Pan Ocean Makes Oil Discovery Onshore Gabon

Pan Ocean Energy has confirmed a new commercial light oil discovery on its Tsiengui prospect, onshore Gabon, West Africa. Petrophysical analysis of the TST-2 exploration well indicates net oil pay of approximately 14 meters in the Gamba sandstone. PanOcean is the operator and has 100% interest in the Tsiengui field prior to a government back-in of 7.5%.

Given the success of this well, the Company plans to immediately drill and complete a horizontal section to make TST-2 production ready. The TST-2 well is located in the southwest corner of the Maghena Permit, seven kilometers north of PanOcean's producing Obangue field and five kilometers east of the Company's recently announced Koula discovery. The Company has initiated engineering studies to optimize development strategies that include the Tsiengui discovery, the Koula field and the Obangue field which has been producing since 1998.

This is the second exploration well that PanOcean has drilled on the property. The first Tsiengui exploration well, TST-1, was drilled in late 2002, sidetracked and plugged back to 9 5/8" casing. That well encountered hydrocarbon bearing sands in the Gamba and Dentale formations, however technical difficulties prevented raising an oil sample to the surface. Subsequently, seismic data over the Tsiengui prospect was reprocessed and reinterpreted using Pre-Stack Depth Migration (PSDM) technology. This enabled PanOcean to reinterpret and remap the Tsiengui prospect and identify a drilling target on a potential high quality Gamba and Upper Dentale sandstone reservoir further north.

The TST-2 exploration well, north of TST-1, was successfully drilled to a total depth of 1,816 meters and logged. PanOcean's petrophysical analysis of well logs indicates net oil pay of approximately 14 meters (46 feet) in the Gamba sandstone having a porosity of approximately 24%. A gas column approximately 31 meters (102 feet) thick was also encountered in the same formation. The total Gamba sandstone reservoir thickness encountered was 46 meters (151 feet). The TST-2 well also encountered a thick Upper Dentale reservoir sequence. MDT pressure analysis supports the petrophysical analysis and the hydrocarbon contacts observed in the Gamba sandstone. Two clean oil fluid samples were obtained from the well. Based on the data collected thus far, the TST-2 well has come in close to prognosis, confirming the Company's expectation for the prospect.