Drilling Report

Pan Andean Resources PLC
30 June 2004


Pan Andean, the listed oil and gas producer, announces successful completion of
                             Drilling Onshore Texas


Pan Andean plc., explorers for and producers of oil and gas in South America and
in the U.S., is pleased to announce that the Vrazel No. 2 well in the Danbury
Dome area onshore Texas, is a commercial discovery expected to produce at a rate
of 1.9 million cubic feet of gas per day. Tie in to existing pipelines will be
completed within days. Pan Andean holds a 21% interest in this project.

John Teeling, Chairman said, 'Finally Vrazel is commercial. Drilling confirmed
the presence of a number of gas zones. Technical problems greatly delayed the
completion process, but now all is in place for commercial production. Current
gas prices make this a profitable venture for Pan Andean.  Expected production
and cash flow from Vrazel complements our other successful producer in the area,
The Zachry - Korenek No. 1 discovery. These two discoveries bode well for the
forthcoming drilling program on our 100% owned properties in the Danbury Dome
area. Pan Andean expects to make an announcement specific to this venture in the
coming weeks.

Our offshore drilling program is also active. A rig is in place on our 50% owned
Hi Island A-68 Block in the Gulf of Mexico. I expect to announce the start up of
drilling within a few days'.


Contacts:

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

Barrie Newton - Managing Director, Rowan Dartington -     Tel.[phone]

Emma Kane - Chief Executive, Redleaf Communications -     Tel.[phone]


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