Drilling Report

Pan Andean Resources PLC
08 March 2005


                           Pan Andean Resources PLC

                                Texas Update

Pan Andean Resources, (AIM: PRE) the oil and gas explorer and producer in South
America and the Gulf of Mexico, announces an update on exploration and
development activities in the coming months.

Danbury Dome Area, onshore Texas

Pan Andean is active in this large area, some 60 kilometres south of Houston
with one well coming on stream and four wells being spudded in the coming
months.
     
•    The Blackstone Ivory well on the Pan Andean lease is being connected into 
     the Pan Andean owned gas gathering system and will shortly produce at a
     minimum level of 1 million cubic feet of gas a day. Pan Andean has a 20%
     interest.

•    Pan Andean as 100% operator will workover the 8,800 foot deep Korenek No. 4 
     well. It is believed that commercial levels of gas exist in other strata.
     Assuming success, further wells will be drilled on the lease.

•    Zachry as operator will spud within 10 days an 8,450 foot well in to test 
     the Frio Sands in the Korenek area. Pan Andean has a 7.3 % working 
     interest.

•    In June Zachry will drill a 10,650 foot well to test the Frio Sand strata 
     in Danbury Dome East. Pan Andean has a 9.75% interest.

•    In July, Zachry will test the two strata in Danbury Dome Neff area by
     drilling a 10,000 foot well.  Again the targets are the Frio Sands, Pan 
     Andean holds a 9.75% interest.

•    A well will be drilled by Houston Petroleum in the Vrazel area of Danbury 
     Dome. The Pan Andean interest is 20.9%. This well will commence once the
     Zachry wells are complete using the same drilling rig.

Gulf of Mexico, High Island 30

Pan Andean is installing gas lift and developing a new pipeline system for this
block.  Difficulties in acquiring sufficient gas has delayed the installation of
a pipeline tying in to the gas gathering system. Production will start when
compression and platform modifications are completed. Output should be circa 300
barrels daily. Pan Andean has a 67% working interest.

Estaban Project, West Texas

The Cooper No.1 well will spud within two weeks. The target depth is 6,400 feet.
Targeted production is 200 barrels of oil daily. A further 8 wells are planned
if the first one is successful. The overall potential could be 5 to 6 million
barrels of oil. The prospect is low risk as oil has already been discovered. New
technology acid treatments will be used to extract oil from the un-drained
zones. Pan Andean holds a 25% interest.

John Teeling, Chairman of Pan Andean Resources plc, said, 'This is a busy time
for Pan Andean. The opportunity is onshore USA. High prices, quick drilling and
fast connections offer a rare chance to generate rapid cash flow. In the coming
months we will participate in at least 5 wells onshore USA. We also have two
producers coming on stream. The Blackstone Ivory well on Danbury Dome is coming
on stream at a minimum of 1 million cubic feet of gas daily. High Island 30 will
shortly restart at 300 barrels of oil daily. At current oil and gas prices, both
projects will be very profitable.

Most of our wells are being drilled in the Danbury Dome area of Texas. We
already produce in the Zachry, Vrazel and Korenek areas. There is significant
potential in each of these leases. While not reaching the very high levels
expected, the Black Stone Ivory well in Danbury Dome will contribute up to
$50,000 a month to Pan Andean.

While focusing on immediate opportunities in the US, we are examining a proposal
to increase our stake in the Monteagudo oil and gas field in Bolivia. At the
same time, we are examining early stage exploration projects in Africa and the
Middle East'.


Contacts:

John Teeling        + 353 1 8332833
Jim Finn            + 353 1 8332833
David Horgan        + 353 1 8332833

Bell Pottinger Corporate & Financial
Nick Lambert        [phone]


                           www.panandeanresources.com


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