Re Contract

Pan Andean Resources PLC
05 November 2007

                            PAN ANDEAN RESOURCES PLC

      Pan Andean is an oil and gas producer and explorer in South America
                             and the Gulf of Mexico


           Pan Andean Awarded Antorcha Exploration Block in Colombia



Highlights



O      Pan Andean awarded exploration block in Colombia



O      First operational project in country



O      Highly prospective block:



o        Adjacent to two producing fields - on matching geological trend

o        Studies suggest there could be 1 to 2 billion barrels of oil equivalent
in place (Stock Tank Original Oil In Place (STOOIP)) / 100 to 300 million
barrels of oil equivalent (boe) recoverable reserves



O      Fast track programme to include localised seismic and the drilling of one
well



Pan Andean, the Anglo Irish, AIM listed oil and gas producer (AIM: PRE) is
pleased to announce the signing of an exploration and production contract with
the Agencia Nacional de Hydrocarburos (ANH), Colombia's resource management
agency, to explore the 35,000 hectare Antorcha block located in the prolific
Middle Magdalena Basin. Pan Andean holds a 100% interest in the block.



The Antorcha block is located up dip of existing heavy oil producing fields, the
Velasquez-Palagua field with more than 300 million barrels of oil reserves, and
the Teca-Cocorna-Nare-Jazmin heavy oil field with more than 1,000 million
barrels of oil in place. The Antorcha block is thought to have the same
petroleum geology as adjacent producers.



Preliminary studies suggest significant undiscovered heavy oil potential at
shallow depths of less than 2,000 feet. Between 1 and 2 billion barrels of heavy
oil in place could exist on the block with 100 to 300 million barrels of
recoverable reserves, using parameters of nearby fields i.e. porosity 20 - 25%,
oil saturation 60%, average net oil thickness of 100 - 200 feet, recovery factor
of 10 - 15%. Expected crude quality could be in the range of 10degrees to 20
degrees API.



The block has little seismic coverage, with only the tails of 5 seismic lines.
Nine stratigraphic wells were drilled by Texaco in the 1950's and another three
wells were drilled during the 1980's. Several of these found heavy oil shows,
and some were considered as potential producers. However, low oil prices then
prevailing, early technology, the oil gravity, and exploration targets elsewhere
meant that the area remained off the radar screen of mainstream explorers.



Pan Andean's exploration programme in the Antorcha block will consist of
regional studies, focused seismic acquisition in part of the block, and drilling
one shallow well. The programme is expected to be undertaken in 18 months, but
given the scope of work, excellent above ground conditions, and equipment
availability for this type of drilling, the programme is likely to be expedited.






David Horgan, Managing Director, said:



'This is the first concrete result from our pursuit of new opportunities in
Colombia. Antorcha is located in a highly prospective and much sought after area
beside two producing oilfields.



Unlike other petroleum provinces, seismic crews and drilling rigs are available.
We plan to expedite our operational programme, drilling an early well and
monetising our asset by establishing a resource base.



Pan Andean is building a strong portfolio in South American oil provinces with 3
blocks in Peru and now the first of what we hope will be several blocks in
Colombia. We aim to create a multi basin portfolio with a mix of production,
development and exploration, maximising value and potential for shareholders.'



This announcement has been approved by Ivan Sandrea, Director, Pan Andean. Mr
Sandrea has more than 10 years of international E&P experience.




Contacts:

Pan Andean
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
John Wakefield                                        [phone]
Simon Moynagh



www.panandeanresources.com






About Colombia



Colombia is a proven world class hydrocarbons province, with excellent
infrastructure and a modern operating environment. Over 9 billion barrels of oil
and 21 trillion cubic feet of gas (TCF) have been discovered in world class
basins. It is estimated that over 35 billion barrels of oil equivalent remain to
be found, much of which may be heavy oil. The country produces more than half a
million barrels of oil per day, has an excellent oil and gas infrastructure and
has been a net oil exporter since the mid 1980's.



Impressive annual economic growth for the past few years, combined with
significant reforms, and improvements in the security situation, make Colombia
one of the most attractive exploration and development plays in the region and
world wide. Foreign investment is strong, particularly in natural resources. Oil
and gas legislation is modern and transparent, with royalties ranging from 5% to
25% depending on production volumes, incentives for heavy oil developments, and
effective corporate income tax rate of around 35%.



Secure title and attractive terms make Colombia an attractive location to
explore for and produce oil. Pan Andean has dedicated a significant amount of
resources since early 2007 to identify attractive opportunities. The Pan Andean
focus is on high potential shallow depth exploration opportunities (>100 million
barrels) that can be accessed in non competitive bidding rounds by direct
negotiation with the government. However, other opportunities are also being
evaluated.




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