Interim Results

Pan Andean Resources PLC
06 December 2006



                            Pan Andean Resources PLC

                         'Pan Andean, or 'the Company'



           Interim Results for the period ending September 30th 2006



Highlights

>   Profit up to £306,000 (205: £301,000)

>   Refurbishment of High Island 30 near to completion - revenue to come on
    stream early 2007

>   Farm in deal has been agreed with Phoenix Exploration on High Island 52

>   Seismic reprocessing and environmental and community relations programme
    progressing on Peruvian Licence



John Teeling, Chairman of Pan Andean Resources commented,



'Pan Andean has a strong model of production driven cash-flow balanced by an
ambitious exploration programme in a proven hydrocarbon province.



With cash flows expected to rise due to a North American project coming back on
stream, our Peruvian exploration programme developing nicely and further
consideration on wider exploration projects, we have every reason to look
forward to a brighter future for the company'





For further information:


Pan Andean Resources plc

John Teeling                                          00 353 18332833
Jim Finn                                              00 353 18332833

Corporate Synergy Plc

Ian Rice                                              0117 933 0020
Craig Howie                                           0207 448 4432

College Hill

Paddy Blewer / Nick Elwes                             0207 457 2020






Interim Statement Accompanying Results to 30th September 2006



Overview and Strategy

Pan Andean is an oil and gas exploration and production company, with proven
assets in the United States and in Bolivia and recently acquired exploration
acreage in Peru.  In the six months to September 30th 2006 Pan Andean made a
profit of £306,000 (2005: £301,000). Operations are profitable in the Gulf of
Mexico, particularly the ongoing royalty from High Island 52, marginally
profitable onshore Texas, while nothing is being received from our Bolivian
operations.



Pan Andean primarily generates income from High Island 52 (Pan Andean 50%) in
the shallow waters of the Gulf Mexico. The income originates from a 1.3% royalty
on gas production from a small section on the block where Woodside produce over
35m cubic feet of gas a day. The three producing onshore Texas assets provide a
small regular monthly income.



Pan Andean's strategy is, to further exploit our US assets to maximise income
potential, leverage our South American experience and expertise in countries
outside of Bolivia and to examine opportunities open to Pan Andean in the Middle
East and Africa, where the management has considerable experience.



North America

A valuable asset of the Company, High Island 30 in the Gulf of Mexico (Pan
Andean 62.9%), has been closed in since 2004 to add gas lift to the platform and
to allow the construction of a new pipeline and pumping system to transport the
oil and gas to shore. After extensive delays, due mainly to the aftermath of
hurricanes Katrina and Rita, a boat capable of undertaking the necessary
alterations was obtained and is completing work on the pumping installation.
The pipelines are finished and the pumps should be operational in January 2007.
After testing, production will commence at an expected rate of 300 barrels a day
of oil with associated gas. At current prices this implies a revenue of over
$20,000 a day.



Our US assets have been good to us and further potential exists. After extensive
negotiations, a farm in deal has been agreed with Phoenix Exploration whereby
they have an option to drill the deep plays on most of High Island 52. Having
evaluated existing seismic, it is believed that Phoenix will drill a deep well
on the block in early 2007. Pan Andean has a 2.15% royalty.



Onshore Texas we are expecting to participate, in mid 2007, in a well on the
Vrazel property (Pan Andean 21%). There is a limited interest in the deep play
on our Danbury Dome acreage (Pan Andean 100%).



Latin America

Peru, where we have begun to explore, has a natural advantage through favourable
geology. The economic terms are good. Pan Andean has a 90% interest in the 1.85m
hectare Block 114 which was drilled in the 1970s, but abandoned due to low
prices. The focus is on the Rio Caco area in the block.  The Rio Caco area has
extensive historical seismic information as well as drill data and oil shows.
It contains known structures which have the potential to contain extensive
deposits of oil and gas.



Seismic is being reprocessed and analysed using modern techniques. On the
ground, a detailed environmental and community relations programme is underway.
Current plans call for a three well programme commencing in August 2007.



Our Bolivian strategy is to monitor the developing situation. The
Nationalisation Decree of May 1st 2006, when combined with the additional
royalties and taxes, rules out any investment in the country. We will continue
to study options on the large El Dorado gas discovery (Pan Andean 10%, BP 90%)
while limited gas and oil production continues at our Monteagudo oil and gas
field (Pan Andean 30%, Repsol 40%, Petrobras 30%). The consortium is hopeful
that 'marginal status' will be applied to this field. Marginal status applies
lower tax and royalty levels which may offer the possibility of profitable
operation.



Outlook

The Company is profitable and generates a positive cash flow. From early 2007,
both profits and cash flow will be enhanced by the restart of production on High
Island 30.



Near term upside potential comes from a deep well expected to be drilled by
Phoenix in early 2007, the Vrazel well, expected to be drilled in mid 2007 and
by the possibility of a 3 well programme on the Rio Caco structure in Peru .



We are also investigating additional exploration opportunities in other South
American states, in addition to the continuing evaluation of Middle Eastern
potential.



John J Teeling

Chairman

6th December 2006



                                     Pan Andean Resources

                              Financial Information (unaudited)



                                                            Six Months ended
                                                     30 Sep 06         30 Sep 05
                                                         £'000             £'000
Group Profit and Loss
Turnover                                                   818             1,201
Operating Costs                                          (385)             (770)

Operating Profit                                           433               431
Interest Receivable                                         46                39
Interest Payable                                          (42)              (40)

Profit before Taxation                                     437               430
Taxation                                                 (131)             (129)

Profit for the period                                      306               301

Profit per share                                         0.26p             0.25p





                                                     30 Sep 06         30 Sep 05
                                                         £'000             £'000
Group Balance Sheet
Fixed Assets                                            13,930            13,458

Current Assets                                           5,554             5,981
Current Liabilities                                    (1,666)           (1,594)

Current Assets less Current Liabilities                  3,888             4,387
Creditors (amounts falling due after one year)         (2,243)           (1,773)

Total Assets less Liabilities                           15,575            16,072

Share Capital and Reserves                              15,575            16,072






                                                     30 Sep 06         30 Sep 05
                                                         £'000             £'000
Group Cash Flow
Operating Profit                                           434               431
Movements in Working Capital                              (80)               249
Exchange Movements                                       (211)               643

Net Cash Inflow from Operating Activities                  143             1,323


Returns on Investments                                       4               (1)
Capital Expenditure                                      (356)           (1,110)

Decrease in Cash                                         (209)               212





Notes

1.      The figures for the six months to 30th September 2006 and 30th September
2005 are unaudited. The financial information set out above and does not
constitute full statutory accounts within the meaning of section 240 of the
Companies Act 1985.



2.      Copies of this announcement will be sent to shareholders and will be
available for inspection at the Company's registered office at 20-22 Bedford
Row, London, WC1R 4JS.




                      This information is provided by RNS
            The company news service from the London Stock Exchange