Drilling updateNSE-A1 New Pool Discovery-1,245 BOPD
CALGARY, ALBERTA--(Marketwire- July 17, 2008) - Pan Orient Energy Corp. (TSX VENTURE:POE) -
NOT FOR DISSEMINATION TO U.S.NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
NSE-A1 New PoolDiscovery Well (60% WI & Operator)
The NSE-A1 well is currently free flowing from a newlydiscovered, approximately 17 meter thick upper volcanic/volcanic clasticreservoir at a restricted rate of approximately 1,245 bopd. Current water cutis approximately 0.5% and flowing tubing and casing head pressures are high at210 psig @26/64" choke and 340 psig @26/64" choke, respectively.
NSE-A1, located off the crest of the NSE Central faultcompartment, was drilled vertically and initially programmed to core thehighest section of the approximately 180 meter thick main volcanic reservoir.While drilling through a previously untested upper zone at approximately 720meters true vertical depth (TVD), and above the main volcanic objective, veryhigh mud gas readings and strong oil shows resulted in the decision to cut a 20meter core sample. Initial well site analysis of this upper volcanic coreindicated mixed fractured volcanics and volcanic clastics with good oil showsthroughout and good visible matrix porosity in the volcanic clastic section.The decision was made to TD the well and test this new upper volcanic, and notdrill through to the main volcanic interval.
NSE-A1 represents the first oil production within theCentral and Southern fault compartment from a zone other than the massive mainvolcanic. The full areal extent of this upper zone will be evaluated as part ofthe current round of NSE appraisal drilling; however, initial interpretationsuggests this zone may be equivalent to the oil producing zone in the L44G-D1well located in the Northern fault compartment approximately 3.5 kilometers tothe north, the upper volcanic zone at Bo Rang-1 that tested gas (at the crestof the structure) approximately 7 kilometers to the northeast and a very thick(approximately 100 meter thick - gross) section at L44H-D1 that exhibited verygood oil shows and very high mud gas readings while drilling through aninterbedded clastic and volcanic section that was never logged due to boreholeobstructions through that section.
NSE-A3 HorizontalAppraisal Well (60% WI & Operator)
The NSE-A3 deviated appraisal well has been drilled to atotal measured of 897 meters, penetrating the top of the main volcanic targetat a depth of 755 meters TVD at a location approximately 420 meters due northof the NSE-A1 surface location. Drilling fluid losses of approximately 3,833bbls were observed while drilling 60 meters of horizontal section within theupper 6 meters of the approximately 180 meter thick volcanic. A formation microimaging (FMI) log, indicates intense fracturing of the target volcanic zone.The newly discovered productive section at NSE-A1, detailed above, was alsoencountered, and drilled though, in NSE-A3 exhibiting high mud gas readings andgood oil shows.
Testing of the main volcanic reservoir zone is anticipatedto commence in 7 days with results to be announced shortly thereafter.
Aztec rig #14 is currently skidding over to the NSE-A4 wellcellar where another horizontal well will be drilled targeting the mainvolcanic reservoir at a subsurface location approximately 400 meters northeastof the NSE-A drill pad and near the crest of the NSE Central fault compartment.
L44-C VerticalAppraisal Well (60% WI & Operator)
The L44-C vertical appraisal well is currently drillingahead, utilizing the second Aztec drilling rig Pan orient has under long termcontract, at a depth of 370 meters towards multi-zone objectives within the Fand G sandstones and deeper "WB-1" volcanic at a location 1.15kilometers north of the POE-6 oil discovery and within the POE-6 fault compartment.The deeper volcanic objective is interpreted to be the same as that encounteredat WB-1 "Deep" but situated in a position approximately 250 metersstructurally higher.
L44-C is part of a multi-well appraisal program that isintended to define the potential of sandstone and volcanic reservoir targets inthe up dip portion of the POE-6 and Wichian Buri fault compartments for futurevertical and horizontal infill drilling.
L44-C drilling is anticipated to be completed within 14days.
L33-3 Exploration Well(60% WI & Operator)
The L33-3 exploration well, located on concession L33 on thebasis of one 2D seismic line within the untested Khon Khwang graben, located 33kilometers north of the nearest proven production at Wichian Buri was drilledto a depth of 1,084 meters TVD and abandoned after failing to producehydrocarbons at commercial rates.
There still remain two additional prospects unrelated toL33-3 within the southernmost portion of the L33 concession. Drilling pads havebeen completed and drilling is planned to take place later in 2008 at these twolocations.
NS9-H1 HorizontalAppraisal Well (60% WI & Operator)
NS9-H1, located within the Na Sanun oil field (due west anda distinctly separate field from NSE) has been abandoned after failing toencounter the main reservoir objective. A structurally higher volcanic zoneencountered to the north of the main volcanic zero edge, though exhibiting oilshows, failed to produce hydrocarbons at commercial rates.
Summary
Full scale development of the NSE field and adjacent areasof resource potential, with up to 19 wells, has now commenced. Production isanticipated to ramp up significantly over the coming months as a result of thisdrilling program. Early drilling results have been exceptionally encouragingwith an indicated new pool discovery at NSE-A1, which highlights the resourcepotential that Pan Orient believes exists within the greater NSE region.
Pan Orient is a Calgary, Albertabased oil and gas exploration and production company with operations currentlylocated onshore Thailand,Indonesia andin 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 othersimilar wording. Forward-looking information in this news release includes, butis not limited to, references to: well drilling programs and drilling plans,estimates of reserves and potentially recoverable resources, and information onfuture production and project start-ups. By their very nature, theforward-looking statements contained in this news release require Pan Orientand its management to make assumptions that may not materialize or that may notbe accurate. The forward-looking information contained in this news release issubject to known and unknown risks and uncertainties and other factors, whichcould cause actual results, expectations, achievements or performance to differmaterially, including without limitation: imprecision of reserve estimates andestimates 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 economicfactors or revisions and other factors, many of which are beyond the control ofPan Orient. Although Pan Orient believes that the expectations reflected in itsforward-looking statements are reasonable, it can give no assurances that theexpectations of any forward-looking statements will prove to be correct.
45,769,766 common shares issued