Pan Andean is pleased to announce the spudding of an exploration well on our
Vrazel lease which is part of the Danbury Dome area onshore Texas.



The well has as targets three zones which may contain up to 7 billion cubic feet
of gas. At a cost of $1 million, the well will take 12 days to reach the target
depth of 9,200 feet and, if successful, can be tied in to existing pipelines
within three weeks. Pan Andean holds a 21 per cent interest in the project with
Houston Petroleum Inc, the majority partner.



Meanwhile, formal discussions continue in relation to the 75 billion cubic feet
target on our Danbury Dome leases. Pan Andean currently holds 100 per cent of
these leases and is examining proposals which may lead to a 20 per cent carry on
a $ 3 million 14,000 foot deep well.



John Teeling, Chairman commented, "Actions to develop our operations in the
highly prospective Danbury Dome area of onshore Texas continue to bear fruit.
Following the successful discovery on our, Zachery lease, I am very hopeful that
the Vrazel well will further enhance, not only our cash flow, but also the
potential and prospectivity of our 100 per cent owned Danbury Dome leases.

SWW, Positive news, you've brought a smile to my face..........An exciting ride ahead then

Quick analysis for you:

20mcf production a day sold at $8/ 1000cf (less depletion and delivery costs - say $1) = $7 *20,000 = $140k a day
Say 360 days production a year $50.4m approximate revenue (subject to steady gas price - it was recently only $6/1000cf)

JV Share 20% = $10.080m using a conservative $1.925/ for next year gives 5.236m

PE for a producer of say 9 (until recently i would have said 8).
(75bcf is 10 years production)

Market value addition of 47m for one well.
Say market cap was 15m before the drilling, make it 60m.
Price of shares based on 99m in issue is 60p.

Analysis overlooks time value of money so figuring that in say 55p a share right now .. though gas prices will probably stay at an average of 8 or more over the producing life of the Dome so add some for that ..

Plus on top of that the ability to commercialise the reserves more quickly with a second well.
And the Bolivian assets - which ultimately may be exported ..

TIPS.COM
Pan Andean - Drilling Progress

I detect a few nerves jangling among Pan's People. We had expected news from the Danbury Dome well by Tuesday evening. I have made a few discreet enquiries and with target depth at 13,000 feet the well was at 12,800 feet this morning. Now drilling is not an exact science, the structure could begin at 12,900 feet or at 13,100 feet. But at the current rate of progress we will find out within 24-36 hours. Tomorrow is of course Thanksgiving but my enquiries suggest that this will not distract the drillers and on that basis I'd expect an announcement by Friday morning at the latest.

If Danbury Dome is a total flop then Pan Andean is worth 17-20p a share. If it comes in as some hope it is worth perhaps as much as 40p a share. On that basis, at 25.5p, the stance remains "hold."

Stolen from iii.co.uk bb. The state of play..................

Pan Andean - Drilling (non) News

26 November 2004 (16:10:53)

We had expected news from drilling at the potentially company making Danbury Dome well by Tuesday. Then Wednesday. So what is afoot? I gather that there have been two very minor snags. Hard rock wore out the drill bit. That will have taken about 36 hours to replace. And then there was a snapped wireline - a few more hours lost. So Pan Andean is probably around 2 days behind schedule. That means it should know the results either late today or over the weekend. An RNS is therefore inevitable one way or another by Monday morning. As I have noted before the shares are worth at least 19p if Danbury Dome flops. If it is a success the share price starts with a 4. At 25p the stance is a very firm "hold."

Not happy this mornin.

Bad news this am on PRE, price dropped 32%, surely overdone?!?!
Woodside drilling news bad too, meaning I've taken a hit on PMO,HNR,ROC as a consequence. Anyone care to cheer me up?

Wellm I'm more or less in the same boat, but now it will just have to a long wait for us......

Well well well reminds me of Aug 2000, more hot air than gas lol ....

reminds me of the move in 1995/6. 90p to 27p.

Net asset value per share 12.04p, so they won't go below that hopefully.

