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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 Corp. Thailand Update

Jan 02, 2007 - 16:15 ET

CALGARY, ALBERTA--(CCNMatthews - Jan. 2, 2007) -

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

Pan Orient Energy Corp. (TSX Venture:POE):

Highlights

- POE-9 high impact exploration well has been logged and cased after encountering severe mud loss while drilling through two of the fractured volcanic objectives. Testing of one of four potential zones has commenced.

- POE-5 commingling of the "G", "H" and "F" sand production has resulted in stabilised rates of 102 bopd.

- WB-N6 has been perforated over the "G" interval and is flowing oil at un-stabilised rates of 77 to 115 bopd. Prior to perforation of the "G" sand, N6 was producing approximately 10 to 15 bopd.

- POE-1 development well has been perforated within the "F" sand interval and surface pumps are being installed.

POE-9 Exploration Well

POE-9 was drilled and cased to a total depth of 1,275 meters on December 31, 2006. Four potential volcanic or igneous reservoir intervals where encountered at depths of 794, 853, 1,007 and 1,142 meters with thicknesses ranging from 15 to 50 meters. Severe drilling mud losses were encountered at 802 and 867 meters within the first two potential reservoir zones indicating the presence of fractures. Total subsurface mud losses of approximately 900 to 1,000 barrels of drilling fluid occurred after penetrating the first target zone in POE-9 and oil was observed over the shale shakers at surface in addition to high mud gas readings over five separate intervals. Testing is underway with 17 meters of perforations between 853 and 870 meters over the zone that correlates directly to the productive interval at nearby Na Sanun-1 well that flowed 1,400 bopd. Extended testing is required to confirm the hydrocarbon potential of this type of complex volcanic or igneous reservoir and initial results are expected in approximately two weeks.

POE-5 Production Testing

POE-5 is flowing oil at stabilised production rates of 102 bopd from the commingled "F", "G" and "H" sands with the majority of production from the "F" and "H" sands.

WB-N6 Development Well

WB-N6 was drilled by a previous operator of the Wichian Buri field and prior to current operations was producing oil at a rate of approximately 10 to 15 bopd from the "F" sand interval. Pan Orient recently perforated the deeper "G" sand interval and the well is currently producing at commingled rates of 77 to 115 bopd. With these excellent results, similar operations will be undertaken at WB-N4 and WB-N5 and Si Thep upon service availability towards the end of January 2007.

POE-1 Development Well

POE-1 has been perforated over the "F" sand interval and surface pumping equipment is currently being installed.

POE-2 Production Testing

POE-2 has been perforated in the "F" sand and is currently being flowed commingled with the earlier perforated "G" sand zone. Results indicate no contribution from the "F" sand possibly due formation damage caused by the fresh water based mud used only in the drilling of this first well of the 2006 drilling program. A number of remediation options are being considered.

SUMMARY

Pan Orient management is pleased with the Thailand testing results achieved to date. Wichian Buri production is approximately 430 bopd, up 600% from a low of 60 bopd in Q2 2006 and a production record for the field. We anticipate further production gains in early Q1 2007 with additional contributions from the testing or re-completion of five additional wells. With significant pools of carried forward tax losses and exploration and development expenses obtained partly from the acquisition of Tiger Petroleum, we expect cash flow from Thailand operations to fund the majority of the 2007 work program that will include 15 to 20 exploration and appraisal wells. Full field development of the one well Si Thep field and a pilot water flood of the Wichian Buri field are also being considered at this time.

Pan Orient is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand and in Western Canada.

This news release contains forward-looking information. Forward-looking information is generally identifiable by the terminology used, such as "expect", "believe", "estimate", "should", "anticipate" and "potential" or other similar wording. Forward-looking information in this news release includes, but is not limited to, references to: well drilling programs and drilling plans, estimates of reserves and potentially recoverable resources, and information on future production and project start-ups. By their very nature, the forward-looking statements contained in this news release require Pan Orient and its management to make assumptions that may not materialize or that may not be accurate. The forward-looking information contained in this news release is subject to known and unknown risks and uncertainties and other factors, which could cause actual results, expectations, achievements or performance to differ materially, including without limitation: imprecision of reserve estimates and estimates of recoverable quantities of oil, changes in project schedules, operating and reservoir performance, the effects of weather and climate change, the results of exploration and development drilling and related activities, demand for oil and gas, commercial negotiations, other technical and economic factors or revisions and other factors, many of which are beyond the control of Pan Orient. Although Pan Orient believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statements will prove to be correct.

(Listed on the TSX Venture Exchange - Symbol "POE" - 40,056,842 common shares issued).


The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. 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.
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