Final Results

Pan Andean Resources PLC
24 September 2004


                              Pan Andean Resources plc


NEWS RELEASE

ADDRESS
162 Clontarf Road
Dublin 3
Ireland

CONTACT NUMBERS
Tel: [phone]
Fax: [phone]


24th September 2004


 The Aim listed Irish based oil and gas company is pleased to announce results
                      for the period ended March 31st 2004


               Highlights of results and accompanying statement:


-  Profits rose from £360,000 to £1.2 million

-  Operations in both the US and Bolivia were profitable.

-  Successful drilling in the US where the Zachry and Vrazel wells onshore
   Texas are now producing. A successful well on High Island 52 in the Gulf of
   Mexico came on  stream in July 2004

-  Drilling is underway on the 14,500 foot, $5m Danbury Dome prospect
   onshore Texas. First indications are due in October. The target is a 
   reservoir which may contain 75 billion cubic feet of gas.

-  Drilling is advanced in the $7m El Dorado well in Bolivia. Results will
   be available shortly. The objective is to prove up gas reserves in excess of 
   100 billion cubic feet.

-  After a six month refurbishment to install gas lift and a new pipeline
   system, High Island 30L in the Gulf of Mexico will recommence oil production
   within weeks. Daily output to Pan Andean will be in excess of 200 barrels.

-  Pan Andean is examining two strategic acquisitions outside of the
   Americas.


In a commentary on the results, John Teeling Chairman said 'Successful drilling
and high gas prices made these results. Operations in the US, particularly
onshore, are handsome contributors to the company. The Danbury Dome drilling in
Texas, which is currently underway, if successful, will provide a significant
boost to production and profits. The restart of oil production in the coming
weeks on our High Island block 30 L in the Gulf of Mexico will add 200 barrels a
day to output and will boost profits. I am very hopeful that the deep El Dorado
well being drilled in Bolivia will confirm the very large gas reserves and will
improve our prospects to supply the Brazil gas market, as well as improve the
economics of our GTL study.



We need to take Pan Andean to the next level of output.  Having rejected
numerous proposals in the Americas we are now examining two projects in new
geographic areas.'



Contacts:

Pan Andean Resources

John Teeling / Jim Finn                        Tel: [phone]

Bell Pottinger Corporate & Financial

Nick Lambert                                   Tel: [phone]

Rowan Dartington

Barrie Newton                                  Tel.[phone]


Statement Accompanying Results


In the year ended 31st March 2004, Pan Andean increased profits from £360,000 to
£1.2m.  Our operations in both the U.S. and Bolivia are profitable.  We are
using our profits to increase exploration.  In the past year we have
participated in four wells in the U.S., three have become producers.  Currently
we are drilling on our Danbury Dome prospect in Texas (20 per cent. interest)
and our El Dorado project in Bolivia (10 per cent. interest).  In the last year
we have successfully drilled and completed the Vrazel and Zachry wells (7 per
cent. interest) in the Danbury Dome area and a well on our High Island 52 block
(50 per cent. interest) in the Gulf of Mexico.  A well on High Island A68 (50
per cent. interest) was dry.



This is a good time to be an energy producer, particularly in the U.S. where
there is an ever growing gap in oil and gas supply versus demand.  Worldwide oil
production capacity is stretched.  It takes time to bring new reserves on stream
so unless Chinese demand falls, a continued period of high oil prices look
likely.



Gas is different.  The U.S. is becoming increasingly dependent on natural gas.
Demand is forecast to grow by 35 per cent. to 2025.  Production has not kept
pace with rising demand.  The market price of natural gas reflects the tight
balance between supply and demand.  There are vast gas reserves in the world but
much of them are in areas of little demand, often far removed from centres of
population e.g. Siberia, the Middle East and Bolivia.  Pipelines and improved
technologies are making many 'Stranded Gas' reserves viable.  In Bolivia, our
large El Dorado gas field, is located within 25kms of the Bolivia-Brazil
pipeline.  Weak demand in Brazil led to spare capacity in the pipeline.  A
resurgent Brazilian economy is leading to an increased demand, which in turn may
provide opportunities within two years to develop some of the El Dorado
reserves.



Improvements in Gas To Liquids technology (GTL) means that smaller, less capital
intensive, more cost efficient plants can be built.  Pan Andean, in a joint
venture with BP and a US technology group, is examining the feasibility of a
small GTL plant to serve the domestic Bolivian demand.  The existing wells on
the field can produce enough gas to service the proposed plant.



The Review of Operations below gives details on what and where we produce.



To summarise, we produce about 500 barrels of oil equivalent a day from four
onshore Texas projects, three offshore Gulf of Mexico projects and one oil/gas
producer in Bolivia.  Our most profitable producer is a royalty on High Island
52 in the Gulf which is worth an equivalent 650,000 feet of gas a day, though we
expect that High Island 30 L (62 per cent. interest) will be more profitable
when it resumes production in the last quarter of 2004.  High Island 30 L,
primarily an oil producer, has been shut in since March while we install gas
lift and a new pipeline system.  This expenditure will prolong the life of the
field.  A step out well on High Island 52 was successful and is producing.  A
well on High Island 68 was dry.



