Drilling Report

Pan Andean Resources PLC
19 December 2005

                                Drilling Update


Drilling has now been completed at the Blackstone Day No 1 well.  There were no
hydrocarbons present.  The rig will now move location to drill the Neff -
Geissen No 1 well, where spudding is expected within 2 days.  The target is
450,000 barrels of oil and 1.5 billion cubic feet of gas at a depth of 8,900
feet.  Drilling is expected to take 10 - 12 days.  Zachry Exploration is the
operator and Pan Andean holds a 9.375% working interest.


Contact:                      Jim Finn
                              Tel: [phone]

                              Ian Rice
                              Tel:  [phone]


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