Drilling Report

Pan Andean Resources PLC
6 December 2000



Production tests at the X-1002 well on the El Dorado block in Central Bolivia
have flowed substantial quantities of gas.  Details of the flow rates and
choke sizes used will be released in the coming days.

The results from drill hole DRD X-1002 are similar to those found in the DRD
X-1001 well drilled some 2.8 kms away where gas flowed at 20m cubic feet a
day.  There is now a strong likelihood that the gas bearing zones stretch
between these two wells and so contain very significant reserves.

The El Dorado block is a joint venture between Pan American, (BP- 54%,
Bridas-36%) and Pan Andean, 10%.

The Chairman, John Teeling, commented, 'At last, after a decade of exploring,
it is a pleasure to be able to report a hit.  I am now confident that El
Dorado, which is located close to the Brazil gas pipeline, will become a
substantial producer.  In addition, the results of this well increase our
expectations of further discoveries on adjacent structures.  All in all, a
good result for Pan Andean'.