Pan Orient Energy Corp.
TSX VENTURE : POE

Pan Orient Energy Corp.

November 25, 2010 08:00 ET

Pan Orient Energy Corp.: 2010 Third Quarter Financial & Operating Results and Operations Update

CALGARY, ALBERTA--(Marketwire - Nov. 25, 2010) -

Pan Orient Energy Corp. ("Pan Orient") (TSX VENTURE:POE) is pleased to provide highlights of its 2010 third quarter consolidated financial and operating results and an update on operations. Please note that all amounts are in Canadian dollars unless otherwise stated and BOPD refers to barrels of oil per day net to Pan Orient.

The Corporation today filed its unaudited consolidated financial statements as at and for the three and nine months ended September 30, 2010 and related management's discussion and analysis with Canadian securities regulatory authorities. Copies of these documents may be obtained online at www.sedar.com or the Corporation's website, www.panorient.ca.

HIGHLIGHTS



-- Exploration drilling by Pan Orient in Thailand during the third quarter
of 2010 resulted in three new field discoveries with the Wichian Buri
Extension field (WBEXT) in Concessions L44 and L33, and the L33-1 and
L33-2 fields in Concession L33. Pan Orient drilled seven wells (4.2 net
wells) in the third quarter with five wells in the new WBEXT field and
the two discovery wells in Concession L33.
-- The WBEXT field currently being developed in Concession L44 has oil
production from two volcanic reservoirs and one sandstone reservoir. For
each of these three reservoirs there is one producing oil well which
commenced production in the third quarter of 2010 under a 90-day
production test period. At the end of each 90-day production test period
the well is shut-in until a new production license for the WBEXT field
is granted by the Thailand Department of Mineral Fuels. The production
license application for the WBEXT field was submitted on November 22,
2010 and approval has historically been received 90 days from the date
of submission.


These three WBEXT producing wells in Concession L44 had combined oil sales of 159,092 barrels for the third quarter of 2010. The WBEXT-1 well, producing 2,000 BOPD, was shut-in in early November at the end of its 90-day production test period and had produced 169,000 barrels of oil net to Pan Orient from the WBV1 volcanic reservoir during that period. The WBEXT-1A well is producing during a 90-day production test period until early December from the WBV2 volcanic reservoir and has produced approx.104,000 barrels of oil net to Pan Orient to date. The initial production test rate of 3,000 BOPD has been choked back to 200 BOPD as a result of water incursion. The WBEXT-1B well is producing during the 90-day production test period until mid December from a sandstone reservoir and has produced approx.10,900 barrels of oil net to Pan Orient to date.

Subsequent to September 30th, the Company drilled the WBEXT-1C appraisal well which started a 90-day production test period on November 15th, has produced approx.21,000 barrels of oil net to Pan Orient to date and is currently producing approximately 2,000 BOPD. This well is within 200 meters of the offsetting WBEXT-1 well, and the WBEXT-1 well may be recompleted to produce from a different sandstone or volcanic zone.

An estimate of contingent and prospective resources for the proposed 18.5 km(2) portion of the WBEXT field in Concession L44 was prepared by Gaffney Cline & Associates-Singapore as of September 30, 2010 as part of the production license application submitted to the Thailand Department of Mineral Fuels. That report assigned "best estimate" "2C" contingent resources to the WBV1and WBV2 volcanic reservoirs and a sandstone reservoir in Concessions L44 of 13.06 million barrels of oil recoverable net to Pan Orient. Contingent resource volumes estimated in the GCA report are contingent on Pan Orient receiving approval for the production license area application as submitted to the Thailand Department of Mineral Fuels. The extent of the crude oil accumulations in the reservoirs set out in this estimate of contingent resources will not be known until after additional appraisal drilling and production testing.



