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NEWS RELEASE TRANSMITTED BY Marketwire

FOR: PAN ORIENT ENERGY CORP.

TSX VENTURE SYMBOL: POE - | View Quote |  View Chart |  View Financials | 

Pan Orient Energy Releases Third Quarter Message to Shareholders

Dec 05, 2005 - 12:58 ET

CALGARY, ALBERTA--(CCNMatthews - Dec. 5, 2005) -

NOT FOR DISSEMINATION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Pan Orient Energy Corp. (TSX VENTURE:POE) ("Pan Orient") announced its third quarter 2005 operating results on November 30, 2005. The following are excerpts from the "Message to Shareholders" in Pan Orient's 2005 Third Quarter Report which can be viewed in its entirety on SEDAR at www.sedar.com.

Message to Shareholders

Throughout the third quarter of 2005 Pan Orient worked on steps necessary to successfully complete the acquisition of Tiger Petroleum Inc. ("Tiger"). On October 21 we announced that approximately 92% of the issued and outstanding Tiger shares, and 93% of the aggregate principal amount of the Tiger debentures, had been tendered to our offer. The remaining 8% is currently being acquired pursuant to the compulsory acquisition provisions contained in the Quebec Companies Act. The process of delisting the shares of Tiger has been initiated.

This acquisition lays the foundation for the first phase of growth of Pan Orient. After giving effect to the Tiger acquisition, using Tiger's December 31, 2004 reserve report, Pan Orient's net asset value ("NAV") is approximately $3.52 per share based on the future revenue attributable to 9.06 million barrels of proved plus probable reserves, discounted at 10% after tax, plus current working capital. Pan Orient paid $14.69 per net proven barrel acquired, and $1.04 per net proven and probable barrel acquired, inclusive of the terms of settlement with Tiger's 40% joint venture partner Carnarvon Petroleum Ltd.

Upon taking up the 92% of Tiger shares on October 20, Pan Orient immediately began constructive discussions with Carnarvon, which culminated on November 30, 2005, with an announcement that terms of settlement had been agreed to. Carnarvon had long standing unresolved claims on Tiger's Thailand assets. Pan Orient views the Carnarvon settlement as a constructive and critical step in the process of developing the Thailand assets. Pan Orient also believes that the Tiger acquisition and Carnarvon settlement reflect well on the depth of the management and directors of Pan Orient in identifying, evaluating, capturing and restructuring underexploited, undervalued assets with significant exploration and development upside. I would like to take this opportunity to thank all the management and directors of Pan Orient for their valuable insights and contributions to the successful completion of the Tiger acquisition. I would also like to welcome former Tiger shareholders who now hold Pan Orient shares and I would like to provide a brief summary of the way forward into 2006. 2006 promises to be a year of unprecedented activity within the two Thailand concessions and other areas.

Thailand: L44/43 (60% WI & Operator)

Pan Orient initiated a 3D seismic Environmental Impact Assessment ("EIA") approximately 2 months ago and anticipates formal government approval for the seismic program by the end of December. Discussions are at an advanced stage with one of the premier international seismic contractors and contract award is anticipated by mid December with acquisition to start in February 2006, taking approximately 2 months to completion. In the interim period, the long lead time EIA (3 months) has been initiated on 35 future drilling locations and is expected be completed towards the end of January. An initial 10-15 locations will be high graded on the basis of the newly acquired 3D with a back to back program anticipated to start in April 2006. In the interim period, Pan Orient is currently reprocessing a small, earlier acquired 3D seismic survey where the plan is to choose two locations within the existing production licenses to boost current gross production of 150 bbls per day significantly. At an upcoming partner technical meeting scheduled for December 8, 2005, the partnership will also be discussing the merit of drilling further exploration locations outside the region of the new 3D, prior to the completion of the 3D in April. A drilling rig is currently stacked within concession L44/43 with a drilling contract award subject to final contract negotiation and partner approval.

L33/43 (60% WI & Operator)

On November 30, 2005 Pan Orient completed the reprocessing of approximately 500 kilometers of 2D seismic over exploration concession L33/44, a task initiated over 3 months ago by Pan Orient. Preliminary mapping of the reprocessed data clearly indicates a new, mature source kitchen 20 kilometers north of the previously defined main play fairways. Seismic amplitude anomalies over a structural lead adjacent to this new source kitchen lend strong technical support to the prospect of future drilling in this area, which is outside of the main play fairway where 11.76 million barrels (gross) of possible reserves have already been defined by third party engineering. Upon final mapping in January 2006, a minimum of two locations will be selected and a three month EIA will be conducted. Initial drilling is targeted for June 2006.

L53/48 (New Application, 100% WI & Operator)

Discussions between Pan Orient and the Thailand Department of Mineral Fuels (DMF) took place in Bangkok the week of November 21, 2005 regarding the form of bank guarantee required by the DMF to ensure completion of the proposed 3 year firm work program. Should this application be successful, which management has no reason to believe otherwise, we anticipate 3D seismic acquisition in December 2006 followed by drilling in the first quarter of 2007. There is a possibility of drilling on the basis of reprocessed 2D seismic data as early as July 2006.

Canada: Sawn Lake (10% WI)

As announced on October 31, 2005 the SRGG et al 1-36-91-13 horizontal well was drilled to total depth and completed with a slotted liner. Pan Orient has been informed by the operator, Surge Global Canada, that pump installation and test production will commence sometime in December 2005, subject to service rig availability.

Outlook

2006 will be an exciting year of significant activity for Pan Orient. In order to achieve our targeted high level of activity, we anticipate announcements regarding the addition of key personnel, shortly.

Our Company is fully committed to maintaining a selective new ventures program that will target entry into one more new core country in 2006 and we will continue with efforts to expand and enhance our Thailand assets. Our initial growth stage has targeted shallow, onshore, inexpensive oil prospects with a minimum threshold of approximately 10 million barrels per concession net to the Company. 2006 activities are focused on providing a platform for us to expand into carefully selected exposures to significant projects that the management and directors of Pan Orient have had success with in the recent past.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. This news release may contain forward-looking information. Actual future results may differ materially from those contemplated.

27,362,810 common shares issued

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Pan Orient Energy Corp.
Jason Bednar
Vice President Finance and CFO
(403) 294-1770
Email: jason@panorient.ca