Proposed Open Offer at 22p Per Share

Pan Andean Resources PLC
2 December 1999

                           PAN ANDEAN RESOURCES PLC                           
                                                                              
             PROPOSED OPEN OFFER OF 4,368,810 NEW ORDINARY SHARES             
                            AT 22 PENCE PER SHARE                             

Introduction

Following the announcement on 17 November 1999 that the Company had raised
£3,747,098, before expenses, through a placing of 17,032,264 Ordinary Shares
('the Placing'), Pan Andean Resources PLC ('Pan Andean' or 'Company') is
pleased to announce that it is proposing to raise up to £961,138 before
expenses (£900,000 after expenses), through an open offer of 4,368,810 New
Ordinary Shares at 22p per share ('the Open Offer').

The Company will be posting a Prospectus and Open Offer application form to
Qualifying Shareholders on 6 December 1999.


Background to and Reasons for the Open Offer

Since acquiring the Chapare oil concession in central Bolivia in 1993, Pan
Andean and partners have spent approximately $32 million on seismic,
geophysical and geochemical studies of the hydrocarbon opportunities.  The
work to date has identified at least ten targets in the southern third of the
block.  We now intend to drill an exploratory well at Chipiriri some 22km
north of Pan Andean's first well at Todos Santos.

A suitable rig will shortly become available and Pan Andean expects to spud
the well in early 2000.  The total target depth is 3.75km metres and the
expected drilling time is fifty days.

Road, platform and well design is already underway.  Since Chipiriri lies in
virgin forest our civil construction partners must drive a road through to the
well site.

Pan Andean believes that the Chapare region is oil prone, with associated gas.
Should we encounter commercial hydrocarbons, Pan Andean expects to extend an
existing pipeline and refine liquids at the nearby refinery.

There is export capacity in the existing products pipeline.  A newly completed
gas pipeline now provides access to the large and rapidly growing Brazilian
market.  Pan Andean has also studied gas markets within Bolivia and in
neighbouring Argentina.

As part of our fundraising exercise, including the recently completed private
placing, Pan Andean wishes to offer existing shareholders the opportunity to
subscribe for New Ordinary Shares at the same price as the investors in the
private placing.

Funds raised will be used to drill one or more wells in the Chapare block as
well as cover corporate costs.


Open Offer

The Open Offer is being made by Rowan Dartington & Co. Limited ('Rowan
Dartington') on behalf of the Company.  Under the Open Offer, up to 4,368,810
New Ordinary Shares are being offered to Qualifying Shareholders at 22p per
share, payable in full on application, on the following basis:

1 New Ordinary Share for every 11 Existing Ordinary Shares

held at the close of business on 17 November 1999 and so in proportion for any
other number of Existing Ordinary Shares then held.  Qualifying Shareholders
may apply for up to their maximum entitlement of New Ordinary Shares as set
out in the Application Form enclosed with this document.  Application forms
are personal to Shareholders and may not be transferred except to satisfy bona
fide market claims.  Application forms, together with remittances for the full
amount subscribed, must be received by the Company's registrars, Computershare
Services (Ireland) Limited not later than 3.00 p.m. on 23 December 1999. 
Application forms may be split, but only to satisfy bona fide market claims,
up to 3.00 p.m. on 21 December 1999.  To the extent to which New Ordinary
Shares are not applied for, Qualifying Shareholders should note that their
entitlements will lapse and the Directors may instruct Rowan Dartington to
place such New Ordinary Shares with other investors.

Detailed information on the Open Offer, including the procedure for acceptance
and payment, will be set out in the letter from Rowan Dartington contained in
Part II of the Prospectus.

Application has been made for all the New Ordinary Shares to be issued
pursuant to the Open Offer to be admitted to listing on the Alternative
Investment Market of the London Stock Exchange Limited.  It is expected that
admission to the Alternative Investment Market will become effective and that
dealings will commence on 4 January 2000.


Current Trading and Prospects

The Directors believe that Pan Andean is now a well established company in oil
and gas exploration in Bolivia.  With the funds raised from the Open Offer and
the recent Placing the Directors are confident that the Company's drilling
programme in the current financial year can proceed as planned.