-- Development of the portion of the WBEXT field in Concession L33 will
commence in the first quarter of 2011 as the Company moves north from
the existing producing wells in the WBEXT field. For development of the
WBEXT field in Concession L33, Pan Orient has waited for the granting of
the first production license in Concession L33 to establish a point of
sale in Concession L33 so that new wells drilled can produce and sell
oil under an a 90-day production test period.
-- The L33-1 and L33-2 oil fields discovered during the third quarter of
2010 represent the first discovery of hydrocarbons at commercial rates
in Concession L33. No oil production could be sold from wells in
Concession L33 until a point of sale had been established by a
production license in the Concession, granted by the Thailand Department
of Mineral Fuels. A production license was granted in November and the
Company is waiting for the final environmental approval for production.
Production and sale of oil from these wells commenced on November 20,
2010 under a 90-day production test. The L33-1 well is currently
producing 460 BOPD and the L33-2 well is currently producing 400 BOPD.


An estimate of contingent and prospective resources for the proposed 12.02 km(2) L33-1 / L33-2 fields in Concession L33 was prepared by Gaffney Cline & Associates-Singapore as of August 31, 2010 as part of the production license application submitted to the Thailand Department of Mineral Fuels. That report assigned "best estimate" "2C" contingent resources to the WBV1 volcanic reservoir net to Pan Orient's 60% operated working interest of 2.3 million barrels of oil recoverable. Contingent resource volumes estimated in the GCA report were contingent on Pan Orient receiving approval for the production license area application as submitted to the Thailand Department of Mineral Fuels, which has now been received. The extent of the crude oil accumulations in the reservoirs set out in this estimate of contingent resources will not be known until after additional appraisal drilling and production testing.



-- Production in Concession L53 (100% ownership by Pan Orient) commenced in
August 2010 with the L53-A well being placed back on-stream after Pan
Orient received formal approval by the Thailand Department of Mineral
Fuels for the 2.0 km(2) L53-A Production License around the L53-A
exploration well. Oil sales in the third quarter were 20,579 barrels of
oil, including approximately 13,500 barrels of oil previously produced
during the 90-day test period which had been stored in tanks. Current
production is 95 BOPD with a water cut of 83%. The high water cut is
thought to be the result of a poor cement bond in the well bore and the
well will be re-drilled in 2011. Pan Orient will also drill another one
to two commitment wells in Concession L53 in January 2011.


An estimate of contingent and prospective resources for the proposed 2.0 km(2) L53-A field in Concession L53 was prepared by Gaffney Cline & Associates-Singapore as of March 31, 2010 as part of the production license application submitted to the Thailand Department of Mineral Fuels. That report assigned "best estimate" "2C" contingent resources to the sandstone reservoir of 1.4 million barrels of oil recoverable. Contingent resource volumes estimated in the GCA report were contingent on Pan Orient receiving approval for the production license area application as submitted to the Thailand Department of Mineral Fuels, which has now been received. The extent of the crude oil accumulations in the reservoirs set out in this estimate of contingent resources will not be known until after additional appraisal drilling and production testing.



