CALGARY, ALBERTA--(Marketwire - Jan. 6, 2011) - Pan Orient Energy Corp. (TSX VENTURE:POE)

Concession L44 – Pan Orient Energy 60% Working Interest and Operator

WBEXT-2AST1 Appraisal Well (Wichian Buri Extension Field)

The WBEXT-2AST1 well was a sidetrack of the original WBEXT-2A well and was designed to test the unproven WBV3 volcanic at a more favorable subsurface location in close proximity to a large fault. The target WBV3 volcanic was encountered at a depth of 1,510 meters TVD and the drilling terminated after penetrating the top 10 meters of volcanic with minor drilling fluid losses of 15-20 barrels per hour and oil shows. Despite the apparent permeability inferred from the minor drilling fluid losses, the zone quickly pumped off on test indicating the zone was tight.

WBEXT-3 Appraisal Well (Wichian Buri Extension Field)

The WBEXT-3 well was drilled from a surface location approximately two kilometers northeast of the WBEXT-1 surface location and was targeting various volcanic and sandstone intervals equivalent to those found hydrocarbon bearing in wells drilled from the WBEXT-1 drilling pad in the fault compartment immediately adjacent to the west. The WBV1 volcanic was encountered at a depth of 800 meters TVD and total drilling fluid losses around this depth were observed. Testing resulted in no flow (tight) and subsequent post drill and test analysis suggests the permeable loss zone was a fault encountered just above the volcanic interval that is behind casing. A shallow sandstone interval at 460 meters TVD that exhibited good oil shows while drilling and was interpreted on wire logs as 8 meters of potential net pay will be tested when the service rig returns from Concession L53.

WBEXT-4 Appraisal Well (Wichian Buri Extension Field)

The WBEXT-4 well was drilled from a surface pad approximately 1 kilometer north of the WBEXT-1 surface pad and 300 meters south of the L33/L44 concession boundary. At approximately 414 meters true vertical depth ("TVD") the well encountered very good oil and gas shows within a sandstone approximately 14 meters thick and located within what is designated fault compartment II. The decision was made to stop drilling and test the zone which resulted in an initial rate of 40 bopd of 22 API degree oil and a water cut of approximately 12%, mainly load fluid. Subsequently, the fluid rate dropped and the well has been shut-in for observation to allow the fluid level to rise. It is suspected that the low API degree, waxy crude at this shallow depth (low temperature) is highly viscous under reservoir conditions resulting in the low fluid influx.

Fault compartment II was located due west of fault compartment I which had been proven oil bearing by the WBEXT-1B well. With fault compartment II, now shown to be oil bearing by the WBEXT-4 well, future wells will target this sand at a deeper depth where the oil is anticipated to be less viscous.

WBEXT-4AST1 Exploration Well (Wichian Buri Extension Field)

WBEXT-4ST1 was drilled to a depth of 1,217 meters TVD targeting the as yet unproven WBV3 volcanic. The well encountered the top of the target volcanic at a depth of 1,194 meters TVD and penetrated 18 meters of volcanic section with no oil shows or drilling fluid losses observed (likely low permeability) while drilling. Subsequent wire line logging confirmed the zone to be tight. The well is currently suspended while a decision is made on which of two potential shallower zones to test when the service rig, currently down in Concession L53, is available.

WBEXT-1D Appraisal Well (Wichian Buri Extension Field)

The WBEXT-1D well was drilled due east of the WBEXT-1 well pad with the primary objective of testing the multiple oil bearing sandstones encountered in the WBEXT-1B well at a subsurface location approximately 400 meters to the south. Drilling was terminated at a depth of 700 meters TVD after encountering good to excellent oil shows over 12 separate sandstone intervals between 421 and 700 meters. Drilling fluid losses of 250 barrels in one sandstone interval indicate high permeability. Wire line log data was only achieved over the interval of 583 to 596 meters due to unstable wellbore conditions in this highly deviated well. Testing of multiple zones is anticipated to commence when the service rig returns from work on Concession L53 in approximately three days.

Concession L33 – Pan Orient Energy 60% Working Interest and Operator

L33-2ST1 Appraisal Well (Wichian Buri Extension Field)

The L33-2ST1 appraisal well will be targeting the WBV1 volcanic at a subsurface location that is 682 meters north east and 40 meters up structure from the WBV1 volcanic at L33-2 The target region is in an area that is currently defined as prospective resources in Gaffney Cline and Associates' recent third party resource report that was part of the L33 production license application. The well is anticipated to commence drilling in the next 1-2 days. 

Concession L53 Pan Orient Energy 100% Working Interest and Operator

L53-A Development well

The L53-A development well had been producing at approximately 75 barrels of oil per day and approximately 300 barrels of water day from the K40-C sandstone when the decision was made to shut in the well in late December 2010 and perforate the previously untested K40-A sandstone. After perforating a 5.5 meter interval below 1,045 meters TVD, the well has been producing at a stabilized at a rate of 400 barrels of 29 degree API oil and a water cut of 0.1%. This is a better than anticipated result and highlights the potential of the upcoming two to four well L53 development program that will commence in approximately 12 days, after the drilling of the L53-C high impact exploration well.

