2008 Highlights:

— Pan Orient Energy achieved remarkable growth during 2008 in terms of oil production, funds flow from operations, net income, reserve additions, and an increase in exploration acreage & within generated drilling prospects.

— Average daily oil production for the year-end 2008, net to Pan Orient Energy, increased 408% to 4,947 barrels per day from 974 barrels per day in the previous year, and averaged 6,982 per day in the fourth quarter of 2008. Oil production for the first quarter of 2009, net to Pan Orient Energy, is anticipated to be 6,165 barrels per day with the decrease from the fourth quarter of 2008 a result of wells coming off flush production and drilling programs in the last three months focusing on exploration targets against development opportunities.

— Funds flow from operations raised 439% to $63.9 million for the year-end 2008 from $11.9 million in the previous year, with $24.9 million in the fourth quarter of 2008 despite the downturn in commodity prices. On a per share basis (diluted), funds flow from operations was $1.31 for 2008 and $0.52 for the fourth quarter of 2008.

— Net income of $10.8 million in the fourth quarter of 2008 reflects the success Pan Orient Energy has achieved in creating value through full cycle exploration and drilling. On a per share of $0.23 for the fourth quarter of 2008.

— Year-end proven plus probable reserves reported for Thailand increased by 47% to 25 million barrels.

— Pan Orient Energy obtained high working interests and operatorship in three concessions in Indonesia resulting in 11,468 square kilometers of new exploration lands. These lands complement the exploration lands onshore Thailand which comprises a major portion of concession L44/43 which is at present undeveloped, concession L33/43 and concession L53/48.

— Pan Orient Energy continued its emphasis on exploration activities with seismic programs, geological & geophysical work and drilling to deliver growth and profitability through the drill bit. Regarding future development programs, Pan Orient Energy has now constructed an inventory of 17 development locations in Na Sanun East and will become more active in development and appraisal drilling in 2009.

— The results achieved by Pan Orient Energy in 2008 are the result of successful exploration and development of the Na Sanun East field in concession L44/43 for which Pan Orient Energy is the operator and a 60% working interest owner. The Na Sanun East field started production in January 2007 and daily production net to Pan Orient Energy grew to about 6,800 barrels per day in December 2008.

— During 2008, the capital program of the company has drilled 22 (13.2 net) wells in Thailand with 20 (12 net) wells drilled in the Na Sanun East field and an overall drilling success rate of 68%. Drilling 2009 was balanced between exploration targeting new reserves and development.

— The operations in Thailand delivered very strong results for year-end 2008 with $65.7 million in funds flow from operations, transportation and operating expenses of $4.62 per barrel, and funds flow from operations per barrel after tax of $36.27. For the fourth quarter of 2008, the Thailand operations generated $23.8 million in funds flow from operations, operating and transportation expenses were $4.16 per barrel, and funds flow from operations per barrel after tax of $36.27 even though the reference price for crude oil declined to $58.15 per barrel. For Thailand production in 2008, crude oil revenue was allocated 7% to expenses for other royalties, transportation, operating, and general & administrative, 51% to the government of Thailand in the form of royalties, special remuneratory benefit and income tax, and 42% to Pan Orient Energy (before interest income and realized foreign exchange gain).

— These strong results have been gained while preserving financial strength and flexibility. At December 31, 2008 Pan Orient Energy had $46.4 million of working capital and deposits, and no long-term debt. Internally generated funds flow from operations of $63.9 million in 2008 completely financed by the $40.5 million of capital expenditures in Thailand, Indonesia and Canada, $15.2 million for the cash portion of acquisition of exploration interests in Indonesia, and increased working capital plus deposits by $5.6 million.

Operations:

Pan Orient Energy’s base capital budget for 2009 will be about $60 million, with 57% directed towards exploration and development in Thailand and 43% high grading exploration opportunities in Indonesia. The base 2009 capital program includes the following:

Thailand:

— Capital program of $34 million that includes the drilling of 29 wells. Exploration and development activity will carries on in concession L44/43 (operator and 60% working interest owner) with the drilling of 25 wells, site upgrades and workovers. Additionally, there is anticipation that to be two exploration wells drilled in concession L33/43 (operator and 60% working interest owner) and two exploration wells drilling in concession L53/48 (operator and 100% working interest owner).

Indonesia:

Capital program of $26 million that includes 500 kilometers of 2D seismic in the Batu Gajah PSC, and 1,250 kilometers of 2D seismic in the Citarum PSC to bring exploration prospects and leads on those concessions up to drill ready status.

— Additionally the stated capital budget of $26 million for Indonesia, there will be a contingent budget of a further $7 million related to the cost of long lead time drilling equipment and the potential drilling of one exploration well in late 2009.

Sawn Lake, Canada

— No capital expenditures are planned by Andora for 2009. The $60 million capital program for 2009 will be funded through utilizing the $46.4 million of working capital and deposits at December 31, 2008, plus an additional $5.4 million of equipment inventory on hand at the beginning of 2009, and through cash flow generated from the Thailand operations.

Outlook:

Thailand

The 29 wells Pan Orient Energy plans to drill on three company operated concessions will utilize two drilling rigs which are under long term contract. At least two wells are intended on the 100% working interest L53/48 concession beginning on October 2009. The remainder of the Thailand drilling program in Concession L44/43 and L33/43 will focus on the continued development of the NSE field (south and central), appraisal at NSEE1, NSE north, Na Sanun, NSE-F1 and up to four exploration wells in the Bo Rang and Si Thep areas.

The 2009 program is planned to strike a balance between development drilling targeting new production, and exploration defining potential new reserves. The goal is to reach and hold production in the range of 7,200 to 9,000 barrels per day net to Pan Orient Energy (12,000 to 15,000 barrels per day gross) by the third quarter of 2009 and add proven and probable reserves of 12 million barrels net. Any exploration success will be assessed after initial appraisal drilling as to the impact on production targets with updated guidance provided by the company at that time.

Indonesia

At the Citarum PSC situated onshore Java (operated and 69% working interest) a 2D seismic program is now in progress, with the initial 750 kilometer program about 25% complete. Upon completion of this initial 750 kilometer program, an additional 500 kilometers of infill 2D will be acquired in order to convert leads defined in the reconnaissance program into drillable prospects. All seismic operations are expected to be concluded by year end with drilling expected in the second quarter of 2010.