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Pan Ameri Energy LLC (57UC)

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Friday 18 May, 2007

Pan Ameri Energy LLC

3rd Quarter Results

Pan American Energy LLC, Argentine Branch
                  

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2006 AND COMPARATIVE INFORMATION

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CONTENTS                                                                              Page


Review report on interim financial statements                                          2
Corporate information                                                                  4
Balance sheet                                                                          5
Statement of income                                                                    6
Statement of cash flows                                                                7
Notes to the financial statements                                                      8
Exhibits A, B, C, D, E, F, G, H and I                                                 21
Reporting summary                                                                     34
Supplementary information required by the Buenos Aires Stock Exchange                 40
*T

REVIEW REPORT ON INTERIM FINANCIAL STATEMENTS

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To the Legal Representative of
Pan American Energy LLC (Argentine Branch)
Av. Leandro N. Alem 1180 - 11th Floor
Buenos Aires
C.U.I.T.: 30-69554247-6
*T

We reviewed the accompanying balance sheet of Pan American Energy LLC (Argentine
Branch) as of September 30, 2006, and the related statements of income and cash
flows, notes 1 to 14 and exhibits A, B, C, D, E, F, G, H and I for the
nine-month period then ended, comparative with the same period of the prior
year, and in the case of the balance sheet and the related notes and exhibits,
with the financial statements as of December 31, 2005. The preparation of these
financial statements is the responsibility of the Legal Representative of the
Branch.

We conducted our review in accordance with auditing standards generally accepted
in the Republic of Argentina applicable to the limited scope review of interim
financial statements. A review of interim financial information consists
principally in applying analytical procedures to the accounting data and making
inquiries of the individuals responsible for its preparation. As a review is
substantially less in scope than an audit of annual financial statements, we do
not express an opinion on the financial position of the Branch as of September
30, 2006, nor on the results of its operations and the cash flows for the
nine-month period then ended.

In relation to the financial statements as of December 31, 2005 presented for
comparative purposes, we issued an unqualified opinion on February 24, 2006. In
addition, on November 7, 2005, we issued an unmodified review report on the
financial statements as of September 30, 2005, also presented for comparative
purposes.

Based on our review, we report that the financial statements as of and for the
nine months ended September 30, 2006 referred to in the first paragraph consider
all the significant facts and circumstances of which we became aware during our
review and in relation to them we have no observations.

In compliance with rules and regulations in force, we report that:

a) the financial statements comply with the provisions of the Corporations Law
and the regulations on accounting documentation of the National Securities
Commission, they are transcribed in the Inventory Book and they derive from the
accounting records of the Branch maintained in Argentina which, in their formal
aspects, are kept pursuant to legislation in force. The information systems used
to process the data included in the financial statements are kept under the
security and integrity conditions based on which they were authorized;

b) we read the information included in the reporting summary (sections 'Balance
sheet items', 'Income statement items', 'Statistical data' and 'Ratios') and in
the supplementary information to the financial statements required by section 68
of the regulations of the Buenos Aires Stock Exchange and, based on our review
as far as it relates to our area of responsibility, we have no observations, and

c) as of September 30, 2006, the accrued liability for pension contributions
arising from the accounting records amounted to $ 2,607,627, no amounts being
due as of that date.

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Buenos Aires, November 9, 2006

SIBILLE

Graciela C. Laso
Partner
*T

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

FINANCIAL STATEMENTS as of September 30, 2006 for the nine-month period
beginning January 1, 2006 and ended September 30, 2006 and comparative
information.

Stated in pesos

Legal address of the Branch: Av. Leandro N. Alem 1180 - 11th floor - Buenos
Aires

Main activity of the Branch: Oil and gas exploration and production

Date of registration with the Public Registry of Commerce: October 17, 1997

Registration number with the Inspection Board of Legal Entities: 1868, Book 54,
Volume B of Foreign Companies

Capital registered with the Inspection Board of Legal Entities: $ 200,000,000
under number 1257, Book 57, Volume B of Foreign Companies, and $ 21,779,007
under number 2106, Book 58, Volume B of Foreign Companies (Note 8).

Date of registration of capital with the Inspection Board of Legal Entities:
$ 200,000,000 on July 11, 2003 and $ 21,779,007 on December 12, 2005

Subscribed capital (paid in full): $ 221,779,007

HEAD OFFICE

Name: Pan American Energy LLC

Legal address: The Corporation Trust Company, Trust Corporation Center, 1209
Orange Street, Wilmington, Delaware - 19801 - United States of America

Main activity: Oil and gas exploration and production

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PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)
BALANCE SHEET as of September 30, 2006 and December 31, 2005
 (in pesos)
                                                                     09/30/2006        12/31/2005
                                                              ------------------------------------
ASSETS
CURRENT ASSETS
Cash on hand and in banks (Note 4 a)                                 26,444,557         9,130,717
Investments (Exhibit C)                                             464,628,305       374,163,381
Accounts receivable (Note 4 b)                                      755,820,806       536,783,441
Other receivables (Note 4 c)                                        190,785,610       150,094,893
Inventories (Note 4 d)                                              121,108,087       123,056,552
                                                              ------------------------------------

Total current assets                                              1,558,787,365     1,193,228,984
                                                              ------------------------------------
NON CURRENT ASSETS
Other receivables (Note 4 e)                                         28,001,275        71,903,761
Investments (Exhibit C)                                               7,371,734         5,691,193
Property, plant and equipment (Exhibit A)                         5,534,137,478     4,797,794,173
Intangible assets (Exhibit B)                                         2,739,307         3,716,720
                                                              ------------------------------------

Total non current assets                                          5,572,249,794     4,879,105,847
                                                              ------------------------------------

Total assets                                                      7,131,037,159     6,072,334,831
                                                              ====================================
LIABILITIES
CURRENT LIABILITIES
Accounts payable (Note 4 f)                                         586,539,602       464,381,789
Loans (Note 4 g)                                                    955,821,287       546,436,420
Payroll and social security contributions                            27,334,979        23,093,534
Taxes payable (Note 4 h)                                            455,526,170       348,761,336
Provision for future compensation of personnel (Exhibit D)            1,968,408         1,841,405
                                                              ------------------------------------

Total current liabilities                                         2,027,190,446     1,384,514,484
                                                              ------------------------------------
NON CURRENT LIABILITIES
Accounts payable (Note 4 i)                                          49,702,727        44,138,822
Loans (Note 4 j)                                                  2,237,084,755     1,485,426,710
Other liabilities (Note 3.2.j)                                       83,096,246        69,687,858
Deferred tax (Note 3.2.h and 11)                                    393,026,382       438,487,889
Provision for future compensation of personnel (Exhibit D)            3,131,625         4,704,049
Provision for environmental remediation (Exhibit D)                 107,848,841       100,386,197
Accruals (Exhibit D)                                                 18,945,546        22,152,066
                                                              ------------------------------------

Total non current liabilities                                     2,892,836,122     2,164,983,591
                                                              ------------------------------------

Total liabilities                                                 4,920,026,568     3,549,498,075

Account with Head Office (Note 7)                                 1,749,771,584     2,061,597,749
Capital allocated to the Branch (Note 8)                            221,779,007       221,779,007
Capital adjustment                                                  239,460,000       239,460,000
                                                              ------------------------------------

Total                                                             7,131,037,159     6,072,334,831
                                                              ====================================
*T

The accompanying notes and exhibits are an integral part of these financial
statements.

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PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)
STATEMENT OF INCOME for the nine-month period beginning January 1, 2006 and ended September 30,
 2006 comparative with the same period of the prior year (in pesos)
                                                     2006                        2005
                                                 (9 months)                  (9 months)
                                        --------------------------------------------------------

Sales                                                 4,002,097,366               2,684,581,252
Cost of sales (Exhibit E)                            (1,749,613,593)             (1,216,910,303)
                                                     ---------------             ---------------

Gross profit                                          2,252,483,773               1,467,670,949

Administrative expenses (Exhibit G)                   ( 163,278,464)              ( 102,553,741)
                                                     ---------------             ---------------

Operating income                                      2,089,205,309               1,365,117,208

Financial results
 Provided by assets
  Interest                                45,063,238                  12,978,568
  Exchange gains/losses                   30,318,370                 ( 9,468,443)
    Other financial results                  845,506     76,227,114    1,541,888      5,052,013
                                        -------------               -------------

 Provided by liabilities
  Interest                              (120,057,375)                (78,706,849)
  Exchange gains/losses                 ( 52,121,112)                 49,389,209
    Bank commissions and other financial
     results                             ( 7,632,635) ( 179,811,122) (20,644,655)  ( 49,962,295)
                                        -------------               -------------

Other income and expenses - net (Note
 3.2.j
and Exhibit D, line 6)                                 ( 36,853,241)               ( 19,698,264)
                                                     ---------------             ---------------

Income before income tax                              1,948,768,060               1,300,508,662

Income tax expense - current (Note 3.2 h
 and 11)                                              ( 727,581,754)              ( 491,427,561)

Income tax benefit - deferred
(Note 3.2.h and 11)                                      45,461,507                  31,874,626
                                                     ---------------             ---------------

Net income (Note 7)                                   1,266,647,813                 840,955,727
                                                     ===============             ===============
*T

The accompanying notes and exhibits are an integral part of these financial
statements.

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PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)
STATEMENT OF CASH FLOWS for the nine-month period ended September 30, 2006 comparative with the
 same period of the prior year (in pesos)
                                                                         2006           2005
                                                                    --------------- --------------
                                                                      (9 months)      (9 months)
Cash provided by (used in) operations:

  Net income                                                         1,266,647,813    840,955,727

  Adjustment to reconcile net income with the cash provided by
   operations

  Depreciation of Property, Plant and Equipment                        481,912,961    424,407,009
  Amortization of intangible assets                                      1,444,304      1,684,314
  Income tax expense                                                   727,581,754    491,427,561
  Net increase in allowance for bad debtors                             10,536,261      5,512,785
  Decrease in Property, Plant and Equipment (net)                        2,333,592      1,729,386
  Net (decrease) increase in accrual for lawsuits                      ( 2,930,955)     1,856,986
  Net increase in provision for environmental remediation                7,462,644      3,543,686
  (Decrease) increase in the allowance for obsolescence of materials       ( 3,877)       425,682
  Other non-cash items (1)                                              99,003,960    ( 8,262,281)

  Changes in assets, liabilities and account with Head Office:

  Increase in accounts receivable                                    ( 229,573,626) ( 146,031,092)
  Decrease in inventories                                                1,952,342     24,174,778
  Increase in other current receivables                               ( 40,690,717)   ( 1,720,414)
  Decrease (increase) in other non current receivables                  43,902,486   ( 19,078,395)
  Decrease in accounts payable, payroll and social security
   contributions,
taxes payable and other liabilities                                  ( 475,445,369) ( 509,672,365)
  Compensation (post retirement) to personnel                          ( 1,445,421)   ( 1,239,179)
  Payments related to lawsuits                                           ( 275,565)     ( 112,194)
  Contribution received from Head Office                                         -     21,779,007
                                                                    --------------- --------------
  Net cash provided by operations                                    1,892,412,587  1,131,381,001
                                                                    =============== ==============

Cash used in investing activities:

  Increase in long-term investments                                    ( 1,680,541)   ( 6,308,326)
  Additions of Property, Plant and Equipment                        (1,220,589,858) ( 851,882,961)
  Additions of intangible assets                                         ( 466,891)      ( 58,054)
                                                                    --------------- --------------
  Cash used in investing activities                                 (1,222,737,290) ( 858,249,341)
                                                                    --------------- --------------

Cash used in financing activities::

  Increase in loans (net)                                            1,016,577,445    349,624,792
  Remittances made to Head Office                                   (1,578,473,978) ( 338,860,096)
                                                                    --------------- --------------
  Cash used in financing activities                                  ( 561,896,533)    10,764,696
                                                                    --------------- --------------

Net increase in cash                                                   107,778,764    283,896,356

Cash at beginning of the period (2)                                    383,294,098    157,842,042
                                                                    --------------- --------------

Cash at the end of period (2)                                          491,072,862    441,738,398
                                                                    =============== ==============
*T

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(1) Exchange gains/losses and other financial results
     relating to loans, account with Head Office and other             144,465,467     22,179,581
     deferred tax (benefit) expense                                   ( 45,461,507)  ( 30,441,862)(3)

     Total                                                              99,003,960    ( 8,262,281)

(2) Cash and banks plus investments becoming due within three
 months.

(3) In the nine month period of fiscal 2005, it includes $ 1,432,764 corresponding to the deferred tax
 effect provided by the assets and liabilities contributed by Head Office (Note 8)

*T

The accompanying notes and exhibits are an integral part of these financial
statements.

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

NOTES TO THE FINANCIAL STATEMENTS as of September 30, 2006 and comparative
information (in pesos)

NOTE 1 - THE BRANCH

Pan American Energy LLC (Argentine Branch) is engaged in the exploration,
development and production of hydrocarbons.

