Welwyn Resources Ltd.
TSX VENTURE : POE

May 31, 2005 17:10 ET

Welwyn Announces Restructuring Completion with Focus on Asia in First Quarter 2005 Results

CALGARY, ALBERTA--(CCNMatthews - May 31, 2005) -

NOT FOR DISSEMINATION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Welwyn Resources Ltd. (TSX VENTURE:POE) ("Welwyn") announced today its first quarter 2005 operating results. The following are excerpts from the "President's Message" and "Management's Discussion and Analysis" in Welwyn's 2005 First Quarter Report which can be viewed in its entirety on SEDAR at http://www.sedar.com.

PRESIDENT'S MESSAGE

Throughout the first quarter of 2005, the executive team of Pan Orient Energy Ltd. ("Pan Orient") worked closely with Welwyn's previous management to complete a series of transition steps. This process culminated on April 15, 2005, with the executive team of Pan Orient assuming all key management positions at Welwyn and re-constituting Welwyn's board of directors. Formal TSX Venture Exchange approval of the reverse takeover allowed shares of the newly reorganized Welwyn to commence trading under the trading symbol "POE" on April 18, 2005.

Our newly reorganized Welwyn is primarily focused on acquiring positions in low cost, high impact projects in Asia. To properly reflect this focus we intend to change our name to Pan Orient Energy Corp. at the upcoming annual meeting. Our focus on Asia is motivated by a desire to position our Company with assets in the world's largest energy demand growth region. In doing so, we expect to produce significant, sustainable growth in shareholder value.

Our major corporate accomplishments to May 30, 2005, are as follows:

- Closed the reverse takeover of Pan Orient Energy Ltd.

- Appointed a new Calgary-based management team with an exceptional record of international and domestic success

- Appointed an accomplished new Board of Directors including some of the most highly successful names in international exploration

- Completed $12.5 million of financings to position the Company with sufficient cash to pursue multiple project opportunities within the Asia region

- Executed a takeover agreement with the Board of Directors of Tiger Petroleum Inc. (a TSX Venture Exchange listed company) whereby Welwyn is to acquire all of the outstanding shares of Tiger on a share exchange basis (1 Welwyn share for each 4.25 Tiger shares). The Boards of Directors of each of Welwyn and Tiger have approved the transaction

- Prepared and submitted bids for the May 31, 2005 NELP-V bid round in India

- Prepared for the mid 2005 drilling of the Company's first Sawn Lake well in northern Alberta. The Company owns a 10% interest in 63 contiguous sections in this heavy oil project. Third party engineering evaluations have credited the property with 1.2 billion barrels of oil in place.

Acquisition of Tiger

On April 28, 2005 Welwyn announced an acquisition agreement had been executed with the Board of Directors of Tiger Petroleum Inc. ("Tiger"). The acquisition consideration consists of one (1) common share of Welwyn for each four and one quarter (4.25) common shares of Tiger and is subject to certain conditions, including the deposit of not less than 66 2/3% of the outstanding Tiger shares, receipt of all required regulatory approvals and other customary conditions. The agreement also includes a corresponding offer to Tiger convertible debenture holders. We currently anticipate mailing the offer and the accompanying take-over bid circular to Tiger security holders in June 2005, immediately following completion of required securities commission compliance matters by Tiger.

Key attributes that make the Tiger acquisition attractive for Welwyn are as follows:

- The acquisition allows us to establish a meaningful asset base in Asia at a reasonable cost - total consideration paid by Welwyn expected to be approximately 4.6 million Welwyn shares

- The acquisition allows us to secure an operated, majority interest position in approximately 2 million acres of exploration and production licenses in an under-explored basin onshore Thailand

- Tiger has an established reserve base with current net production of approximately 100 bbl/d

- The license acreage holds material exploration upside on existing and newly identified prospects which can be explored using low cost drilling techniques

- The existing developed area has ample available operated infrastructure to accommodate new production

- The acquisition positions Welwyn as an 'existing international operator' that will be recognized by international governments, further enhancing access to new opportunities particularly through new license and concession bids in the Asia region

- The acquisition provides a sound central Asia base for building on other Asia region opportunities that Welwyn is currently exploring

After closing of the Tiger acquisition, Welwyn will have approximately 28.1 million shares outstanding, over $10 million in available uncommitted cash and zero debt.

Management believes it has sufficient cash on hand (over $10,000,000) to fund a robust seismic and exploration program on Tiger's Thailand assets, fund a multi-well drilling program on Pan Orient's Sawn Lake prospect as well as fund entrance and drilling opportunities in other Asian countries.

Outlook

Our new management, with the active support of the board, has already embarked on a strategy to aggressively; yet prudently, position the Company for significant growth. Our focus on low cost drilling opportunities with material upside is expected to produce significant, sustainable growth in shareholder value over the near term and beyond. Our activities on our Sawn Lake prospect and our Tiger acquisition of Thailand licenses are just the first steps in moving aggressively to achieve our growth objectives. At this time we are also utilizing our existing network of contacts to actively pursue land and production acquisitions in India, China and Indonesia. We are focused on remaining well capitalized, with ample cash on hand to pursue new projects as they arise and expeditiously develop our existing asset base.

This news release may contain forward-looking information. Actual future results may differ materially from those contemplated.

23,548,787 common shares issued

Contact Information

  • Welwyn Resources Ltd.
    Jeff Chisholm
    President and CEO
    (403) 294-1770
    or
    Welwyn Resources Ltd.
    Jason Bednar
    Vice President Finance and CFO
    (403) 294-1770