Re Joint Venture

Pan Andean Resources PLC
25 February 2008



Major Oil Group Joint Ventures Pan Andean Blocks 114 and 131 in Peru


Highlights:



> CEPSA to joint venture with Pan Andean on Peruvian blocks 114 and 131



> Pan Andean to recover costs incurred to date



> CEPSA to cover exploration costs including first well and half of second well
on both blocks





Pan Andean (AIM:PRE), the AIM listed oil and gas producer, is pleased to
announce that it has agreed terms on which CEPSA, a major international Spanish
based oil company, will joint venture Blocks 114 and 131 in the Ucayali jungle
of Peru.  Previous drilling proved a working oil system in the Blocks.  The
joint venture is part of the Pan Andean strategy to reduce financial exposure
whilst accelerating drilling plans in high potential blocks.



The agreement is subject to the regulatory approval of the Authorities.  Once
such approval is obtained, CEPSA will reimburse Pan Andean for all costs
incurred to date, estimated at US$3m.





Peruvian Block 114



Pan Andean will dilute its interest in Block 114 to 30%, in return for CEPSA
incurring all exploration costs through the first well and half of the second
well.



The new ownership of Block 114 will be 30% Pan Andean, 10% CCP (a local private
Peruvian company) and 60% CEPSA.  CEPSA will operate the block.



Block 114 is situated in 1.8 million acres of jungle terrain, drained by
navigable rivers.  Environmental preparation and permitting for seismic and
wells are almost completed.





Peruvian Block 131



CEPSA is also joint venturing and will operate, the 100% Pan Andean owned
neighbouring block 131.



Pan Andean will dilute its interest in Block 131 to 30%, in return for CEPSA
incurring all exploration costs through the first well and half of the second
well.





Block 131 borders Block 114, immediately to the west.  The Block covers 2.5
million acres in the central Peruvian Amazonian jungle region.  It is on trend
with oil discoveries, and includes two hydrocarbon shows and three oil seeps.
There is a producing oil field cut out of Block 131, operated by Maple of the
USA.





David Horgan, Managing Director of Pan Andean Resources, commented:



'CEPSA's joint venture is a convincing statement of the exploration potential of
Blocks 114 and 131, as well as an expression of confidence in Peru as an
excellent investment location.  CEPSA, in which Total holds 48%, and plays a
supporting role, is highly regarded in the industry as a serious player with a
strong technical orientation.  We look forward to a successful joint venture and
an active and positive exploration campaign'.



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


College Hill                                           [phone]
Paddy Blewer
Nick Elwes


Blue Oar Securities                                    [phone]
John Wakefield
Simon Moynagh


www.panandeanresources.com




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