On October 30, 1997, a definitive agreement for the transfer of assets and
liabilities was entered into between Amoco Argentina Oil Company (Argentine
Branch) and Pan American Energy LLC (Argentine Branch) hereinafter 'the Branch',
whereby Amoco Argentina Oil Company (Argentine Branch) transferred its business
consisting of assets and liabilities to the Branch, effective on October 8,
1997.

On May 1, 1998 a definitive agreement for the transfer of assets and liabilities
was entered into between Pan American Continental S.R.L. and the Branch, whereby
Pan American Continental S.R.L. transferred to the Branch its business
consisting of the assets and liability except for the name Pan American
Continental.

NOTE 2 - OPERATIONS OF THE BRANCH

The following table summarizes the main operations, blocks and joint ventures in
which the Branch is involved as of September 30, 2006 or was involved in the
nine-month period then ended.

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                Activity                                                         Ownership        Branch's
                                         Main blocks/ operations                  interest         participation
---------------------------------------- ----------------------------------------------------     -------------------

Oil and gas production and development   Cerro Dragón                                 100.00%     Operator
                                         Piedra Clavada                               100.00%     Operator
                                         Koluel Kaike                                 100.00%     Operator
                                         Lindero Atravesado                            62.50%     Operator
                                         Anticlinal Funes (2)                          80.00%     Operator
                                         Acambuco                                      52.00%     Operator
                                         Aguada Pichana                                18.18%     Non operator
                                         San Roque                                     16.47%     Non operator
                                         Estancia La Escondida (1)                     25.00%     Non operator

Oil and gas exploration and development  Acambuco 'B'                                 100.00%     Operator
                                         Río Barrancas (2)                            100.00%     Operator
                                         Bandurria                                     18.18%     Non operator
                                         Costa Afuera Argentina 'CAA-40'               50.00% (3) Non operator
                                         Costa Afuera Argentina 'CAA-46'               50.00% (3) Non operator
*T

Explanations:

(1) The Joint Venture agreement (UTE) governing the relationships between the
holders of concession states that their participating interests in rights,
obligations and interests inherent in the property including production, will be
distributed based on the depth from which production is obtained: in the deep
area, the Branch has a 75% interest and the co-holder has the remaining 25%; in
the shallow area from which current total production is obtained, the Branch has
a 25% interest and the co-holder the remaining 75%; and in the area
'Descubrimiento El Zanjón', both parties hold a 50% interest. The average
interest described grants the Branch a 50% interest in the rights over the
property, regardless the percentage thereof in the concession.

(2) In February 2005, the Branch acquired an 80% interest in the area Anticlinal
Funes, located in the Province of Chubut and a 100% interest in the area Río
Barrancas, located in the Province of Neuquén, under the corporate
reorganization between Head Office and Head Office's subsidiary Pan American
Continental S.R.L (Note 8). In December 2005, the Branch relinquished the
concession for Lote Chapúa Este which covered part of the area CNQ-4, Río
Barrancas, as commercial production would not be achieved based on reserves
estimates.

(3) In December 2003, the Branch acquired a 35% interest in the exploration
blocks Costa Afuera Argentina (CAA) 40 and 46, located in Malvinas Basin. In
December 2004, one of the members withheld from the CAA 46 block and transferred
an interest of 15.72% to the Branch and, therefore, the interest in such block
was 50.72%. In December 2005, the Branch assigned an interest of 0.72% in the
CAA 46 block and acquired a 15.00% interest in the CAA 40 block and, therefore,
the Branch's interest in both exploration blocks is 50.00%.

NOTE 3 - ACCOUNTING PRINCIPLES

3.1 Reporting currency

In accordance with Decree 664/2003 and General Resolution No. 441/2003 of the
National Securities Commission (the 'Comisión Nacional de Valores' or CNV), the
Branch discontinued the application of currency restatement as from March 1,
2003.

From January 1, 2002 to February 28, 2003, the Branch applied the restatement
methodology set forth by Technical Resolution No. 6, amended by Technical
Resolutions Nos. 17 and 19 of the Argentine Federation of Professional Councils
of Economic Sciences (FACPCE) and by the Professional Council of Economic
Sciences of the City of Buenos Aires (CPCECABA), using indexes derived from the
Internal Wholesale Price Index.

3.2 Valuation and presentation principles

a) Presentation

The financial statements are presented in accordance with the presentation
principles established by the accounting standards generally accepted in the
City of Buenos Aires (Republic of Argentina).

Investments to become due or to be realized in the short term are considered a
cash equivalent in the statement of cash flows.

Certain reclassifications were made to the financial statements presented as
comparative information to conform them to the presentation used in the current
period.

b) Participating interest in joint ventures

The Branch is engaged in exploration and production activities in certain areas
through its participation in joint ventures with other companies. The account
balances reflecting the joint ventures' assets, liabilities, income and expenses
are proportionately consolidated in these financial statements.

c) Foreign currency

Assets and liabilities denominated in foreign currency as listed in Exhibit F
have been stated in Argentine Pesos at the exchange rate prevailing at the end
of each period. The resulting exchange gains or losses are presented in the
financial results line (provided by either assets or liabilities, as applicable)
of the Statement of Income.

d) Inventories

Crude oil is stated at reproduction cost. Spare parts, materials and raw
materials are stated at the latest acquisition cost. Goods in transit are stated
at acquisition cost plus import expenses. Advances to suppliers are valued at
the amounts actually incurred.

The carrying value of inventories, taken as a whole and after considering the
allowance for obsolescence (see Note 3.2.g), does not exceed their recoverable
value.

e) Property, plant and equipment

Property, plant and equipment is stated at acquisition cost as indicated in Note
3.1 less the related accumulated depreciation. The acquisition cost includes all
the necessary costs incurred in order to put the assets in working condition.

3.2 Valuation and presentation principles (Cont.)

e) Property, plant and equipment (Cont.)

Depreciation is calculated by applying the straight-line method over the
estimated useful lives of the assets and/or the duration of the contracts, as
applicable, except for production wells, equipment and services, which are
depreciated per the units of production method.

The pre-operating costs of the properties in the exploration stage, except for
geology and geophysics related expenses that are charged to the Statement of
Income as incurred, remain capitalized for a given period based on the
characteristics of each property, without exceeding five years considered as
from the completion of the exploration stage or, if applicable, as from
production interruption, unless:

a) it is expected that explored areas will proceed to the commercial production
stage, in which case the referred costs remain capitalized, or

b) during the referred five year period, management estimates that commercial
production will not be feasible, in which case, the referred costs are expensed.

For Property, plant and equipment existing as of January 6, 2002, the
acquisition or construction of which resulted in outstanding liabilities
denominated in foreign currency - exchange gains/losses resulting from restating
such liabilities totaling $1,832,303,600 through July 28, 2003 were capitalized
pursuant to specific accounting principles, based on the determination of the
direct or indirect ratio between the assets subject to capitalization and the
outstanding liabilities in foreign currency. The assets or group of assets
eligible for the capitalization of exchange gains/losses have remained
unchanged. Such capitalization of exchange gains/losses was performed in
proportion to the balance of the original value of the referred assets not
subject to depreciation. Additionally, exchange gains and losses were
capitalized up to the limit arising from the comparison between the replacement
or reproduction cost of the assets and their recoverable value.

For the purposes of presenting the financial statements in restated currency
(see Note 3.1), the capitalized exchange gains/losses amounting to $
1,832,303,600 are considered an anticipated currency restatement until such
differences are absorbed thereby. The excess of capitalized exchanges losses
over the restated amounts totals $ 85,358,131 as of September 30, 2006.

The Branch considers that the net carrying value of Property, plant and
equipment, taken by group of assets of similar characteristics, does not exceed
their estimated value in use based on the information available as of the date
of issuance of the financial statements.

f) Intangible assets

These are pre-production geological expenditures and acquisition cost of blocks
valued at restated cost as indicated in Note 3.1., less the related accumulated
amortization. Amortization is calculated per the units of production method.

Deferred expenditures, mainly consisting of organization and system development
expenses, are amortized per the straight-line method over 5 and 3 years
respectively.

g) Allowances, Provisions and Accruals

Allowances deducted from assets:

- For bad debtors: they are determined following the detailed analysis of the
credit status of each customer.

Allowances deducted from assets:

- For obsolescence of materials: the Branch creates an allowance for those
assets evidencing significant slow movement based on a specific analysis.

Accruals:

- For lawsuits: they are determined considering the potential costs of those
lawsuits filed against the Branch based on the opinion of legal counsel.

Provisions:

- For future compensation of personnel: they are estimated as a percentage of
compensation paid, calculated in terms of actuarial methods, and can be applied
to compensate employees of the Branch who have complied with certain seniority
requirements defined by the Branch. Payments are debited from the related
provision.

- For environmental remediation: calculated on the basis of well-abandonment
forecasts until the expiration of agreements, at present values.

h) Income tax /Minimum deemed income tax

The Branch applies the deferred tax method to account for income tax. Based on
the referred method, the current income tax is calculated by applying the rates
prevailing as of September 30, 2006 and 2005 on taxable income; and the future
tax effect of a) the temporary differences in the book and tax values of assets
and liabilities and b) the tax loss carryforwards, if any, are recognized as
deferred tax assets or liabilities. The deferred tax assets are recognized only
to the extent of their recoverability.

No provision for the minimum deemed income tax was recognized for the periods
ended September 30, 2006 and 2005, as the income tax provision is higher.

i) Use of estimates

The preparation of the financial statements in accordance with generally
accepted accounting principles requires that the Legal Representative of the
Branch and management make estimates about the value of certain assets and
liabilities, including contingent liabilities, as well as the amounts informed
of certain income and expenses. The final amounts may differ from the estimates
used in the preparation of the financial statements.

j) 'Plan Puente'

The Branch implemented a pension plan for the benefit of its personnel called
'Plan Puente' or 'Bridge Plan'. The amount accrued upon the implementation of
such plan amounts to $ 83,096,246, presented under Other non current
liabilities, out of which the amount of $ 13,417,067 accrued in the nine-month
period ended September 30, 2006 and is included in Other income and expenses of
the Statement of Income. Such amount is made up of $ 143,354,445 of nominal
value less $ 60,258,199 (financial effect from the discount to present value).

k) Revenue recognition

Revenue derived from the sale of oil and gas production is recognized when the
significant risks and rewards of ownership have been transferred to the
purchaser.

l) Lease agreements

The Branch leases the space occupied by its offices, which agreements are of an
operating nature and, therefore, the expenses incurred are recognized in the
Statement of income to the extent they are accrued.

The amount of the leases, broken down by maturity dates, is reported below:

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*T
                                               Nominal value
                                     ---------------------------------

Up to a year                         U$S 1,374,900 and $ 311,928
Over one year and up to five years   U$S 1,258,400
*T

During the nine-month period, the Branch recognized an expense of $ 3,594,078
related to such lease agreements, presented in the line Buildings Rentals and
Maintenance in Exhibit G.

m) Enactment of new technical resolutions and other regulations

In line with General Resolution No. 487/2006 of the CNV, the Branch now
considers the currency restatement of Property, plant and equipment as a
temporary difference for the purposes of the deferred tax calculation.
Consequently, an increase in the net deferred tax liabilities amounting to
$229,088,577 was recognized, as well as an adjustment to prior year results
(loss) presented as part of the Account with Head Office (Note 7).

As required by Resolution N° 487/2006 of the CNV in connection with the
recoverable values of assets, we report that at the balance sheet date no
indicators exist that the carrying value of the assets exceeds the recoverable
value.

