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Pan Ameri Energy LLC (57UC)

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Monday 03 December, 2007

Pan Ameri Energy LLC

Half-yearly Report

Pan American Energy LLC, Argentine Branch
                  

 Translation from the original prepared in Spanish for publication in Argentina

PAN AMERICAN ENERGY LLC
(ARGENTINE BRANCH)

FINANCIAL STATEMENTS AS OF JUNE 30, 2007
AND COMPARATIVE INFORMATION

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*T
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 financial statements                                                                                          8
Exhibits A, B, C, D, E, F, G, H and I                                                                                 24
Reporting summary                                                                                                     37
Supplementary information required by the Buenos Aires Stock Exchange                                                 43
*T

REVIEW REPORT ON INTERIM FINANCIAL STATEMENTS

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

We reviewed the accompanying balance sheet of Pan American Energy LLC (Argentine
Branch) as of June 30, 2007, and the related statements of income and cash
flows, notes 1 to 15 and exhibits A, B, C, D, E, F, G, H and I for the six-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, 2006. 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 June 30,
2007, nor on the results of its operations and the cash flows for the six-month
period then ended.

In relation to the financial statements as of December 31, 2006, presented for
comparative purposes, we issued an unqualified opinion on March 9, 2007. In
addition, on August 11, 2006, we issued an unmodified review report on the
financial statements as of June 30, 2006, also presented for comparative
purposes.

Based on our review, we report that the financial statements as of June 30, 2007
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 the Republic of Argentina timely
authorized by the Inspection Board of Legal Entities (IGJ). Despite submitting
the special report required by section 287 of Resolution 7/2005 of the IGJ, the
Branch has not received the certification from such authorities evidencing so.
The information systems used to process the data included in the financial
statements are maintained under the security and integrity conditions based on
which they were authorized;

b) we read the reporting summary (sections 'Balance sheet items', 'Income
statement items', 'Statistical data' and 'Ratios') and 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 June 30, 2007, the accrued liability for pension contributions arising
from the accounting records amounted to $ 2,323,474, no amounts being due as of
that date.

Buenos Aires, August 10, 2007

SIBILLE

Graciela C. Laso
Partner

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

FINANCIAL STATEMENTS as of June 30, 2007 for the six-month period beginning
January 1, 2007 and ended June 30, 2007 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

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

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BALANCE SHEET as of June 30, 2007 and as of December 31, 2006 (in pesos)
                                                                       06/30/2007         12/31/2006
                                                               ------------------ ------------------
ASSETS
CURRENT ASSETS
Cash on hand and in banks (Note 4 a)                                   22,061,770         34,350,572
Investments (Exhibit C)                                               304,922,461        215,056,665
Accounts receivable (Note 4 b)                                        708,362,486        737,519,309
Other receivables (Note 4 c)                                           90,465,067        117,891,798
Inventories (Note 4 d)                                                115,452,548        130,809,611
                                                               ------------------ ------------------

Total current assets                                                1,241,264,332      1,235,627,955
                                                               ------------------ ------------------
NON CURRENT ASSETS
Other receivables (Note 4 e)                                           28,945,822         28,915,445
Investments (Exhibit C)                                                11,596,449          8,719,558
Property, plant and equipment (Exhibit A)                           6,419,675,372      5,870,488,156
Intangible assets (Exhibit B)                                             617,137          1,918,767
                                                               ------------------ ------------------

Total non current assets                                            6,460,834,780      5,910,041,926
                                                               ------------------ ------------------

Total assets                                                        7,702,099,112      7,145,669,881
                                                               ================== ==================
LIABILITIES
CURRENT LIABILITIES
Accounts payable (Note 4 f)                                           602,902,690        661,464,349
Loans (Note 4 g)                                                    1,520,310,881        877,022,350
Payroll and social security contributions                              18,339,566         32,833,398
Taxes payable (Note 4 h)                                              294,604,907        465,157,941
Provision for future compensation of personnel (Exhibit D)              2,018,028          1,968,408
                                                               ------------------ ------------------

Total current liabilities                                           2,438,176,072      2,038,446,446
                                                               ------------------ ------------------
NON CURRENT LIABILITIES
Accounts payable (Note 4 i)                                            56,995,802         32,579,735
Loans (Note 4 j)                                                    1,777,191,405      2,265,642,982
Other liabilities (Note 3.2.j)                                        108,519,585         97,036,602
Deferred tax (Note 3.2.h and 11)                                      399,762,982        441,951,134
Provision for future compensation of personnel (Exhibit D)             11,136,664          9,797,018
Provision for environmental remediation (Exhibit D)                   105,970,057        122,553,250
Accruals (Exhibit D)                                                   20,867,164         19,903,786
                                                               ------------------ ------------------

Total non current liabilities                                       2,480,443,659      2,989,464,507
                                                               ------------------ ------------------

Total liabilities                                                   4,918,619,731      5,027,910,953

Account with Head Office (Note 7)                                   2,322,240,374      1,656,519,921
Capital allocated to the Branch (Note 8)                              221,779,007        221,779,007
Capital adjustment                                                    239,460,000        239,460,000
                                                               ------------------ ------------------

Total                                                               7,702,099,112      7,145,669,881
                                                               ================== ==================
*T

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

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

STATEMENT OF INCOME for the period beginning January 1 and ended June 30, 2007
comparative with the same period of the prior year (in pesos)

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*T
                                                      2007                            2006
                                                   (6 months)                      (6 months)
                                         ------------------------------- -------------------------------

Sales                                                     2,610,490,344                   2,689,415,890
Cost of sales (Exhibit E)                                (1,257,994,877)                 (1,152,575,349)
                                                        ----------------                ----------------

Gross profit                                              1,352,495,467                   1,536,840,541

Administrative expenses (Exhibit G)                       ( 121,384,556)                  ( 109,224,165)
                                                        ----------------                ----------------

Operating income                                          1,231,110,911                   1,427,616,376

Financial results
 Generated by assets
  Interest                                  19,930,813                      31,548,317
  Exchange gains (losses)                    8,508,614                      17,871,190
    Other financial results                    581,081       29,020,508        127,070       49,546,577
                                         --------------                  --------------

