Pan Orient Energy's Asia Operations UpdateCALGARY, ALBERTA, Nov 27, 2008 (Marketwire via COMTEX) --PAN ORIENT ENERGY CORP. (POE) -
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THAILAND
NSE-C1 appraisal well (60-per-cent working interest and operator)
The NSE-C1 appraisal well, located in an area of 3P reserves asdefined in the year end 2007 NI 51-101 compliant reserves report, iscurrently pumping through the tubing and free flowing through thecasing at a restricted rate of 575 bopd with a water cut of 7%. Thewater cut continues to decline and rates will likely be increased whenthe well has cleaned up. Over 1,900 bbls of drilling mud and water waslost to the formation during the drilling of the main volcanicreservoir section.
The results of NSE-C1 came in generally as predicted by anintegrated geologic reservoir model that was recently completed for PanOrient by Rock Deformation Research (RDR), a group based in Leeds, UK.This NSE reservoir model is currently in the process of being formattedinto reservoir simulation software for a simulation study that will becompleted in early Q1 2009 and will form a basis for an estimation ofNSE reserves.
NSE-D3 appraisal well (60-per-cent working interest and operator)
The NSE-D3 appraisal well is currently pumping through the tubingand free flowing through the casing at a restricted rate of 1,130 bopdwith a water cut of 4%. As with NSE-C1, the water cut continues todecline and rates will likely be increased when the well has cleanedup.
The NSE-D3 appraisal well was drilled into the main volcanicreservoir at a depth of approximately 823 meters TVD and a sub surfacelocation approximately 315 meters north west of the NSE-D1 location. Ahighly fractured volcanic reservoir section was encountered thatresulted in over 6,000 barrels of drilling fluid and water losses. An 8meter highly fractured oil stained core was cut through the mainreservoir objective.
NSE-D2 appraisal well (60-per-cent working interest and operator)
The NSE-D2 appraisal well encountered the top of the main volcanicreservoir at 754 meters true vertical depth (TVD) approximately 330meters north of the NSE-D1 location. Approximately 34 meters of highlyfractured volcanic reservoir was drilled with mud losses ofapproximately 1,200 barrels. The well was put on test, flowing mainlygas with some oil, indicating close proximity to an interpreted gas/oilcontact. Rig 14 is currently drilling ahead on a side track that isplanned to encounter the main volcanic reservoir approximately 10 to 15meters structurally lower into the oil leg, below the gas/oil contact.Upon the completion of drilling, the well will be tested and resultsreported when complete.
NSE-E1 exploration well (60-per-cent working interest and operator)
The NSE-E1 exploration well, located approximately 260 meters duewest of the NSE-D1 drill pad is currently setting casing just above themain volcanic reservoir target at a depth of 881 meters. The objectiveof the well is to test a volcanic reservoir prospect on the downthrownside of the main fault that defines the western limit of the NSE field.There are currently no reserves attributed to this area.
Thailand Production
Thailand production is currently over 14,000 barrels gross (net toPan Orient greater than 8,400) of oil per day. Up to two additionalwells (not including the currently drilling NSE-D2) may be drilled intothe NSE field between now and year end depending on reservoirperformance balanced against the desire to complete at least two highimpact wells targeting: 1) an area of large resource potential east ofand adjacent the NSE producing area, and 2) a potential oil leginterpreted to be down dip to gas that was tested in the Bo Rang-1well. Bo Rang-1 was drilled by a previous operator in 1990 and flowedgas at a rate of 5.5 MMcf/d from one of four potential volcanic zones.
INDONESIA
Citarum PSC (69-per-cent working interest and operator)
Testing operations are currently underway over the high risk, highimpact reef target in the Pasundan-1 well, located onshore West Java,Indonesia. Pasundan-1 was drilled approximately one year ago by theformer operator of the Citarum PSC, targeting a very large seismicallydefined reef. The well encountered approximately 500 meters oflimestone section with 21 meters of cavernous reservoir in the upperportion. Severe drilling difficulties were experienced with the loss ofover 100,000 barrels of drilling fluid into the cavernous zone,requiring approximately a 30 day period to control the mud losses,which resulted in the well going severely over budget. Subsequently,the well was cased and two tests were conducted over the bottom portionof the reef, both unsuccessful. Financial difficulties necessitated thesuspension of the well, for testing of the cavernous zone at a futuredate. Total cost of testing is estimated at $1.75MM USD ($1.4MM USD netto POE) with approximately $18MM USD spent on drilling, prior to POEacquiring a 69% interest in this concession. Cement plugs are currentlybeing drilled out with perforation and flow testing of the main zoneanticipated within the next 10 days. Test results will be announcedupon completion, anticipated prior to year end.
The limestone reefs in the area of Pasundan-1 represent one ofnumerous potential play types on the concession with the largest areadominated by large western Canada foothills style folds. Existingseismic data covers approximately 20 percent of the concession area. Anapproximately 800 km 2D seismic survey is currently underway with firstshots anticipated in the next few weeks, the majority of the survey istargeting several large, surface expressed leads in anticipation ofdrilling in late 2009.
Batu Gajah PSC (90-per-cent working interest and operator)
Permitting activities are currently underway for a 500 km 2D seismicsurvey that is planned to commence in early 2009 in the onshore SumatraBatu Gajah PSC. The newly acquired seismic data, in combination withexisting data, will form the basis for a late 2009 drilling programthat will include up to three wells.
Pan Orient is a Calgary, Alberta based oil and gas exploration andproduction company with operations currently located onshore Thailand,Indonesia and in Western Canada.