Final Results

Pan Andean Resources PLC
26 September 2003



                                 PRESS RELEASE

                                                             26th September 2003


                            PAN ANDEAN RESOURCES PLC
The Aim listed oil and gas producer announces Preliminary results for the period
                             ended March 31st 2003



'These are good results. Pan Andean is profitable and cash generative with
significant drilling opportunities on our US assets and an exciting GTL project
in Bolivia. We are examining high potential exploration proposals in the
Americas and elsewhere. We will move forward in the current year.'



John Teeling, Chairman, Pan Andean Resources PLC



Highlights:



-            A maiden profit in the year to 31st March '03 of £360,000 and a
             cash flow in excess of £1.6m.

-            Profits and cash flow ahead in the first half of the current year
             and expected to grow.

-            Daily production almost 1000 barrels of oil equivalent.

-            Royalties now amount to $100,000 a month.

-            The recent acquisition of 100% ownership of significant acreage in
             the Danbury Dome area of Texas offers significant drilling 
             opportunities on targets which may contain up to 100 billion cubic 
             feet of gas.

-            The deep target farm-in with Gryphon on High Island 52 offshore
             Texas has high potential. Gryphon has already drilled two hits on 
             the block producing 35 million cubic feet of gas a day.

-            In Bolivia we are completing a feasibility study into a 2000-ton
             per day GTL plant to commercialise the huge gas reserves in El 
             Dorado. A second project on El Dorado is examining the feasibility 
             of using existing wells to produce oil condensate.

-            An exploration/development project in the Caribbean is at decision
             stage.

-            Projects in Venezuela and outside the Americas are being analysed.



Statement accompanying preliminary results



It is with great pleasure, that in our fifteenth year in business, I can report
a maiden profit of £360,000. Not only that, our cash flow, to the year ended
last March, was in excess of £1.6m. In the first half of this current year both
profits and cash flow are further ahead and this trend should continue as
royalties from the Gryphon and Zachary discoveries flow to Pan Andean.



We produce oil and gas in Bolivia and in the Gulf of Mexico. Both areas are
profitable and cash generative. Our average daily production in the period was
365 barrels of oil and 1.74 million cubic feet of gas. Converting our gas
production and oil royalties into equivalent barrels of oil indicates our daily
production to be 1000 barrels of oil equivalent.  In Bolivia, we cleared the
debt that came with the Petrolex acquisition in 2001, despite an arbitrary local
tax increase. I am delighted to report the Bolivian operation is now
contributing cash to the parent.



The performance in the Gulf of Mexico reflects high gas and oil prices rather
than increasing production. During the year, two of our platforms, High Island
52 and 68, were shut in as the wells depleted. High Island 52 is back producing
as a result of a workover. Happily, High Island 30 continues to produce
excellent quantities of oil and associated gas.  The results from the US
suffered from a number of exceptional events. We had significant ongoing legal
costs relating to a dispute on our onshore Texas assets in the Danbury Dome
area. In recent weeks there has been a most satisfactory conclusion to this
dispute. As a result, Pan Andean now controls 100 per cent of some highly
prospective ground which we should drill next year.  We also had difficulties
with the operator of our offshore platforms resulting in a cost of almost
£250,000 to Pan Andean. The operator is gone. But the biggest single non-cash
cost affecting our results was the amortization and depletion charge of over £1m
arising from the purchase of the US assets in 2000.



Before looking at the wider exploration picture let me bring you up to date on
developments on our producing assets.  We are particularly active in the Gulf.
This year will see a number of significant developments.



1.           Either on our own, or in partnership, we will drill the shallow
(14,000 feet) targets on our Danbury Dome acreage. Targets identified may
contain up to 75 billion cubic feet of gas.


2.           We will drill, in joint venture, the deep (17,000 feet) Golden Eye
prospect in the Danbury Dome area which may contain up to 100 billion cubic feet
of gas.