My guess is 16/17p for a time, but then struggling to go over 20p, even on a positive announcement, because of the blow to confidence.

Only have 3k free shares so can afford to sit tight, for once selling early was the right decision, it usually isn't.

I was stung in 2000 for 7.5k when it fell off the cliff down to 12 from around 45, did a 200% bounce from 12 though!

16 to sell and 17.9 to buy. MM's not falling over themselves to sell us any. A large buy order from someone who thinks like me that they are now oversold? Is this the time to buy?

Yes - just put my money where my mouth is! They cost 17.25 with charges an tax.

This is from a poster on TMF. It has been recommended 22 times.

Good luck PRE holders, good luck PET holders. Hang it, good luck all!

Starts here:-
Thank you for recommending this post to our Best of feature.

Well, for those that have been waiting, Danbury Dome has gas, not as much as anticipated, 2 principal targets non-commercial, no oil and lots of disappointment.

http://www.uk-wire.com/cgi-bin/articles/200411290700287353F.html

(full text thus)
Pan Andean Resources PLC
29 November 2004

Drilling on the Blackstone Ivory No. 1 well has penetrated the upper anomolina target sands, including the two principal targets. Initial indications are that the anomolina sands do not contain commercial quantities of gas. However, gas has been encountered in a smaller zone which could contain up to 1 billion cubic feet of gas. Drilling is continuing to 14,500 feet to penetrate the remaining smaller targets.
Contacts:
John Teeling + 353 1 833 2833
etc
----


So what did Horgan mean a few days ago when he was quoted on oilbarrel:

++ Pan Andean is drilling ahead at the moment on the Blackstone Ivory-1 well on its Danbury Dome leases onshore Texas. We are now at 13,000 ft and we've seen excellent gas shows which means we know there's some gas to pay back the cost of the well, said Horgan.....++

==

Either "Excellent" can be interpreted as 'Non-Commercial'

Or, IMHO, Horgan can best be described as having given a statement that was deliberately misleading, or, perhaps, to use an unparliamentary phrase, a liar.

This really is disgraceful. I'm glad I don't hold PRE, PET or any other Teeling vehicles

All the 17p unknown trades are buy's.

"we've seen excellent gas shows"

To be fair to the guy, to see any substantive gas show on the way down to what you believe to be a big pocket is surely good news, although excellent might be pushing it a bit.

Irish hyperbole perhaps, which could now be going on with Petroceltic and the 50% chance of a big strike. It's their revenge for us sending in the Black and Tans! We had it coming.

Pan Andean's (PRE) great hope Danbury Dome, the onshore Taxas gas play, has flopped. You would not have a chance to trade out this morning which makes me feel all the better about advising a top slice at 30.5p a couple of weeks ago. I sincerely hope that you did follow that call. The statement reads:

"Drilling on the Blackstone Ivory No. 1 well has penetrated the upper anomolina target sands, including the two principal targets. Initial indications are that the anomolina sands do not contain commercial quantities of gas. However, gas has been encountered in a smaller zone which could contain up to 1 billion cubic feet of gas. Drilling is continuing to 14,500 feet to penetrate the remaining smaller targets."

The best case scenario is thus that in a perhaps 10 days time we will hear news of a small commercial find worth a penny or two on Pan's NAV. The worst case scenario is that this is a write-off. That leaves Pan Andean with a risk-weighted NAV of c19p per share although given what I suspect will happen to US gas prices this winter that is a cautious number. Clearly the market was always going to over-react to either success or failure. It has indeed done just that, whacking the shares down to 16.75p. That leaves them trading at a discount to my cautious NAV. If the US winter is cold and/or if John Teeling pulls off one of his long promised corporate deals there is still a good bit of upside. The stance is therefore "hold

The joys of investing.........first PRE and now PCI.........BUGGER!!!
At least NBR is goin in the right direction. No need to mention PET at this point!!

Remember this share? It is now looking cheap.

You couldn't give it away!

I'll take any that you want to give away SWW!