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*T
NOTE 4 - BREAKDOWN OF CERTAIN BALANCE SHEET ACCOUNTS
                                                                  09/30/2006         12/31/2005
                                                               ------------------ ------------------
ASSETS
CURRENT ASSETS

a) Cash on hand and in banks
   Cash on hand in local currency                                        143,122            146,969
   Cash on hand in foreign currency (Exhibit F)                          137,682            281,946
   Cash in banks in local currency                                    14,721,496          4,086,100
   Cash in banks in foreign currency (Exhibit F)                      11,442,257          4,615,702
                                                               ------------------ ------------------

   Total                                                              26,444,557          9,130,717
                                                               ================== ==================

b) Accounts receivable
   Accounts receivable in local currency                              69,513,000         62,040,957
   Allowance for bad debtors in local currency (Exhibit D)           ( 6,273,722)       ( 3,547,930)
   Accounts receivable in foreign currency (Exhibit F)               529,755,517        252,277,278
   Affiliated companies in foreign currency
    (Note 9 and Exhibit F)                                           182,873,373        238,250,029
   Allowance for bad debtors in foreign currency
    (Exhibits D and F)                                              ( 20,047,362)      ( 12,236,893)
                                                               ------------------ ------------------

   Total                                                             755,820,806        536,783,441
                                                               ================== ==================

c) Other receivables
   Loans to personnel                                                  6,651,751          4,625,479
   Tax credits                                                        15,734,407         32,515,843
   Expenses recoverable in local currency                              6,001,508          5,837,727
   Expenses recoverable in foreign currency (Exhibit F)                2,253,779          2,063,279
   Prepaid expenses in local currency                                 13,879,369          2,996,588
   Tax credit certificate, Decree 564/05 in foreign currency
    (Exhibit F)                                                       35,235,138         36,985,316
   Interest in Fideicomiso Gas ampliación Gasoducto Sur               48,000,000                  -
   Miscellaneous in local currency                                    35,149,369         28,333,063
   Miscellaneous in foreign currency (Exhibit F)                      26,750,773         35,602,288
   Affiliated companies in foreign currency
    (Note 9 and Exhibit F)                                             1,129,516          1,135,310
                                                               ------------------ ------------------

   Total                                                             190,785,610        150,094,893
                                                               ================== ==================

d) Inventories
   Crude oil in stock                                                 53,115,100         62,065,127
   Spare parts, materials and raw materials                           43,896,852         44,967,474
                                                               ------------------ ------------------
   Subtotal                                                           97,011,952        107,032,601
   Allowance for obsolescence of materials (Exhibit D)               ( 2,416,057)       ( 2,419,934)
                                                               ------------------ ------------------
   Subtotal (Exhibit E)                                               94,595,895        104,612,667
   Goods in transit                                                   20,833,359         13,076,372
   Advances to suppliers in local currency                             5,250,718          3,929,418
   Advances to suppliers in foreign currency (Exhibit F)                 428,115          1,438,095
                                                               ------------------ ------------------
   Total                                                             121,108,087        123,056,552
                                                               ================== ==================

NON-CURRENT ASSETS

e) Other receivables
   Loans to personnel                                                  2,854,277          1,974,314
   Advances to suppliers in local currency                             4,902,320                  -
   Interest in Fideicomiso Gas ampliación Gasoducto Sur                        -         48,000,000
   Miscellaneous in local currency                                     5,643,597          5,795,618
   Miscellaneous in foreign currency (Exhibit F)                      14,601,081         16,133,829
                                                               ------------------ ------------------

   Total                                                              28,001,275         71,903,761
                                                               ================== ==================

LIABILITIES
CURRENT LIABILITIES

f) Accounts payable
   Trade payables in local currency                                  393,129,933        283,641,773
   Trade payables in foreign currency (Exhibit F)                    161,749,564        160,999,848
   Expenses payable in local currency                                 29,736,790         17,305,648
   Affiliated companies in foreign currency
    (Note 9 and Exhibit F)                                             1,923,315          2,434,520
                                                               ------------------ ------------------

   Total                                                             586,539,602        464,381,789
                                                               ================== ==================

g) Loans
   Bonds in foreign currency (Exhibit F)                             310,400,000                  -
   Unsecured bonds payable in local currency                         360,051,675        305,964,724
   Secured bonds payable in foreign currency
    (Exhibit F)                                                        6,290,337         13,202,113
   Unsecured bonds payable in foreign currency
    (Exhibit F)                                                      243,441,938        182,659,601
   Interest accrued on bonds payable in foreign currency
    (Exhibit F)                                                       35,637,337         44,609,982
                                                               ------------------ ------------------

   Total                                                             955,821,287        546,436,420
                                                               ================== ==================

h) Taxes payable
   Income tax net of prepayments                                     378,228,722        288,037,030
   Other taxes payable                                                77,297,448         60,724,306
                                                               ------------------ ------------------

   Total                                                             455,526,170        348,761,336
                                                               ================== ==================

NON CURRENT LIABILITIES

j) Accounts payable
   Miscellaneous liabilities in local currency                        26,960,081         27,432,054
   Miscellaneous liabilities in foreign currency (Exhibit F)          22,742,646         16,706,768
                                                               ------------------ ------------------

   Total                                                              49,702,727         44,138,822
                                                               ================== ==================

j) Loans
   Affiliated companies in local currency (Note 9)                   384,000,000                  -
   Bonds in foreign currency (Exhibit F)                           1,086,400,000        606,400,000
   Secured bonds payable in foreign currency
    (Exhibit F)                                                                -          4,131,712
   Unsecured bonds payable in foreign currency
    (Exhibit F)                                                      766,684,755        874,894,998
                                                               ------------------ ------------------

  Total                                                            2,237,084,755      1,485,426,710
                                                               ================== ==================
*T

NOTE 5 - BOND ISSUANCE

On July 13, 1995, Resolution No. 10982 of the CNV authorized the short and
medium term bond program submitted by the branch in Argentina of the foreign
corporation Amoco Argentina Oil Company for a total maximum amount of US$
200,000,000, nominal value. The bonds are issued as 'Obligaciones Negociables'
(negotiable obligations).

In September 1995, Amoco Argentina Oil Company (Argentine Branch) issued the
First Series of bonds in the amount of US$ 100,000,000 due in ten years with an
interest rate of 6.63% p.a. Principal was repaid at maturity.

On February 11, 1997, Amoco Argentina Oil Company (Argentine Branch) issued the
Second Series of bonds in the amount of US$ 100,000,000 due in ten years.
Principal is to be repaid in a single payment at maturity and accrues interest
at a rate of 6.75% p.a. This issuance completes the maximum amount of the short
and medium term bond program referred to above.

The funds obtained from both bond issues were used to repay loans granted by
affiliated companies of Amoco Argentina Oil Company (Argentine Branch).

As a result of the transfer of assets and liabilities referred to in the second
paragraph of Note 1, Amoco Argentina Oil Company (Argentine Branch) transferred
the above mentioned bonds to Pan American Energy LLC (Argentine Branch). The
First Series of bonds was guaranteed by BP Company North America Inc. until
repayment in September 2005. The Second Series is also guaranteed by this
company.

On February 21, 2002, through Resolution No. 14123, the CNV authorized the
Global Program for the Issuance of Bonds of Pan American Energy LLC (Argentine
Branch) (the 'Global Program') in the total amount of US$ 1,000,000,000. These
bonds are also issued as 'Obligaciones Negociables' (negotiable obligations). On
April 16, 2002, the Branch issued under this Global Program its Bonds Class 1 in
the amount of US$ 20,400,000 becoming due in two years (April 16, 2004) at an
annual 7.5% rate. These Bonds were paid upon maturity. On October 17, 2002, the
Branch issued Bonds Class 2, Sub-Class A in the amount of US$ 500,000 and
Sub-Class B in the amount of US$ 15,000,000 under the Global Program. These
bonds became due in two years (October 17, 2004) and accrued interest at a 7%
rate p.a. The funds obtained in the issues under the Global Program were
allocated to the Branch's working capital.

On October 27, 2004, the Branch issued Bonds Class 3 in the amount of US$
100,000,000 under the Global Program which become due in five years (October 27,
2009) with a 7.125% annual interest rate to be paid on a half-yearly basis took
place. The price of the issuance was 99.483%, nominal value. The funds derived
from this issuance were allocated to investments in property and equipment and
the repayment of loans.

On August 9, 2006, the Branch issued Bonds Class 4 in the amount of US$
250,000,000 under the Global Program, to be repaid in two equal installments
becoming due on February 9, 2011 and February 9, 2012, with interest accruing at
a fixed annual interest rate of 7.75% to be paid on a half-yearly basis. The
price of the issuance was 100.00% of the nominal value. The funds obtained in
this issue will be allocated to investments in property and equipment, working
capital and repayment of loans.

NOTE 6 - OTHER FINANCIAL LIABILITIES

Pan American Energy LLC (Argentine Branch) obtained the following loans at a
five-year term, with interest compounded bi-annually amortized in monthly
installments: 1) On July 20, 2001, in the amount of US$ 72,051,406, with
interest accruing at an annual rate of 7.54%, with the first installment falling
due on April 19, 2002 and the repayment term being completed on June 20, 2006,
and 2) on September 17, 2001, in the amount of US$ 40,001,944, with interest
accruing at an annual rate of 6.72%, with the first installment falling due on
June 20, 2002 and completing repayment on August 21, 2006. For the purpose of
fixing the interest rate, the Branch has entered into integrated derivative
transactions, the impact of which has been included in the cost of the
transactions. Both loans have been guaranteed by Pan American Energy LLC until
the repayment thereof in June and August 2006.

On July 11, 2005, the Branch obtained from the International Finance Corporation
(IFC) a loan in the amount of US$ 250,000,000 guaranteed by Head Office and
consisting of three tranches:

- 'A' in the amount of US$ 100,000,000, with interest accruing at an annual
fixed rate of 7.56%, through an interest rate swap with IFC, amortizable on
six-month basis and becoming due in July 2015,

- 'B' in the amount of US$ 135,000,000, at an annual fixed rate of 6.97%,
through an interest rate swap with IFC, amortizable on a six-month basis, and
becoming due in July 2012, and

- 'C' in the amount of US$ 15,000,000, at an annual fixed base rate of 5.66%
becoming due in July 2016.

As of December 31, 2005, the amount of the loans has been fully disbursed. The
first principal installment for tranches 'A' and 'B' becomes due on January 15,
2007.

The funds obtained were used to partially fund the 2005 investment program in
Golfo San Jorge.

NOTE 7 - ACCOUNT WITH HEAD OFFICE

The changes in the account with Head Office during the nine-month period ended
September 30, 2006 and September 30, 2005 are as follows:

-0-
*T
                                                                   Nine-month period ended
                                                             ------------------------------------
                                                                  09/30/2006          09/30/2005
                                                             ------------------------------------

Balance at beginning of year with Head Office (in historical
 currency)                                                     2,290,686,326       1,846,528,170
Effects of revaluation (included in Financial Results
 provided by liabilities, exchange gains/losses of the
 Statement of Income)                                                      -        ( 15,619,765)
                                                             ------------------------------------
Balance at beginning of year with Head Office subsequent to
 revaluation                                                   2,290,686,326       1,830,908,405
Adjustment to prior-year results (Note 3.2.m)                  ( 229,088,577)      ( 210,939,575)
                                                             ------------------------------------
Balance at beginning of year with Head Office subsequent to
 adjustment                                                    2,061,597,749       1,619,968,830

Exchange gains/losses resulting from the redenomination of
 balances in
local currency (included in Financial Results provided by
 liabilities,
exchange gains/losses of the Statement of Income)                          -         ( 1,126,107)
Remittances made to Head Office - net                         (1,578,473,978)      ( 338,860,096)
Contribution made by Head Office for the period (Note 8)                   -          21,779,007
Capital allocated to the Branch                                            -        ( 21,779,007)
Transfer of net income                                         1,266,647,813         840,955,727
                                                             ------------------------------------
Net changes for the period                                     ( 311,826,165)        500,969,524
                                                             ------------------------------------
Balance at period-end with Head Office (1)                     1,749,771,584       2,120,938,354
                                                             ====================================
*T

(1) As of September 30, 2006 balance is stated in local currency and, as
September 30, 2005 it is made up of $ 1,883,958,200 in local currency and
$ 236,980,154 in foreign currency, according to the documentation signed on June
8, 2004.

NOTE 8 - CAPITAL ALLOCATED TO THE BRANCH

Pursuant to the Consent Action taken by the members on December 27, 2001, Pan
American Energy LLC allocated capital to the Branch in the amount of $
200,000,000. Such capital is registered with the Public Registry of Commerce. In
accordance with Consent Action dated February 1, 2005, Pan American Energy LLC
allocated capital to the Branch in the amount of $ 21,779,007. Such capital
contribution represents the contribution of assets and liabilities of the areas
Anticlinal Funes and Río Barrancas made by Head Office (Note 2, line 2) within
the scope of the corporate reorganization registered in the State of Delaware,
USA and in the Public Registry of Commerce of the City of Buenos Aires on
December 12, 2005 under number 2106, Book 58, Volume B of Foreign Companies.

NOTE 9 - TRANSACTIONS AND BALANCES WITH AFFILIATED COMPANIES

The transactions and balances with Pan American Energy LLC, the Branch's Head
Office, are disclosed in note 7.

The transactions and balances with Affiliated companies are detailed below:

-0-
*T
                                               2006         2005
                                            --------------------------
                                             (9 months)   (9 months)
TRANSACTIONS

   Pan American Continental S.R.L.
       Sales and recovery of expenses                 -    15,558,481
   Pan American Fueguina S,R.L.
       Recovery of receivables                    3,014             -
       Financing                            384,000.000             -
   PAE E & P Bolivia Ltd.
       Purchases of goods and services                -        17,585
   PAE Oil & Gas Bolivia Ltd.
       Purchases of goods and services            3,489         1,048
   BP West Coast Products LLC
       Sales                                984,587,543 1,360,291,582
   BP America Production Company
       Services                               4,682,925     6,684,610


                                             09/30/2006    12/31/2005
                                            --------------------------
BALANCES

   Pan American Fueguina S.R.L.
       Accounts payable                         129,902       126,888
       Loans                                384,000,000             -
   PAE E & P Bolivia Ltd.
       Other receivables                      1,072,910     1,082,193
   PAE Oil & Gas Bolivia Ltd.
       Other receivables                         56,606        53,117
   BP West Coast Products LLC
       Accounts receivable                  182,873,373   238,250,029
   BP America Production Company
       Accounts payable                       1,793,413     2,307,632
*T

NOTE 10 - GUARANTEES AND OTHER COMMITMENTS

In terms of investment commitments, the Branch has not granted any guarantees as
of September 30, 2006.