 Generated by liabilities
  Interest                                (126,163,975)                    (70,213,346)
  Exchange gains (losses)                 ( 29,119,588)                    (31,494,627)
    Other financial results                ( 3,643,423)   ( 158,926,986)   ( 4,575,920)   ( 106,283,893)
                                         --------------                  --------------

Other income and expenses - net                            ( 28,169,970)                   ( 33,934,774)
                                                        ----------------                ----------------

Income before income tax                                  1,073,034,463                   1,336,944,286

Income tax expense - current (Note 3.2.h
 and 11)                                                  ( 415,247,332)                  ( 499,445,409)

Income tax benefit - deferred (Note
 3.2.h and 11)                                               42,188,152                      26,790,567
                                                        ----------------                ----------------

Net income (Note 7)                                         699,975,283                     864,289,444
                                                        ================                ================
*T

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

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

STATEMENT OF CASH FLOWS for the period beginning January 1 and ended June 30,
2007 comparative with the same period of the prior year (in pesos)

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                                                                         2007             2006
                                                                    ---------------- ---------------
                                                                       (6 months)      (6 months)
Cash provided by operations:

  Net income                                                            699,975,283     864,289,444

  Adjustment to reconcile net income with the cash generated by
   operations

      Depreciation of property, plant and equipment                     405,625,069     321,603,526
      Amortization of intangible assets                                   1,369,020       1,168,469
  Income tax expense                                                    415,247,332     499,445,409
  Net (decrease) increase in the allowance for bad debtors                ( 545,075)     11,171,101
  Gain (loss) on property, plant and equipment                            5,960,286         468,191
  Net increase (decrease) in the accrual for lawsuits                       963,378     ( 4,095,773)
  Increase in the provision for future compensation of personnel          2,486,475               -
  Net increase in the provision for environmental remediation             2,508,361       1,856,031
  Net increase (decrease) in the allowance for obsolescence of
   materials                                                                175,391         ( 3,877)
  Other non-cash items (1)                                               66,489,432      60,829,748

     Changes in assets, liabilities and account with Head Office:

  Decrease (increase) in accounts receivable                             29,701,898    (357,059,600)
  Decrease in inventories                                                15,181,672       2,864,646
  Decrease in other current receivables                                  27,426,731      52,285,095
  (Increase ) decrease in other non current receivables                    ( 30,377)      1,454,805
  (Decrease) increase in accounts payable, payroll and social
   security
contributions, taxes payable less provisions and other liabilities     ( 11,916,611)     88,128,900
        Compensation paid to personnel due to defined benefit plans     ( 1,097,209)      ( 974,567)
  Payments related to lawsuits                                                    -       ( 112,419)
        Income tax paid                                               ( 611,040,196)  ( 475,219,574)
                                                                    ---------------- ---------------
  Net cash generated by operations                                    1,048,480,860   1,068,099,555
                                                                    ================ ===============

Cash used in investing activities:

  Increase in non current investments                                   ( 2,876,891)    ( 1,030,782)
  Acquisitions of property, plant and equipment                       ( 986,825,798)  ( 753,373,173)
  Additions to intangible assets                                           ( 67,390)      ( 110,516)
  Collection due to the sale of property, plant and equipment             6,961,673               -
  Decrease in intangible assets (net)                                             -         411,784
                                                                    ---------------- ---------------
      Cash used in investing activities                               ( 982,808,406)  ( 754,102,687)
                                                                    ---------------- ---------------

Cash generated by (used in) financing activities:

  Increase in loans (net)                                                46,159,370     104,474,802
  Remittances made to Head Office (net)                                ( 34,254,830)  ( 502,293,910)
                                                                    ---------------- ---------------
  Cash generated by (used in) financing activities                       11,904,540   ( 397,819,108)
                                                                    ---------------- ---------------

Net increase (decrease) in funds                                         77,576,994    ( 83,822,240)

Cash at the beginning of period (2)                                     249,407,237     383,294,098
                                                                    ---------------- ---------------

Cash at the end of period (2)                                           326,984,231     299,471,858
                                                                    ================ ===============
(1) It is made up of:
    Exchange gains (losses) and other financial results
    relating to loans and other                                         108,677,584      87,620,315
    Deferred income tax benefit                                       ( 42,188,152)    (26,790,567)
                                                                    ---------------  --------------
    Total                                                                66,489,432      60,829,748
                                                                    ===============  ==============
(2) Cash and banks plus investments the maturity date of which is lower than three months.
*T

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

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

NOTES TO FINANCIAL STATEMENTS as of June 30, 2007 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 assets and liabilities 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 for the six-month period ended June 30, 2007.

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                                                             Main blocks/              Ownership         Branch's
                    Activity                                  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                    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
                                                  Bandurria                           18.18%      Non operator
                                                  Costa Afuera Argentina 'CAA-40'     50.00%      Non operator
                                                  Costa Afuera Argentina 'CAA-46'     50.00%      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.

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 and pursuant to the provisions of the CNV.

Investments to become due or to be realized in the short term (3 months) are
considered a cash equivalent in the statement of cash flows.

For comparative purposes, necessary reclassifications were made on prior-year
financial statements in order to present the figures on a consistent basis.

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.

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:

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

2. 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 as of July 28, 2003, date on which Resolution CD
87/2003 of the CPCECABA was published, exchange gains/losses resulting from
restating such liabilities totaling $1,832,303,600 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 June 30, 2007.

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 these 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.

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.

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

Accruals included in liabilities:

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

Provisions included in liabilities:

- 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

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 June 30, 2007 and 2006 on taxable income; and the future tax
effect of the tax loss carryforwards, if any, and the temporary differences in
the book and tax values of assets and liabilities is recognized as deferred tax
assets or liabilities.

The deferred tax assets are recognized only to the extent of their
recoverability.

i) Use of estimates

The preparation of the financial statements in accordance with generally
accepted accounting principles requires that the Management of the Branch makes
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 present value of the transactions and items affected by these
estimates may differ from the estimated amounts.

j) Defined benefit plan

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 $108,519,585, ($ 97,036,602 as of December 31, 2006)
presented under Other non current liabilities, out of which the amount of
$ 11,573,178 accrued in the six-month period ended June 30, 2007 and was
included in Other income and expenses of the Statement of Income. Such amount is
made up of $ 181,255,896 of nominal value less $ 72,736,311 (financial effect
from the discount to present value).

k) Revenue recognition

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

The Branch uses the production method to recognize revenues from the sale of
oil. In those cases where the Branch has a shared interest with other producers,
revenues are recorded upon the basis of the interest held in each joint venture.

