Pan Orient provided an update on its Thailand operations.

Concession L44 (POE 60% Working Interest and Operator) WBEXT-1A Exploration / Appraisal Well (Wichian Buri Extension Field) The WBEXT-1A well free flowed oil from a new lower volcanic reservoir at an average rate of 5,300 barrels of oil per day gross (3,180 BOPD net POE) of 36 degree API crude, with no water and a stable, final flowing bottom hole pressure of 1,425 psia in the last 48 hours of a 62 hour test. The high flowing bottom hole pressure at these high production rates is very encouraging. This is the highest oil flow rate of any well ever drilled onshore Thailand.

WBEXT-1A is currently shut-in due to limited tank storage capacity and will be brought back on production at approximately 5,000 BOPD gross (3,000 BOPD net POE) upon the approval for a 90 day production test by the Thailand Department of Mineral Fuels, anticipated this week. While the 90 day production test is underway, additional appraisal wells will be drilled and a production license application for the WBEXT Field will be submitted to the Thailand Department of Mineral Fuels in September. Historically, the approval of production license applications takes approximately 90 days from application submission to approval.

The WBEXT-1A exploration / appraisal well was drilled from the same well pad as the WBEXT-1 exploration well which discovered oil an upper volcanic reservoir. While drilling the WBEXT-1A well, there were 100 meters of oil shows and elevated mud gas readings while drilling through this upper volcanic reservoir discovered with the WBEXT-1 well (WBV1 volcanic reservoir), but drilling fluid losses were not encountered. As a result, high flow rates from the upper volcanic reservoir were not certain at this location and the decision was made to continue drilling to a deeper volcanic target (WBV2 volcanic reservoir) identified on 3D seismic data. This lower volcanic zone is approximately 200 meters deeper than the upper volcanic target and was first targeted unsuccessfully back in January 2007 by the WB-1DEEP exploration well located 5.2 kilometers south of the WBEXT-1A subsurface location. The WBV2 volcanic reservoir was intersected at a depth of 1,023 meters true vertical depth (TVD), 500 meters structurally higher than in the prior WB-1DEEP well. Oil shows and highly elevated mud gas readings were observed while drilling the shale section above the WBV2 volcanic reservoir target and drilling fluid losses totaling approximately 858 barrels were observed while drilling the upper six meters of the target zone, indicating excellent permeability.

The WBV1 and WBV2 volcanic reservoirs discovered by the WBEXT-1 and WBEXT-1A wells in Concession L44 are located in a highly faulted complex of possibly separate compartments that include the compartments proven oil bearing in Concession L33 with the L33-1 and L33-2 exploration wells. This structural complex is located within a large, regional structural high at the northern end of the Wichian Buri sub-basin, a location that is the natural focal point for the migration of hydrocarbons generated to the south. The complex is a maximum of 30 square kilometers in areal extent at the WBV1 volcanic reservoir level and slightly smaller at the WBV2 volcanic reservoir level. There are nine separate fault compartments at the WBV1 volcanic reservoir level, three of which have been successfully tested by the L33-1, L33-2 and WBEXT-1 exploration wells. There are four separate fault compartments at the WBV2 volcanic reservoir level, one of which has now been tested successfully by the WBEXT-1A well. A deeper, third potential volcanic reservoir (WBV3) has been identified on 3D seismic and will be the primary objective of a future well to be drilled prior to year end.

Tags: Pan Orient Energy Corp.