The terms agreed in certain loan agreements include commitments assumed by the
Branch referring to the maintenance of certain indebtedness and debt service
ratios and certain restrictions on the distribution of dividends. As of
September 30, 2006, the Branch complied with all the commitments assumed in loan
agreements.

The Branch signed the agreement entered into between producers and refineries on
January 2, 2003 for the stability of the prices of crude oil, gasoline and gas
oil (Resolution No. 85/2003 of the Energy Department), in force until April 30,
2004. The Branch has complied with the quotas set forth in the crude oil
agreement. Such deliveries were stated at spot price upon carrying out the
transaction, giving rise to a receivable of $ $ 27,737,776 as of September 30,
2006, in favor of the Branch, contingent on the decrease in the crude oil WTI
price to an amount lower than US$28.50 per barrel. The price thereof was US$
62.82 as of September 30, 2006.

On February 27, 2006 the Branch executed an agreement with Shell C.A.P.S.A.
whereby Shell agreed to pay the Branch a total negotiated price of $86.499.326
in connection with deliveries of crude oil made in 2003 and 2004 under the price
stabilization agreement referred to in the preceding paragraph, and $ 14,032,834
as interest accrued since each delivery. The Branch agreed to waive further
claims in connection with said deliveries. The related income was recognized in
the period ended September 30, 2006.

NOTE 11 - INCOME TAX

The breakdown of the main deferred tax assets and liabilities is as follows:

-0-
*T
                                                                    09/30/2006        12/31/2005
                                                            -------------------------------------

Deferred tax assets
   Allowance for materials obsolescence                                845,620           846,977
   Inventories - materials and spare parts                                   -           329,834
   Provision for future compensation to personnel                    1,929,535         2,432,628
   Allowance for lawsuits                                            6,734,763         7,869,259
   Provision for environmental remediation                           9,393,952         2,112,951
   Other provisions and allowances                                  18,888,989        10,452,004
   Accumulated carryforward tax losses                                       -        16,183,519
                                                            -------------------------------------

Total deferred tax assets                                           37,792,859        40,227,172
                                                            -------------------------------------

Deferred tax liabilities
   Inventories - materials and spare parts                             990,096                 -
   Property, plant and equipment                                   410,617,946       459,441,253
   Other                                                            19,211,199        19,273,808
                                                            -------------------------------------

Total deferred tax liabilities                                     430,819,241       478,715,061
                                                            -------------------------------------

Net deferred tax liabilities                                       393,026,382       438,487,889
                                                            =====================================
*T

The total deferred tax liabilities relate to the following:

-0-
*T
- deferred tax liabilities provided by the contribution of
 assets and
   liabilities made by Head Office (Note 8)                                  -         1,432,764
- deferred tax liabilities provided by the Branch                  393,026,382       437,055,125
                                                            -------------------------------------

  Total                                                            393,026,382       438,487,889
                                                            =====================================
*T

The reconciliation between the income tax expense for the period and the
theoretical expense resulting from applying the prevailing tax rate to income
before tax is as follows:

-0-
*T
                                                                   2006              2005
                                                            -------------------------------------
                                                                (9 months)          (9 months)

Net income before taxes                                          1,948,768,060     1,300,508,662

Prevailing tax rate                                                         35%               35%
                                                            -------------------------------------
Net income at prevailing tax rate                                ( 682,068,821)    ( 455,178,032)

Permanent differences at the tax rate:
   Miscellaneous - net                                                ( 51,426)      ( 4,374,903)
                                                            -------------------------------------

Subtotal permanent differences at the tax rate                        ( 51,426)      ( 4,374,903)
                                                            -------------------------------------

Income tax - total                                               ( 682,120,247)    ( 459,552,935)
                                                            =====================================

Current income tax expense                                       ( 727,581,754)    ( 491,427,561)
Deferred income tax benefit                                         45,461,507        31,874,626
                                                            -------------------------------------
                                                                 ( 682,120,247)    ( 459,552,935)
                                                            =====================================
*T

NOTE 12 - RESTRICTED ASSETS

In 2003 the Branch made a bank deposit in its own name as a collateral for a
loan from a foreign bank, which cannot be disposed before the loan is fully
repaid. The balance on the deposit is US$ 2,505,351 as of September 30, 2006.

In May 2005, the Branch made a bank deposit in its own name as a collateral for
a loan from a foreign bank, which cannot be disposed before November 2006. The
balance on the deposit is US$ 1,764,705 as of September 30, 2006.

Four generators were pledged in the amount of US$ 13,985,376 as a collateral for
outstanding accounts payable in the amount of as of U$S 2,026,526 as of
September 30, 2006.

There are no other restricted assets.

NOTE 13 - INFORMATION ON LITIGATION AND OTHER SUPPLEMENTARY MATTERS

Lawsuits were filed against the Branch, particularly in courts in labor and
commercial matters. Based on the information available, the Legal Representative
of the Branch on the basis of the opinion of legal counsel considers that the
contingent liability that might arise from such lawsuits would not have a
material adverse effect on the financial position of the Branch or the results
of its operations.

NOTE 14 - SUBSEQUENT EVENTS

No events or transactions have occurred between September 30, 2006 and the date
of issuance of these financial statements that would have a material effect on
the financial position of the Branch or the results of its operations as of that
date.

-0-
*T
                                                     EXHIBIT A
PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

PROPERTY, PLANT AND EQUIPMENT (in pesos)
as of September 30, 2006 and December 31, 2005

                                                       Original values
                           -----------------------------------------------------------------------

                                 At
                              beginning    Increases of              Decreases of        At
Main account                   of year      the period    Transfers    the period    period-end
--------------------------------------------------------------------------------------------------

Land and buildings             41,790,165     2,401,994    4,697,716           -       48,889,875
Plants, wells and
 exploration and
production facilities      10,590,679,855    43,554,787  382,839,894  18,343,506   10,998,731,030
Furniture and fixtures          8,075,589             -       13,148           -        8,088,737
Equipment                     104,806,729         6,561   15,494,335           -      120,307,625
Vehicles                       28,564,843        39,418    4,154,490      63,776       32,694,975
Work in progress              417,946,801 1,171,941,434 (407,199,583)          -    1,182,688,652
Advances to suppliers          23,210,178     2,645,664            -           -       25,855,842
                           ------------------------------------------------------  ---------------

Total as of 09/30/2006     11,215,074,160 1,220,589,858            -  18,407,282   12,417,256,736
                           ======================================================  ===============

Total as of 12/31/2005      9,973,486,390 1,253,752,672            -  12,164,902   11,215,074,160
                           ======================================================  ===============

                                              Depreciations
                           ---------------------------------------------------
                            Accumulated                          Accumulated         Net           Net
                            at beginning                          at the of         as of         as of
Main account                  of year       Increases Decreases   the period       09/30/06      31/12/05
------------------------------------------------------------------------------  ----------------------------
                                              (1) (2)
Land and buildings            22,865,571   1,459,799          -    24,325,370      24,564,505    18,924,594
Plants, wells and
 exploration and
production facilities      6,280,951,714 465,744,319 16,035,159 6,730,660,874   4,268,070,156 4,309,728,141
Furniture and fixtures         7,765,827     115,739          -     7,881,566         207,171       309,762
Equipment                     86,743,376  11,620,058          -    98,363,434      21,944,191    18,063,353
Vehicles                      18,953,499   2,973,046     38,531    21,888,014      10,806,961     9,611,344
Work in progress                       -           -          -             -   1,182,688,652   417,946,801
Advances to suppliers                  -           -          -             -      25,855,842    23,210,178
                           ---------------------------------------------------  ----------------------------

Total as of 09/30/2006     6,417,279,987 481,912,961 16,073,690 6,883,119,258   5,534,137,478
                           ===================================================  ==============

Total as of 12/31/2005     5,843,746,089 575,601,999  2,068,101 6,417,279,987                 4,797,794,173
                           ===================================================                ==============
*T

(1) See Exhibit G. (2) See depreciation policies in Note 3.2.e)

-0-
*T
                                                       EXHIBIT B
PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)
INTANGIBLE ASSETS (in pesos)
as of September 30, 2006 and December 31, 2005

                                            Original value
                           ------------------------------------------------
                                At
                            beginning  Increases ofDecreases of     At
       Main account          of year    the period  the period  period-end
---------------------------------------------------------------------------

Pre-operating expenses and
 dry
wells                       48,740,915           -           -  48,740,915
Acquisition cost of blocks   6,487,247           -           -   6,487,247
Deferred expenditures       63,070,921     466,891           -  63,537,812
                           ------------------------------------------------

Total as of 09/30/2006     118,299,083     466,891           - 118,765,974
                           ================================================

Total as of 12/31/2005     117,521,784   1,297,879     520,580 118,299,083
                           ================================================

                                             Amortization
                           ------------------------------------------------
                           Accumulated            Decreases                    Net        Net
                           at beginning For the    of the    Accumulated at   as of      as of
       Main account          of year     period     period     period-end   09/30/06   12/31/05
-------------------------------------------------------------------------------------------------
                                          (1) (2)
Pre-operating expenses and
 dry
wells                       48,017,778   160,128           -    48,177,906    563,009    723,137
Acquisition cost of blocks   5,513,300   767,969           -     6,281,269    205,978    973,947
Deferred expenditures       61,051,285   516,207           -    61,567,492  1,970,320  2,019,636
                           ----------------------------------------------------------------------

Total as of 09/30/2006     114,582,363 1,444,304           -   116,026,667  2,739,307
                           ===========================================================

Total as of 12/31/2005     112,803,984 2,298,959     520,580   114,582,363             3,716,720
                           ================================================           ===========
*T

(1) See Exhibit G. (2) See amortization criteria in Note 3.2.f).

-0-
*T
                                                                                      EXHIBIT C

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

OTHER INVESTMENTS (in pesos)
as of September 30, 2006 and December 31, 2005



                                                                  Amount            Amount
                                                                 recorded          recorded
             Main account                                      09/30/2006        12/31/2005
                                                              --------------   ----------------

Short-term investments

Mutual funds in foreign currency (Exhibit F)                    430,457,298        374,163,381

   Class: Citi Institutional Liquid Reserves
   Amount: 140,488,674 units
   Quoted value: US$ 1
   (US dollar)

Other short-term investments in foreign currency (Exhibit F)     34,171,007                  -

           Total short-term investments                         464,628,305        374,163,381


Long-term investments

Government securities:
   Bonos de la República Argentina - discount bonds
   in pesos 5.83% final amortization in 2033
   Amount: 4,821,350
   Nominal value: $ 1
   Quoted value: $ 1,2615                                         6,082,133          5,689,193
   PBI coupon in pesos
   Amount: 14,306,676
   Nominal value: $ 1
   Quoted value: $ 0,09                                           1,287,601                  -

Shares:
   Garantizar S.A.
   Number: 2000
   Class: B
   Nominal value: $ 1                                                 2,000              2,000

           Total long-term investments                            7,371,734          5,691,193

           Total investments                                    472,000,039        379,854,574
*T

-0-
*T
                                                                                EXHIBIT D
PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)
ALLOWANCES, PROVISIONS AND ACCRUALS (in pesos)
as of September 30, 2006 and December 31, 2005
                                Balances at     Increases      Decreases     Balances as
                                 beginning of    of the          of the           of
         Main account                year         period         period        09/30/06
------------------------------  -------------  ------------    ----------    ------------

Deducted from current assets:

Allowance for bad debtors in
 local
currency                           3,547,930     2,828,513  (1)  102,721  (2)  6,273,722
Allowance for bad debtors in
 foreign
currency                          12,236,893     7,810,469  (1)        -      20,047,362
Allowance for obsolescence of
materials                          2,419,934             -         3,877  (3)  2,416,057
                                -------------  ------------    ----------    ------------

Total deducted from assets        18,204,757    10,638,982       106,598      28,737,141
                                =============  ============    ==========    ============

Included in current
 liabilities:

Provision for future
 compensation
of personnel                       1,841,405       127,003  (4)        -       1,968,408
                                -------------  ------------    ----------    ------------

Subtotal current liabilities       1,841,405       127,003             -       1,968,408
                                -------------  ------------    ----------    ------------

Included in non current
 liabilities:

