Re Agreement

Pan Andean Resources PLC
29 April 2008

                            Pan Andean Resources Plc



      Pan Andean is an oil and gas producer and explorer in South America

                             and the Gulf of Mexico





29th April 2008



          Major Oil Group Joint Ventures Pan Andean Block 141 in Peru





Highlights:





O      Reliance Industries Ltd to joint venture with Pan Andean on Peruvian
Block 141.



O      Reliance Industries to cover exploration costs including wells through
commercial discovery.



O      Pan Andean's new stake to be a minimum of 10% and maximum of 30% based on
an agreed formula dependent on discovery size.





Peruvian Block 141



Pan Andean (AIM:PRE), the AIM listed oil and gas producer, is pleased to
announce that it has signed an agreement with Reliance Industries, India's
largest private sector enterprise with businesses in the energy and materials
value chain, to farm into Block 141 in the high plateau of Peru.  This move is
in line with the stated Pan Andean strategy of reducing financial exposure,
while accelerating drilling plans in potentially high value blocks.



The agreement is subject to the regulatory approval of the Peruvian authorities.
Once such approval is obtained, Reliance Industries will assume operatorship.



Pan Andean will dilute its interest in Block 141 to 10%, in return for which
Reliance Industries will incur all exploration costs through commercial
discovery.



The new ownership of Block 141 will be 10% Pan Andean, and 90% Reliance
Industries.



Following a commercial discovery of an agreed size, Pan Andean will reimburse
Reliance for its share of the exploration costs. In addition, based on a formula
established in the Farm-Out Agreement, Pan Andean has the right, though not the
obligation, to increase its stake to a maximum of 30%.  In such a situation Pan
Andean will reimburse Reliance Industries for that proportion of its exploration
expense on Block 141 which Pan Andean will then own.



Block 141 is situated in 1.2 million acres (0.5 million hectares) of Andean
mountain plateau.





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



'We believe that Block 141 contains highly prospective and potentially valuable
structures. This is based on the belief that the kitchen that charges the
world-class Camisea gas and condensate field to the north may also charge
structures in our Block 141 to the south.



We plan to conduct geological & geophysical work.  If the seismic shows adequate
structures we anticipate drilling and a total work programme that may exceed $40
million.



Reliance's joint venture is a convincing statement of the exploration potential
of Block 141, as well as an expression of confidence in Peru as an excellent
investment location.  Reliance's decision to farm in should also be seen in
context with CEPSA's decision to farm into our Blocks 114 and 131. Peru is being
positively reassessed by international majors as they search for valuable new
reserves.



Reliance Industries is highly regarded in the industry as a serious player with
a strong technical orientation.  They have grown to operate circa 500,000
barrels daily of production, following several successes worldwide.  Reliance's
achievements reflect the wider resurgence of Indian science and business.



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
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 Plc
John Wakefield                                         [phone]
Simon Moynagh



www.panandeanresources.com


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