3.           The recent agreement on High Island 52 involves an active 3D
seismic and drilling programme by Gryphon at depths below 8660 feet. Pan Andean
can opt to take a 3.2% royalty or a 22.5% working interest in any drilling.

4.         Pan Andean believes that there are seven drilling targets at the
shallower levels on High Island 52.


5.         Production from the Gryphon wells on High Island 52 and the Zachary
well, adjacent to Danbury Dome, should continue to produce royalties in excess
of $100,000 a month to Pan Andean.


6.         Forest Oil who have a substantial gas find on High Island 53 have
agreed to use the platform and facilities on High Island 52 thereby giving us a
monthly income.


7.         Above all, gas and oil prices are expected to remain high.



Our main producer, High Island 30, is on a decline curve but is holding up. We
are currently examining a proposal to build a new connection line between High
Island 30 and High Island 52 at a cost of up to $750,000.



In Bolivia our focus is;



a)      The commercialization of our El Dorado gas deposit;

b)      Improving the economics of the Monteagudo oil/gas field.



El Dorado is a significant gas deposit, in which Pan Andean holds a 10%
interest, some 25kms from the Brazil - Bolivia pipeline. Rather than wait for a
pickup in gas demand in Brazil, which will offer opportunities to tie in the El
Dorado reserves, Pan Andean is examining two proposals.



1)         A Gas to Liquids (GTL) plant that converts gas into valuable diesel
and naphtha. A study underway suggests that a small 2000-ton a day plant costing
$35 million is commercial using low priced gas feedstock. The GTL technology is
going through rapid evolution at present as companies seek ways to move gas from
remote locations to the US, European and Japanese markets.


2)         An oil condensate stripping venture, whereby Pan Andean would use the
two existing wells to produce 20 million cubic feet of gas a day. The oil would
be stripped from the gas and the gas reinjected. There is a ready market for
oil.





Bolivia, which promised so much in recent years, is suffering. The economic
situation is fragile, political uncertainty is growing and the legal system
leaves much to be desired. But, Bolivia holds vast quantities of gas and is well
located to be the main energy supplier to the southern cone of South America.



The Monteaguso field, in which we hold a 30% interest, continues to produce oil
and gas from a series of shallow wells. There is vast gas potential at deep
levels but no immediate market. Together with Repsol and Petrobras, the other
partners, we are working to improve operating efficiency.



Bolivia, which promised so much in recent years, is suffering. The economic
situation is fragile, political uncertainty is growing and the legal system
leaves much to be desired. But, Bolivia holds vast quantities of gas and is well
located to be the main energy supplier to the southern cone of South America.



Pan Andean is primarily an explorer. It may be hard to credit that significant
exploration potential remains on our assets in the US but it does.  At current
prices, exploration on our properties is highly attractive. Wells on our Danbury
Dome leases costing $3 million each will payback within a year if successful.
The deep wells on High Island 52 are already major producers and earners.



We need projects with significant upside potential. We know this and we are very
active in pursuing opportunities. In the past year we spent time and money in
Mexico. The country is highly prospective but not yet ready for explorers. The
deals on offer are not good and there are major political problems.



We are active in Venezuela where we are conducting a geological due diligence on
a proposed joint venture. Venezuela has oil, and plenty of it, but I am not sure
if the people and administration are ready to accept overseas investment on
terms attractive to the investor.



For the past fifteen months we have painstakingly worked our way toward an
agreement on an exploration/development venture in the Caribbean. Technically
the project is top class with potential for up to 50 million barrels of oil. The
commercial terms are tough. The board will decide in the coming weeks whether or
not to proceed.



Pan Andean is a highly attractive partner to many. We have cash, profits, no
debt, a stock exchange listing and a highly liquid share.  The consequence is a
flow of suitors. We see at least one deal a month. We believe that our share
price is significantly undervalued so we are not keen to acquire for paper or to
merge. We have also hesitated to move outside of our geographic area of
competence, the Gulf and South America. That said, some of the proposals
presented to us merit consideration. We currently have three at various stages
of examination; two are producers with exploration upside, while the third is a
high potential pure exploration play. All three are geographically distant from
our current activities.



