Drilling Report

Pan Andean Resources PLC
12 February 2004


                                   Drilling Update


Pan Andean Resources plc announces the following drilling update from its Vrazel 
2 well onshore Texas, in which it has a 21.3 per cent interest.

Drilling will take an additional two weeks due to straightforward mechanical
problems encountered at depth by the drill contractor - a cement plug has been
set at 2,083 feet and the hole is being redrilled. This is a turnkey project so
there is no additional cost to Pan Andean.

Last week the well reached a depth of 9,271 feet. Mud logs were encouraging,
with 10 gas shows. Particularly strong shows were encountered in the main target
zone.

The Vrazel 2 well is being drilled in an area adjacent to the Danbury Dome area
which is 100% owned by Pan Andean and may contain up to 75 billion cubic feet of
gas.

Pan Andean's Managing Director David Horgan commented: 'Drilling is ongoing and
the gas shows make us optimistic. If successful, this well will enhance the
Danbury Dome area.'


Contacts:

John Teeling            + 353 87 258 1178     162 Clontarf Road, Clontarf, Dublin 3, Ireland.
Jim Finn                + 353 86 258 1178     Telephone: [phone]
David Horgan            + 353 87 292 3500     Fax: [phone]
                                              Email: [e-mail]

Redleaf Communications                        Web: www.panandeanresources.com
Nick Lambert            [phone]




                      This information is provided by RNS
            The company news service from the London Stock Exchange