Pan Andean to Begin Drilling Danbury Dome Prospect in Texas

Pan Andean has put together a package of leases covering 1,700 acres in the Danbury Dome area of Texas. Work done by Pan Andean has identified prospects with potential reserves of 75 billion cubic feet of gas, at depths between 13,000 and 14,500 feet. The Anomalina sands at 13,000 feet will be drilled within the next 60 days. The well, costing $4m will take 45 days to drill and an additional 30 days to test and complete.

The lease area also covers the separate Golden Eye Yegua/Vicksburg prospect which may contain up to 100 billion cubic feet of gas. This totally separate target is estimated to be at 17,000 to 18,000 feet.

A consortium has been formed to drill Danbury Dome in which Pan Andean will have a 20 per cent free carry through the first well. The consortium is made up as follows:

Pan Andean 20%
Palace Exploration Company/Zinke & Trumbo, Inc. (Operator) 55%
LaRose Texas Interests, Inc. 20%
Radiant Energy, L.C. 5%

Zinke & Trumbo, Inc. who will operate the consortium, is a large privately owned US oil and gas company, with specific expertise in drilling deep onshore wells.

Commenting, John Teeling, Chairman said, "Danbury Dome became a high priority target in 2003 when we acquired 100 percent ownership of the disputed Korenek lease. Our studies suggested that the target reservoir stretched between our Korenek and Vieman leases but we did not have rights on the intervening ground. With great skill and patience, our US team negotiated and acquired leases on the ground between Korenek and Vieman. We now believe that we have leases covering the entire structures.

Deep onshore drilling is not only expensive but technically challenging. We wanted a partner with a strong track record in this area. Zinke & Trumbo, Inc. has been built on successful onshore gas drilling. We are delighted to have them as a partner and operator.

High gas prices make Danbury Dome a most desirable target. Drilling is uncertain but with skill and luck, we could have a very lucrative discovery".