Final Results

PAN ANDEAN RESOURCES PLC
29 September 1999

CHAIRMAN'S STATEMENT 

Pan Andean has weathered a turbulent period in world oil and is now well
positioned to take advantage of rising oil prices and a rapidly growing demand
for gas in Bolivia/Brazil.  I am pleased to report that Pan Andean is at the
final stages of putting together a consortium which will drill the Chipiriri
oil target on the giant Chapare oil concession in central Bolivia.

The consortium expects to drill quickly - within four months if possible.  The
start up date is subject to obtaining permits, an environmental impact
assessment and the weather. Much work has already been done.  All required
permits have been applied for, the environmental studies are underway and
mobilisation requirements are being managed.

The well site at Chipiriri is some 23km further into virgin jungle than our
earlier Todos Santos 1 well.  It will take up to 12 weeks to construct a road
to the proposed site and to build a pad.  Once spudded the target depth is
3,500 metres.  Drilling is expected to take 50 days.  Total well cost will be
$5 million.  Depending on the final makeup of the consortium Pan Andean may
contribute up to $1.5 million.

It is important to note the basis of the consortium.  It is formed purely to
drill Chipiriri.  Everyone invests on a 'heads up' basis.  That means that
they pay no premium.  In return they do not participate in any part of the
Chapare other than the single well in Chipiriri.  Pan Andean will have the
right to buy out the participants at an agreed multiple so, if the well is
successful, Pan Andean can own 100 per cent of the block.  Participants may
have an option to stay in for further drilling.  This form of participation is
a major boost for Pan Andean.  We maintain a dominant interest and control
while at the same time drilling and meeting our obligations on the entire
block.

We have boosted management to take on this new work.  David Horgan has joined
us in a full time position as Managing Director.  His energy and enthusiasm is
responsible for the consortium being put together.  We are delighted to report
that Marcelo Paz has joined as Pan Andean's Bolivian local manager.  Marcelo
was formally Bolivian Energy Minister and an Ambassador.  He brings unique
skills and relationships with key decision-makers in Bolivia and elsewhere. 
He will be in the forefront co-ordinating the consortium and the drilling as
well as developing some additional opportunities in Bolivia.

What is outlined above is very exciting.  It represents the culmination of
three years work.  The Chapare is a highly prospective oil/gas block. 
Successful discoveries require drilling.  This we are doing while at the same
time maintaining most of the equity.

It is worthwhile reviewing what has happened in the Chapare block where over
$32 million has already been spent.  When Pan Andean acquired the block in
1991 it was outside the traditional oil/gas areas of Bolivia.  We spent two
years in discussions with prospective partners.  Between 1994 and 1996 over
$20 million was spent by our then partner on seismic and surface studies.  In
the meantime oil discoveries were made to the east and south of Chapare.  

Pan Andean and BHP drilled a $7million well at Todos Santos in mid 1996.  This
well produced significant indications of gas over substantial lengths. There
were disagreements between Pan Andean and the operator BHP, over the well site
location and over the decision not to test the well.  With hindsight we should
have been more forthright in negotiations on both areas.  Our geological
advice was to drill the Chipiriri prospect, a very well defined target.  BHP,
our partner and operator, chose the Todos Santos target because, we believe,
it was closer to infrastructure and cheaper to drill.  The well location at
Todos Santos was also subject to dispute.  Our advisors chose a location 3km
northeast of the site which was spudded but the operator had the final say.
The well results were confusing.  The nature of Bolivian geology in the
Chapare area is such that standard well testing can give false results.  Pan
Andean had the right to test the well at our own expense.  We declined to do
so and have wondered since.  Once the drilling ceased it took a further eight
months to evaluate and analyse the well logs.  

In May 1997 our then partner sought changes in the relationship which we were
unable to accept so the agreement terminated.  We were comfortable that a new
partner could be found.  This proved more difficult than anticipated  despite
the fact that additional discoveries had been made close to the Chapare.  Part
of the reason was that the oil business in Bolivia had gone through rapid
change. The privatisation of YPFB the State oil company offered investors many
alternative exploration opportunities.  The pipeline to Brazil was delayed and
world oil prices slumped. New laws relating to oil introduced in 1996 while
flexible are expensive for explorers.  For instance Pan Andean must pay
$400,000 a year rent.

