Testing of the Vieman No.1 well at Danbury Dome Texas has not produced commercial levels of gas after early shows and are now "watered out", Pan Andean Resources reported Friday.

There were significant technical difficulties in drilling and testing the well. It proved impossible to reach the target depth of 13,500 feet. The partners have plugged the well while reviewing the data. An option to side track the well to reach the target depth is under consideration.

Pan Andean holds a 15 percent interest that rises to 30 percent on "payout". The well will cost Pan Andean $500,000.

"While the plugging of the Danbury Dome well is disappointing, Pan Andean remains cash generative and profitable and its Board considers that it remains very well positioned to take advantage of emerging opportunities," chairman John Teeling said in a statement.

Tags: Pan Andean Resources