-- Thailand operations in the third quarter had oil sales of 4,211 BOPD.
Funds flow from operations after tax in Thailand for the quarter was
$15.4 million, or $39.67 per barrel. Total capital expenditures in
Thailand during the quarter were $8.7 million.
-- Capital expenditures of $2.1 million in Indonesia during the third
quarter related to the completion of the seismic programs at Batu Gajah
Production Sharing Contract in Sumatra and the Citarum Production
Sharing Contract area in Java and initial costs associated with the
upcoming drilling programs. Pan Orient is still waiting for Indonesia
Ministry of Forestry approval for one of the three drilling locations
for the Batu Gajah drilling program, and this remains the most
significant item outside of the Company's control. The three well Batu
Gajah drilling program will not start until all approvals are in place,
and drilling will commence approximately 45 to 60 days after approval is
received for the Tuba Obi drilling location. The drilling program in the
Citarum Production Sharing Contract area in Java, Indonesia is expected
to commence in the second quarter of 2011 after the completion of the
Batu Gajah drilling program.
-- For the third quarter of 2010, Pan Orient had total corporate funds flow
from operations of $15.4 million, or $0.31 per share (diluted), funding
all of the $11.0 million of total capital expenditures in Thailand,
Indonesia and Canada. For the nine months ended September 30, 2010, Pan
Orient had total corporate funds flow from operations of $41.2 million,
or $0.82 per share, funding 86% of the $47.7 million of total capital
expenditures in Thailand, Indonesia and Canada.
-- Net income attributable to common shareholders for the third quarter of
2010 was $4.7 million, or $0.09 per share (diluted), and was $12.1
million, or $0.24 per share (diluted), for the nine months ended
September 30, 2010.
-- At September 30, 2010 Pan Orient had $27.7 million of working capital
and long-term deposits, and no long-term debt.
-- Oil sales in October 2010 averaged 5,189 BOPD. Oil sales are expected to
be approximately 3,600 BOPD in November resulting from the shut-in of
the WBEXT-1 well at the beginning of November (having completed its 90-
day production test), the increase in water cut from the WBEXT-1A well
and new wells which came on-stream at WBEXT-1C, L33-2 and L33-1 in the
second half of November. Current production is approximately 4,750 BOPD
with the two L33 wells initially being produced at a combined 860 BOPD,
which is less than the rates tested for these wells, as the wells are
being observed for production performance during this initial period.
-- The outlook for average 2010 oil production of between 4,200 BOPD and
4,500 BOPD with an exit rate of between 6,500 BOPD and 7,500 BOPD
remains unchanged although the Company expects to be at the lower end of
the range. In order to expedite drilling in Concessions L44 and L53, a
second rig is anticipated to commence operation on December 7, 2010.
There still remains considerable uncertainty related to appraisal
drilling timing and results, and the production test results for the
volcanic reservoirs at the WBEXT, L33-1 and L33-2 fields.