The new hydrocarbon law places two obligations on prospectors, minimum work
commitments and annual rents.  The work commitments on the entire Chapare
block for the 3 year period ending July 2002 will be more than covered by
drilling Chipiriri.  The reason being the credits held by Pan Andean from
previous work.  The reason for the high rent cost is the size of our block. 
It is the largest in the country.  If we wish we can reduce the cost by
reducing the block size.

The current year has seen a welcome improvement in the oil industry.  The gas
pipeline to Brazil is now working.  This offers a huge market in Brazil for
Bolivian gas.  The incentive is already effective with numerous new gas
discoveries being announced.  The rising oil price is slowing filtering into
exploration budgets.  There are still many competing opportunities for oil and
gas exploration in Bolivia but the Chapare because of its size, its location
and the availability of seismic lines and well log data is once more
attractive.

The target in Chipiriri is oil though we will be happy with gas.  The whole
area of central Bolivia is now highly prospective with hit rates way above the
world average.  

But do not for one minute think or believe that success is certain.  Oil
exploration is a high reward high risk venture.  The only way to find out what
is three miles into the ground is to drill.  Given the cost of each well every
effort is made to minimise risk but it still remains.

Other Activities

While drilling the Chapare is the primary focus of Pan Andean your directors
must take note of the risks and take steps to ensure the success of the
company.  In the slow days of 97 and 98 when we were finding it tough to
interest investors and partners in the Chapare block we looked at other
opportunities in Bolivia and elsewhere.  We are well established in Bolivia. 
As you will read below Bolivia is becoming the energy hub of South America. 
With our experience, skill and contacts we are well placed to assist newcomers
to Bolivia.  I am hopeful that the coming months may yield some developments
in this area.  Our new manager has ideas and concepts which may prove
fruitful.

Despite the best efforts of everyone involved it can happen that exploration
opportunities do not work.  While the management of Pan Andean concentrates on
Bolivia I undertook to evaluate opportunities in other parts of the world.  A
number of projects were examined and discarded.  The low oil price of 1998
cast a cloud over many prospects.  We spent time and money examining a large
gas deposit in North Africa.  Markets were difficult to find.  We looked at,
and discarded, projects in Eastern Europe and in parts of the Middle East.  We
are currently in discussions with a company which has attractive acreage in
Africa.  I must repeat that these are peripheral activities.  For the
foreseeable future exploring the Chapare is our mission.

Finance

Pan Andean has only 47 million shares in issue.  We are loath to dilute
existing holders.  A fund raising of $1million in late 1997 has financed
operations to date.  Depending on the final makeup of the consortium Pan
Andean may contribute up to $1.5 million out of $5million.  Should funds be
required they will be raised in a small private placement.

Future

As I have said before exploration in frontier areas is not for the faint
hearted.  Success will bring great rewards.  To be successful we must drill. 
On your behalf I want to pay tribute to our managers who have persistently
believed in the potential of the Chapare block.  Hopefully their belief will
be justified in the coming well.  


CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 March 1999

                                                           1999       1998
                                                              £          £

Turnover                                                      -          -

Operating charges                                             -          -
                                                        -------    -------
Gross result                                                  -          -


Administrative expenses                                (113,031)  (402,212)
                                                        -------    -------
Total administrative expenses                          (113,031)  (402,212)
                                                        -------    -------
Operating loss                                         (113,031)  (402,212)

Interest receivable and similar income                   29,730     13,535
                                                        -------    -------
Loss on ordinary activities before taxation             (83,301)  (388,677)

Taxation                                                      -          -
                                                        -------    -------
Loss on ordinary activities after taxation              (83,301)  (388,677)
                                                        =======    =======

Loss per share                                           (0.18p)    (0.82p)

Loss per share - diluted                                 (0.17p)    (0.78p)
                                                        =======    =======

The loss for the year can be analysed as follows:

Holding company                                         (83,301)  (388,677)

Subsidiary                                                    -          -
                                                        -------    -------
                                                        (83,301)  (388,677)
                                                        =======    =======

BALANCE SHEETS
as at 31 March 1999

                                   Group     Company       Group     Company
                                    1999        1999        1998        1998
                                       £           £           £           £

