Pan Orient Energy Corp.: L53-DD1 Thailand oil discovery

This interpretation was based on conventional open hole wire line logs and hydrocarbon indications observed while drilling and confirmed with post drill pressure data and oil samples brought to surface from each of the zones. The oil is estimated to be approximately 28 degree API gravity. The sandstone reservoirs are interpreted to be high quality based on wireline log interpretation and high mobility observed while acquiring the pressure data and oil samples across each zone.

Current plans are to immediately appraise the L53-DD1 discovery with the L53-DD2 well that will commence drilling within the next five days targeting the deepest two of the three reservoirs, in a position substantially up dip of the discovery well and be drilled from the same well pad. The L53-DD1 discovery will not commence production until the completion of the L53-DD2 appraisal well due to limited well pad space. During the drilling of L53-DD2, Government of Thailand approval will be sought for a 90-day production test of both wells.

L53-DD1 is a deviated exploration well drilled to a measured depth of 1373 m (1323 m true vertical depth) located in the northern most portion of the Concession L53 ‘exploration reserve area’, approximately 28 km north of any existing producing wells within Concession L53 and approximately 5 km south of the PTT Exploration and Production Public Company Limited operated U-Thong oil field located in the adjacent concession.

The L53-DD1 exploration well will fulfil the US$600 000 minimum annual exploration expenditure that is required to retain the approximately 214 km² of ‘exploration reserve area’, which is all the remaining area of the original Concession 53, outside of existing four production licenses.

The go forward Concession L53 activities will include the drilling of the L53-DD2 appraisal well, applications for 90-day production tests for both L53-DD1 & L53-DD2, compilation and submission of a production license (‘PL’) area application that will encompass the discovery area and generation of the technical information to be provided to the Company’s reserve evaluators for inclusion of the L53-DD1 discovery into the year-end 2018 independent reserves evaluation. Past experience has typically seen PL government approval within three to five months of submission, at which time long term (not subject to 90-day production test) production can commence. In addition, work is currently underway utilising the L53-DD1 well results to better define the hydrocarbon potential in the immediate vicinity of the L53-DD1 oil discovery that would form the basis for any potential future exploration drilling in the area.

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