In order to recognize revenues from the sale of gas, the Branch uses the sales
method, whereby these revenues are recognized regardless of the fact they are
the Branch's own production or output shared with other producers.

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 as they accrue.

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

-0-
*T
                                                                                             Nominal value
                                                                                      ----------------------------

Up to a year                                                                          US$ 2,545,764 and $ 64,397
Over one year and up to five years                                                    US$ 3,722,994
*T

During the six-month period, the Branch recognized an expense of $ 4,394,688
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 has
considered the currency restatement of property, plant and equipment as a
temporary difference for the purpose of the deferred tax calculation.
Consequently, at the beginning of the fiscal year 2006, 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 No. 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 their recoverable
value.

NOTE 4 - BREAKDOWN OF CERTAIN BALANCE SHEET ITEMS



-0-
*T
                                                                       06/30/2007          12/31/2006
                                                               ------------------- -------------------
ASSETS
CURRENT ASSETS
a) Cash on hand and in banks
  Cash on hand in local currency                                          141,295             141,977
  Cash on hand in foreign currency (Exhibit F)                             56,900             232,722
  Cash in banks in local currency                                      21,762,592          24,481,235
  Cash in banks in foreign currency (Exhibit F)                           100,983           9,494,638
                                                               ------------------- -------------------

  Total                                                                22,061,770          34,350,572
                                                               =================== ===================
b) Accounts receivable
  Accounts receivable in local currency                                77,113,375          73,659,586
  Allowance for bad debtors in local currency (Exhibit D)             ( 4,294,022)        ( 4,983,016)
  Accounts receivable in foreign currency (Exhibit F)                 471,596,367         682,872,598
  Affiliated companies in foreign currency (Note 9
and Exhibit F)                                                        178,120,544                   -
  Allowance for bad debtors in foreign currency (Exhibits D
and F)                                                               ( 14,173,778)       ( 14,029,859)
                                                               ------------------- -------------------

  Total                                                               708,362,486         737,519,309
                                                               =================== ===================
c) Other receivables
  Loans to personnel                                                    7,830,338           8,490,283
  Tax credits                                                           2,411,868          24,907,001
  Expenses recoverable in local currency                                4,951,710           7,310,337
  Expenses recoverable in foreign currency (Exhibit F)                  1,626,239           1,284,463
  Prepaid expenses in local currency                                    4,058,901           7,648,706
  Tax credit certificate - Decree 564/05
    in foreign currency (Exhibit F)                                    36,328,355                   -
  Miscellaneous in local currency                                      20,382,911          39,819,127
  Miscellaneous in foreign currency (Exhibit F)                        11,682,647          28,032,599
  Affiliated companies in foreign currency (Note 9
and Exhibit F)                                                          1,192,098             399,282
                                                               ------------------- -------------------

  Total                                                                90,465,067         117,891,798
                                                               =================== ===================
d) Inventories
  Crude oil in stock                                                   32,382,002          69,704,063
  Spare parts, materials and raw materials                             53,763,638          47,997,293
                                                               ------------------- -------------------

  Subtotal                                                             86,145,640         117,701,356

  Allowance for obsolescence of materials (Exhibit D)                 ( 3,039,521)        ( 2,864,130)
                                                               ------------------- -------------------

  Subtotal (Exhibit E)                                                 83,106,119         114,837,226

  Goods in transit                                                     28,468,821           7,924,880
  Advances to suppliers in local currency                               3,877,608           7,765,719
  Advances to suppliers in foreign currency (Exhibit F)                         -             281,786
                                                               ------------------- -------------------

  Total                                                               115,452,548         130,809,611
                                                               =================== ===================
NON CURRENT ASSETS
e) Other receivables
  Loans to personnel                                                    4,830,916           3,837,996
  Advances to suppliers in local currency                               3,173,211           4,534,641
  Miscellaneous in local currency                                       6,355,336           6,517,545
  Miscellaneous in foreign currency (Exhibit F)                        14,586,359          14,025,263
                                                               ------------------- -------------------

  Total                                                                28,945,822          28,915,445
                                                               =================== ===================
*T


NOTE 4 - BREAKDOWN OF CERTAIN BALANCE SHEET ITEMS (Cont.)
-0-
*T
                                                                       06/30/2007         12/31/2006
                                                               ------------------ ------------------
LIABILITIES
CURRENT LIABILITIES
f) Accounts payable
  Trade payables in local currency                                    399,809,376        449,624,468
  Trade payables in foreign currency (Exhibit F)                      160,118,603        167,263,681
  Expenses payable in local currency                                   33,116,019         34,598,789
  Affiliated companies in foreign currency (Note 9 and
Exhibit F)                                                              9,858,692          9,977,411
                                                               ------------------ ------------------

  Total                                                               602,902,690        661,464,349
                                                               ================== ==================
g) Loans
  Affiliated companies in local currency (Note 9)                     469,672,203                  -
  Affiliated companies in foreign currency (Note 9 and
Exhibit F)                                                            269,340,437                  -
  Bonds in foreign currency (Exhibit F)                                         -        306,200,000
  Unsecured notes payable in local currency                           432,789,547        275,057,276
  Secured notes payable in foreign currency
(Exhibit F)                                                                     -          4,172,593
  Unsecured notes payable in foreign currency
(Exhibit F)                                                           295,841,549        226,105,569
  Interest accrued on bonds and notes payable in foreign
currency (Exhibit F)                                                   52,667,145         65,486,912
                                                               ------------------ ------------------

  Total                                                             1,520,310,881        877,022,350
                                                               ================== ==================
h) Taxes payable
  Income tax net of prepayments                                       198,498,937        391,273,549
  Miscellaneous                                                        96,105,970         73,884,392
                                                               ------------------ ------------------