Accrual for lawsuits              22,152,066     3,078,937  (5)6,285,457  (6) 18,945,546
Provision for environmental
remediation                      100,386,197     8,484,295  (7)1,021,651  (3)107,848,841
Provision for future
 compensation
of personnel                       4,704,049             -     1,572,424  (8)  3,131,625
                                -------------  ------------    ----------    ------------

Subtotal non current
 liabilities                     127,242,312    11,563,232     8,879,532     129,926,012
                                -------------  ------------    ----------    ------------

Total included in liabilities    129,083,717    11,690,235     8,879,532     131,894,420
                                =============  ============    ==========    ============
*T

-0-
*T
(1) Charges for the period. It is included in Administrative Expenses
 of the Statement of Income (See Exhibit G)
(2) Recoveries for the period.
(3) Recoveries for the period.
(4) Transfer from the non current provision for future compensation
 to personnel.
(5) Charges for the period. It is made up of $ 2,642,725 included in
 Production Costs (see Exhibit G), $ 308,049 included in
 Administrative Expenses (see Exhibit G) and $ 128,163 arising from
 Exchange gains/losses included in Financial Results provided by
 liabilities of the Statement of Income.
(6) It is made up of payments made in the period in the amount of $
 275,565 and recoveries for the period included in Other Income and
 Expenses of the Statement of Income in the amount of $ 6,009,892.
(7) Charges for the period. It is made up of $ 4,290,086 included in
 Financial Results provided by liabilities of the Statement of Income
 and $ $ 4,194,209 included in Property, plant and equipment.
(8) It is made up of compensations paid during the period in the
 amount of $ 1,445,421 and the transfer referred to in line 4 above
 in the amount of $ 127,003.
*T

-0-
*T
                                                                                 EXHIBIT E
PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)
COST OF SALES (in pesos)
For the period ended September 30, 2006, comparative with the same period of the prior
 year
                                                             2006             2005
                                                        ----------------------------------
                                                           (9 months)       (9 months)

Inventories at the beginning of the year                    104,612,667        82,192,971

Purchases                                                   156,218,065       140,432,713

Production costs (Exhibit G)                              1,583,378,756     1,065,863,322

Inventories at period-end                                  ( 94,595,895)     ( 71,578,703)
                                                        ----------------------------------

Cost of sales                                             1,749,613,593     1,216,910,303
                                                        ==================================
*T

-0-
*T
                                                                                              EXHIBIT F
PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)
ASSETS AND LIABILITIES IN FOREIGN CURRENCY
as of September 30, 2006 and December 31, 2005
                                                          Amount in                        Amount in
                           Amount and type of Prevailing   Argentine   Amount and type of  Argentine
                            foreign currency   exchange     currency    foreign currency    currency
          Items             As of 09/30/2006     rate     09/30/2006    As of 12/31/2005    12/31/2005
-------------------------------------------------------------------------------------------------------
                              U$S      Euros           $           (1)    U$S      Euros            (2)
ASSETS

CURRENT ASSETS

Cash on hand and in banks
  Cash on hand                      -   4,170    3,8861        16,205           -  4,200        14,865
                               39,647             3,064       121,477      89,265              267,081
  Cash in banks
    Domestic                    4,457             3,064        13,657       2,638                7,893
    Foreign                 3,729,961             3,064    11,428,600   1,540,043            4,607,809

Investments
  Foreign mutual funds    140,488,674             3,064   430,457,298 125,054,606          374,163,381
  Other foreign
   investments             11,152,417             3,064    34,171,007           -                    -

Accounts receivable
  Domestic                 85,829,942             3,064   262,982,943  74,788,050          223,765,845
  Foreign                  87,066,767             3,064   266,772,574   9,529,223           28,511,433
  Foreign affiliated
   companies               59,684,521             3,064   182,873,373  79,629,020          238,250,029
  Allowance for bad debts ( 6,542,873)            3,064  ( 20,047,362)( 4,089,871)        ( 12,236,893)

Other receivables
  Expenses recoverable -
   foreign                    735,568             3,064     2,253,779     689,599            2,063,279
  Tax credit certificate   11,499,719             3,064    35,235,138  12,361,402           36,985,316
  Miscellaneous - domestic  1,920,797             3,064     5,885,323   2,903,281            8,686,614
  Miscellaneous - foreign   6,809,873             3,064    20,865,450   8,995,881           26,915,674
  Foreign affiliated
   companies                  368,641             3,064     1,129,516     379,448            1,135,310

Inventories
  Advances to suppliers
    Foreign                   139,724             3,064       428,115     480,647            1,438,095
                                                        --------------                   --------------

  Total current assets                                  1,234,587,093                      934,575,731
                                                        --------------                   --------------

NON CURRENT ASSETS

Other receivables
  Miscellaneous - domestic  4,765,366             3,064    14,601,081   5,392,323           16,133,829
                                                        --------------                   --------------

  Total non current assets                                 14,601,081                       16,133,829
                                                        --------------                   --------------

  Total assets                                          1,249,188,174                      950,709,560
                                                        ==============                   ==============
*T

US$ = United States dollars

(1) As per buy exchange rate as of September 30, 2006.

(2) As per buy exchange rate as of December 31, 2005.

-0-
*T
PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)
ASSETS AND LIABILITIES IN FOREIGN CURRENCY
as of September 30, 2006 and December 31, 2005
                                                                       Amount and type
                            Amount and type               Amount in      of foreign     Amount in
                               of foreign    Prevailing   Argentine        currency     Argentine
                                 currency     exchange     currency                      currency
           Items              al 09/30/2006     rate                       as of
                                                         06/30/2006       12/31/2005   12/31/2005
----------------------------------------------------------------------------------------------------
                                   U$S           $           (1)             U$S           (2)
LIABILITIES

CURRENT LIABILITIES

Accounts payable
  Trade - domestic                36,982,803     3,104     114,794,621     47,080,435   142,747,880
  Trade - foreign                 15,127,237     3,104      46,954,943      6,019,779    18,251,968
  Affiliated companies -
   domestic                           41,850     3,104         129,902         41,850       126,888
  Affiliated companies -
   foreign                           577,775     3,104       1,793,413        761,092     2,307,632


Loans                            100,000,000     3,104     310,400,000              -             -
  Bonds - foreign
  Secured bonds payable -
   foreign                         2,026,526     3,104       6,290,337      4,354,259    13,202,113
  Unsecured bonds payable -
    Foreign                       78,428,459     3,104     243,441,938     60,243,932   182,659,601
  Interest accrued on bonds
   payable
    - foreign                     11,481,101     3,104      35,637,337     14,713,055    44,609,982
                                                       ----------------               --------------

  Total current liabilities                                759,442,491                  403,906,064
                                                       ----------------               --------------

NON CURRENT LIABILITIES

Accounts payable
  Miscellaneous liabilities
   - domestic                      1,816,736     3,104       5,639,147              -             -
  Miscellaneous liabilities
   - foreign                       5,510,148     3,104      17,103,499      5,510,148    16,706,768

Loans
  Bonds -
    Foreign                      350,000,000     3,104   1,086,400,000    200,000,000   606,400,000
  Secured bonds payable -
    Foreign                                -         -               -      1,362,702     4,131,712
  Unsecured bonds payable -
    Foreign                      246,998,955     3,104     766,684,755    208,553,759   874,894,998
                                                       ----------------               --------------

  Total non current
   liabilities                                           1,875,827,401                1,502,133,478
                                                       ----------------               --------------

  Total liabilities                                      2,635,269,892                1,906,039,542
                                                       ================               ==============
*T

US$ = United States dollar

(3) As per selling exchange rate as of September 30, 2006.

As per selling exchange rate as of December 31, 2005.

-0-
*T
                                                                                      EXHIBIT G
PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)
INFORMATION REQUIRED BY ART. 64, CLAUSE 1b) OF LAW 19550, for the nine-month period ended
 September 30, 2006, comparative with the same period of the prior year (in pesos)

                                         Production  Administrative  Total 2006    Total 2005
  Items                                     cost        expenses     (9 months)    (9 months)
-----------------------------------------------------------------------------------------------

Fees and compensation for services         4,562,572     8,617,401    13,179,973    10,359,386
Salaries, wages and benefits to
personnel                                 72,532,034    24,366,531    96,898,565    64,331,447
Social security contributions              8,858,508     5,157,687    14,016,195     6,686,623
Taxes, assessments and other tributes    552,977,395    90,213,493   643,190,888   290,177,926
Depreciation of property, plant and
 equipment (Exhibit A)                   479,181,506     2,731,455   481,912,961   424,407,009
Intangible asset amortization (Exhibit
 B)                                        1,444,304             -     1,444,304     1,684,314
Transportation, freight and storage
 expenses                                 61,387,574        10,300    61,397,874    43,925,571
Contracted services                      263,566,978       501,360   264,068,338   214,393,456
Travel and accommodation expenses          3,488,121     5,533,911     9,022,032     6,595,729
Building rentals and maintenance             661,901     8,097,959     8,759,860     6,057,955
Environmental remediation                  7,714,016             -     7,714,016     6,186,068
Bad debtors (Exhibit D)                            -    10,638,982    10,638,982     5,512,785
Lawsuits (Exhibit D)                       2,642,725       308,049     2,950,774     1,021,941
Production, exploration and
 administrative
  general expenses                       124,361,122     7,101,336   131,462,458    87,076,853
                                       --------------------------------------------------------

Total 2006 (9 months)                  1,583,378,756   163,278,464 1,746,657,220
                                       ==========================================

Total 2005 (9 months)                  1,065,863,322   102,553,741               1,168,417,063
                                       ============================              ==============
*T

-0-
*T
                                                                          EXHIBIT H
PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)
Balance sheet as of September 30, 2006 and December 31, 2005
TERMS, INTEREST RATES AND ADJUSTMENT CLAUSES OF SHORT-TERM INVESTMENTS, LOANS,
 RECEIVABLES AND PAYABLES (in pesos)

                                Investments                   Receivables
                       ------------------------------------------------------------
                          09/30/2006     12/31/2005      09/30/2006     12/31/2005
                       ------------------------------------------------------------

Total amount without an
 established term       1,289,601 (1)         2,000   69,710,341 (3)   105,728,106

To become due:

Up to 3 months           464,628,305    374,163,381     857,447,743    643,548,180
From 3 to 6 months                 -              -      49,352,708      2,221,420
From 6 to 9 months                 -              -       1,318,000      1,329,307
From 9 to 12 months                -              -         650,428     14,295,203
From 1 to 2 years                  -              -       1,505,003      3,636,492
From 2 to 3 years                  -              -         857,096        467,666
From 3 to 4 years                  -              -         627,556        222,071
From 4 to 5 years                  -              -         475,154         90,892
From 5 to 6 years                  -              -         203,057         30,993
From 6 to 7 years                  -              -               -              -
From 7 to 8 years                  -              -               -              -
From 8 to 9 years                  -              -               -              -
From 9 to 10 years                 -              -               -              -
From 10 to 11 years                -              -               -              -
Over 11 years           6,082,133 (2)  5,689,193 (2)              -              -
                       ------------------------------------------------------------

Subtotal                 472,000,039    379,854,574     982,147,086    771,570,330
                       ------------------------------------------------------------

Other items that are
 not to be collected or
 paid in cash                      -              -      18,781,689      2,996,588
                       ------------------------------------------------------------

Total                    472,000,039    379,854,574   1,000,928,775    774,566,918
                       ============================================================

                                  Payables                         Loans
                       --------------------------------------------------------------
                           09/30/2006      12/31/2005     09/30/2006      12/31/2005
                       --------------------------------------------------------------

Total amount without an
 established term         636,594,207     657,214,133              -               -

To become due:

Up to 3 months            675,180,631     543,420,481    424,203,518     437,960,556
From 3 to 6 months            492,102     288,497,381    458,804,137      49,782,408
From 6 to 9 months        378,720,824         460,351     12,894,016      33,709,776
From 9 to 12 months        16,975,602       5,699,851     59,919,616      24,983,680
From 1 to 2 years             211,614         190,682    545,069,523     494,086,030
From 2 to 3 years                   -               -    128,694,944     165,683,640
From 3 to 4 years                   -               -    428,622,048     365,062,888
From 4 to 5 years                   -               -    492,325,440     110,216,232
From 5 to 6 years                   -               -    492,325,440     101,905,520
From 6 to 7 years                   -               -     34,485,440     101,905,520
From 7 to 8 years                   -               -     34,485,440      33,685,520
From 8 to 9 years                   -               -     34,516,480      33,685,520
From 9 to 10 years                  -               -     46,560,000      33,715,840
From 10 to 11 years                 -               -              -      45,480,000
Over 11 years                       -               -              -               -
                       --------------------------------------------------------------

Subtotal                1,708,174,980   1,495,482,879  3,192,906,042   2,031,863,130
                       --------------------------------------------------------------

Other items that are
 not to be collected or
 paid in cash                       -               -              -               -
                       --------------------------------------------------------------

Total                   1,708,174,980   1,495,482,879  3,192,906,042   2,031,863,130
                       ==============================================================
*T

