Drilling Report

Pan Andean Resources PLC
03 January 2006

                       US Drilling and Production Update


Pan Andean Resources plc announces that: drilling on the Neff - Geissen No 1
well onshore Texas has reached target.  The reservoir was encountered but
contained water.  The well has been plugged.



In a separate development the company has been informed by Sterling Exploration
& Production Company who will pump and pipe oil from our High Island 30 Platform
in the Gulf of Mexico that they have been unable to complete repairs and
refurbishment of their own facilities due to a lack of service boats.  It will
be 'several weeks' before a boat can be secured to lift the equipment into
place.


The No 3 well on High Island 52 in which Pan Andean has a 50% interest is
expected to be back in production this week.  The Gryphon wells on High Island
52 (Pan Andean has a 1.3% royalty) continues to produce in excess of 30 million
cubic feet of gas a day.  Onshore Texas gas production continues from the Zachry
and Vrazel Wells.



Contacts:

Jim Finn        + 353 1 8332833

Bell Pottinger Corporate & Financial
Nick Lambert    [phone]


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

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