Drilling Commences at Vieman-1 Onshore Texas

Pan Andean has commenced drilling the Vieman-1 well on its Danbury Dome leases, onshore Texas.

The target is the Anomalina Sands which 3D seismic surveys indicate could contain up to 28 billion cubic feet of gas at depths of between 13,000 and 13,500 feet. The well, which will take approximately 45 days to drill to target depth, is being drilled and operated by Turnkey E&P Corporation and will cost in excess of $5 million.

A consortium of North American companies has been formed to drill Danbury Dome. Pan Andean will have a 20% free carry after pay-out following commercial discovery. In addition, Pan Andean will participate for an additional 15%. This will give Pan Andean a net 31.25% interest if this well is a discovery.

David Horgan, Managing Director of Pan Andean Resources, commented, "Danbury Dome's gas potential is very large. This is well supported by seismic and other studies. Although wells drilled to date have been unsuccessful and may never have reached the target zone, which is deep by Texan standards, the Operator and principal partner is a Canadian company experienced in deep drilling, so we have every hope that we can get a definitive result with this well."