L53-C Exploration Well

The L53-C exploration well has set surface casing at a depth of approximately 100 meters utilizing the EMAS service rig with Pan Orient's second rig currently moving off of the WBEXT-1D location in Concession L44 and mobilizing down to Concession L53. Drilling is anticipated to commence in the next 2 days with the well targeting multiple stacked sandstone reservoirs within an approximately 11 square kilometer structural closure. Upon completion of the L53-C well, Pan Orient's second rig will commence a 2-4 well appraisal program of the L53-A discovery which had tested oil from four separate sandstone intervals.


Current Thailand production is approximately 3,220 barrels of oil per day (net) with an additional approximately 1,800 barrels of oil per day (net) currently shut in at WBEXT-1A, WBEXT-1 (this well originally at 2,100 bopd (net) will be brought back on as a WBV1 volcanic producer at 1,200 bopd),WBEXT-1B (until the award of a production license by the Thailand Department of Mineral Fuels ("DMF") which is anticipated within the next 45 days), and L33-2 which was shut in to allow sidetracking to the L33-2ST1 location. Production at year end was below expected 2010 exit rates.

Production was negatively impacted by: 1) the initial water cut increase observed at WBEXT-1C on the morning of January 5, 2011 and resulting reduction of production from this well from 2,040 barrels of oil per day (net) to approximately 1,398 barrels oil per day (net); 2) delays in testing wells drilled in December 2010 due to the service rig drilling surface casing at L53-C and perforating L53-A on concession L53; and 3) the lack of success in exploration wells targeting the unproven WBV3 reservoir in December 2010.

Meaningful near term positive results are anticipated from the testing of multiple sandstone reservoirs encountered at WBEXT-1D and appraisal drilling targeting multiple stacked sands of the L53-A discovery. In addition, the high impact L53-C exploration well is anticipated to commence drilling the L53-C prospect in Concession L53 within the next two days and a second rig is currently moving on to location L33-2ST1 in Concession L33 targeting the WBV1 volcanic approximately 40 meters high to the L33-2 discovery in an area defined as prospective resources in the recent Gaffney Cline and Associates third party resource report that was completed as part of the L33 production license application.

Throughout 2010 Pan Orient had engaged one drilling rig through the course of the year. In late December 2010 the Company engaged a second rig that drilled the WBEXT-1D well on concession L44 and is currently mobilizing to Concession L53 to drill the L53-C high impact exploration well and a 2 to 4 well appraisal program on the L53-A discovery. Upon completion of L53 drilling, it is anticipated the rig will return to Concession L44 resulting in two rigs operating on concessions L33 and L44 during the first quarter of 2011 and perhaps the entire year subject to final budget approval by partners and the Pan Orient board of directors.

A 2011 Pan Orient budget and work program update is anticipated to be provided to shareholders in late January after all approvals from partners, host governments and the Pan Orient board of directors are in place. This will include the specific timing of exploration drilling in Indonesia that remains on track to commence in Q1 2011.

Pan Orient's remaining exploration and development location drilling inventory in Thailand is high quality and large. With the utilization of two drilling rigs in Thailand, production growth can be accelerated. Thailand activities in combination with the drilling of six high impact exploration wells in Indonesia will make 2011 the most active year with the greatest amount of potential upside in the Corporation's history.

Pan Orient is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand, Indonesia and in Western Canada.

This news release contains forward-looking information. Forward-looking information is generally identifiable by the terminology used, such as "expect", "believe", "estimate", "should", "anticipate" and "potential" or other similar wording. Forward-looking information in this news release includes, but is not limited to, references to: well drilling programs and drilling plans, estimates of reserves and potentially recoverable resources, and information on future production and project start-ups. By their very nature, the forward-looking statements contained in this news release require Pan Orient and its management to make assumptions that may not materialize or that may not be accurate. The forward-looking information contained in this news release is subject to known and unknown risks and uncertainties and other factors, which could cause actual results, expectations, achievements or performance to differ materially, including without limitation: imprecision of reserve estimates and estimates of recoverable quantities of oil, changes in project schedules, operating and reservoir performance, the effects of weather and climate change, the results of exploration and development drilling and related activities, demand for oil and gas, commercial negotiations, other technical and economic factors or revisions and other factors, many of which are beyond the control of Pan Orient. Although Pan Orient believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statements will prove to be correct.

Contact Information: Pan Orient Energy Corp.
Jeff Chisholm
President and CEO
(403) 294-1770
Pan Orient Energy Corp.
Bill Ostlund
Vice President Finance and CFO
(403) 294-1770