-0-
*T
(1) It includes $1,287,601 relating to GDP coupons in pesos. The
 government securities linked to the GDP become due on 12/31/2035.
 However, in the event a certain GDP rate growth is exceeded in the
 country, the bondholders shall be entitled to annual payments.
(2) It is amortized as from 06/30/2024 in 20 semiannual installments
 (on 06/30 and 12/31 of each year), the final maturity of which is on
 12/31/2033.
(3) It includes the overdue receivables detailed in item 3.a of the
 supplementary information.
*T

-0-
*T
PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)
Balance sheet as of September 30, 2006 and December 31, 2005
TERMS, INTEREST RATES AND ADJUSTMENT CLAUSES OF SHORT-TERM INVESTMENTS, LOANS, RECEIVABLES AND
 PAYABLES (in pesos)

                                     Investments                           Receivables
                          ---------------------------------------------------------------------------
                                 09/30/2006      12/31/2005          09/30/2006           12/31/2005
                          ---------------------------------------------------------------------------
                          Rate       Pesos Rate       Pesos  Rate        Pesos    Rate        Pesos
                          ---------------------------------------------------------------------------

Annual fixed rate in US$     -           -    -           -     -             -       -            -
Annual fixed rate in US$     -           -    -           -     -             -       -            -
Annual fixed rate in US$     -           -    -           -     -             -       -            -
Annual fixed rate in US$     -           -    -           -     -             -       -            -
Annual fixed rate in US$     -           -    -           -     -             -       -            -
Annual fixed rate in US$     -           -    -           -     -             -       -            -
Annual fixed rate in US$     -           -    -           -     -             -       -            -
Annual fixed rate in US$     -           -    -           -     -             -       -            -
Annual fixed rate in US$     -           -    -           -     -             -       -            -
Annual fixed rate in US$     -           -    -           -     -             -       -            -
Annual fixed rate in US$     -           -    -           -     -             -       -            -
Annual fixed rate in US$     -           -    -           -     -             -       -            -
Annual fixed rate in US$     -           -    -           -     -             -       -            -
Annual fixed rate in US$     -           -    -           -     -             -       -            -
Annual fixed rate in US$     -           -    -           -  8.00     3,406,870    8.00    7,870,836
Annual fixed rate in $       -           -    -           - 11.00    48,000,000   11.00   48,000,000
Average annual variable
 rate in $                   -           -    -           -  8.00     6,713,410    8.00    4,568,565
Average annual variable
 rate in $                   -           -    -           -     -             -       -            -
Average annual variable
 rate in US$                 -           -    -           -     -             -       -            -
Annual variable rate in
 US$                      5.27 430,457,298 4.20 374,163,381  4.50        28,574    4.50       42,858
Annual variable rate in
 US$                      5.29  34,171,007                -     -             -       -            -
Annual fixed rate in $
 plus CER                 5.83   6,082,133 5.83   5,689,193     -             -       -            -
Non-interest bearing         -   1,289,601    -       2,000     -   942,779,921       -  714,084,659
                               ------------     ------------      --------------        -------------

Total                          472,000,039      379,854,574       1,000,928,775          774,566,918
                               ============     ============      ==============        =============

                                          Payables                                       Loans
                          -------------------------------------------------------------------------------------------
                                  09/30/2006            12/31/2005             09/30/2006                 12/31/2005
                          -------------------------------------------------------------------------------------------
                          Rate        Pesos    Rate         Pesos    Rate            Pesos    Rate           Pesos
                          -------------------------------------------------------------------------------------------

Annual fixed rate in US$     -             -       -             -    6.75       310,400,000  6.75       303,200,000
Annual fixed rate in US$     -             -       -             -   7.125       310,400,000 7.125       303,200,000
Annual fixed rate in US$     -             -       -             -       -                 -  7.50         5,356,586
Annual fixed rate in US$     -             -       -             -    7.00         6,290,337  7.00        11,977,240
Annual fixed rate in US$     -             -       -             -       -                 -  7.54        22,278,132
Annual fixed rate in US$     -             -       -             -       -                 -  6.72        16,843,633
Annual fixed rate in US$     -             -       -             -    5.45         7,552,246  5.45         9,252,848
Annual fixed rate in US$     -             -       -             -    6.18           253,122  6.18           309,064
Annual fixed rate in US$     -             -       -             -    7.60        12,416,000  7.60        66,704,000
Annual fixed rate in US$     -             -       -             -    7.56       310,400,000  7.56       303,200,000
Annual fixed rate in US$     -             -       -             -    6.97       419,040,000  6.97       409,320,000
Annual fixed rate in US$     -             -       -             -    5.66        46,560,000  5.66        45,480,000
Annual fixed rate in US$     -             -       -             -    8.00        31,040,000  8.00        30,320,000
Annual fixed rate in US$     -             -       -             -    5.00        77,600,000     -                 -
Annual fixed rate in US$  5.00    11,662,755    4.00     9,839,552    7.75       776,000,000     -                 -
Annual fixed rate in $       -             -       -             -       -                 -     -                 -
Average annual variable
 rate in $                   -             -       -             -    8.76       360,051,674  7.51       305,964,724
Average annual variable
 rate in $                                 -       -             -   10.12       384,000,000     -                 -
Average annual variable
 rate in US$                 -             -       -             -    6.27       105,265,326  5.54       153,846,921
Annual variable rate in
 US$                         -             -       -             -       -                 -     -                 -
Annual variable rate in
 US$                         -             -       -             -       -                 -     -                 -
Annual fixed rate in $
 plus CER                    -             -       -             -       -                 -     -                 -
Non-interest bearing         - 1,696,512,225       - 1,485,643,327       -                 -     -                 -
                               --------------        --------------        ------------------      ------------------

Total                          1,708,174,980         1,495,482,879         (1) 3,157,268,705       (1) 1,987,253,148
                               ==============        ==============        ==================      ==================
*T

(1) It only includes the nominal principal.

-0-
*T
EXHIBIT I
PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)
Balance sheet as of September 30, 2006 and December 31, 2005
PARTICIPATION IN JOINT VENTURES (in pesos)



                    Lindero     Lindero     Aguada      Aguada       San         San
                   Atravesado Atravesado   Pichana     Pichana      Roque       Roque      Acambuco    Acambuco
                     62,50%     62,50%      18,18%      18,18%     16,47 %     16,47 %     52,00 %     52,00 %
                    09/30/      12/31/     09/30/      12/31/      09/30/      12/31/      09/30/      12/31/
Balance sheet        2006        2005       2006        2005        2006        2005        2006        2005
-----------------------------------------------------------------------------------------------------------------


ASSETS
------------------
CURRENT ASSETS
------------------
Cash on hand and
 in banks              96,780     25,794     142,280     109,965     168,371      74,588     221,754   1,631,159
Other receivables     863,043  1,330,694     616,354   1,535,137     189,492     841,192   1,498,940   1,546,694
Inventories         5,783,685  5,737,494   6,912,799  21,104,717   7,420,380   4,346,767   1,759,402   2,844,356
                  -----------------------------------------------------------------------------------------------

Total current
 assets             6,743,508  7,093,982   7,671,433  22,749,819   7,778,243   5,262,547   3,480,096   6,022,209
                  -----------------------------------------------------------------------------------------------

NON CURRENT ASSETS
------------------
Property, plant
 and equipment     97,874,058 88,332,865 193,678,776 160,476,554 201,219,223 170,692,555 564,611,374 493,183,604
Intangible assets           -          -      12,092      24,184           -           -           -       1,112
                  -----------------------------------------------------------------------------------------------

Total non current
 assets            97,874,058 88,332,865 193,690,868 160,500,738 201,219,223 170,692,555 564,611,374 493,184,716
                  -----------------------------------------------------------------------------------------------

Total assets      104,617,566 95,426,847 201,362,301 183,250,557 208,997,466 175,955,102 568,091,470 499,206,925
                  ===============================================================================================

                                                               Costa      Costa     Costa    Costa
                                                              Afuera     Afuera    Afuera   Afuera
                    Estancia    Estancia                     Argentina  Argentina ArgentinaArgentinaAnticlinalAnticlinal
                                  La
                  La Escondida  EscondidaBandurria Bandurria Block 40   Block 40  Block 46 Block 46   Funes     Funes
                     25,00%      25,00%    18,18%   18,18%    50,00%     50,00%    50,00%   50,00%    80,00%    80,00%
                     09/30/     12/31/    09/30/    12/31/    09/30/     12/31/    09/30/   12/31/   09/30/    12/31/
Balance sheet         2006       2005      2006      2005      2006       2005      2006     2005     2006      2005
------------------------------------------------------------------------------------------------------------------------


ASSETS
------------------
CURRENT ASSETS
------------------
Cash on hand and
 in banks                  619   188,621    88,335        -          -          -        -        -     6,432     4,620
Other receivables      388,941   123,516    26,019  207,412     26,980     26,980   26,980   26,980 1,009,848   561,302
Inventories             94,384   181,101         -        -          -          -        -        -         -         -
                  ------------------------------------------------------------------------------------------------------

Total current
 assets                483,944   493,238   109,170  295,747     26,980     26,980   26,980   26,980 1,016,280   565,922
                  ------------------------------------------------------------------------------------------------------

NON CURRENT ASSETS
------------------
Property, plant
 and equipment       6,154,351 5,627,729 4,141,637        - 11,175,237 11,175,237  588,337  588,337 2,370,651 4,759,282
Intangible assets      205,978   973,947         -        -          -          -        -        -         -         -
                  ------------------------------------------------------------------------------------------------------

Total non current
 assets              6,360,329 6,601,676 4,141,637        - 11,175,237 11,175,237  588,337  588,337 2,370,651 4,759,282
                  ------------------------------------------------------------------------------------------------------

Total assets         6,844,273 7,094,914 4,250,807  295,747 11,202,217 11,202,217  615,317  615,317 3,386,931 5,325,204
                  ======================================================================================================
*T

-0-
*T
PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)
Balance sheet as of September 30, 2006 and December 31, 2005
PARTICIPATION IN JOINT VENTURES (in pesos)



                   Lindero     Lindero     Aguada      Aguada       San         San
                  Atravesado Atravesado   Pichana     Pichana      Roque       Roque      Acambuco    Acambuco
                    62.50%     62.50%      18.18%      18.18%      16.47%      16.47%      52.00%      52.00%
                   09/30/      12/31/     09/30/      12/31/      09/30/      12/31/      09/30/      12/31/
 Balance sheet      2006        2005       2006        2005        2006        2005        2006        2005
---------------  -----------------------------------------------------------------------------------------------

LIABILITIES
---------------
CURRENT
 LIABILITIES
---------------
Accounts
 payable           3,608,757  2,783,143  30,774,803  15,439,407  13,118,030  11,671,186  74,912,974  21,357,795
Payroll and
 social security
 contributions       420.570    461,536           -           -           -           -     466,792   1,071,545
Taxes payable        183,332     20,123           -           -           -           -     599,939     259,774
                 -----------------------------------------------------------------------------------------------

Total current
 liabilities       4.212.659  3,264,802  30,774,803  15,439,407  13,118,030  11,671,186  75,979,705  22,689,114
                 -----------------------------------------------------------------------------------------------

NON CURRENT
 LIABILITIES
-----------------
Accounts
 payable           1,253,124  1,115,984     219,132     219,132     876,528     876,528   1,005,109     907,017
Provision for
 environmental
 remediation       4.221.192  3,890,123   2,755,592   2,584,332   6,308,160   5,915,268   1,844,166   2,071,144
Accruals           4,797,138  2,489,331     319,761     271,113     284,484     212,049   1,999,472   7,565,318
                 -----------------------------------------------------------------------------------------------

Total non current
 liabilities      10.271.454  7,495,438   3,294,485   3,074,577   7,469,172   7,003,845   4,848,747  10,543,479
                 -----------------------------------------------------------------------------------------------

Total
 liabilities      14,484,113 10,760,240  34,069,288  18,513,984  20,587,202  18,675,031  80,828,452  33,232,593
                 -----------------------------------------------------------------------------------------------

Owners' equity    90,133,453 84,666,607 167,293,013 164,736,573 188,410,264 157,280,071 487,263,018 465,974,332
                 -----------------------------------------------------------------------------------------------

Total            104,617,566 95,426,847 201,362,301 183,250,557 208,997,466 175,955,102 568,091,470 499,206,925
                 ===============================================================================================

                                                               Costa      Costa     Costa    Costa
                                                              Afuera     Afuera    Afuera   Afuera
                    Estancia    Estancia                     Argentina  Argentina ArgentinaArgentinaAnticlinalAnticlinal
                                  La
                  La Escondida  EscondidaBandurria Bandurria Block 40   Block 40  Block 46 Block 46   Funes     Funes
                     25.00%      25.00%    18.18%   18.18%    50.00%     50.00%    50.00%   50.00%    80.00%    80.00%
                    09/30/      12/31/    09/30/    12/31/    09/30/     12/31/    09/30/   12/31/   09/30/    12/31/
 Balance sheet       2006        2005      2006      2005      2006       2005      2006     2005     2006      2005
---------------  -------------------------------------------------------------------------------------------------------

