Pensana Plc Regulatory News (PRE)

9 Feb 2007 07:00

Pan Andean Resources PLC09 February 2007 Hunt Oil to tie in New Discovery to Pan Andean Platform and Take Over Operatorship Highlights • New discovery on Hunt Oil's High Island 31 to be routed through Pan Andean's High Island 30, in the Gulf of Mexico• Discovery of both oil and gas on High Island 31 is less than 800 metres from Pan Andean's High Island 30• Reassessment underway of additional High Island 30 prospectivity: Hunt Oil has a new oil and gas discovery on High Island 31, 800 metres from theborders of the Pan Andean High Island 30 Block (Pan Andean 63%). Both blocks arein shallow waters offshore Galveston, Texas. Pan Andean and Hunt Oil have agreed that oil and gas production from the newdiscovery will be tied into the Pan Andean platform. It has also been agreedthat Hunt Oil will takeover operatorship of the Pan Andean platform on HighIsland 30. This agreement will improve the cash flow from the block through a monthlyproduction handling fee of $40k and lower expected operating costs; it alsoextends the life of the platform by an expected 7 years. Most importantly itimproves prospectivity of the High Island 30 Block where little prospecting hasbeen done in the past three decades, opening a new exploration option for PanAndean. The long delay in bringing our platform back into operation is almost over.Tying in the new discoveries and refitting the platform will take upwards of sixweeks. In addition, ownership changes at High Island 24 have delayedrefurbishment of the High Island 24 platform, which will pump the oil from HighIsland 30 and High Island 31 to shore. It is now anticipated that all facilitieswill be on stream during Q2 2007. Oil production from High Island 30 is expectedto commence at over 300 barrels of oil per day. John Teeling, Chairman, commented "This is an excellent deal for Pan Andean. The 7 years life of the project willprovide positive cash flow and defer any potential abandonment liability. More importantly, this discovery is very close to our block. We are thereforereassessing High Island 30's exploration potential as little prospecting hasbeen done in the past three decades." Contacts: Jim Finn + 353 1 833 2833 Ian RiceCorporate Synergy +44 (0) 117 933 0020 Paddy BlewerNick Elwes +44 (0) 20 7457 2020College Hill This information is provided by RNS The company news service from the London Stock Exchange