  Total                                                               294,604,907        465,157,941
                                                               ================== ==================
NON CURRENT LIABILITIES
i) Accounts payable
  Miscellaneous liabilities in local currency                          39,952,915         15,707,663
  Miscellaneous liabilities in foreign currency (Exhibit F)            17,042,887         16,872,072
                                                               ------------------ ------------------

  Total                                                                56,995,802         32,579,735
                                                               ================== ==================
j) Loans
  Affiliated companies in local currency (Note 9)                               -        446,709,189
  Bonds in foreign currency (Exhibit F)                             1,082,550,000      1,071,700,000
  Unsecured notes payable in foreign currency
(Exhibit F)                                                           694,641,405        747,233,793
                                                               ------------------ ------------------

  Total                                                             1,777,191,405      2,265,642,982
                                                               ================== ==================
*T

NOTE 5 - ISSUANCE OF BONDS

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, at a
6.75% rate per annum. The bonds were paid upon maturity on February 1, 2007.
This issuance completes the maximum amount of the short and medium term bond
program of US$ 200,000,000 approved by the National Securities Commission
through Resolution No. 10982 dated July 13, 1995.

As a result of the transfer of assets and liabilities referred to in the second
paragraph of Note 1 to these financial statements, Amoco Argentina Oil Company
(Argentine Branch) transferred the above mentioned bonds to Pan American Energy
LLC (Argentine Branch). Such Bonds were guaranteed until repayment, in February
2007, by BP Company North America Inc.

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.

On October 27, 2004, the Branch issued Bonds Class 3 in the amount of US$
100,000,000 under the Global Program. The bonds become due in five years
(October 27, 2009) with a 7.125% annual fixed interest rate to be paid on a
half-yearly basis. 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
an annual fixed 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 were 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
installments 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 installments
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%
plus additional interest calculated in relation to Head Office's economic
performance, becoming due in July 2016.

As of December 31, 2005, the amount of the loans had been fully disbursed.

The first principal installment for tranches 'A' and 'B' was paid on January 15,
2007.

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

The Branch considers that its access to credit lines is suitable in order to
that meet commercial and financial obligations which are expected to be honored,
despite the fact the working capital is negative.

NOTE 7 - ACCOUNT WITH HEAD OFFICE

The changes in the account with Head Office during the six-month periods ended
June 30, 2007 and 2006 have been as follows:

-0-
*T
                                                                      Six-month period ended
                                                              ---------------------------------------
                                                                    06/30/2007            06/30/2006
                                                              ----------------- ---------------------

Balance at beginning of year with Head Office                    1,656,519,921         2,290,686,326
Adjustment to prior-year results (Note 3.2.m)                                -         ( 229,088,577)
                                                              ----------------- ---------------------
Balance at beginning of the year with Head Office after
 adjustment                                                      1,656,519,921         2,061,597,749

Remittances made to Head Office - net                             ( 34,254,830)        ( 502,293,910)
Transfer of net income                                             699,975,283           864,289,444
                                                              ----------------- ---------------------
Net changes for the period                                         665,720,453           361,995,534
                                                              ----------------- ---------------------

Balance at period-end with Head Office (1)                       2,322,240,374         2,423,593,283
                                                              ================= =====================
*T

(1) As of June 30, 2007 and as of June 30, 2006 the balances are in local
currency.

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,
answerable to the Inspection Board of Legal Entities. 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 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
                                             2007            2006
                                       -------------------------------
                                          (6 months)      (6 months)
TRANSACTIONS

   Pan American Fueguina SA
       Recovery of receivables                        -          2,261
       Financing (including interest)       292,303,451              -

   Pan American Sur S.A.
       Lending of LPG                           835,883              -

   PAE E & P Bolivia Ltd,
       Purchases and hiring of
        services                                329,541        105,801

   PAE Oil & Gas Bolivia Ltd.
       Purchases and hiring of
        services                                463,275        111,012

   BP West Coast Products LLC
       Sales                                322,280,943    800,018,212

   BP America Production Company
       Services                               1,616,445      3,397,554

                                          06/30/2007      12/31/2006
                                       -------------------------------
BALANCES

   Pan American Fueguina S.A.
       Accounts payable                               -        899,281
       Loans                                739,012,640    446,709,189

   Pan American Sur S.A.
        Accounts payable                      7,345,348      8,181,231

   PAE E & P Bolivia Ltd.
       Other receivables                        623,224        293,683

   PAE Oil & Gas Bolivia Ltd.
       Other receivables                        568,874        105,599

   BP West Coast Products LLC
       Accounts receivable                  178,120,544              -

   BP America Production Company
       Accounts payable                       2,513,344        896.899
*T


NOTE 10 - GUARANTEES AND OTHER COMMITMENTS

In terms of investment commitments, the Branch has not granted any guarantees as
of June 30, 2007.

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 June 30,
2007, 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 $ 30,112,985 as of June 30, 2007 in
favor of the Branch, contingent on the decrease in the crude oil WTI price to an
amount lower than US$28.50 per barrel. The price thereof was US$ 70.33 as of
June 30, 2007.

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. The Branch agreed to waive further claims in connection with said
deliveries. The related income was recognized in the period ended June 30, 2006.

NOTE 11 - INCOME TAX

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

-0-
*T
                                                06/30/2007  12/31/2006
                                               ----------- -----------

Deferred tax assets
   Allowance for obsolescence of materials       1,063,833   1,002,446
   Provision for future compensation to
    personnel                                    4,437,863   4,296,053
   Allowance for lawsuits                        7,419,543   7,082,362
   Provision for environmental remediation      11,318,380   9,835,326
   Other provisions and allowances              18,972,716  18,174,616
                                               ----------- -----------

Total deferred tax assets                       43,212,335  40,390,803
                                               ----------- -----------

Deferred tax liabilities
   Inventories - materials and spare parts         956,830     962,248
   Property, plant and equipment and
    intangible assets                          418,979,608 458,338,264
   Other                                        23,038,879  23,041,425
                                               ----------- -----------

Total deferred tax liabilities                 442,975,317 482,341,937
                                               ----------- -----------

Total deferred tax liabilities - net           399,762,982 441,951,134
                                               =========== ===========
*T

NOTE 11 - INCOME TAX (Cont.)