We have had a good year onshore Texas with the successful Zachry and Vrazel
wells.  We are finally drilling the first of three deep targets on our 1,700
acre Danbury Dome lease area.  It has taken six years to put the package
together and to obtain farm-in partners.  If the current drilling is successful
we will be in production within weeks as a pipeline network crosses the lease
area.  We have a 20 per cent. carry in the first well but will participate in
full thereafter.




We have had a profitable but difficult year in Bolivia.  The political situation
is unstable.  Additional royalties and taxes are threatened.  These negative
factors are more than offset by the potential of the country.  Bolivian gas
reserves have grown twentyfold in the past decade.  The country is at the hub of
the Southern cone of South America with rapidly growing energy demand in the
surrounding countries of Argentina, Brazil, Peru and Chile.



Our Monteagudo field, in which we hold a 30 per cent. interest, with Repsol and
Petrobras as our partners, continues to be profitable, though it is declining
each year.  We have had lengthy discussions with our partners about taking
control of the field.  Nothing has been finalised.  There is a spectacular deep,
5,000 metres, gas play on the block but at present there is no market for the
gas.



Our second project in Bolivia, the El Dorado gas field, is a joint venture with
a B.P. subsidiary.  Two successful wells on the block are capable of producing
20 million cubic feet of gas a day.  Currently a third well is being drilled.
This is expected to reach target depth by early October 2004.  Success will
greatly improve the proven resources on the block.  Though very well located,
within 25 kms of the Bolivia-Brazil pipeline, it has proven difficult to
commercialise the gas reserves.  Improvements in the demand for gas in Brazil
offers hope that a window of opportunity will open in the next two years.



The Future



Our first priority is to continue to develop our existing assets, particularly
the potential of our onshore Texas blocks.  Our net cash, stock market listing,
liquidity and assets, result in a flow of potential deals most of which do not
stand up to scrutiny.  We walked away from significant acquisitions in the
Caribbean and in Venezuela.  Tough terms in Trinidad and political uncertainty
in Venezuela outweighed the potential in each area.  Outside of the Americas we
have reviewed projects in Europe, the Middle East and in North Africa.  Two
significant projects are currently being evaluated.  The first an existing
producer with exploration potential in Europe, the second an exploration joint
venture in the Middle East.  We are, and will remain, selective.  Pan Andean is
a good company with good prospects.  We need to grow but we want to be sure that
the direction we take does not fritter away the hard won assets.


John Teeling

Chairman

23 September 2004






Consolidated Profit and Loss Account

As at March 31, 2004


                                                                                               2004                2003
                                                                                                  £                   £


TURNOVER                                                                                  3,547,568           4,021,966
Cost of sales                                                                           (1,630,469)         (3,058,906)

GROSS PROFIT                                                                              1,917,099             963,060
Administrative expenses                                                                   (628,321)           (537,032)

OPERATING PROFIT                                                                          1,288,778             426,028
Interest receivable and similar income                                                        4,963               5,110
Interest payable and similar charges                                                       (90,324)            (70,658)

PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION                                             1,203,417             360,480
Tax on profit on ordinary activities                                                      (361,025)            (94,640)

PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION FOR THE FINANCIAL YEAR
                                                                                            842,392             265,840

Earnings per share                                                                             .86p                .27p
Earnings per share - diluted                                                                   .83p                .26p


All income arises from continuing operations.



Consolidated Balance Sheet

As at March 31, 2004


                                                                                              2004                 2003
                                                                                                 £                    £
FIXED ASSETS
Tangible assets                                                                         11,143,948           11,232,105
Investments                                                                                  2,810                2,945

                                                                                        11,146,758           11,235,050

CURRENT ASSETS
Debtors                                                                                  1,962,484            1,863,876
Cash at bank                                                                             1,450,758            1,463,605

                                                                                         3,413,242            3,327,481

CREDITORS :(Amounts falling due within one year)                                       (1,117,092)          (1,019,703)

NET CURRENT ASSETS                                                                       2,296,150            2,307,778

TOTAL ASSETS LESS CURRENT LIABILITIES                                                   13,442,908           13,542,828

PROVISION FOR LIABILITIES AND CHARGES                                                  (1,508,105)          (1,196,970)

NET ASSETS                                                                              11,934,803           12,345,858

CAPITAL AND RESERVES
Called-up share capital                                                                    973,220              973,220
Share premium account                                                                   17,715,926           17,715,926
Profit and loss account - (deficit)                                                    (6,754,343)          (6,343,288)

EQUITY SHAREHOLDERS'FUNDS - ALL EQUITY                                                  11,934,803           12,345,858


The financial statements were approved by the Board of Directors on 23 September
2004 and signed on its behalf by:


John Teeling

DIRECTOR



Consolidated Cash Flow Statement

As at March 31, 2004


                                                                                              2004                 2003
                                                                                                 £                    £

NET CASH INFLOW FROM OPERATING ACTIVITIES                                                1,767,351            1,243,489

RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received                                                                            4,963                5,110
Interest paid                                                                             (90,324)             (70,658)

NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
                                                                                          (85,361)             (65,548)

TAXATION                                                                                 (361,025)            (145,662)

CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Payments to acquire tangible fixed assets                                              (1,333,812)            (395,716)

NET CASH OUTFLOW FROM CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
                                                                                       (1,333,812)            (395,716)

NET CASH (OUTFLOW)/INFLOW BEFORE FINANCING                                                (12,847)              636,563

(DECREASE)/INCREASE IN CASH                                                               (12,847)              636,563


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