Trading Statement

Pan Andean Resources PLC
05 May 2006


The directors of Pan Andean announce that operations continue at their
Monteagudo oil and gas field in Bolivia in which Pan Andean holds a 30% interest
(40% Repsol, 30% Petrobras) and at their exploration block El Dorado held 10%
Pan Andean, 90% Chaco.

The Supreme Decree Number 28701 issued on May 1st 2006, implements the
Hydrocarbon Law of May 2005 and as a first step, increases royalties payable to
the State. Royalty and taxation levels on small fields, such as Monteagudo will
be fixed after an audit by the state oil company (YPFB).

The appearance of military personnel on certain sites, as shown in recent media
programmes, was to protect the facilities. Most have now withdrawn.

Pan Andean personnel and management continue to work normally. The directors of
Pan Andean remain committed to Bolivia. Bolivia has significant untapped
reserves of natural gas and the directors believe that opportunities will emerge
from the current changes.


Contacts:

Pan Andean Resources
John Teeling, Chairman - 00 353 1 833 2833

Rowan Dartington
Ian Rice - 00 44 117 933 0020


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