NSE-C1 appraisal well (60-per-cent working interest and operator)
The NSE-C1 appraisal well, located in an area of 3P reserves as defined in the year end 2007 NI 51-101 compliant reserves report, is currently pumping through the tubing and free flowing through the casing at a restricted rate of 575 bopd with a water cut of 7%. The water cut continues to decline and rates will likely be increased when the well has cleaned up. Over 1,900 bbls of drilling mud and water was lost to the formation during the drilling of the main volcanic reservoir section.
The results of NSE-C1 came in generally as predicted by an integrated geologic reservoir model that was recently completed for Pan Orient by Rock Deformation Research (RDR), a group based in Leeds, UK. This NSE reservoir model is currently in the process of being formatted into reservoir simulation software for a simulation study that will be completed in early Q1 2009 and will form a basis for an estimation of NSE reserves.
NSE-D3 appraisal well (60-per-cent working interest and operator)
The NSE-D3 appraisal well is currently pumping through the tubing and free flowing through the casing at a restricted rate of 1,130 bopd with a water cut of 4%. As with NSE-C1, the water cut continues to decline and rates will likely be increased when the well has cleaned up.
The NSE-D3 appraisal well was drilled into the main volcanic reservoir at a depth of approximately 823 meters TVD and a sub surface location approximately 315 meters north west of the NSE-D1 location. A highly fractured volcanic reservoir section was encountered that resulted in over 6,000 barrels of drilling fluid and water losses. An 8 meter highly fractured oil stained core was cut through the main reservoir objective.
NSE-D2 appraisal well (60-per-cent working interest and operator)
The NSE-D2 appraisal well encountered the top of the main volcanic reservoir at 754 meters true vertical depth (TVD) approximately 330 meters north of the NSE-D1 location. Approximately 34 meters of highly fractured volcanic reservoir was drilled with mud losses of approximately 1,200 barrels. The well was put on test, flowing mainly gas with some oil, indicating close proximity to an interpreted gas/oil contact. Rig 14 is currently drilling ahead on a side track that is planned to encounter the main volcanic reservoir approximately 10 to 15 meters structurally lower into the oil leg, below the gas/oil contact. Upon the completion of drilling, the well will be tested and results reported when complete.
NSE-E1 exploration well (60-per-cent working interest and operator)
The NSE-E1 exploration well, located approximately 260 meters due west of the NSE-D1 drill pad is currently setting casing just above the main volcanic reservoir target at a depth of 881 meters. The objective of the well is to test a volcanic reservoir prospect on the downthrown side of the main fault that defines the western limit of the NSE field. There are currently no reserves attributed to this area.
Thailand Production
Thailand production is currently over 14,000 barrels gross (net to Pan Orient greater than 8,400) of oil per day. Up to two additional wells (not including the currently drilling NSE-D2) may be drilled into the NSE field between now and year end depending on reservoir performance balanced against the desire to complete at least two high impact wells targeting: 1) an area of large resource potential east of and adjacent the NSE producing area, and 2) a potential oil leg interpreted to be down dip to gas that was tested in the Bo Rang-1 well. Bo Rang-1 was drilled by a previous operator in 1990 and flowed gas at a rate of 5.5 MMcf/d from one of four potential volcanic zones
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