PanOcean Reaches Record Productions Levels

Pan-Ocean Energy announces record production levels of 12,500 bopd in Gabon and confirms that its facilities and export pipeline are progressing on schedule.

Over the past five months, PanOcean has increased its production from 9,600 bopd at year-end to average 11,500 bopd in May and average in excess of 12,500 bopd for the past two weeks. This level is a record for the Company, being a 30% increase in production over year-end. These increased rates are a result of a number of factors. First, four new development wells have been drilled and completed in the Tsiengui Field since the beginning of the year. Secondly, Total installed two replacement export pumps at Avocette allowing less down time and greater volumes through the terminal. Together, this more than doubled export rates from the Tsiengui/Obangue Fields to over 6,380 bopd net through the Company's six-inch export pipeline to Avocette. PanOcean's onshore production rates now exceed those from offshore.

Since the Company reporting on its drilling programme in Q1, the Tsiengui development well TST-8H has been drilled and completed in the Gamba sandstone and TST-9H is currently drilling the horizontal portion of the well for another Gamba completion. PanOcean has contracted a second rig to start the planned 2006 drilling and appraisal programme in the Obangue Field, commencing with the East Obangue appraisal well which is planned to start towards the end of June. Construction of the Central Production Facility at Tsiengui and the Central Export Pump Station, as well as the installation of the export pipeline, remain on schedule for completion by the end of July. The pipeline itself is approximately 90% complete, and start-up and commissioning of the entire Production System is expected to take about three weeks once the construction phase is completed.

PanOcean is an international energy company engaged in the exploration, production and marketing of oil and natural gas. PanOcean's asset portfolio is focused on conventional light oil production in Gabon, West Africa.