Drilling Report

Pan Andean Resources PLC
08 July 2004

Pan Andean Resources announces that the well drilled on High Island A-68, in
which Pan Andean holds a 50% interest, reached target depth yesterday. Although
gas shows were reported and one potentially productive sand identified from
logs, overall it was felt that this was insufficient for commercial production.
The hole is therefore being plugged and abandoned. The rig is being moved to
block High Island 52, where Pan Andean holds a 45% interest. Operations on this
block will commence early next week.


Contacts:



Jim Finn, Pan Andean Resources -        Tel.[phone]

David Horgan, Pan Andean Resources -    Tel. [phone]

James White - Redleaf Communications -  Tel.[phone]

Ian Rice - Rowan Dartington -           Tel.[phone]


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