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

Pan Orient Energy Corp.: L33-2 Exploration/Appraisal Well Tests at 2,370 BOPD

Aug 11, 2010 - 08:24 ET

CALGARY, ALBERTA--(Marketwire - Aug. 11, 2010) - Pan Orient Energy Corp. (TSX VENTURE:POE)

Concession L33 (POE 60% Working Interest and Operator)

L33-2 Exploration / Appraisal Well

The L33-2 well has tested on free flow, 38 degree API crude at an average rate of approximately 2,370 BOPD gross (1,422 BOPD net POE) with a water cut of less 0.05% during the last 15 hours of a 36 hour test.

The L33-2 well was drilled from a surface location approximately 1.8 kilometers south of the L33-1 discovery well and was targeting the same L33-1 volcanic zone within an interpreted potential 9.8 square kilometer maximum areal extent structural closure. The variation in crude oil gravity (35 degree API at L33-1 compared with 38 degree API at L33-2) suggests the two structural culminations at L33-1 and L33-2 may be separate accumulations. The extent of the oil accumulations in the structures of L33-1 and L33-2 will not be known until the oil water contacts have been defined by additional appraisal drilling.

Now that L33-2 well has been tested and proven oil bearing, a production license application is being prepared and a submission of the final document to the Thailand Department of Mineral Fuels (DMF) has been targeted for the first week of September 2010. Until a production license is approved by the DMF, historically 90 days from the date of the application submission, no production may be sold from wells in Concession L33 since a point of sale as established by a production license does not exist within the concession.

Concession L44 (POE 60% Working Interest and Operator)

WBEXT-1 (Wichian Buri Extension-1) Exploration Well

The WBEXT-1 well is currently back on production and free flowing 35 degree API oil at a rate of over 2,500 BOPD gross (1,500 BOPD net POE) with a water cut of less than 0.05 percent. Approval by the DMF of a 90 day production test was received on August 9, 2010. Three Additional appraisal wells are planned for this discovery while the 90 day production test is underway. A production license application is expected to be submitted to the DMF upon the completion of three additional appraisal wells.

WBEXT-1A (Wichian Buri Extension-1A) Appraisal Well

The WBEXT-1A well is the first of three appraisal wells planned to be drilled from the WBEXT-1 surface location pad, and is currently logging prior to running intermediate casing at a depth of 549 meters true vertical depth (TVD). The top of the main volcanic objective is expected to be penetrated at a subsurface location approximately 525 meters north of the WBEXT-1 penetration.

The two potential sandstone reservoirs encountered by the WBEXT-1 exploration well are also expected to be encountered in the WBEXT-1A appraisal well and a full open hole logging program is planned over these untested potential sandstone reservoirs. In the event that suitable reservoir characteristics are interpreted from wireline logs, one of the future wells drilled from the WBEXT-1 surface location pad will be designed to specifically target these zones.

Concession L53 (POE 100% Working Interest and Operator)

L53-A Exploration Well

Pan Orient has been informed by the DMF that the two square kilometer L53-A production license around the L53-A exploration well has been approved by the petroleum committee and official notification by letter is expected later this week. Upon receipt of the letter, approximately 13,500 barrels of crude oil currently stored in tanks will be immediately sold and the L53-A well will be placed back on production at a rate of approximately 175 BOPD.

A third party estimate of crude oil resources conducted by Gaffney Cline and Associates-Singapore at March 31, 2010 estimated the following contingent resources within the area of the 2 square kilometer production license of: 0.26 million barrels of 1C contingent resources, 1.41 million barrels of 2C contingent resources, and 3.39 million barrels of 3C contingent resources. The only contingent item of this third party assessment was the granting of the production license. The timing of further drilling in Concession L53 will be a function of the results of appraisal drilling in Concession L44. If drilling success in Concession L44 continues, drilling in Concession L53 may be delayed into early 2011, or a second drilling rig may be contracted for the latter part of 2010.

Oil Production

Oil production for the second quarter of 2010 averaged 3,428 BOPD. Financial and operating results for the second quarter of 2010 will be released approximately August 26th.

Oil production including the WBEXT-1 well is currently 4,700 BOPD net to Pan Orient, excluding an additional estimated 2,257 BOPD net to Pan Orient shut-in pending the award of new production licenses in Concession L33 and Concession L53. Shut-in production capacity from the L33-1 and L33-2 wells in Concession L33 is approximately 2,082 BOPD net to Pan Orient and shut-in production capacity for the L53-A exploration well is estimated at 175 BOPD net to Pan Orient.

Additional drilling in the near term will concentrate on the Wichian Buri Extension area and, based on drilling results, may include:

  • three additional appraisal wells drilled from the WBEXT-1 surface pad

  • up to four exploration / appraisal wells targeting further fault compartments west of the WBEXT-1 discovery and drilled from the WBEXT-2 surface pad which is located approximately 1.6 kilometers northwest of the WBEXT-1 surface location

  • up to four exploration / appraisal wells from the WBEXT-3 surface pad located 1.9 kilometers to the northeast of WBEXT-1, and

  • up to four exploration / appraisal wells from the WBEXT-4 surface pad located 1.1 kilometers due north of WBEXT-1

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

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
Pan Orient Energy Corp.
Bill Ostlund
Vice President Finance and CFO
(403) 294-1770