2010 THIRD QUARTER RESULTS



-- During the third quarter of 2010 Pan Orient drilled seven wells (4.2 net
wells) in Thailand with capital expenditures of $8.7 million. The
Thailand drilling program in the third quarter of 2010 was exclusively
related to the oil discoveries at the WBEXT, L33-1 and L33-2 fields,
with five wells in the new WBEXT field plus the two discovery wells in
Concession L33.
-- In the first nine months of 2010 Pan Orient has drilled 19 wells (11.4
net wells) at several different prospects in Concession L44 and
Concession L33. Drilling consisted of five wells in the new WBEXT field,
the two discovery wells in Concession L33, five development & appraisal
wells at the Bo Rang "B" field, the first three appraisal wells in the
NSE-F1 field, and the drilling of four additional wells in Na Sanun
East. In addition, Pan Orient completed the drilling and testing of the
two 2009 exploration wells in the 100% owned Concession L53. Total
capital expenditures in Thailand of $31.7 million for the nine months
ended September 30, 2010 have been fully funded by oil sales in Thailand
which has generated $40.5 million in funds flow from operations during
this period.
-- Pan Orient has drilled five exploration / appraisal wells at the new
WBEXT field at a cost of $5.5 million to September 30, 2010. This
has resulted in three producing oil wells which came on-stream in
the third quarter and produced 159,092 barrels of oil and
contributed an average of 1,729 BOPD in the third quarter of 2010
(representing 41% of total Pan Orient production for the quarter).
-- Pan Orient has drilled two exploration / appraisal wells in
Concession L33 to September 30, 2010 at a cost of $1.8 million, and
resulted in new field discoveries at L33-1 and L33-2. The L33-1 and
L33-2 oil fields represent the first discovery of hydrocarbons at
commercial rates in Concession L33.
-- In the first nine months of 2010, Pan Orient drilled two development
wells and three appraisal wells at Bo Rang "B" at a cost of $5.8
million. This has resulted in four producing oil wells which have
produced 176,000 barrels of oil in the first nine months of 2010,
contributed an average of 771 BOPD in the third quarter of 2010, and
are currently producing approximately 615 BOPD. Total oil production
from the Bo Rang "A&B" fields in the third quarter of 2010 averaged
1,240 BOPD and represented 29% of total Pan Orient production.
-- Four wells were drilled at Na Sanun East in the first nine months at
a cost of $7.9 million. The NSE-G3 exploration well is currently
suspended and will be re-entered and sidetracked in order to test a
deep volcanic target once mapping of the pre stack depth migration
processing of the 3D seismic survey over this area is completed. The
NSE-E3 horizontal well is the third well drilling into the NSE-E1
structure and has produced 45,000 barrels of oil in the first nine
months of 2010, contributed an average of 165 BOPD in the third
quarter of 2010, and is currently producing approximately 82 BOPD.
The NSE-H3 well produced mainly gas from a secondary gas cap with
some oil, and is currently shut-in. The NSE-B3 well is on production
with current oil production of 87 BOPD and contributed an average of
45 BOPD for the third quarter of 2010. The 2010 year-end reserve
evaluation is expected to have negative revisions to probable
reserves at the NSE Central fields due to well performance.
-- The first three appraisal wells in the NSE-F1 field were drilled in
the second quarter of 2010 at a cost of $2.8 million to further
define the oil field. The NSE-F2 well is currently on production at
25 BOPD, the NSE-F3 well is a shut-in gas well and the NSE-F4 well
is shut-in and awaiting a work-over. The area of oil accumulation in
the NSE-F1 field appears to be much larger in areal extent than the
envelope for proven reserves assigned in the December 31, 2009
reserve report, however the reservoir gross rock volume is reduced
by: 1) the higher inferred oil water contact, and 2) a gas cap
encountered in the eastern portion of the structure. These results
will negatively impact the assessment of probable and possible
reserves for the NSE-F1 field in the year-end reservoir evaluation,
likely resulting in the loss of all possible reserves and a new
probable estimate expected to be less than half the estimate of 7.2
million barrels net to Pan Orient assigned in the evaluation at
December 31, 2009.
-- Thailand oil sales for the third quarter of 2010 were 4,211 BOPD
compared with 3,448 BOPD in the second quarter of 2010, representing a
22% increase. For oil sales volume in the third quarter of 2010, the new
WBEXT field contributed 41%, the Bo Rang "A" & "B" fields contributed
29%, the Na Sanun East field contributed 17%, the L53-A well in
Concession L53 contributed 5%, and 8% came from other fields. Production
additions in the first nine months of 2010, primarily from three new
producing wells at WBEXT and the four new producing wells at Bo Rang "B"
and the NSE-E3 well, replaced production declines at the other fields.


On a year to date basis, average oil sales for the first nine months of 2010 were 3,826 BOPD compared with 4,875 BOPD for the first nine months of 2009.



