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US

United States - Gulf of Mexico

Pan Andean, through its wholly owned subsidiary Endeavour Oil and Gas Inc, is active in the Gulf of Mexico (offshore) and Texas (onshore). The US assets were acquired during 2000 and 2001.

High Island 52

High Island 52 (HI 52) was discovered in 1959 by the Standard Oil Company of Texas and is composed of 6 offshore continental shelf leases covering all of Block 52 and a portion of Block 53. Production commenced in October 1959. Most of the producing wells were drilled in the 1960’s and 1970’s by Standard Oil which later became Chevron. El Paso became operator in 1996 and Sterling Energy became operator in April 2004 as a 50% working partner. To date over 120 billion cubic feet of gas and 3.6 million barrels of oil have been produced.

In 2000, lease number 508, located in the northeast quarter of Block 52 was farmed out to Gryphon Exploration, which was subsequently purchased by Woodside Petroleum in 2005. Gryphon drilled three successful wells and is currently producing gas. Pan Andean retained a royalty interest of 1.32% in this lease.

In 2006, a farm in deal was agreed with Phoenix Exploration whereby they have an option to drill the deep plays on most of High Island 52 excluding lease 508 in return for a royalty and release of all future liabilities. A successful well was drilled in July 2007 which discovered gas hydrocarbons at shallow depth and this has now being put into production. Pan Andean now has a 2.15% royalty in this property. Additional wells, particularly deep horizons are now under consideration.

High Island 30L

Pan Andean has a 62.9% working interest in High Island 30 (HI 30) which is a single platform field in Texas State Waters. The field was discovered in 1977 by Kilroy Company of Texas. To date the field has produced 7 million barrels of oil and 5 billion cubic feet of gas.

HI 30 platform was shut in October 2005 due to damaged caused by Hurricanes in the US GoM. The platform remained shut due to a lack of equipment in the area and shortage of boats. In early 2007, a new discovery was made on High Island 31 (Hunt Oil operated), 800 metres from the borders of High Island 30. Pan Andean and Hunt Oil agreed on February 2007 to tie in the new discovery into HI 30 platform as well as make the necessary refurbishments to bring back production. It was also agreed that Hunt Oil will takeover operatorship of the platform from Pan Andean. Production to start in Q3 2007.

United States - Onshore Texas

Vrazel, Brazoria

Pan Andean holds a 20.9% working interest in this lease. The Vrazel No 2 well was successfully drilled in 2004 and remains in production today. The operator is Houston Petroleum.

Zachry-Korenek, Brazoria

Pan Andean holds a 7.3% working interest in this lease. There are two producing wells. The No1 well has been producing since April 2003. The No 2 well was drilled in March 2005, and also remains in production today. The operator is Zachry Exploration.

North Bob West Field, Zapata, Texas-Mexico border

Pan Andean has an overriding royalty interest (up to 1%) in this gas field with certain depth limitations applied in specific areas. The North Bob West Field is operated by El Paso and is located on the Texas-Mexico border beneath the Falcon Lake reservoir. There are currently seventeen wells producing.

Estaban project, Nolan County

Pan Andean has a 20% working interest in this property. The Estaban No 1 well was drilled in March 2005 but a drillstem test concluded the surrounding reservoirs are depleted. A new well location is being considered.