Final Results

Pan Andean Resources PLC
26 September 2007



                            Pan Andean Resources plc

                  Results for the year ending 31st March 2007


Highlights

•  Profit of £860,570


Gulf of Mexico

•  Commercial discovery and enhanced exploration potential
   •  Recent commercial discovery on HI 52
   •  Recommencement of production on HI 30 imminent
      Improved exploration potential on both blocks: additional wells expected 
      in 2008

Latin America

•  Significant progress in Peru: seventh largest exploration land holder
   •  New blocks acquired: 131 and 141
   •  11 targets identified on Block 114
   •  Rio Caco structure could contain as much as 90 million barrels of oil
   •  In discussions with 3 companies re potential joint ventures

•  Re-emergence of Columbia as an exploration province
   •  Significant opportunities identified
   •  Late stage exploration licence applied for


John Teeling, Chairman of Pan Andean commented;

'This has been a year of substantial progress. The gas discovery in the Gulf
and the re-start of oil production will significantly enhance our cash
generation, while the release of substantial abandonment liabilities on HI 52
and the extension of the life of HI 30 strengthen our assets.

Winning tenders for blocks 131 and 141 in Peru, puts Pan Andean in a very strong
land position.  While we continue to work our ground, we have commenced
discussions with potential partners.


We expect an early decision on our licence application in Colombia.'


Contacts:

David Horgan, Managing Director                 + 353 87 292 3500
John Teeling, Chairman                          + 353 1 833 2833

College Hill
Paddy Blewer                                    [phone]
Nick Elwes

Blue Oar Securities Plc
John Wakefield                                  [phone]
Simon Moynagh

www.panandeanresources.com


Chairman's Statement

Pan Andean is a profitable, cash positive oil and gas producer in the US, the
Gulf of Mexico and Bolivia.  We are exploring in both the Gulf and Peru.  In the
period under review we made a profit before tax of £861,000, which is a decline
of £63,000 on last year due to the fall in the Dollar/Sterling rate.  A rise in
hydrocarbon prices was offset by higher operating costs as we boosted our
exploration activities.

The strategy being followed by Pan Andean is clear; to utilise our producing
assets in the Gulf, to exploit exploration opportunities in our US assets and to
leverage our cash, experience and expertise, to build a strong ground position
in South America.

We are making significant progress toward our objectives, assisted by high oil
and gas prices. But high prices are a double edged sword.  We earn more money
on what we produce but everything in the oil industry now costs more and/or is
in scarce supply. A surge in oil exploration means that rigs, skills and
supplies are simply hard to get.  Exploration acreage is now highly sought after
while producing assets are bought on the assumption of everlasting high prices.

In the US, we have two offshore blocks in the Gulf, and a small interest in a
third, as well as two producing assets onshore Texas.  The saga of the HI 30L
shut-in has been uppermost in our shareholders' minds but the real gem in the
crown is HI 52 where we have a regular royalty income, currently over $150,000 a
month, and a recent successful discovery, which will be worth up to $75,000 a
month to Pan Andean.  An agreement with the discoverer absolves us of major
abandonment liabilities and virtually guarantees additional wells in 2008.  The
Gryphon royalty (1.3% Pan Andean) on the block comes from 3 wells producing over
35 million cubic feet of gas a day.

Phoenix has successfully completed an 8,000 foot well, finding 160 feet of gas
bearing sands.

It is important to understand the deal with Phoenix.  Our one well production on
HI 52 is declining.  Our share of platform costs (50%) was $500,000 a year and
rising.  We had drilled a dry well with our partner Sterling and were reluctant
to drill again.  Abandonment was staring us in the face at a cost in excess of
$6m.  We negotiated a royalty deal (2.1%) with Phoenix whereby they drilled a
shallow well.  If the well was successful Phoenix would take over the platform,
become operator and assume all liabilities.  This is what has happened.  Phoenix
are tie-ing in the well to our existing pipelines and platform.  They will
become operator in late September 2007.  Production will start shortly at an
estimated 5m cubic feet of gas a day and is expected to rise significantly.

The HI 30L shut-in has lasted for over 2 years.  It is difficult for frustrated
investors and directors to accept that the delay in restarting production has
produced significant benefits for Pan Andean.  During the closedown, oil prices
have doubled increasing the in situ value of our estimated 300,000 barrels of
recoverable oil by $12m.  In addition, discoveries on an adjacent block in 2006
resulted in Hunt Oil becoming operator of HI 30L, paying Pan Andean a monthly
rent to process oil and gas from their discoveries through our platform.  Hunt
Oil, as operator, opened the log jam on supply boats and finished repairs to HI
30L and completed new pipelines.  It is a simple, stark and unfortunate fact of
life that Pan Andean, as a small independent, lacked the ability to get boats in
the Gulf.  We had contracts and promises, but the majors called the shots.  Our
partner, Hunt, have their own boats.  Hunt have completed the repairs and
refurbishments.  Tammany, the operators of HI 24, have completed their work and
pipeline testing is underway.  HI 30L is expected to produce 300 barrels of oil
a day.  At current prices the net income to Pan Andean is $250,000 a month.