-- Operations in Thailand for the third quarter of 2010, generated $15.4
million in funds flow from operations, with transportation expenses of
$2.50 per barrel, operating expenses of $6.46 per barrel, G&A of $2.42
per barrel and funds flow from operations per barrel of $39.67. Funds
flow from operations increased 20% compared to the previous quarter,
with the 22% increase in oil sales volume partially offset by a $1.69
per barrel decrease in the realized price of crude oil and an increase
in payments to the Government of Thailand resulting from the higher
level of crude oil sales. In the third quarter of 2010, Thailand crude
oil revenue was allocated 16% to expenses for transportation, operating,
and general & administrative, 27% to the government of Thailand in the
form of royalties, Special Remuneratory Benefit and Income Tax, and 57%
to Pan Orient.
-- On a year to date basis, the operations in Thailand have generated $40.5
million in funds flow from operations, with transportation expenses of
$2.52 per barrel, operating expenses of $6.36 per barrel, G&A of $3.23
per barrel and funds flow from operations per barrel of $38.76. Thailand
crude oil revenue for the nine months ended September 30, 2010 has been
allocated 17% to expenses for transportation, operating, and general &
administrative, 29% to the government of Thailand in the form of
royalties, Special Remuneratory Benefit and Income Tax, and 54% to Pan
Orient.
-- Total funds flow from operations of Pan Orient for the quarter was $15.4
million compared with $13.5 million for the second quarter of 2010 and
$11.2 million for the third quarter of 2009. Funds flow from operations
per share (diluted) was $0.31 for the third quarter of 2010 and $0.82
year to date.
-- Net income attributable to common shareholders for the three months
ended September 30, 2010 was $4.7 million, or $0.09 per share (diluted),
compared with $3.9 million, or $0.08 per share, for the second quarter
of 2010. On a year to date basis, Pan Orient reports net income
attributable to common shareholders of $12.1 million, or $0.24 per share
(diluted) to September 30, 2010.
-- Pan Orient continued active capital programs in both Thailand and
Indonesia in the third quarter of 2010. Total capital expenditures for
the quarter were $11.0 million, including $8.7 million in Thailand and
$2.1 million in Indonesia. Total capital expenditures to September 30,
2010 were $47.7 million including $31.7 million in Thailand primarily
for drilling operations and $15.4 million in Indonesia primarily on
seismic operations.
-- Capital expenditures in Indonesia were $2.1 million for the third
quarter and $15.4 million for the nine months ended September 30, 2010.
Capital expenditures of $7.1 million for the Batu Gajah Production
Sharing Contract and $8.0 million for the Citarum Production Sharing
Contract in the first nine months of 2010 primarily related to
completion of the seismic programs and some initial costs associated
with the drilling programs.
-- Pan Orient continues to maintain its financial strength and flexibility.
At September 30, 2010 Pan Orient had $27.7 million of working capital
and long-term deposits, and no long-term debt. For the nine months ended
September 30, 2010 Pan Orient had funds flow from operations of $41.2
million, funding 86% of the $47.7 million of total capital expenditures
in Thailand, Indonesia and Canada. For the third quarter of 2010, Pan
Orient's funds flow from operations of $15.4 million fully funded the
$11.0 million of total capital expenditures in Thailand, Indonesia and
Canada. In addition, at September 30, 2010 Pan Orient had $8.3 million
of equipment inventory to be utilized for future Thailand and Indonesia
operations that is included in petroleum and natural gas assets on the
balance sheet.


THAILAND OPERATIONS UPDATE

Concession L44 - WBEXT (Wichian Buri Extension) Field

WBEXT-1C Appraisal Well (Wichian Buri Extension Field)

The WBEXT-1C well is currently producing during a 90-day production test from the WBV1 volcanic reservoir at a rate of 2,000 BOPD with a flowing bottom hole pressure 1,197 psia and a water cut of less than 0.05%.

A shallow 10 meter thick volcanic zone was encountered approximately 150 meters above the main WBV1 objective with severe drilling fluid losses (an indicator of good permeability), elevated mud gas readings and oil observed in samples and at surface. A future well is planned to evaluate this new target.

The adjacent WBEXT-1 well producing from the WBV1 volcanic reservoir was shut in on November 2, 2010 as required at the termination of its 90-day production test and as outlined in a prior press release. The WBEXT-1C well is within 200 meters of the offsetting WBEXT-1 well, and the WBEXT-1 well may be recompleted to produce from a different sandstone or volcanic zone.

WBEXT-2ST2 Appraisal Well (Wichian Buri Extension Field)

The WBEXT-2ST2 well is currently shut in with no fluid influx into the well bore after briefly flowing approximately 500 barrels of oil and 1,500 barrels of water. The test results from this well are currently being investigated as to an explanation for the sudden drop of fluid level and bottom hole pressure with the possibility that the WBV2 volcanic zones at WBEXT-1 well and WBEXT-2 well may not be part of the same hydrocarbon pool.