Fixed Assets
Intangible assets              1,133,144   1,133,144     761,132     761,132
Tangible assets                       25          25       2,499       2,499
Investments                        1,955       1,955       1,885       1,885
                               ---------   ---------   ---------   ---------
                               1,135,124   1,135,124     765,516     765,516
                               ---------   ---------   ---------   ---------
Current Assets
Stocks                               157         157         252         252
Debtors                            6,372       6,372     249,992     249,992
Cash at bank                     386,831     386,831     721,420     721,420
                               ---------   ---------   ---------   ---------
                                 393,360     393,360     971,664     971,664

Creditors (amounts falling
due within one year)             (33,246)    (33,246)   (168,023)   (168,023)
                               ---------   ---------   ---------   ---------
Net current assets               360,114     360,114     803,641     803,641
                               ---------   ---------   ---------   ---------
Total assets less current
liabilities                    1,495,238   1,495,238   1,569,157   1,569,157
                               =========   =========   =========   =========

Capital and Reserves
Called up share capital          472,569     472,569     472,569     472,569
Share premium                  2,908,217   2,908,217   2,908,217   2,908,217
Profit and loss account - 
deficit                       (1,885,548) (1,885,548) (1,811,629) (1,811,629)
                               ---------   ---------   ---------   ---------
Equity shareholders' funds     1,495,238   1,495,238   1,569,157   1,569,157
                               =========   =========   =========   =========


CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March 1999

                                                            1999        1998
                                                               £           £

Net cash inflow/(outflow) from operating activities        7,693    (275,360)
                                                       ---------   ---------
Returns on Investments and Servicing of Finance
Interest received                                         29,730      13,535
Costs associated with shares issued during the year            -     (37,452)
                                                       ---------   ---------
Net cash inflow/(outflow) from returns on investments
and servicing of finance                                  29,730     (23,917)
                                                       ---------   ---------
Capital Expenditure and Financial Investment 
Payments to acquire intangible fixed assets             (372,012)   (629,672)
                                                       ---------   ---------
Net cash outflow from capital expenditure and 
financial investment                                    (372,012)   (629,672)
                                                       ---------   ---------
Net cash outflow before financing                       (334,589)   (928,949)
                                                       ---------   ---------
Financing
Issue of ordinary share capital                                -   1,544,198

Net cash inflow from financing                                 -   1,544,198
                                                       ---------   ---------
(Decrease)/increase in cash                             (334,589)    615,249
                                                       =========   =========  
                                                                              
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the year ended 31 March 1999

                                                            1999        1998
                                                               £           £

Loss attributable to group shareholders                  (83,301)   (388,677)
Currency translation adjustments                           9,382      (7,401)
                                                       ---------   ---------
Total recognised losses for the year                     (73,919)   (396,078)
                                                       =========   =========

RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS

                                                            1999        1998
                                                               £           £

Total recognised losses                                  (73,919)   (396,078)
New share capital subscribed                                   -   1,544,198
Costs associated with shares issued during the year            -     (37,452)
                                                       ---------   ---------
Net change in shareholders' funds                        (73,919)  1,110,668

Opening shareholders' funds                            1,569,157     458,489
                                                       ---------   ---------
Closing shareholders' funds                            1,495,238   1,569,157
                                                       =========   =========

Notes:

1. Continuing Operations
   None of the Group's activities were acquired in this financial year or
   discontinued during the above two financial years.

2. Total Recognised Gains and Losses
   The Group has no recognised gains or losses other than the loss for the
   above two financial years.

3. Loss Per Share
   The calculation of the undiluted earnings per share is based on losses of
   £83,301 (1998: £388,677) and 47,256,905 shares (1998: 47,256,905) being
   the average number of shares in issue during the year weighted on a time
   basis. 

4. The results set out above are not full accounts as defined in s.254 of the
   Companies Act 1985.  The auditors have made an unqualified report on the
   accounts for each of the years ended 31 March 1997 and 1998 under s.236 of
   the Companies Act 1985 which have been and will be filed with the Registrar
   of Companies.

5. A copy of this announcement will be available at the offices of the Company
   for 14 days from the date of this announcement.