Pan Orient report that the L53-D2 exploration well is currently on 90 day production test flowing 27 API degree oil at a rate of 1,015 barrels per day through 17.8 meters of perforations between 1110.8 meters to 1154.7 meters measured depth (860 to 890 meters true vertical depth), within one of six conventional sandstone reservoir intervals interpreted as oil bearing based on oil shows while drilling and open hole log and pressure data analysis.

This rate is constrained by the mechanical limitations of the down hole electrical submersible pump ("ESP") as indicated by a fluid level at approximately 240 meters (pump depth 1,044 meters). The water cut is negligible at approximately one tenth of one percent. This test result marks the highest oil flow rate ever achieved by POE from a conventional sandstone reservoir in Thailand.

As announced on January 9, 2012, the L53-D2 exploration well encountered approximately 65 meters of interpreted net oil pay averaging 20% porosity within six sandstone reservoir intervals between the true vertical depths of 550 to 940 meters. The test results disclosed today represent production from only one of the six conventional sandstones reservoirs that were encountered in the well. Three shallower sandstone intervals (than the currently producing zone) are interpreted as being of comparable thickness and reservoir quality and will be tested in the follow up appraisal well. The drilling of the first appraisal well to this oil discovery will commence drilling immediately on the completion of drilling of the L53-G exploration well, anticipated within the next five days, and take approximately ten to twelve days to reach total depth. Upon completion of the second well, an environmental application will made for up to 12 additional well locations and a production license. It is anticipated this application process will take approximately 120 days to approval.

L53-G Exploration well

The L53-G exploration well, located approximately 2.7 kilometers southeast and on trend with the L53-A oil field, is currently drilling ahead at a depth of 1,266 meters measured depth (1,125 meters true vertical depth) after open hole logging and setting of casing down to a depth of 1,245 meters (1,104 meters true vertical depth). Within the previously logged section there is a nine meter zone of interest at approximately 876 meters true vertical depth that will be tested immediately on the completion of drilling.

Tags: Pan Orient Energy Corp.