Pensana Regulatory News (PRE)

8 Mar 2005 07:00

Pan Andean Resources PLC08 March 2005 Pan Andean Resources PLC Texas Update Pan Andean Resources, (AIM: PRE) the oil and gas explorer and producer in SouthAmerica and the Gulf of Mexico, announces an update on exploration anddevelopment activities in the coming months. Danbury Dome Area, onshore Texas Pan Andean is active in this large area, some 60 kilometres south of Houstonwith one well coming on stream and four wells being spudded in the comingmonths. • The Blackstone Ivory well on the Pan Andean lease is being connected into the Pan Andean owned gas gathering system and will shortly produce at a minimum level of 1 million cubic feet of gas a day. Pan Andean has a 20% interest. • Pan Andean as 100% operator will workover the 8,800 foot deep Korenek No. 4 well. It is believed that commercial levels of gas exist in other strata. Assuming success, further wells will be drilled on the lease. • Zachry as operator will spud within 10 days an 8,450 foot well in to test the Frio Sands in the Korenek area. Pan Andean has a 7.3 % working interest. • In June Zachry will drill a 10,650 foot well to test the Frio Sand strata in Danbury Dome East. Pan Andean has a 9.75% interest. • In July, Zachry will test the two strata in Danbury Dome Neff area by drilling a 10,000 foot well. Again the targets are the Frio Sands, Pan Andean holds a 9.75% interest. • A well will be drilled by Houston Petroleum in the Vrazel area of Danbury Dome. The Pan Andean interest is 20.9%. This well will commence once the Zachry wells are complete using the same drilling rig. Gulf of Mexico, High Island 30 Pan Andean is installing gas lift and developing a new pipeline system for thisblock. Difficulties in acquiring sufficient gas has delayed the installation ofa pipeline tying in to the gas gathering system. Production will start whencompression and platform modifications are completed. Output should be circa 300barrels daily. Pan Andean has a 67% working interest. Estaban Project, West Texas The Cooper No.1 well will spud within two weeks. The target depth is 6,400 feet.Targeted production is 200 barrels of oil daily. A further 8 wells are plannedif the first one is successful. The overall potential could be 5 to 6 millionbarrels of oil. The prospect is low risk as oil has already been discovered. Newtechnology acid treatments will be used to extract oil from the un-drainedzones. Pan Andean holds a 25% interest. John Teeling, Chairman of Pan Andean Resources plc, said, "This is a busy timefor Pan Andean. The opportunity is onshore USA. High prices, quick drilling andfast connections offer a rare chance to generate rapid cash flow. In the comingmonths we will participate in at least 5 wells onshore USA. We also have twoproducers coming on stream. The Blackstone Ivory well on Danbury Dome is comingon stream at a minimum of 1 million cubic feet of gas daily. High Island 30 willshortly restart at 300 barrels of oil daily. At current oil and gas prices, bothprojects will be very profitable. Most of our wells are being drilled in the Danbury Dome area of Texas. Wealready produce in the Zachry, Vrazel and Korenek areas. There is significantpotential in each of these leases. While not reaching the very high levelsexpected, the Black Stone Ivory well in Danbury Dome will contribute up to$50,000 a month to Pan Andean. While focusing on immediate opportunities in the US, we are examining a proposalto increase our stake in the Monteagudo oil and gas field in Bolivia. At thesame time, we are examining early stage exploration projects in Africa and theMiddle East". Contacts: John Teeling + 353 1 8332833Jim Finn + 353 1 8332833David Horgan + 353 1 8332833 Bell Pottinger Corporate & FinancialNick Lambert +44 7811 358 764 www.panandeanresources.com This information is provided by RNS The company news service from the London Stock Exchange