WBEXT-3 Appraisal Well (Wichian Buri Extension Field)

The WBEXT-3 well is being drilled from a surface location approximately two kilometers northwest of the WBEXT-1 surface location and is targeting various volcanic and sandstone intervals equivalent to those found hydrocarbon bearing in wells drilled from the WBEXT-1 drilling pad. The well is currently drilling ahead at a true vertical depth ("TVD") of approximately 800 meters after logging what are interpreted as potentially oil bearing sands between 450 to 490 meters TVD and 510 to 540 meters TVD. At 796 meters TVD a volcanic zone was encountered that resulted in total drilling fluid losses (no returns) and the decision to set casing. The current plan it to drill ahead approximately 140 meters to determine if any further volcanic zones are present and to then complete the well for testing.

At the completion of drilling at WBEXT-3, the rig will move on to the WBEXT-2AST1 location to sidetrack the original wellbore in order to target the WBV3 unproven volcanic zone at a location interpreted to be more highly fractured than at the original WBEXT-2A location which was tight with the recovery of no fluid when tested as announced in an earlier press release.

INDONESIA OPERATIONS UPDATE

Batu Gajah Production Sharing Contract (POE 90% Working Interest and Operator)

All tenders for a drilling rig and related services have been received, evaluated and memorandums of understanding have been signed with contractors awaiting the final contract awards (upon the approval of the final location by the Forestry Ministry for the three well program). Two locations are currently under construction and construction on the final third location expected to commence immediately upon government approval and is anticipated to be completed within approximately 60 days from the approval date.

Citarum Production Sharing Contract (POE 69% Working Interest and Operator)

Three prospects have been agreed to by partners and the exploration wells have been approved by the Government of Indonesia. Drilling of the first of three back-to-back wells is expected to commence in the second quarter of 2011.




----------------------------------------------------------------------------
Three Months Ended Nine Months Ended Change
Operations Summary September 30, September 30,

(thousands of Canadian
dollars except where
indicated) 2010 2009 2010 2009
----------------------------------------------------------------------------
FINANCIAL
----------------------------------------------------------------------------
Oil revenue, before
royalties and transportation
expense 27,050 22,824 74,524 75,956 -2%

Funds flow from operations
(Note 1) 15,412 11,189 41,209 43,005 -3%
Per share - basic $ 0.32 $ 0.24 $ 0.85 $ 0.94 -10%
Per share - diluted $ 0.31 $ 0.23 $ 0.82 $ 0.90 -8%
Funds flow from operations
by region (Note 1)
Canada (33) (68) 814 (654)
Thailand 15,370 11,218 40,490 43,750 -7%
Indonesia - General and
administrative expense 75 39 (95) (91) -5%
----------------------------------------------------------------------------
Total 15,412 11,189 41,209 43,005 -3%
----------------------------------------------------------------------------
Net income attributable to
common shareholders 4,727 10,167 12,080 8,149 48%
Per share - basic $ 0.10 $ 0.23 $ 0.25 $ 0.18 40%
Per share - diluted $ 0.09 $ 0.22 $ 0.24 $ 0.17 42%
Working capital 23,897 34,689 23,897 34,689 -31%
Working capital plus
long-term deposits 27,746 39,830 27,746 39,830 -30%
Long-term debt - - - -

