Drilling Report

Pan Andean Resources PLC
20 April 2005



                            Pan Andean Resources plc

                            Drilling Update - Texas


Pan Andean Resources, (AIM: PRE) the oil and gas explorer and producer in South
America and the Gulf of Mexico, announces an update on drilling on its Texas
interests.


The Zachry-Korenek No.2 well in Danbury Dome, in which Pan Andean holds a 7.3%
interest, has been completed to the target depth of 8,585 feet. Electric logs
confirm at least four commercially productive zones. Gross reserves are
estimated to be 3 billion cubic feet of gas and 300,000 barrels of oil. The well
has been tied into the production system and is producing 300,000 cubic feet of
gas per day from one zone.


In West Texas, the Estaban No. 1 well in which Pan Andean holds a 20% interest
has been drilled to the target depth of 6,400 feet without finding the
reservoir. This result is surprising and disappointing as the well was drilled
close to existing producers. It is expected that, following evaluation, one of
the existing abandoned shallow wells will be re-entered and drilled to target
depth. The reservoir was discovered in 1955 but available technology at the time
and low oil prices combined to make production uneconomic.


In the coming three months, further wells will be drilled in the Danbury Dome
licence area:


•   Danbury Dome East (Pan Andean interest - 9.75%)
•   Neff Area (Pan Andean interest - 9.75%)
•   Vrazel Area (Pan Andean interest - 20.9%)



Contacts:

Jim Finn            + 353 1 8332833


Bell Pottinger Corporate & Financial
Nick Lambert        [phone]



                           www.panandeanresources.com




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