Pan Andean finds gas in GoM

Pan Andean Resources announces that the exploration well drilled on High Island 52 is a commercial discovery. The well was drilled to the target depth of 8,700 feet and encountered over 160 ft net pay of hydrocarbon column in three separate sections.

Production casing has been set and flowlines are being prepared for production, which is expected to commence at an initial level of 5 million cubic feet of gas per day. Pan Andean retains a 2.15% royalty on all revenues from this well.

Pan Andean’s farm-in partner Phoenix Exploration drilled the well. Under the terms of the agreement Phoenix have now earned into the block and will take over the platform and related abandonment liabilities, estimated at US $6 million (Pan Andean: 50%).

Pan Andean holds an existing 1.32% revenue royalty on 3 wells drilled by Gryphon Exploration in the northeast quarter of the block High Island 52.