The Future



The future looks good. Pan Andean is profitable and cash generative with
significant drilling opportunities on our US assets and an exciting GTL project
in Bolivia.  Our increasing cash flow, AIM listing, liquid share and 7000
shareholder base attracts many exploration and development proposals. We are
examining high potential projects in the Americas with one close to a decision.
Outside of the Americas we are working our way through three projects. We are
fully aware of the need to build shareholder value.





John Teeling



CONSOLIDATED PROFIT AND LOSS ACCOUNT

for the year ended 31 March 2003

                                                                                 2003                 2002

                                                                                    £                    £


Turnover                                                                    4,021,966            3,846,754

Cost of sales                                                             (3,058,906)          (3,470,309)

Gross profit                                                                  963,060              376,445


Administrative expenses                                                     (537,032)            (646,565)

Operating profit/(loss)                                                       426,028            (270,120)

- Interest receivable and similar income                                        5,110                9,270

- Interest payable and similar charges                                       (70,658)            (103,713)

Profit/(Loss) on ordinary activities before taxation                          360,480            (364,563)


Tax on Profit/(Loss) on ordinary activities                                  (94,640)                    -

Profit/(Loss) on ordinary activities                                          265,840            (364,563)

after taxation and for the financial year


Profit/(Loss) per share                                                          .27p               (.37p)

Profit/(Loss) per share - diluted                                                .26p               (.37p)




BALANCE SHEETS
at 31 March 2002
                                          Group             Company                Group             Company
                                           2003                2003                 2002                2002
                                                                                       £                   £

Fixed assets                                                               (as restated)
Tangible assets                      11,232,105             275,414           12,970,195             121,046
Investments                               2,945           6,837,159                3,219           6,837,344
                                     11,235,050           7,112,573           12,973,414           6,958,390
Current assets
Debtors                               1,863,876           4,896,211            1,633,336           5,122,542
Cash at bank                          1,463,605              53,300              975,831               9,431
                                      3,327,481           4,949,511            2,609,167           5,131,973
Creditors: (Amounts falling
due within one year)                 (1,019,703)           (149,273)          (1,662,961)           (169,399)

Net current assets                    2,307,778           4,800,238              946,206           4,962,574

Provision for liabilities and        (1,196,970)                  -           (1,165,385)                  -
charges

Total assets less liabilities        12,345,858          11,912,811           12,754,235          11,920,964

Capital and reserves
Called-up share capital                 973,220             973,220              973,220             973,220
Share premium                        17,715,926          17,715,926           17,715,926          17,715,926
Profit and loss account -
(deficit)                            (6,343,288)         (6,776,335)          (5,934,911)         (6,768,182)
Equity shareholders' funds -
all equity                           12,345,858          11,912,811           12,754,235          11,920,964



Notes:



The financial information contained in this announcement does not constitute
statutory accounts within the meaning of Section 240 of the Companies Act 1985.
The figures for the year ended 31 March 2002 have been extracted from the
statutory accounts which have been filed with the Register of Companies and
which are available on request from the Company Secretary.  The auditor's report
on those accounts was unqualified and did not contain any statement under
section 237(2) or section 237(3) of the Companies Act 1985.  The statutory
accounts for the financial year ended 31 March 2003 have been approved by the
Directors.  The auditors' report on these accounts was unqualified and did not
contain any statement under section 237(2) or section 237(3) of the Companies
Act 1985.



A copy of the audited Annual Report for 2003 will be mailed to shareholders and
is also available for inspection at the Company's registered office at 20-22
Bedford Row, London WC1R 4JS.





Contacts:


David Horgan, Managing Director - Tel + 00 353 87 292 3500
Jim Finn, Director - Tel [phone]




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