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
                                                   2007           2006
                                         -------------- --------------
                                           (6 months)      (6 months)

Net income before taxes                   1,073,034,463  1,336,944,286

Prevailing tax rate                                 35%            35%
                                         -------------- --------------
Net income at prevailing tax rate        ( 375,562,062) ( 467,930,500)

Permanent differences at the tax rate:
   Miscellaneous - net                        2,502,882   ( 4,724,342)
                                         -------------- --------------

Subtotal permanent differences at the
 tax rate                                     2,502,882   ( 4,724,342)
                                         -------------- --------------

Income tax expense - total               ( 373,059,180) ( 472,654,842)
                                         -------------- --------------

Current income tax expense               ( 415,247,332) ( 499,445,409)
Deferred income tax benefit                  42,188,152     26,790,567
                                         -------------- --------------
                                         ( 373,059,180) ( 472,654,842)
                                         ============== ==============
*T

NOTE 12 - RESTRICTED ASSETS

In November 2006, the Branch collected the deposit made in the fiscal year 2003
as collateral for a loan from a foreign bank. As of June 30, 2006 it amounted to
US$ 2,505,351.

In May 2005, the Branch made a bank deposit in its own name as collateral for a
loan from a foreign bank. The deposit is held in an account pertaining to a bank
institution on behalf of the Branch in an amount that as of June 30, 2007 and
2006 was US$ 1,764,705.

Two generators were pledged in the amount of US$ 7,483,776 as collateral for
outstanding accounts payable. The balance was paid off in June 2007.

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, Management and the legal
counsel of the Branch consider 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 - AGREEMENTS WITH THE PROVINCES OF CHUBUT AND SANTA CRUZ

The Branch entered into with the provinces of Chubut (04/27/2007) and Santa Cruz
(06/25/2007) sound investment agreements and contracts for the extension of the
hydrocarbon exploration and production concession for a ten-year period in the
blocks known as Cerro Dragón, the area of which is extended in the territory of
both provinces, and Piedra Clavada and Koluel Kaike in the province of Santa
Cruz. The agreements expired between 2016 and 2017.

NOTE 14 - AGREEMENTS WITH THE PROVINCES OF CHUBUT AND SANTA CRUZ

(Cont.)

These agreements provided for minimum investments of US$ 2,000,000,000 in the
Province of Chubut and of US$ 500,000,000 in the Province of Santa Cruz. These
investments are to be made before 2017 and are destined to onshore activities.
Other investments of US$ 1,000,000,000 in the Province of Chubut and of US$
300,000,000 in the Province of Santa Cruz are to be made before 2027.

The agreements also set forth an investment of US$ 80,000,000 to explore in the
sea, at the company's own expense. To this end, joint ventures with the
state-owned companies Petrominera (in the case of Chubut) and Fomicruz (in the
case of Santa Cruz) will be created. The eventual success of the exploration and
the related commerciality entail an additional investment of US$ 500,000,000 for
the purpose of developing the offshore fields that are to be discovered.

The creation of the joint ventures referred to in the preceding paragraph is
consistent with the provisions of sections 11 and 95 of the Hydrocarbon Law,
which allows state-run companies to enter into agreements and create
corporations, partnerships or other associations with individuals or entities
for the development of their activities.

The Operation Agreements are included in the aforesaid Law. These agreements are
signed with the same state-run companies and shall be in force in 2027, subject
to the compliance with the investments and to Pan American Energy's exploration
success, which will allow it to show that it has developed sufficient reserves
for the purpose of maintaining production in the fields as from that year.

Other commitments assumed by the Branch are as follows:

    --  Contribute the amount of US$ 120,000,000 to the Province of Chubut and
        the amount of US$ 40,000,000 to the Province of Santa Cruz. The referred
        amounts will be applied by halves in both cases in order to set up
        several provincial funds. The amounts shall be paid by the Branch in
        four equal and consecutive installments on an annual basis; and

    --  Since the period during which the agreements are in force, the Branch
        will make a Special Contribution of 3% on net income generated by the
        concessions to the Province of Chubut and the Province of Santa Cruz.

The agreement with the Province of Chubut was ratified by provincial law Nr.
5616 of the Legislature of the aforesaid province on May 24, 2007.

Provincial Law Nr. 5616 was promulgated by decree Nr. 500/2007 and published in
the Official Gazette on May 28, 2007.

The Government of the Province of Santa Cruz has sent the agreement to the
Provincial Legislature for the related approval.

These agreements involve a new horizon to sustain the increase in production and
reserves in oil fields such as Cerro Dragón, Piedra Clavada and Koluel Kaike,
and the new off shore operations in the Gulf. This new horizon shall allow
addressing long-term projects requiring sound investments, new technologies and
teams working for the future.

NOTE 15 - SUBSEQUENT EVENTS

On July 13, 2007, the Branch obtained from the International Finance Corporation
(IFC) a loan in the amount of U$S 550,000,000, consisting of two tranches:

- 'A' in the amount of US$ 150,000,000, amortizable on a six-month installments
basis and becoming due in April 2018; and

- 'B', Tranch '1' in the amount of US$ 158,500,000, amortizable on a six-month
installments basis and becoming due in April 2014, and Tranch '2' in the amount
of US$ 241,500,000, amortizable on a six-month installments basis and becoming
due in April 2015.

The loan is guaranteed by Head Office and the funds obtained shall be destined
to partially finance the investment program that the Company is planning to
launch in Cerro Dragón, in the San Jorge Gulf basin, located in the provinces of
Santa Cruz and Chubut.

