Pan Orient Deepens POE-8 Well After Strong Hydrocarbon Shows

Pan Orient Energy says the POE-8 was drilled to a total depth of 1,312 meters, approximately 200 meters below the initially planned depth of 1,100 meters. The deepening of POE-8 was a decision made on the basis of strong indications of hydrocarbons (oil shows and high mud gas readings) while drilling at and below 1,100 meters.

Logging indicates hydrocarbon pay of approximately 2 meters within the F sand, 3 meters within the G sand and 4 meters in a deeper sand at 1,250 meters. Neither the G sand nor the deeper sand has been tested or produced on the concession to date. Logs also suggest hydrocarbons may be present in shallower zones at 615 meters, 635 meters, 660 meters and 785 meters. While uncertain on logs, indications of hydrocarbons while drilling also suggest hydrocarbon potential within a fractured volcanic sill at 1,155 meters. Testing will be required to confirm the hydrocarbon potential of these zones.

As a result of a poor cement job while casing the well, current operations involve a remedial program to clean the well bore. This will be completed over the next few days at which time it is expected POE-8 will be suspended for testing, using the smaller workover drilling rig currently working on site.

The fourth and next well to be drilled, POE-6, is located 500 meters north and 35 meters structurally up dip from a well drilled in the late 1980's that flowed oil to surface from a thin oil column over water. POE-6 will test a large area of possible reserves, defined by the Gaffney Cline and Associates reserve report, that are located within a large fault block to the west of the main Wichian Buri field.

The first attempt at production optimization within the Wichian Buri oil field has resulted in stabilised production of approximately 20 barrels per day from an older well, WB-N4, achieved at negligible cost. Prior to the change out of the jet pump to beam pump, WB-N4 was producing at approximately 5 barrels of oil per day. This same operation will be performed on WB-N6 where similar increases in production are anticipated.

Commenting on the current Thailand drilling operation, Pan Orient president and CEO Jeff Chisholm stated, "Based on the drilling results from POE-1 and POE-8, Pan Orient is currently focused on confirming the indicated multi zone oil potential between 600 and 1,300 meters depth in the greater Wichian Buri region, in addition to increasing production from the F and G sands. Exploration to date has inadequately assessed the hydrocarbon potential of the full sedimentary section other than the main F sand reservoir."