of 5 million cubic feet of gasper day. Pan Andean retains a 2.15% royalty on all revenues from this well. The well was drilled by Pan Andean's farm-in partner Phoenix Exploration. Underthe terms of the agreement Phoenix have now earned into the block and will takeover the platform and related abandonment liabilities, estimated at US $6million (Pan Andean: 50%). Pan Andean holds an existing 1.32% revenue royalty on 3 wells drilled byGryphon Exploration in the northeast quarter of the block High Island 52. Todate, Pan Andean has received over US$8 million from the Gryphon royalty David Horgan, Managing Director of Pan Andean commented, "This is a excellent discovery for both Pan Andean and Phoenix Exploration. HighIsland 52 in the Gulf of Mexico has been very good to Pan Andean. The existingGryphon royalty produces over USD140,000 a month, royalties will flow fromPhoenix in weeks and we have exited or aboandoment liabilities. Moreimportantly this discovery means that additional wells will be drilled on theblock." This announcement has been approved by Ivan Sandrea, Director, Pan Andean. MrSandrea has more than 10 years of international E&P experience. Notes to editors Pan Andean was founded in 1988 as an oil & gas exploration and production("E&P") company with a focus in South America. The group has assets in Bolivia,and Peru and important working interests and minority holdings in the UnitedStates in the Gulf of Mexico (offshore) and Texas (onshore). Profitable, cashgenerative and debt free, Pan Andean's strategy is to identify and access uniqueopportunities in frontier and established basins with transforming commercialpotential. Contacts: Pan Andean Resources PlcJohn Teeling (Chairman) +353 1 8332833James Finn (Director) +353 1 8332833 College HillPaddy Blewer +44 207 457 2074 Blue Oar SecuritiesJohn Wakefield +44 1179 330020 This information is provided by RNS The company news service from the London Stock Exchange