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

Pan Orient Energy Corp.: Indonesia Operations Update

Apr 19, 2011 - 08:30 ET

CALGARY, ALBERTA--(Marketwire - April 19, 2011) -

Batu Gajah Production Sharing Contract – POE 97% Interest & Operator

Tuba Obi Utara-1 Exploration Well

Pan Orient (TSX VENTURE:POE) is pleased to announce that Tuba Obi Utara-1 ("NTO-1") exploration well, the first of three back to back high impact exploration wells located in the Batu Gajah Production Sharing Contract ("PSC") onshore Sumatra has encountered approximately 10.5 feet of gas pay within a good quality sand at a depth of 3,991 feet near the top of the primary target Lower Talang Akar formation as indicated by wire line logs, mud logs and wire line pressure data. A reservoir sample was obtained at a depth of 4,001 feet and the sample is currently being analyzed by Core Lab in Jakarta.

The highest known water from wire line logs is at a depth of approximately 4,234 feet, and based on three nearby fields where oil is present with gas, management believes there is the possibility of an oil leg down dip of the indicated gas accumulation encountered at NTO-1. On this basis, and in combination with actual drilling costs for NTO-1 coming in significantly lower than pre-drilling estimates, the decision was made to sidetrack NTO-1 ("NTO-1ST") to determine if a down dip oil leg is present at this location.

NTO-1ST is currently drilling ahead at 2,704 feet true vertical depth towards a subsurface Lower Talang Akar formation target approximately 780 meters northeast of the original Lower Talang Akar formation reservoir penetration and 113 feet structurally lower than encountered at NTO-1. Drilling is anticipated to be completed within the next ten days with testing likely only in the event that an oil leg is present. A substantial portion of interpreted reservoir volume exists up dip of the NTO-1 well and will likely be evaluated with an additional well (NTO-2) in late 2011, subject to various Government of Indonesia approvals.

Indonesia 2011 Work Program

As disclosed on February 9, 2011, the initially planned 2011 Indonesia work program with a combined estimated cost of $27 million consisted of six high impact exploration wells, with three at the Batu Gajah PSC (currently underway) and three at the Citarum PSC (Pan Orient 77% interest and operator) late in the third quarter or early in the fourth quarter of 2011.

On the basis of the Corporation's available capital after the $49.5 million financing which closed on March 8, 2011, the decision has been made to accelerate exploration and / or appraisal drilling at the Batu Gajah PSC with an additional three wells later in 2011, with exact timing subject to various Government of Indonesia approvals. The entire 2011 Indonesia capital program is now forecast to include nine wells plus the NTO-1ST sidetrack at an estimated cost of $37 million. Contingent items for the 2011 work program include initial costs related to 400 square kilometers of 3D seismic on the Batu Gajah PSC and 250 line kilometers of 2D seismic on South CPP PSC (Pan Orient 97% interest and operator).

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.

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