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Sea Oil farms-in to Concession L53/48 onshore Thailand with Pan Orient deal

03rd February 2015

Pan Orient Energy Corp has entered into an agreement for the sale of a 50-per-cent equity interest in subsidiary Pan Orient Energy (Siam) Ltd. to a wholly owned subsidiary of Sea Oil Public Company Limited, of Thailand, for a cash price of USD 42.5m, including a working capital adjustment of USD 2.4m

Pan Orient Energy Corp has entered into an agreement for the sale of a 50-per-cent equity interest in subsidiary Pan Orient Energy (Siam) Ltd. to a wholly owned subsidiary of Sea Oil Public Company Limited, of Thailand, for a cash price of USD 42.5m, including a working capital adjustment of USD 2.4m
The first of a three well drilling programme on Concession L53 is anticipated to commence in approximately two weeks, with the first well targeting the high impact L53-A North Central prospect (ANC-1)

Pan Orient Energy (Siam) Ltd. holds Pan Orient's 100 per cent interest in Concession L53/48 in Thailand.

On January 12, 2015 Pan Orient was informed that Sea Oil required additional time to complete certain closing conditions to be satisfied by it. Accordingly, Pan Orient and Sea Oil had agreed to delay closing of the transaction for up to three weeks.

On February 2, 2015 Sea Oil and Pan Orient have satisfied the conditions to closing and accordingly a USD 38.5m wire transfer has been initiated to the account of Pan Orient. This wire transfer is anticipated to be received within approximately 2 to 3 business days, as is customary in most international wire transfers. An additional USD 4m break fee has been released from escrow and is being wired to Pan Orient's account. It is anticipated that net proceeds to Pan Orient, after closing adjustments and costs will be approximately USD$40.9 million (CDN $50.5 million).

Completion of the sale of a 50-per-cent interest in Pan Orient's subsidiary Pan Orient Energy (Siam) Ltd., in combination with existing working capital, provides the corporation with substantial financial strength in an uncertain oil price environment.

The first of a three well drilling programme on Concession L53 is anticipated to commence in approximately two weeks, with the first well targeting the high impact L53-A North Central prospect (ANC-1).

ANC-1 will be targeting one of six structural closures defined on recently acquired 3D seismic data which are located approximately 4.5 kilometres south of the U-Thong oil field, operated by another oil company, which has produced over 4.5 million barrels of oil from equivalent sandstone reservoirs that are the primary objective of the ANC-1 well. Further guidance regarding the 2015 Thailand capital programme will be provided upon the completion of drilling of the upcoming programme and discussions with our new partner Sea Oil.

"I am very pleased to welcome Sea Oil as our new partner in Concession L53 and look forward to the imminent drilling of the ANC-1 exploration well,” said Jeff Chisholm, Pan Orient president and CEO. “Pan Orient is financially well positioned as a result of an initiative to strengthen the balance sheet that commenced long before the recent drop in world oil prices and is now experiencing the benefits of this initiative.

“We have built a large cash position and an excellent portfolio of relatively low cost conventional onshore South East Asian oil and gas assets that are expected to be very profitable, even in an extended low oil price environment. A strong balance sheet, low outstanding share count and a prospect portfolio that to a large degree has been de-risked through partnerships, 3D seismic and offsetting oil discoveries allows me to look forward to 2015 with a great deal of optimism and high expectations."

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