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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 Releases Reserves and Operations Update

May 03, 2006 - 08:30 ET

CALGARY, ALBERTA--(CCNMatthews - May 3, 2006) -

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

Pan Orient Energy Corp. (TSX VENTURE:POE) is pleased to release its 2005 year-end Thailand reserves estimates along with an operations update on its operated concessions in Thailand and its non-operated heavy oil project at Sawn Lake Alberta, Canada. Additionally, Pan Orient's 2005 consolidated financial statements and associated management's discussion and analysis can be found online at www.sedar.com.

Highlights:

- Net Asset Value ("NAV") of $4.06 per share based on Thailand proven and probable reserves and cash (excluding any value attribution to the Sawn Lake heavy oil project or undeveloped lands).

- Net present value of $121.7 million (discounted 10% after tax) attributed to Thailand proven and probable reserves of 8.52 million barrels (net).

- Possible Thailand reserves attributed to the company of 32.73 million barrels of oil (net).

- $30 million bought deal financing closed on April 28, 2006.

- 245 square km onshore Thailand 3D seismic survey began on April 15, 2006 with completion anticipated in late May 2006.

- Infill drilling to start in Thailand in June 2006, up to 6 locations, followed by a program of 10 to 15 exploration and development wells commencing in October, 2006.

- Sawn Lake heavy oil project is expected to resume drilling in July 2006 with a two phase, 9 well program.

The net asset value ("NAV") of Pan Orient's proven and probable reserves is approximately $4.06 per share based on the future revenue attributable to 8.52 million barrels of 2P reserves, discounted at 10% after tax, in addition to working capital.

Pan Orient currently has approximately $31.5 million in uncommitted available cash providing a strong financial base for:

- Exploration and development activities on its two existing concessions in Thailand

- To fund the Company's proposed 3 year firm work program on a new Thai concession (contingent on the pending award)

- For further drilling and development of the Company's Sawn Lake interest, and

- For continued new venture activities focused on Thailand, India, Indonesia, and China.

2006 Programs

Thailand

Over the last several months Pan Orient has been working towards development of its two existing concessions onshore Thailand. Activities included:

- The January 23, 2006, appointment of Mr. Ian Halstead as Pan Orient's new COO. Mr. Halstead is based out of Bangkok and will oversee all Asian operations

- The award of a $4.4 million USD contract to CGG (France) for the acquisition of a 245 square km 3D seismic survey

- 3D seismic field operations began in March 2006 with first shot being fired on April 15, 2006

- The signing of an 18 month, multi-well rig agreement with RDS Asia, for Pan Orient's multi-well onshore Thailand drilling program

- Reprocessing and interpretation of a pre-existing 14 square km 3D seismic survey, upon which the first phase of drilling scheduled for June 2006 is based

- Location building and preparation for the first phase of drilling

- Purchase and receipt of well casing in Thailand for an initial 12 wells

- Active and continuing negotiations for a second rig to accelerate the second phase of drilling scheduled for October 2006

- Preparation of 25 environmental impact assessment applications for the 10-15 exploration and development wells scheduled for the second phase of drilling

Pan Orient has planned an aggressive Thailand drilling program for the remainder of 2006 that will extend into early 2007. The new 245 square km 3D survey will lay the foundation for an exploratory and development drilling program that will include 10-15 second phase program wells, outside the areas of existing production, targeting 29.8 million barrels (net) of possible reserves and 5.47 million barrels (net) of probable reserves. The second phase is planned to commence in October, 2006 subject to approved environmental impact assessments.

With the May arrival of our new COO, the RDS rig is expected to spud the initial well in a 4 to 6 well infill program in June 2006. The expected gross cost is approximately $330,000 USD per well ($198,000 USD net). Initial gross production is anticipated at 150 barrels per day per well. The intent of the proposed infill drilling program is to substantially increase existing production of 75 barrels per day (45 bbl/d net) and to move 2.67 million barrels (net) of probable reserves into proven and 2.93 million barrels (net) of possible reserves into probable.

Canada

As a follow up to the successful first Sawn Lake well (Pan Orient 10% working interest), the operator has informed Pan Orient that a further 9 wells will be drilled in two phases throughout the remainder of the year starting in July. For net asset value calculation purposes, no value has been attributed to Sawn Lake until the completion of third party engineering at a future date.

New Ventures

Pan Orient maintains active new ventures programs focused on Thailand, India, China and Indonesia. Pan Orient's management anticipates announcement of the government's award of the L53/48 concession onshore Thailand at any time. Throughout the second and third quarter of 2006 additional Thailand acreage will be evaluated with a view of further participating in the Thailand 19th bid round.

Pan Orient plans to evaluate acreage offered, with the intent of bidding, in the upcoming India NELP VI bid round. Opportunities in China and Indonesia are being examined on a prospect by prospect basis.

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.
Jeff Chisholm
President and CEO
(403) 294-1770

or

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