LIABILITIES
---------------
CURRENT
 LIABILITIES
---------------
Accounts
 payable               749,484 1,319,261   864,964        -          -    186,969        -   80,867 1,472,748   781,505
Payroll and
 social security
 contributions               -         -         -        -          -          -        -        -         -       138
Taxes payable           86,409    61,709         -    2,000          -          -        -    3,854         -       886
                 -------------------------------------------------------------------------------------------------------

Total current
 liabilities           835,893 1,380,970   864,964    2,000          -    186,969        -   84,721 1,472,748   782,529
                 -------------------------------------------------------------------------------------------------------

NON CURRENT
 LIABILITIES
-----------------
Accounts
 payable                     -         -                  -          -                   -        -         -         -
Provision for
 environmental
 remediation           165,903   155,596         -        -          -          -                 -   828,922   775,539
Accruals                     -         -         -        -          -          -        -        -         -         -
                 -------------------------------------------------------------------------------------------------------

Total non current
 liabilities           165,903   155,596         -        -          -          -        -        -   826,922   775,539
                 -------------------------------------------------------------------------------------------------------

Total
 liabilities         1,001,796 1,536,566   864,964    2,000          -    186,969        -   84,721 2,299,670 1,558,068
                 -------------------------------------------------------------------------------------------------------

Owners' equity       5,842,477 5,558,348 3,385,843  293,747 11,202,217 11,015,248  615,317  530,596 1,087,261 3,767,136
                 -------------------------------------------------------------------------------------------------------

Total                6,844,273 7,094,914 4,250,807  295,747 11,202,217 11,202,217  615,317  615,317 3,386,931 5,325,204
                 =======================================================================================================
*T

-0-
*T
PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)
Statement of income for the fiscal period ended September 30, 2006, comparative
 with the same period of the prior year
PARTICIPATION IN JOINT VENTURES (in pesos)



                   Lindero     Lindero      Aguada      Aguada
                  Atravesado  Atravesado   Pichana     Pichana
                    62.50%      62.50%      18.18%      18.18%
                    2006        2005        2006        2005
                 ------------------------------------------------
                  (9 months)  (9 months)  (9 months)  (9 months)
STATEMENT OF
 INCOME
-----------------
Sales (1)                  -           -           -           -
Cost of sales    (34,794,596)(28,096,123)(91,010,660)(66,885,710)
                 ------------------------------------------------

Gross results    (34,794,596)(28,096,123)(91,010,660)(66,885,710)
Administrative
 expenses                              -           -           -
                             ------------------------------------
Operating result             (28,096,123)(91,010,660)(66,885,710)

Financial results
 - net             ( 446.495)  ( 148,079)  ( 111,414)   ( 37,441)
Other income and
 expenses - net  ( 1.657.419)  ( 177,850)   ( 20,262)    169,414
                 ------------------------------------------------

Net results      (36,898,510)(28,422,052)(91,142,336)(66,753,737)
                 ================================================



                     San         San                               Estancia   Estancia
                                                                      La         La
                    Roque       Roque      Acambuco     Acambuco   Escondida  Escondida BandurriaBandurria
                    16.47%      16.47%      52.00%       52.00%     25.00%     25.00%    18.18%   18.18%%
                    2006        2005         2006        2005        2006       2005      2006     2005
                 -----------------------------------------------------------------------------------------
                                                                                           (9       (9
                  (9 months)  (9 months)  (9 months)   (9 months) (9 months) (9 months)  months)  months)
STATEMENT OF
 INCOME
-----------------
Sales (1)                  -           -            -           -          -          -        -        -
Cost of sales    (35,455,991)(26,787,951)(119,970,271)(68,677,478)(3,751,978)(2,373,710)       -        -
                 -----------------------------------------------------------------------------------------

Gross results    (35,455,991)(26,787,951)(119,970,271)(68,677,478)(3,751,978)(2,373,710)       -        -
Administrative
 expenses                  -           -            -           -          -          -        -        -
                 -----------------------------------------------------------------------------------------
Operating result (35,455,991)(26,787,951)(119,970,271)(68,677,478)(3,751,978)(2,373,710)       -        -

Financial results
 - net             ( 255,600)   ( 84,173)   ( 234,476)    131,184   ( 16,286)   ( 3,094) ( 3,761)   2,116
Other income and
 expenses - net    ( 229,183)    583,079    ( 821,595)   ( 22,887)         -          - (611,978)(505,177)
                 -----------------------------------------------------------------------------------------

Net results      (35,940,774)(26,289,045)(121,026,342)(68,569,181)(3,768,264)(2,376,804)(615,739)(503,061)
                 =========================================================================================

                    Costa      Costa      Costa      Costa
                   Afuera     Afuera     Afuera     Afuera
                  Argentina  Argentina  Argentina  Argentina  Anticlinal  Anticlinal
                  Block 40   Block 46   Block 46   Block 46     Funes       Funes
                   50.00%     35.00%     50.00%     50.72%      80.00%      80.00%
                    2006       2005       2006       2005       2006        2005
                 --------------------------------------------------------------------
                 (9 months) (9 months) (9 months) (9 months)  (9 months)  (9 months)
STATEMENT OF
 INCOME
-----------------
Sales (1)                 -          -          -          -           -           -
Cost of sales             -          -          -          - (10,200,885)(13,842,552)
                 --------------------------------------------------------------------

Gross results                                              - (10,200,885)(13,842,552)
Administrative
 expenses                 -          -          -          -           -           -
                 --------------------------------------------------------------------
Operating result          -          -          -          - (10,200,885)(13,842,552)

Financial results
 - net                    -          -          -          -    ( 34,414)      1,408
Other income and
 expenses - net  (3,443,020)(3,369,812)(3,252,953)(3,475,299)          -           -
                 --------------------------------------------------------------------

Net results      (3,443,020)(3,369,812)(3,252,953)(3,475,299)(10,235,299)(13,841,144)
                 ====================================================================
*T

(2) No sales were recorded in the joint ventures because production is directly
assigned to each member.

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

FINANCIAL STATEMENTS as of September 30, 2006

REPORTING SUMMARY REQUIRED BY RESOLUTION No. 290/97 OF THE NATIONAL SECURITIES
COMMISSION

1. Comment on the Branch's activity

1.1. Operating activities

Pan American Energy LLC (Argentine Branch) is mainly engaged in the exploration,
development and production of hydrocarbons. The Head Office of the Branch is Pan
American Energy LLC, which also has various subsidiaries and affiliates that
carry out activities in Argentina and other Mercosur countries. BP and Bridas
Corporation hold interests that account for 60% and 40%, respectively of the
Branch's ownership.

As of September 30, 2006, with a daily average production of 221,600 barrels of
oil, the Branch together with subsidiaries of Head Office rank second in the
production of natural gas and oil in Argentina.

1.2. Issuance of bonds

On July 13, 1995, Resolution No. 10982 of the CNV authorized the short and
medium term bond program submitted by the Argentine branch of the foreign
corporation Amoco Argentina Oil Company for a total maximum amount of US$
200,000,000, nominal value. The bonds are issued as 'Obligaciones Negociables'
(negotiable obligations).

In September 1995, Amoco Argentina Oil Company (Argentine Branch) issued the
First Series of bonds in the amount of US$ 100,000,000 due in ten years with an
interest rate of 6.63% p.a. Principal was repaid at maturity.

On February 11, 1997, Amoco Argentina Oil Company (Argentine Branch) issued the
Second Series of bonds in the amount of US$ 100,000,000 due in ten years.
Principal is to be repaid in a single payment at maturity and accrues interest
at a rate of 6.75% p.a. This issuance completes the maximum amount of the short
and medium term bond program referred to above.

The funds obtained from both bond issues were used to repay loans granted by
affiliated companies of Amoco Argentina Oil Company (Argentine Branch).

As a result of the transfer of assets and liabilities referred to in the first
paragraph of Point 1.1, Amoco Argentina Oil Company (Argentine Branch)
transferred the above mentioned bonds to Pan American Energy LLC (Argentine
Branch). The First Series of bonds was guaranteed by BP Company North America
Inc. until repayment in September 2005. The Second Series is also guaranteed by
this company.

On February 21, 2002, through Resolution No. 14123, the CNV authorized the
Global Program for the Issuance of Bonds of Pan American Energy LLC (Argentine
Branch) (the 'Global Program') in the total amount of US$ 1,000,000,000. These
bonds are also issued as 'Obligaciones Negociables' (negotiable obligations). On
April 16, 2002, the Branch issued under this Global Program its Bonds Class 1 in
the amount of US$ 20,400,000 becoming due in two years (April 16, 2004) at an
annual 7.5% rate. These Bonds were paid upon maturity. On October 17, 2002, the
Branch issued Bonds Class 2, Sub-Class A in the amount of US$ 500,000 and
Sub-Class B in the amount of US$ 15,000,000 under the Global Program. These
bonds became due in two years (October 17, 2004) and accrued interest at a 7%
rate p.a. The funds obtained in the issues under the Global Program were
allocated to the Branch's working capital.

1.2. Issuance of bonds (cont.)

On October 27, 2004, the Branch issued Bonds Class 3 in the amount of
US$ 100,000,000 under the Global Program which become due in five years (October
27, 2009) with a 7.125% annual interest rate to be paid on a half-yearly basis
took place. The price of the issuance was 99.483%, nominal value. The funds
derived from this issuance were allocated to investments in property and
equipment and the repayment of loans.

On August 9, 2006, the Branch issued Bonds Class 4 in the amount of
US$ 250,000,000 under the Global Program, to be repaid in two equal installments
becoming due on February 9, 2011 and February 9, 2012, with interest accruing at
a fixed annual interest rate of 7.75% to be paid on a half-yearly basis. The
price of the issuance was 100.00% of the nominal value. The funds obtained in
this issue will be allocated to investments in property and equipment, working
capital and repayment of loans.

1.3. Loan agreements

Pan American Energy LLC (Argentine Branch) obtained the following loans at a
five-year term, with interest compounded bi-annually amortized in monthly
installments: 1) On July 20, 2001, in the amount of US$ 72,051,406, with
interest accruing at an annual rate of 7.54%, with the first installment falling
due on April 19, 2002 and the repayment term being completed on June 20, 2006,
and 2) on September 17, 2001, in the amount of US$ 40,001,944, with interest
accruing at an annual rate of 6.72%, with the first installment falling due on
June 20, 2002 and completing repayment on August 21, 2006. For the purpose of
fixing the interest rate, the Branch has entered into integrated derivative
transactions, the impact of which has been included in the cost of the
transactions. Both loans have been guaranteed by Pan American Energy LLC until
the repayment thereof in June and August 2006.

On July 11, 2005, the Branch obtained from the International Finance Corporation
(IFC) a loan in the amount of US$ 250,000,000 guaranteed by Head Office and
consisting of three tranches:

- 'A' in the amount of US$ 100,000,000, at an annual fixed rate of 7.56%,
through an interest rate swap with IFC, amortizable on a six-month basis, which
becomes due in July 2015, - 'B' in the amount of US$ 135,000,000, at an annual
fixed rate of 6.97%, through an interest rate swap with IFC, amortizable on a
six-month basis, which becomes due in July 2012, and - 'C' in the amount of US$
15,000,000, at an annual fixed base rate of 5.66% on a six-month basis, which
becomes due in July 2016.

As of December 31, 2005, the amount of the loans has been fully disbursed. The
first principal installment for tranches 'A' and 'B' becomes due on January 15,
2007.

The funds obtained were used to partially fund the 2005 investment program in
Golfo San Jorge.

