Drilling Report

Pan Andean Resources PLC
26 April 2004

 Pan Andean explores and produces oil and gas in South America and the Gulf of
                                     Mexico



Drilling Update



Pan Andean Resources (AIM: PRE), the oil and gas explorer with interests in the
Gulf of Mexico and Bolivia announces drilling updates at High Island 68 and its
Vrazel well.



A mid May spud date has been set for a 4,000 foot well on High Island 68 in the
shallow waters offshore the Gulf of Mexico. Pan Andean holds a 50% interest in
this block. The target is a 3 - 10 billion cubic feet (bcf) reservoir. Drilling
will take 15 days. The estimated cost is $1.8 m.



Completion work continues on the 21% owned Vrazel well in the Danbury Dome area
onshore Texas. Efforts are being made to bring into production the payzones at
the bottom of the 9,000 foot well.  A flow rate of 1 million cubic feet a day
has been obtained, but it is uncertain as to whether it can be maintained. The
alternative of moving to payzones two and three further up the hole will be
decided on within days. These zones appear positive on the electric logs and are
expected to be commercial producers.



John Teeling, Chairman of Pan Andean Resources, said, 'High U.S. gas prices make
exploration attractive.  In the coming weeks and months we are drilling a number
of wells to exploit our U.S. properties. The High Island 68 well is low risk. We
know the geology and we have the infrastructure in place. The target is 3 bcf of
gas, but it could be greater.



The Vrazel well is a hit but we do not yet know how good. The payzone at 9,000
feet is attractive but it is proving very difficult to get a consistent gas
flow. The next two payzones are good and are not expected to pose any problems.
It takes three days to connect to local pipelines so we should be in regular
production within three weeks.





For further information::



John Teeling, Pan Andean Resources plc,  + 353 1 8332833
Jim Finn,  Pan Andean Resources plc,  + 353 1 8332833

Nick Lambert, Redleaf Communications,  [phone]



PAN ANDEAN is an oil and Gas Producer and Explorer traded on the AIM market in
London. Ticker symbol (PRE), www.panandeanresources.com




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