Drilling Report

Pan Andean Resources PLC
14 August 2000

PAN ANDEAN TESTS A POSSIBLE OIL-BEARING SECTION
OF THE CHIPIRIRI WELL IN CENTRAL BOLIVIA

Over recent days Pan Andean has been running electric logs on the 3 target zones
in its Chipiriri X-1 well in central Bolivia.  These electric logs did not
confirm the gas potential of the Yantata and Ichoa Formations, which had earlier
been indicated by mud logs during drilling.  Pan Andean now believes that the
well is not gas bearing and will not test for gas.

However, there have been interesting results from sand intervals totalling a 
net 18 metres of the secondary target, the Petaca Formation.  On technical
advice from Intergas and Western Atlas, Pan Andean is testing this section for
oil over the coming days.