Capital expenditures
(Note 2) 11,012 16,033 47,690 44,535 7%
Shares outstanding
(thousands) 48,619 46,163 48,619 46,163 5%
----------------------------------------------------------------------------
Funds flow from operations
per barrel
----------------------------------------------------------------------------
Canada operations $ (0.08) $ (0.21) $ 0.78 $ (0.50)
Thailand operations 39.67 33.42 38.76 32.87 18%
Indonesia operations 0.19 0.13 (0.09) (0.06) 50%
----------------------------------------------------------------------------
$ 39.78 $ 33.34 $ 39.45 $ 32.31 22%
----------------------------------------------------------------------------
Capital Expenditures
(Note 2)
----------------------------------------------------------------------------
Canada 185 102 595 351 70%
Thailand 8,694 12,403 31,695 35,645 -11%
Indonesia 2,133 3,528 15,400 8,539 80%
----------------------------------------------------------------------------
Total 11,012 16,033 47,690 44,535 7%
----------------------------------------------------------------------------
Working Capital and Deposits
----------------------------------------------------------------------------
Working Capital & Deposits -
beginning of period 24,029 41,969 32,738 46,386 -29%
Funds flow from operations
(Note 1) 15,412 11,189 41,209 43,005 -4%
Capital expenditures
(Note 2) (11,012) (16,033) (47,690) (44,535) 7%
Non-cash settlement of
Andora receivable - - (600) -
Foreign exchange impact on
working capital (772) 2,730 (1,247) (5,551) -77%
Net proceeds (expenditure)
on share transactions 89 (25) 3,336 525 536%
----------------------------------------------------------------------------
Working Capital & Deposits -
end of period 27,746 39,830 27,746 39,830 -30%
----------------------------------------------------------------------------
Canada Operations
----------------------------------------------------------------------------
Interest income 15 7 29 30 -4%
General and administrative
(expense) recovery (67) 5 670 (1,090)
Realized foreign exchange
gain (loss) 19 (77) 172 445 -61%
Foreign new ventures
expenditures - (3) (57) (39) 46%
----------------------------------------------------------------------------
Funds flow from operations (33) (68) 814 (654) 224%
Funds flow from operations
per barrel
Interest income $ 0.04 $ 0.02 $ 0.03 $ 0.02 50%
General and administrative
expense (0.17) 0.01 0.64 (0.82)
Realized foreign exchange
gain (loss) 0.05 (0.23) 0.16 0.33 -51%
Foreign new ventures
expenditures - (0.01) (0.05) (0.03) 67%
----------------------------------------------------------------------------
$ (0.08) $ (0.21) $ 0.78 $ (0.50) 255%
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Three Months Ended Nine Months Ended Change
September 30, September 30,
(thousands of Canadian
dollars except where
indicated) 2010 2009 2010 2009
----------------------------------------------------------------------------
Thailand Operations
----------------------------------------------------------------------------
Total crude oil
sales (bbl) 387,444 335,584 1,044,601 1,330,887 -22%
Average daily crude
oil sales (bbl/d) 4,211 3,648 3,826 4,875 -22%
Average oil sales
price, before
transportation
(CDN$/bbl) $ 69.82 $ 68.01 $ 71.34 $ 57.07 25%
Reference Price
(volume weighted)
and differential
Crude oil (WTI
$US/bbl) $ 76.82 $ 67.89 $ 77.78 $ 54.51 43%
Exchange Rate
$US/$Cdn 1.04 1.111 1.04 1.184 -12%
Crude oil (WTI
$Cdn/bbl) $ 79.69 $ 75.43 $ 81.21 $ 64.54 26%
Sales price / WTI
reference price 88% 90% 88% 88% -
Funds flow from
operations (Note 1)
Crude oil sales 27,050 22,824 74,524 75,956 -2%
Government royalty (1,725) (1,414) (4,698) (5,385) -13%
Other royalty (26) (34) (47) (77) -39%
Transportation
expense (970) (787) (2,636) (3,105) -15%
Operating expense (2,502) (1,996) (6,649) (5,277) 26%
----------------------------------------------------------------------------
Field Netback 21,827 18,593 60,494 62,112 -3%
General and
administrative expense (937) (621) (3,370) (2,658) 27%
Interest Income 5 5 57 394 -85%
Special Remuneratory
Benefit (SRB) (1,957) (592) (4,863) (4,883) 0%
Current income tax (3,568) (6,167) (11,828) (11,215) 5%
----------------------------------------------------------------------------
Funds flow from
operations 15,370 11,218 40,490 43,750 -7%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Funds flow from
operations per
barrel (CDN$/bbl)
Crude oil sales $ 69.82 $ 68.01 $ 71.34 $ 57.07 25%
Government royalty (4.45) (4.21) (4.50) (4.05) 11%
Other royalty (0.07) (0.10) (0.04) (0.06) -22%
Transportation
expense (2.50) (2.35) (2.52) (2.33) 8%
Operating expense (6.46) (5.95) (6.36) (3.96) 61%
----------------------------------------------------------------------------
Field Netback 56.34 55.40 57.92 46.67 24%
General and
administrative expense (2.42) (1.85) (3.23) (2.00) 62%
Interest Income 0.01 0.01 0.05 0.30 -82%
Special Remuneratory
Benefit (SRB) (5.05) (1.76) (4.66) (3.67) 27%
Current income tax (9.21) (18.38) (11.32) (8.43) 34%
----------------------------------------------------------------------------
Thailand - Funds
flow from operations $ 39.67 $ 33.42 $ 38.76 $ 32.87 18%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Government royalty
as percentage of crude
oil sales 6.4% 6.2% 6.3% 7.1% -0.8%
SRB as percentage of
crude oil sales 7.2% 2.6% 6.5% 6.4% 0.1%
Income tax as
percentage of
crude oil sales 13.2% 27.0% 15.9% 14.8% 1.1%
As percentage of
crude oil sales
Expenses -
transportation,
operating, G&A and
other 16% 15% 17% 15% 2%
Government royalty,
SRB and income tax 27% 36% 29% 28% 1%
Funds flow from
operations, before interest
income and realized foreign
exchange 57% 49% 54% 57% -3%
Wells drilled
Gross 7 3 19 18 6%
Net 4.2 1.8 11.4 10.8 6%
----------------------------------------------------------------------------
(1) Funds flow from operations ("funds flow" before changes in non-cash
working capital and reclamation costs) is used by management to analyze
operating performance and leverage. Funds flow as presented does not
have any standardized meaning prescribed by Canadian GAAP and therefore
it may not be comparable with the calculation of similar measures of
other entities
Funds flow is not intended to represent operating cash flow or
operating profits for the period nor should it be viewed as an
alternative to cash flow from operating activities, net earnings
or other measures of financial performance calculated in accordance
with Canadian GAAP. All references to funds flow throughout this
report are based on funds flow from operations before changes in
non-cash working capital and reclamation costs.
(2) Cost of capital expenditures, excluding any asset retirement
obligation and excluding the impact of changes in foreign exchange
rates.
(3) Totals may not add due to rounding.


