Panaco Announces Test Results from East Breaks 161

Panaco, Inc. announced that the East Breaks Block 161 #2 well, drilled in 1,107 feet of water to a total vertical depth of 10,473 feet, has been tested by the operator, Unocal, in the GA-3 zone. Prior to temporarily shutting the well in, the well tested at a rate of 1,444 barrels of oil per day and 1,588 Mcf of natural gas on a 15/64" choke with 3,738 psi flowing tubing pressure. Total testing time was limited to oil storage on the Ocean Ambassador and MMS guidelines. Panaco owns a 25% working interest in this new well and anticipates production to begin during the fourth quarter of this year, after necessary facility modifications.

Robert G. Wonish, President and Chief Operating Officer, stated, "Panaco is enthusiastic about the test results due to the relatively minor amount of drawdown in reservoir pressure during the one day test of the well."