Translation from the original prepared in Spanish for publication in Argentina

EXHIBIT A

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

PROPERTY, PLANT AND EQUIPMENT (in pesos)

as of June 30, 2007 and as of December 31, 2006

-0-
*T
                                                      Original values
                         --------------------------------------------------------------------------

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


Land and buildings           53,902,203        45,000     1,181,117            -         55,128,320
Plants, wells and
 exploration and
production facilities    12,045,371,439    68,859,196   126,241,309   47,315,297     12,193,156,647
Furniture and office
 supplies                     8,090,645             -             -            -          8,090,645
Equipment                   130,526,906             -     8,253,076            -        138,779,982
Vehicles                     37,318,081       130,398             -       32,208         37,416,271
Work in progress            610,477,077   915,382,949 (135,675,502)            -      1,390,184,524
Advances to suppliers        24,040,065     7,287,275             -            -         31,327,340
                         -------------- ------------- ------------- ------------     --------------

Total as of 06/30/2007   12,909,726,416   991,704,818             -   47,347,505     13,854,083,729
                         ============== ============= ============= ============     ==============

Total as of 12/31/2006   11,215,074,160 1,714,133,505             -   19,481,249     12,909,726,416
                         ============== ============= ============= ============     ==============

                                             Depreciation
                         -----------------------------------------------------
                                                                                          Book value
                          Accumulated                             Accumulated    ----------------------------
                          at beginning                                at           Net as of      Net as of
Main account              of the year      Increases  Decreases   period-end        06/30/07      12/31/06
------------------------ -------------- ------------ ----------- -------------   -------------- -------------
                                             (1) (2)

Land and buildings           25,181,488    1,463,061           -    26,644,549       28,483,771    28,720,715
Plants, wells and
 exploration and
production facilities     6,880,673,207  392,316,355  10,422,764 7,262,566,798    4,930,589,849 5,164,698,232
Furniture and office
 supplies                     7,895,688       38,687           -     7,934,375          156,270       194,957
Equipment                   102,450,577    9,148,413           -   111,598,990       27,180,992    28,076,329
Vehicles                     23,037,300    2,658,553      32,208    25,663,645       11,752,626    14,280,781
Work in progress                      -            -           -             -    1,390,184,524   610,477,077
Advances to suppliers                 -            -           -             -       31,327,340    24,040,065
                         -------------- ------------ ----------- -------------   -------------- -------------

Total as of 06/30/2007    7,039,238,260  405,625,069  10,454,972 7,434,408,357    6,419,675,372
                         ============== ============ =========== =============   ==============

Total as of 12/31/2006    6,417,279,987  638,177,818  16,219,545 7,039,238,260                  5,870,488,156
                         ============== ============ =========== =============                  =============
*T

(1) See Exhibit G.

(2) See depreciation policies in Note 3.2.e.

EXHIBIT B

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

INTANGIBLE ASSETS (in pesos)

as of June 30, 2007 and as of December 31, 2006

-0-
*T
                                           Original Values                    Amortization

                                                                                                          Book value
                                              Increases             Accumulated                       ------------------
                                      At         for                    at                Accumulated Net as
                                   beginning    the         At       beginning  For the        at        of    Net as of
          Main account            of the year   period  period-end  of the year   period  period-end  06/30/07 12/31/06
--------------------------------- ----------- --------- ----------- ----------- --------- ----------- -------- ---------
                                                                                  (1) (2)
Pre-operating expenses and dry
wells                              48,740,915         -  48,740,915  48,300,969    31,451  48,332,420  408,495   439,946
Acquisition cost of blocks          6,487,247         -   6,487,247   6,276,829     1,776   6,278,605  208,642   210,418
Deferred charges                   63,488,027    67,390  63,555,417  62,219,624 1,335,793  63,555,417        - 1,268,403
                                  ----------- --------- ----------- ----------- --------- ----------- -------- ---------

Total as of 06/30/2007            118,716,189    67,390 118,783,579 116,797,422 1,369,020 118,166,442  617,137
                                  =========== ========= =========== =========== ========= =========== ========

Total as of 12/31/2006            118,299,083   417,106 118,716,189 114,582,363 2,215,059 116,797,422          1,918,767
                                  =========== ========= =========== =========== ========= ===========          =========
*T

(1) See Exhibit G.

(2) See amortization criteria in Note 3.2.f.

EXHIBIT C

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

OTHER INVESTMENTS (in pesos)

as of June 30, 2007 and as of December 31, 2006

-0-
*T
                                                  Book        Book
                                                  value       value
             Main account                      06/30/2007  12/31/2006
                                               ----------- -----------

Short-term investments

Mutual funds in foreign currency (Exhibit F)   296,869,195 215,056,665

   Class: Citi Institutional Liquid Reserves
   Quantity: 97,238,518 units
   Quoted value: US$ 1
   (US dollar)

Government securities
   Certificates evidencing payment of tax
    liability
   (Government of the Province of Chubut)
    Coupons Nos, 17 and 18                       1,290,522

Time deposits in foreign currency (Exhibit F)    6,762,744           -

           Total short-term investments        304,922,461 215,056,665
                                               =======================

Long-term investments

Government securities:
   Bonos de la República Argentina - discount
    bonds
   in pesos 5.83% final maturity in 2033
   Quantity: 4,821,350
   Face value: $ 1
   Quoted value: $ 1,387                         6,687,212   7,015,064
   GDP coupon in pesos
   Quantity: 14,306,676
   Face value: $ 1
   Quoted value: $ 0,123                         1,759,721   1,702,494

   Certificates evidencing payment of tax
    liability
   (Government of the Province of Chubut)
   Coupons Nos, 19 to 23                         3,147,516           -

Shares:
   Garantizar S.A.
   Quantity: 2000
   Class: B
   Face value: $ 1                                   2,000       2,000
                                               -----------------------

           Total long-term investments          11,596,449   8,719,558
                                               -----------------------

           Total investments                   316,518,910 223,776,223
                                               =======================
*T

EXHIBIT D

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

ALLOWANCES, PROVISIONS AND ACCRUALS (in pesos)

as of June 30, 2007 and as of December 31, 2006

-0-
*T
                                   Balances at    Increases      Decreases       Balances as of
                                    beginning      for the         for the          06/30/07
          Main account              of the year     period          period
---------------------------------  ------------  ------------    -----------    ----------------

Deducted from current assets:

Allowance for bad debtors in
 local
currency                              4,983,016             -        688,994 (1)       4,294,022
Allowance for bad debtors in
 foreign
currency                             14,029,859       143,919 (2)          -          14,173,778
Allowance for obsolescence of
materials                             2,864,130       175,391 (3)          -           3,039,521
                                   ------------  ------------    -----------    ----------------

Total deducted from assets           21,877,005       319,310        688,994          21,507,321
                                   ============  ============    ===========    ================

Included in current liabilities:

Provision for future compensation
of personnel                          1,968,408        49,620 (4)          -           2,018,028
                                   ------------  ------------    -----------    ----------------

Subtotal current liabilities          1,968,408        49,620              -           2,018,028
                                   ------------  ------------    -----------    ----------------

Included in non current
 liabilities:

Accrual for lawsuits                 19,903,786       963,378 (5)          -          20,867,164
Provision for environmental
remediation                         122,553,250     8,231,186 (6) 24,814,379 (7)     105,970,057
Provision for future compensation
of personnel                          9,797,018     2,486,475 (8)  1,146,829 (9)      11,136,664
                                   ------------  ------------    -----------    ----------------

Subtotal non current liabilities    152,254,054    11,681,039     25,961,208         137,973,885
                                   ------------  ------------    -----------    ----------------

Total included in liabilities       154,222,462    11,730,659     25,961,208         139,991,913
                                   ============  ============    ===========    ================
*T

(1) Uses for the period.

