Drilling Report

Pan Andean Resources PLC
05 February 2004

                   Pan Andean Resources plc- Drilling Update

The Vrazel 2 well onshore Texas, in which Pan Andean has a 21.3 per cent.
interest, is expected to reach target depth of 9,200 feet by Friday February 6.
Significant gas shows have been encountered in the mud logs.  It is anticipated
that electric logs will be run over the coming days, with results available next
week.

The chairman of Pan Andean John Teeling commented:  'Drilling is on target and
the presence of gas shows in the mud logs is very positive.  Tests over the
coming week will demonstrate whether or not we have a hit'.


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