2. Balance sheet items as of September 30, 2006 (in pesos)

-0-
*T
                          Balance        Balance        Balance        Balance        Balance
                           Sheet          Sheet          Sheet          Sheet          Sheet
                           as of          as of          as of          as of          as of
                        09/30/2006     09/30/2005     09/30/2004     09/30/2003     09/30/2002
                      ---------------------------------------------------------------------------
Current assets         1,558,787,365  1,060,737,642    745,780,799    576,207,301    548,137,276

Non current assets     5,572,249,794  4,647,841,128  3,967,829,320  3,916,949,439  4,607,832,937
                      ---------------------------------------------------------------------------

Total                  7,131,037,159  5,708,578,770  4,713,610,119  4,493,156,740  5,155,970,213
                      ===========================================================================

Current liabilities    2,027,190,446  1,303,610,293  1,738,521,186  1,105,155,059  1,156,296,930

Non current
 liabilities           2,892,836,122  1,822,791,116  1,076,255,148  1,681,050,538  2,087,046,300
                      ---------------------------------------------------------------------------

Subtotal               4,920,026,568  3,126,401,409  2,814,776,334  2,786,205,597  3,243,343,230
Account with Head
 Office                1,749,771,584  2,120,938,354  1,459,373,785  1,267,491,143  1,473,166,983

Capital allocated to
 the Branch              221,779,007    221,779,007    200,000,000    200,000,000    200,000,000

Capital adjustment       239,460,000    239,460,000    239,460,000    239,460,000    239,460,000
                      ---------------------------------------------------------------------------

Total                  7,131,037,159  5,708,578,770  4,713,610,119  4,493,156,740  5,155,970,213
                      ===========================================================================
*T

3. Income statement items as of September 30, 2006 (in pesos)

-0-
*T
                        Nine-month     Nine-month     Nine-month     Nine-month     Nine-month
                          period         period         period         period         period
                           as of          as of          as of          as of          as of
                          09/30/2006     09/30/2005     09/30/2004     09/30/2003     09/30/2002
                      ---------------------------------------------------------------------------
Ordinary operating
 income                2,089,205,309  1,365,117,208  1,039,958,469    692,418,985    916,325,927

Financial results      ( 103,584,008)  ( 44,910,282) ( 120,722,551)  (110,847,522)  (720,349,746)

Other income and
 expenses - net         ( 36,853,241)  ( 19,698,264)  ( 97,631,702)  ( 73,387,832)  ( 43,200,196)
                      ---------------------------------------------------------------------------

Income (loss) before
 taxes                 1,948,768,060  1,300,508,662    821,604,216    508,183,631    152,775,985

Income tax/minimum
 deemed income tax     ( 727,581,754) ( 491,427,561) ( 358,188,289)  (182,782,653)   ( 1,995,582)

Deferred tax              45,461,507     31,874,626    122,851,793     94,229,283   (549,732,007)
                      ---------------------------------------------------------------------------

Net income (loss)      1,266,647,813    840,955,727    586,267,720    419,630,261   (398,951,604)
                      ===========================================================================
*T

4. Statistical data

-0-
*T
                        Nine-month      Nine-month      Nine-month      Nine-month      Nine-month
                       period ended    period ended    period ended    period ended    period ended
                         09/30/2006      09/30/2005      09/30/2004      09/30/2003      09/30/2002
                      --------------  --------------  --------------  --------------  --------------
                        In cubic        In cubic        In cubic        In cubic        In cubic
                          meters          meters          meters          meters          meters
                      --------------  --------------  --------------  --------------  --------------
Production of crude
 oil                      4,562,441       4,424,441       4,259,197       3,898,929       3,429,507
Sale of crude oil         4,519,444       4,226,528       4,279,900       3,846,215       3,297,805

                       In thousand    In thousand      In thousand     In thousand     In thousand
                       cubic meters    cubic meters    cubic meters    cubic meters    cubic meters
                      --------------  -------------   --------------  --------------  --------------

Production of natural
 gas                      3,619,986      3,286,420        3,146,525       2,543,477       2,258,539
Sale of natural gas       3,512,136      3,312,333        3,003,178       2,324,174       2,068,291
Transportation of
 natural gas                 11,390        221,618          282,390         211,563         165,049

                         In tons         In tons         In tons         In tons         In tons
                      --------------  -------------   --------------  --------------  --------------

Production of L.P.G.         76,160         45,464           50,505          43,348          30,968
Sale of L.P.G.               83,229         32,229           54,231          49,283          15,250
*T

5. Ratios

-0-
*T
                       Financial       Financial      Financial       Financial       Financial
                        statements     statements      statements     statements      statements
                          as of          as of           as of          as of           as of
                       09/30/2006      09/30/2005     09/30/2004      09/30/2003      09/30/2002
                      -------------  --------------  -------------  --------------  --------------

Current                       0.77            0.81           0.43            0.52            0.47
Indebtedness                  2.23            1.21           1.48            1.63            1.70
Tied -up funds                0.78            0.81           0.84            0.87            0.89
Solvency                      0.45            0.83           0.67            0.61            0.59
*T

6. Business prospects

Pan American Energy LLC (Argentine Branch) is working to maintain and increase
its operating efficiency in connection with the oil and gas exploration and
production, to continue increasing its share in hydrocarbons porduction in
Argentina and to meet the growing energy needs of Argentina. Pan American Energy
LLC (Argentine Branch) strives to provide its personnel and contractors with
healthy and safe working conditions while preserving the environment.

Pan American Energy is strongly engaged with the concerns and challenges posed
by the communities where it operates, by developing different social
responsibility programs.

During fiscal year 2005, the Branch achieved significant increases in the
production of hydrocarbons. Oil production grew 3.1% and natural gas production
6.2%, both with respect to fiscal year 2004. It should be noted that in the same
period, the country's total production of oil and natural gas decreased 5.2 %
and 1.4%, respectively. As a result, in fiscal year 2005, the production of oil
and natural gas of the Branch continued growing within a decreasing-volume
national context.

During the first nine months of the current fiscal year, the Branch's oil
production grew by 3.1% and the output of natural gas grew by 10.1% compared to
the same period of the prior year. This growth results from the sound investment
program that the Branch has been implementing in recent years.

After the 2002 crisis, the country has managed to achieve high GDP growth with
relatively low inflation rates and a stable currency. Although a decline has
been noted in unemployment rates, they are still high. In 2005, Argentina
achieved a 9.1% increase in its GDP.

In the nine-month period of fiscal year 2006, the GDP grew 8.5% compared to the
same period of the prior year, which indicates that an interesting growing trend
-initiated 18 quarters ago- continues. GDP is expected to grow 8.6% in 2006.

With regard to tax issues, the national government exceeded the fiscal surplus
expected for fiscal year 2005 by 38% and in the first nine months of 2006 the
figures were well over budget. In December 2005, the government repaid the total
debt of US$ 9.8 billion with the International Monetary Fund (the actual
disbursement took place in January 2006).

The increase in the oil industry costs is a source of concern for management,
since it clearly exceeds the general increase in prices.

Revenues from the exploration and production of oil and gas were affected by the
amendments to the regulations in force. In the case of oil, as from March 2002,
an increasing rate of up to 45% of export tariffs on exports has been applied,
which has also affected the sales prices in the domestic market. In the case of
natural gas, in January 2002, the wellhead price of natural gas was
redenominated into pesos and frozen and, afterwards, restrictions on exports
were established. In April 2004, the Secretary of Energy and the natural gas
producers signed an agreement to regulate wellhead prices. This agreement is
being progressively applied.

On June 29, 2006, the National Government entered into an agreement with the
Republic of Bolivia for the purpose of importing gas from that country. The
agreement stated a price in the amount of US$ 5 per million of BTU with a
maximum daily volume of 7.7 million cubic meters up to December 31, 2006. The
referred agreement provides for imports of an additional daily volume of
approximately up to 20 million cubic meters, once the so-called Norte pipeline
is built. On July 25, 2006, the Economy Ministry, through Resolution No.
534/2006, increased the export tariffs rate on exports of gas to 45% applicable
to the US$ 5 per million of BTU.

Pursuant to Resolution 776 issued by the Argentine Ministry of Economy on
October 11, 2006, the national government provided for the retroactive
application of export tariffs on exports of hydrocarbons made from the Special
Customs Area of the Province of Tierra del Fuego. The oil companies operating in
this province consider that pursuant to the provisions of Law No. 19640 that
establishes a special regime applicable to economic activities in Tierra del
Fuego, the application of export tariffs on future exports becomes a moot issue
and that the retroactive application of export tariffs becomes fully invalid and
therefore these companies have commenced all relevant actions before
administrative authorities and the courts.

In the last months, social protests have been intensifying, particularly in the
oil industry. The activities of the Branch have been affected in the second half
of fiscal year 2005, especially in the oil fields of Golfo San Jorge, preventing
the Branch from achieving the projected levels of production due to delays in
investments, and increasing its operating costs. In addition, such protests
exceed the boundaries imposed by the Constitution and the laws. Consequently, it
is mandatory for all involved to recover an active defense of the rights and
regulations for coexistence in order to allow for the normal development of the
production activities.

During the first six monhts of 2006, the unions and industry associations have
been renegotiating salary levels, whereas the agreements seem to focus on a 20%
pay increase cap which appears relatively reasonable for the Argentine economy.

For fiscal year 2006, the Branch has developed significant investment plans to
continue expanding its activities and meet the growing energy demand. The Branch
will also make all the necessary efforts to implement such plans within an
adequate economic and social environment.

-0-
*T
Buenos Aires, November 9, 2006


                                                                                                 Daniel Grinstein
                                                                                                 Attorney in-fact
*T

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2006

SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2006
REQUIRED BY SECTION 68 OF THE REGULATIONS OF THE BUENOS AIRES STOCK EXCHANGE

Overall issues about the Branch's activity:

1 Specific and significant legal requirements which imply contingent suspensions
or changes of benefits provided for by such regulations:

The Branch is not subject to specific and significant legal requirements, which
may imply the contingent suspension or change of benefits provided for by such
regulations, except as disclosed in notes to the financial statements.

2 Significant changes in the Branch's activities or other similar circumstances
that affect the comparison of the financial statements with prior years', or
with those to be presented in future years.

There are no changes in the Branch's activities that significantly affect the
comparison of the financial statements as of September 30, 2006.

3 Breakdown of receivables and payables as per section 68, subsection 3

3.a.) The breakdown of receivables and payables based on the maturity thereof is
disclosed in Exhibit H to the financial statements.

The following receivables without any established term included in the referred
Exhibit H are due:

-0-
*T
                                                           Current
                                                          receivables
                                                               $
                                                         -------------

 Due from July to September 2006                            2,501,801
 Due from April to June 2006                                7,981,528
 Due from January to March 2006                             5,564,828
 Due from October to December 2005                          4,989,078
 Due from October 2004 to September 2005                   11,988,363
 Due from October 2003 to September 2004                    3,896,218
 Due from October 2002 to September 2003                    1,827,376
 Due from October 2001 to September 2002                    2,378,591
 Due from October 2000 to September 2001                      278,219
 Due from October 1999 to September 2000                       45,389
                                                         -------------

                    Total                                  41,451,391
                                                         =============
*T

There are no overdue payables.

3.b) In connection with the receivables and payables in foreign currency, see
Exhibit F to the financial statements. There are no significant receivables and
payables represented by securities.

3.c) There are no receivables and payables subject to adjustment clauses.

3.d) In connection with the receivables and payables that accrue interest as of
September 30, 2006, see Exhibit H to the financial statements.

4 Corporations Art. 33 Law 19550

None.

5 Receivables or loans with directors, statutory auditors, and relatives
including up to the second degree:

None as of the date of issuance of these financial statements.

6 Physical counts of inventories

Based on the nature of the activity, the Branch carries out physical counts of
most of its inventories. There are no significant slow-moving inventories as of
September 30, 2006 for which an allowance has not been set up.

7 Current values

The valuation method of inventories is disclosed in Note 3.2.d) to the financial
statements.

8 Property, plant and equipment

No items of property, plant and equipment have been subject to appraisal.

To date, there are no property, plant and equipment items that are not in use
due to obsolescence.

9 Interests in other companies

None. The Branch's participating interests in joint operations and other
entities are disclosed in Note 2 to the financial statements.

10 Recoverable value

The recoverable value of inventories and fixed assets, used as a limit to their
valuation for financial reporting purposes, have been determined based on the
net realizable values and values in use, the latter defined as the expected net
cash flows that would result from both the use of the assets and the disposal
thereof at the end of their useful life.

11 Insurance

As of September 30, 2006 the insurance taken on the Branch's assets are as
follows:

-0-
*T
                                                                                        Covered
                    Insured assets                            Insured risk               amount
   --------------------------------------------    ----------------------------    ------------------
                                                                                      Thousand US$

   Equipment, facilities and pipelines
     applied to exploitation and transportation    Physical damage                      288,274

   Equipment, facilities and pipelines
     applied to exploitation and transportation    Liability insurance                  10,000

   Wells                                           Control, re-drilling, spill          25,000
*T

Additionally, the Branch has taken the following policies: workers compensation
insurance, directors and officers liability insurance and automobile liability
insurance.

12 Negative and positive contingencies

To calculate the related accruals, all available elements of judgment and
probability of occurrence have been considered (see Notes 10, 13 and Exhibit D
to the basic financial statements).

14 Contingent events as of the date of issuance of the financial statements with
moderate probability of occurrence, the financial effects of which have not been
fully recorded as of September 30, 2006

None.

Irrevocable advances for future subscriptions

15 As of September 30, 2006, there are no irrevocable advances for future
subscriptions.

16 There are no preferred shares as of the date of issuance of these financial
statements.

17 As of the date of issuance of these financial statements, the Branch has no
restrictions on the distributions of earnings, except as indicated in Note 10.

-0-
*T
Buenos Aires, November 9, 2006
                                                                                                  Daniel Grinstein
                                                                                                  Attorney in-fact
*T
                                                                                                                                           

a d v e r t i s e m e n t