Pan Orient Energy says that testing of the NSE-I1 well has confirmed the discovery of commercial hydrocarbons in a previously untested volcanic reservoir approximately 20 meters in thickness at 637 meters true vertical depth (TVD). The well is currently pumping 34 degree API oil at a stabilized rate of 75 bopd with approximately 200 barrels per day of water.

At year end 2008, there were no reserves of any category attributed to this shallow volcanic zone.

NSE-I1 was a deviated well designed to target a shallow volcanic zone in the downthrown fault closure west of the NSE North fault compartment and a deeper volcanic objective on the high side of the north-south bounding fault. The first volcanic target zone was encountered at a depth of 637 meters TVD and exhibited moderate drilling fluid losses with oil shows observed at surface. A second, deeper volcanic objective was encountered at 750 meters TVD with the upper 85 meters penetrated before drilling was terminated while still in the zone. Minor oil shows were observed at surface along with minor mud losses while drilling through the zone. Subsequent testing of the lowermost objective recovered water and 2 barrels of 32 degree API oil.

Looking ahead, these modest test results have confirmed oil in a shallow volcanic reservoir in the down thrown fault compartment adjacent to NSE north. Plans are currently underway to target this same zone in a structurally much higher position on the high (east) side of the main bounding fault, that in the success case, sets up three to four additional future locations.

Tags: Pan Orient Energy Corp.