PanCanadian Announces Results From The Buzzard Prospect

The "Buzzard" exploration prospect, located approximately 62 miles northeast of Aberdeen, was drilled in 320 feet of water and encountered an oil column of 360 feet. During testing, the well flowed at 6,547 barrels per day of light oil and 0.97 million cubic feet per day of natural gas on a 36/64th inch choke. These rates were constrained by the limits of the testing equipment. The plan is to side track the well to provide a better understanding of the extent of the accumulation.

"This is a significant oil discovery in a region that has become a core area for PanCanadian," said David Tuer, PanCanadian's President and Chief Executive Officer. "We are very excited by these strong test results and are planning further appraisal drilling for later this year."

The discovery lies in PanCanadian operated Licence P986, which was awarded to PanCanadian and its partners in the U.K. 18th Licensing Round in 1998. PanCanadian holds a 45.01 percent interest in the licence. Other interest-holders in the licence are Intrepid Energy North Sea Ltd. With 30.00; BG Group with 19.99 percent; and Edinburgh Oil & Gas PLC with the remaining 5.00 percent.

BG Group drilled and tested the well on behalf of the partnership.

PanCanadian has interests in seven exploration blocks in the vicinity of "Buzzard," with equity interests ranging from 20 percent to 80 percent. The Company has interests in a total of 30 blocks in the Central North Sea area, where it expects to participate in five exploration wells in the next year, in addition to appraising "Buzzard."