AGM Statement

Pan Andean Resources PLC
26 October 2006



Pan Andean Resources plc



 Highlights of comments made by John Teeling, Chairman, Pan Andean Resources at
                    the AGM held in London October 26th 2006



South America

•         Pan Andean has renewed its exploration interest in South America.  In
addition to Block 114 in Peru, Pan Andean, in the coming months, expects to
increase its presence in Peru and elsewhere.



•         The focus is on the prolific hydrocarbon belt stretching from Southern
Bolivia through Peru, Ecuador, Colombia and Venezuela. The 18 years Pan Andean
experience working this belt in Bolivia will be applied in Peru and Colombia.



•         Exploration activities have commenced on Block 114 in Peru. This
800,000 hectare block contains 12 structures.



•         The first target is the Rio Caco structure which has estimate oil in
place of 300 million barrels of oil and probable recoverable reserves of 90
million barrels.  The required technical and environmental work together with
seismic evaluation is underway with drilling of the first well expected in Q3
2007.  A further 3 wells could follow in 2008.



•         Pan Andean continues to work with potential partners on the
development of a small scale GTL plant suitable to process our gas discovery in
El Dorado, Bolivia.  This technology is also applicable to stranded gas reserves
in the Middle East.



•         Recent announcements by the Authorities in Bolivia indicate that there
may be opportunities for Pan Andean to continue to participate in what could be
a rapid development of the Bolivian gas industry.  Pan Andean is one of only
four non majors operating in the country.  We continue to produce oil and gas at
Monteagudo in Central Bolivia.



North America



•         We are very active in developing our American assets.



•         A deep well is expected to be drilled within 6 months on High Island
52 in the Gulf of Mexico.  This well, targeting gas, is part of a new agreement
between Pan Andean, Sterling Energy and an American Company to explore deep
prospects on the block.  Currently 20-35 million cubic feet of gas a day are
produced on the block.  Pan Andean will hold a 2.1% royalty on the new drilling.



•         High Island 30 will be back on stream by year end.  It is expected to
produce 300 barrels of oil daily. Work on the new pumping and pipeline system is
expected to be completed by early December.



•         Early stage discussions are underway with a potential farm in partner
for the deep plays on our Danbury Dome acreage onshore Texas.



•         Our US gas operations, Zachary, Vrazel, North Bob West and Eugene
Island, all contribute cash each month.



•         The Gryphon royalty from High Island 52 contributes in excess of
$100,000 each month to Pan Andean.



•         The company has cash reserves and generates a positive cash flow which
will increase substantially when High Island 30 comes on stream.



•         Discussions on how Pan Andean might participate in the Iranian oil
industry are ongoing.



•         The meeting passed all resolutions.


Contacts:

Pan Andean Resources plc
David Horgan                                        + 353 1 8332833
                                                    www.panandeanresources.com
College Hill
Nick Elwes                                          [phone]

Corporate Synergy Plc
Ian Rice                                            [phone]
Craig Howie                                         [phone]






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