Pensana Regulatory News (PRE)

29 Apr 2008 10:25

Pan Andean Resources PLC29 April 2008 Pan Andean Resources Plc Pan Andean is an oil and gas producer and explorer in South America and the Gulf of Mexico 29th April 2008 Major Oil Group Joint Ventures Pan Andean Block 141 in Peru Highlights: O Reliance Industries Ltd to joint venture with Pan Andean on PeruvianBlock 141. O Reliance Industries to cover exploration costs including wells throughcommercial discovery. O Pan Andean's new stake to be a minimum of 10% and maximum of 30% based onan agreed formula dependent on discovery size. Peruvian Block 141 Pan Andean (AIM:PRE), the AIM listed oil and gas producer, is pleased toannounce that it has signed an agreement with Reliance Industries, India'slargest private sector enterprise with businesses in the energy and materialsvalue chain, to farm into Block 141 in the high plateau of Peru. This move isin line with the stated Pan Andean strategy of reducing financial exposure,while accelerating drilling plans in potentially high value blocks. The agreement is subject to the regulatory approval of the Peruvian authorities.Once such approval is obtained, Reliance Industries will assume operatorship. Pan Andean will dilute its interest in Block 141 to 10%, in return for whichReliance Industries will incur all exploration costs through commercialdiscovery. The new ownership of Block 141 will be 10% Pan Andean, and 90% RelianceIndustries. Following a commercial discovery of an agreed size, Pan Andean will reimburseReliance for its share of the exploration costs. In addition, based on a formulaestablished in the Farm-Out Agreement, Pan Andean has the right, though not theobligation, to increase its stake to a maximum of 30%. In such a situation PanAndean will reimburse Reliance Industries for that proportion of its explorationexpense on Block 141 which Pan Andean will then own. Block 141 is situated in 1.2 million acres (0.5 million hectares) of Andeanmountain plateau. David Horgan, Managing Director of Pan Andean Resources, commented: 'We believe that Block 141 contains highly prospective and potentially valuablestructures. This is based on the belief that the kitchen that charges theworld-class Camisea gas and condensate field to the north may also chargestructures in our Block 141 to the south. We plan to conduct geological & geophysical work. If the seismic shows adequatestructures we anticipate drilling and a total work programme that may exceed $40million. Reliance's joint venture is a convincing statement of the exploration potentialof Block 141, as well as an expression of confidence in Peru as an excellentinvestment location. Reliance's decision to farm in should also be seen incontext with CEPSA's decision to farm into our Blocks 114 and 131. Peru is beingpositively reassessed by international majors as they search for valuable newreserves. Reliance Industries is highly regarded in the industry as a serious player witha strong technical orientation. They have grown to operate circa 500,000barrels daily of production, following several successes worldwide. Reliance'sachievements reflect the wider resurgence of Indian science and business. We look forward to a successful joint venture and an active and positiveexploration campaign.' This announcement has been approved by Ivan Sandrea, Director, Pan Andean. MrSandrea has more than 10 years of international E&P experience. Contacts: Pan AndeanDavid Horgan, Managing Director + 353 87 292 3500John Teeling, Chairman + 353 1 833 2833 College HillPaddy Blewer +44 (0)20 7457 2020Nick Elwes Blue Oar Securities PlcJohn Wakefield +44 (0)1179 330020Simon Moynagh www.panandeanresources.com This information is provided by RNS The company news service from the London Stock Exchange