(2) Charges for the period. They are included in financial results provided by
assets, exchange gains/losses of the Statement of Income.

(3) Charges for the period. They are included in production costs (see Exhibit
G) of the Statement of Income.

(4) Transfer from the non current provision for future compensation to
personnel.

(5) Charges for the period. It is made up of $ 598,165 included in production
costs (see Exhibit G) and $ 365,213 included in administrative expenses (see
Exhibit G) of the Statement of Income.

(6) Charges for the period included in financial results provided by liabilities
in the Statement of Income amounting to $3,352,166 and increases included in
plants, wells and exploration and production equipment in the amount of
$4,879,020.

(7) Decreases included in plants, wells and exploration and production equipment
in the amount of $ 23,970,574 and uses for the period of $ 843,805.

(8) Charges for the period. They are included in other income and expenses of
the Statement of Income.

(9) It is made up of compensation paid during the period in the amount of $
1,097,209 and the transfer referred to in line 4 in the amount of $ 49,620.

EXHIBIT E

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

COST OF SALES (in pesos)

For the six-month period beginning January 1, 2007 and ended June 30, 2007,
comparative with the same period of the prior year

-0-
*T
                                                               2007                2006
                                                        ------------------- ------------------
                                                            (6 months)          (6 months)

Inventories at the beginning of the year                        114,837,226        104,612,667

Purchases                                                       100,413,305        108,273,957

Production costs (Exhibit G)                                  1,125,850,465      1,041,711,810

Inventories at period-end                                     ( 83,106,119)     ( 102,023,085)
                                                        ------------------- ------------------

Cost of sales                                                 1,257,994,877      1,152,575,349
                                                        =================== ==================
*T

EXHIBIT F

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

ASSETS AND LIABILITIES IN FOREIGN CURRENCY

as of June 30, 2007 and as of December 31, 2006

-0-
*T
                                                                Amount in                                    Amount in
                                                                 local                                        local
                      Amount and type of                         currency   Amount and type of                currency
                       foreign currency  Exchange                as of       foreign currency                 as of
        Item           as of 06/30/2007    rate                 06/30/2007   as of 12/31/2006                12/31/2006
                          US$      Euros    $         (1)          (1)          US$      Euros     (2)          (2)
ASSETS
CURRENT ASSETS

Cash on hand and in
 banks
  Cash on hand                   - 4,370   4.1298      18,047                          - 4,370      17,419
                            12,726          3.053      38,853        56,900       71,245           215,303       232,722
                                                  -----------                                  -----------
  Cash in banks
    Domestic                18,882          3.053      57,646                      3,472            10,491
    Foreign                 14,195          3.053      43,337       100,983    3,138,368         9,484,147     9,494,638
                                                  -----------                                  -----------

Investments
  Time deposits in
   foreign currency      2,215,114          3.053                 6,762,744            -                               -
  Foreign mutual
   funds                97,238,518          3.053               296,869,195   71,163,688                     215,056,665

Accounts receivable
  Domestic             143,252,148          3.053 437,348,807                106,460,311       321,723,060
  Foreign               11,217,674          3.053  34,247,560   471,596,367  119,506,796       361,149,538   682,872,598
                                                  -----------                                  -----------
  Foreign affiliated
   companies            58,342,792          3.053               178,120,544            -                               -
  Allowance for bad
   debtors            ( 4,642,574)          3.053             ( 14,173,778) ( 4,642,574)                   ( 14,029,859)

Other receivables
  Expenses
   recoverable -
   foreign                 532,669          3.053                 1,626,239      425,037                       1,284,463
  Tax credit
   certificate          11,899,232          3.053                36,328,355            -                               -
  Miscellaneous -
   domestic                610,491          3.053   1,863,830                  2,675,304         8,084,768
  Miscellaneous -
   foreign               3,216,121          3.053   9,818,817    11,682,647    6,600,871        19,947,831    28,032,599
                                                  -----------                                  -----------
  Foreign affiliated
   companies               390,468          3.053                 1,192,098      132,125                         399,282

Inventories
  Advances to
   suppliers
    Foreign                      -     -        -                         -       93,245     -                   281,786
                      ------------ -----                      ------------- ------------ -----             -------------

  Total current
   assets              324,318,456 4,370                        990,162,294  305,627,888 4,370               923,624,894
                      ------------ -----                      ------------- ------------ -----             -------------

NON CURRENT ASSETS

Other receivables
  Miscellaneous -
   domestic              4,777,713     -    3.053                14,586,359    4,641,053     -                14,025,263
                      ------------ -----                      ------------- ------------ -----             -------------

  Total non current
   assets                4,777,713     -                         14,586,359    4,641,053     -                14,025,263
                      ------------ -----                      ------------- ------------ -----             -------------

  Total assets         329,096,169 4,370                      1,004,748,653  310,268,941 4,370               937,650,157
                      ============ =====                      ============= ============ =====             =============
*T

US$ = US dollar

(1) As per buyer exchange rate as of June 30, 2007.

(2) As per buyer exchange rate as of December 31, 2006.

EXHIBIT F

(Cont.)

