Drilling Report

Pan Andean Resources PLC
19 September 2003

                                 NEWS RELEASE


-   Pan Andean agrees Farm In Agreement on High Island 52 in the Gulf of Mexico.

-   Pan Andean has completed a successful workover on block High Island 52.

-   Negotiations to use the platform on High Island 52 to ship gas from a new 
    discovery on an adjacent block are at the final stages.

The consortium holding High Island 52 located in the shallow waters of the Gulf
of Mexico 40 miles offshore Texas has concluded a farm in deal with Gryphon
Energy to explore and drill deep structures on the block.  Pan Andean holds a
45% interest in the block. The agreement applies to depths below 8660ft.  Pan
Andean and partners continue to evaluate options on shallower plays including
drilling identified structures.

A 3D seismic programme will commence immediately. Having analysed the seismic,
Gryphon can withdraw or drill. If they decide to drill, Pan Andean has the right
to a 22.5% working participation in each well. Alternatively, Pan Andean can
elect to take a royalty of 3.2%.

Gryphon has an existing agreement on part of the block on which they have
drilled two successful wells that currently produce in excess of 30 million
cubic feet of gas a day. Pan Andean holds a 1.7% royalty on this acreage that is
producing an income to the company of $100,000 a month.

Other Activities in the Gulf

Pan Andean and partners have completed a successful workover on block High
Island 52. Production had ceased but has now recommenced at a rate of 850,000
cubic feet of gas a day.

Pan Andean is finalizing an agreement with the discoverer of significant gas
deposits on High Island 53 whereby the gas will be gathered and processed
through the platform on High Island 52. Not only will this provide an income but
it will also extend the economic life of the block and improve the feasibility
of drilling other targets.

Commenting on the announcement, John Teeling the chairman said. 'These are
further steps in the development of our Gulf of Mexico assets. Gryphon is a
highly successful operator using state of the art technology. They believe that
Block 52 has excellent potential at deep levels. They have already had
remarkably success drilling on the block and we hope that success extends to the
new acreage.

The workovers and processing deal give us income and time to evaluate the many
options at shallower levels.

We in Pan Andean are looking at the many options for the shallower plays and are
in discussion with our partners on the best way forward'.

Contacts:

John Teeling   + 353 1 8332833
Jim Finn       + 353 86 258 1178





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