To view a map of Thailand 2010 Drilling - Concessions L33/43 & L44/43, please visit the following link: http://media3.marketwire.com/docs/1125poe_map.pdf

To view a chart of Pan Orient 2010 Thailand Drilling to November 23, 2010, please visit the following link: http://media3.marketwire.com/docs/1125poe_chart.pdf

Pan Orient is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand, Indonesia and in Western Canada.

This news release contains forward-looking information. Forward-looking information is generally identifiable by the terminology used, such as "expect", "believe", "estimate", "should", "anticipate" and "potential" or other similar wording. Forward-looking information in this news release includes, but is not limited to, references to: well drilling programs and drilling plans, estimates of reserves and potentially recoverable resources, and information on future production and project start-ups. By their very nature, the forward-looking statements contained in this news release require Pan Orient and its management to make assumptions that may not materialize or that may not be accurate. The forward-looking information contained in this news release is subject to known and unknown risks and uncertainties and other factors, which could cause actual results, expectations, achievements or performance to differ materially, including without limitation: imprecision of reserve estimates and estimates of recoverable quantities of oil, changes in project schedules, operating and reservoir performance, the effects of weather and climate change, the results of exploration and development drilling and related activities, demand for oil and gas, commercial negotiations, other technical and economic factors or revisions and other factors, many of which are beyond the control of Pan Orient. Although Pan Orient believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statements will prove to be correct.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Pan Orient Energy Corp.
    Jeff Chisholm
    President and CEO
    (403) 294-1770
    or
    Pan Orient Energy Corp.
    Bill Ostlund
    Vice President Finance and CFO
    (403) 294-1770
    www.panorient.ca