An unexpected benefit of taking Hunt on as operator is that they reviewed the
exploration potential on the block. With adjacent discoveries Hunt had specific
company knowledge.  They have identified a target which they estimate could
contain 1 million barrels of recoverable oil.  It will cost a minimum of $6m to
drill.  In the coming months we will discuss options with Hunt, who are a 12%
holder in HI 30L, but would like more.

We continue to work on our onshore US assets where the main focus is in finding
a partner to drill Danbury Dome.  We are also drilling the Estaban field and
working with a range of partners to produce options for the North Bob West Field
in Southern Texas.

Turning to Latin America, we have made substantial progress in Peru to the stage
that we are now the seventh largest independent exploration land holder.  We
have three blocks, two in Ucayali and one near Lake Titicaca.  We obtained two
new blocks, 131 and 141, in the face of intense competition because we are
working on the ground in Peru on Block 114.  We have 20 years experience
exploring in similar environments in Bolivia and have a very strong and
experienced technical staff led by Mauricio Gonzalez.

We have been actively working our way through the licensing requirements on
Block 114 where we have identified 11 targets.  One in particular, the Rio Caco,
has a structure with the potential to contain up to 90 million barrels of oil.
Environmental considerations are rightly a top priority in Peru.  We have spent
the past year producing the required reports and communicating with local
communities.  That work is almost complete. Seismic and well log
reinterpretation is finalised.  The remote location of Rio Caco and weather
windows, mean that necessary roads and campsites can only be constructed in
certain months.  This indicates that the earliest time to have a rig on site is
Q1 2009.

Our ground position in Peru and the growing attractiveness of the country as an
oil province, have produced a selection of interested partners.  We are in
discussions with three companies.

Bolivia, where Pan Andean started in 1988, is frustrating.  The country has much
hydrocarbon promise in terms of geology and location.  The vast gas reserves in
the country are needed in neighbouring Argentina and Brazil.  The political
uncertainty produced by the nationalisation decree deters investment.  Pan
Andean (30%), in partnership with Repsol (40%) and Petrobras (30%), produces oil
and gas at Monteagudo in Central Bolivia.  There is a significant deep gas play
on the site.  In the east of the country, close to the city of Santa Cruz, Pan
Andean (10%), in partnership with BP (90%), has a large gas discovery, El
Dorado, which was declared commercial in 2004.  New contracts have been signed
for both fields.  We are hopeful that in the not too distant future, El Dorado
will be developed and market incentives offered to drill Monteagudo.  In the
meantime, we maintain our on the ground position in Bolivia and our contacts
with the administration.

The re-emergence of Colombia as a destination for oil prospectors is one of the
success stories in Latin America.  It is a highly prospective country with good
economic terms.  Civil and political uncertainty is at acceptable levels.  Pan
Andean is building a presence in the country with the objective of investing in
late stage exploration plays and small producers with exploration potential.  We
have a strong in-country team and a series of projects under evaluation.  We
have applied for a licence over one late stage exploration project.

Outside of Latin America and the US we continue to maintain a weather eye on
opportunities in the Middle East, though our focus is clearly on Peru and
Colombia.


Future

Pan Andean is in a strong position to benefit from high oil prices. Our Gulf of
Mexico assets are cash cows.  We have exploration potential on HI 30L and on HI
52.  At this stage, I am reluctant to commit to a start up date on HI 30L, but
it should be imminent.  The value of the ground we hold in Peru has not yet been
recognised by investors but has been understood by the industry.  Current
discussions could lead to a joint venture.

Pan Andean is very well positioned with excellent partners and exciting
potential.



John J Teeling
Chairman
26th September 2007





CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2007

                                                                                2007                  2006
                                                                                   £                     £

TURNOVER                                                                   1,903,075             2,023,369

Cost of sales                                                              (452,004)             (443,849)

GROSS PROFIT                                                               1,451,071             1,579,520

Administrative expenses                                                    (603,858)             (617,601)

OPERATING PROFIT                                                             847,213               961,919

Interest receivable and similar income                                        95,873                82,694

Interest payable and similar charges                                        (82,516)             (120,875)

PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION                                                              860,570               923,738

Tax on profit on ordinary activities                                       (258,171)             (325,452)

PROFIT ON ORDINARY ACTIVITIES
AFTER TAXATION FOR THE FINANCIAL YEAR                                        602,399               598,286


Earnings per share                                                             0.51p                 0.50p

Earning per share - diluted                                                    0.47p                 0.49p




All income arises from continuing operations.



CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2007

                                                                                   2007                    2006
                                                                                      £                       £
FIXED ASSETS

Intangible assets                                                             4,844,408               4,888,341
Tangible assets                                                              10,145,851               9,792,669
Investments                                                                       2,757                   2,857

                                                                             14,993,016              14,683,867

CURRENT ASSETS

Debtors                                                                       1,664,833               1,630,303
Cash at bank                                                                  3,779,044               4,381,940

                                                                              5,443,877               6,012,243

CREDITORS: (Amounts falling due
within one year)                                                            (2,439,132)             (2,063,535)

NET CURRENT ASSETS                                                            3,004,745               3,948,708

TOTAL ASSETS LESS CURRENT LIABILITIES                                        17,997,761              18,632,575

PROVISION FOR LIABILITIES
AND CHARGES                                                                 (2,486,033)             (2,283,793)

NET ASSETS                                                                   15,511,728              16,348,782


CAPITAL AND RESERVES

Called-up share capital                                                       1,192,278               1,192,178
Share premium account                                                        20,229,868              20,229,168
Share based remuneration reserves                                                25,920                       -
Profit and loss account - (deficit)                                         (5,936,338)             (5,072,564)

EQUITY SHAREHOLDERS' FUNDS -
ALL EQUITY                                                                   15,511,728              16,348,782






CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2007

                                                                                     2007                2006
                                                                                        £                   £

NET CASH INFLOW FROM
OPERATING ACTIVITIES                                                            1,057,125           2,231,864


RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE

Interest received                                                                  95,873              82,694
Interest paid                                                                    (82,516)           (120,875)

NET CASH INFLOW/(OUTFLOW) FROM
RETURNS ON INVESTMENTS AND

SERVICING OF FINANCE                                                               13,357            (38,181)


TAXATION                                                                                -               3,642



CAPITAL EXPENDITURE AND

FINANCIAL INVESTMENT

Payments to acquire intangible fixed assets                                     (445,191)           (246,082)
Payments to acquire tangible fixed assets                                     (1,228,987)         (1,359,670)

NET CASH OUTFLOW FROM
CAPITAL EXPENDITURE AND
FINANCIAL INVESTMENT                                                          (1,674,178)         (1,605,752)



NET CASH (OUTFLOW)/INFLOW

BEFORE FINANCING                                                                (603,696)             591,573



FINANCING

Issue of ordinary share capital                                                       800                   -

NET CASH INFLOW FROM FINANCING                                                        800                   -

(DECREASE)/INCREASE IN CASH                                                     (602,896)             591,573






CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 31 MARCH 2007

                                                                                2007                     2006
                                                                                   £                        £

Profit for the financial year                                                602,399                  598,286

Currency translation adjustments                                         (1,466,173)                  852,000

Total recognised (losses)/gains since last
annual report and financial statements                                     (863,774)                1,450,286







RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS
FOR THE YEAR ENDED 31 MARCH 2007
                                                                                2007                     2006
                                                                                   £                        £

Profit for the financial year                                                602,399                  598,286

Currency translation adjustments                                         (1,466,173)                  852,000

Share based remuneration reserves                                             25,920                        -

New share capital subscribed                                                     800                        -

Net change in equity shareholders' funds                                   (837,054)                1,450,286

Opening equity shareholders' funds                                        16,348,782               14,898,496

Closing equity shareholders' funds                                        15,511,728               16,348,782





Notes:

The financial information set out above does not constitute the Company's
financial statements for the year ended 31 March 2007. The financial
information for 2006 is derived from the financial statements for 2006 which
have been delivered to the Registrar of Companies. The auditors have reported
on 2006 statements; their report was unqualified and did not contain a statement
under section 237(2) or (3) of the Companies Act 1985. The financial statements
for 2007 have been audited and will be delivered to the Registrar of Companies
following the Company's Annual General Meeting. The auditors have reported on
the 2007 statements; their report was unqualified and did not contain a
statement under section 237(2) or (3) of the Companies Act 1985.

A copy of the Company's annual report and accounts for 2007 will be mailed to
all shareholders shortly and will also be available for collection from the
Company's registered office, 20-22 Bedford Row, London WCIR 4JS.





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