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

ASSETS AND LIABILITIES IN FOREIGN CURRENCY

as of June 30, 2007 and as of December 31, 2006

-0-
*T
                                    Amount and                                     Amount and
                                      type of                          Amount in     type of                 Amount in
                                     foreign                            local       foreign                   local
                                      currency                          currency     currency                 currency
                                      as of     Exchange                as of        as of                    as of
               Item                  06/30/2007   rate                 06/30/2007   12/31/2006               12/31/2006
                                        US$        $         (1)          (1)          US$         (2)          (2)
LIABILITIES

CURRENT LIABILITIES

Accounts payable
  Trade - domestic                   47,128,672    3.093 145,768,982                37,552,721 114,986,434             -
  Trade - foreign                     4,639,386    3.093  14,349,621   160,118,603  17,072,909  52,277,247   167,263,681
                                                         -----------                           -----------
  Affiliated companies - domestic     2,374,830    3.093   7,345,348                 2,965,550   9,080,512
  Affiliated companies - foreign        812,591    3.093   2,513,344     9,858,692     292,913     896,899     9,977,411
                                                         -----------                           -----------

Loans
  Affiliated companies - domestic    87,080,646    3.093               269,340,437           -                         -
  Bonds - foreign                             -        -                         - 100,000,000               306,200,000
  Secured notes payable -
    foreign                                   -        -                         -   1,362,702                 4,172,593
  Unsecured notes payable -
   domestic                          35,000,000    3.093 108,255,000                         -           -
  Unsecured notes payable -
    foreign                          60,648,739    3.093 187,586,549   295,841,549  73,842,446 226,105,569   226,105,569
                                                         -----------                           -----------
  Interest accrued on bonds and
notes payable                        17,027,852    3.093                52,667,145  21,386,973                65,486,912
                                    -----------                      ------------- -----------             -------------

  Total current liabilities         254,712,716                        787,826,426 254,476,214               779,206,166
                                    -----------                      ------------- -----------             -------------

NON CURRENT LIABILITIES

Accounts payable
  Miscellaneous liabilities -
   foreign                            5,510,148    3.093                17,042,887   5,510,148                16,872,072

Loans
  Bonds - foreign                   350,000,000    3.093             1,082,550,000 350,000,000             1,071,700,000
  Unsecured notes payable -
    Domestic                         15,000,000    3.093  46,395,000                         -           -
  Unsecured notes payable -
    foreign                         209,585,000    3.093 648,246,405   694,641,405 244,034,550 747,233,793   747,233,793
                                    -----------          ----------- ------------- ----------- ----------- -------------

  Total current liabilities         580,095,148                      1,794,234,292 599,544,698             1,835,805,865
                                    -----------                      ------------- -----------             -------------

  Total liabilities                 834,807,864                      2,582,060,718 854,020,912             2,615,012,031
                                    ===========                      ============= ===========             =============
*T

US$ = US dollar

(1) As per seller exchange rate as of June 30, 2007.

(2) As per seller exchange rate as of December 31, 2006.

EXHIBIT G

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

INFORMATION REQUIRED BY ART. 64, CLAUSE 1b) OF LAW 19550, for the six-month
period beginning January 1, 2007 and ended June 30, 2007, comparative with the
same period of the prior year (in pesos)

-0-
*T
                                           Production    Administrative
  Items                                       cost          expenses        Total 2007     Total 2006
----------------------------------------  ------------- ---------------- --------------- --------------
                                                                           (6 months)      (6 months)

Fees and compensation for services            5,720,450        6,804,614      12,525,064      7,247,992
Salaries, wages and benefits to
personnel                                    63,439,479       24,085,046      87,524,525     64,988,732
Social security contributions                 6,380,523        3,993,954      10,374,477      9,766,639
Taxes, assessments and other tributes       343,484,299       61,927,258     405,411,557    413,538,263
Depreciation of property, plant and
 equipment (Exhibit A)                      401,912,511        3,712,558     405,625,069    321,603,526
Intangible asset amortization (Exhibit
 B)                                           1,369,020                -       1,369,020      1,168,469
Transportation, freight and storage
 expenses                                    63,917,010           34,390      63,951,400     40,149,051
Contracted services                         153,510,105        1,807,691     155,317,796    169,432,979
Travel and accommodation expenses             3,442,822        3,088,076       6,530,898      5,359,575
Building rentals and maintenance                516,534        6,042,301       6,558,835      5,719,803
Environmental remediation                     6,443,729                -       6,443,729      4,670,827
Bad debtors                                           -                -               -     11,273,822
Lawsuits (Exhibit D)                            598,165          365,213         963,378      1,917,360
Obsolescence of materials (Exhibit D)           175,391                -         175,391              -
Production, exploration and
 administrative
  general expenses                           74,940,427        9,523,455      84,463,882     94,098,937
                                          ------------- ---------------- --------------- --------------

Total 2007 (6 months)                     1,125,850,465      121,384,556   1,247,235,021
                                          ============= ================ ===============

Total 2006 (6 months)                     1,041,711,810      109,224,165                  1,150,935,975
                                          ============= ================                 ==============
*T

EXHIBIT H

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

Balance sheet as of June 30, 2007 and as of December 31, 2006

TERMS, INTEREST RATES AND ADJUSTMENT CLAUSES OF SHORT-TERM INVESTMENTS, LOANS,
RECEIVABLES AND PAYABLES (in pesos)

-0-
*T
                                     Investments                    Receivables                      Payables
                            ----------------------------- ------------------------------- ------------------------------
                              06/30/2007     12/31/2006     06/30/2007      12/31/2006      06/30/2007     12/31/2006
                            -------------- -------------- --------------- --------------- -------------- ---------------

Total amount without an
 established term            1,761,721 (1)      1,704,494  73,680,753 (3)      61,217,175    682,161,983     703,702,130

To become due:

Up to 3 months                 304,277,200    215,056,665     756,636,108     821,770,799    693,049,433     746,810,041
From 3 to 6 months                       -              -         859,964       1,780,744        504,507     391,765,651
From 6 to 9 months                 645,261              -         819,878       1,087,619        504,507         492,102
From 9 to 12 months                      -              -         771,418         697,929    223,806,744      22,356,302
From 1 to 2 years                1,290,522              -       3,681,344       2,814,716        223,107         215,609
From 2 to 3 years                1,290,522              -       1,268,000         903,215              -               -
From 3 to 4 years                  566,472              -         851,428         491,328              -               -
From 4 to 5 years                                       -         367,135         332,877              -               -
From 5 to 6 years                                       -          73,035          59,678              -               -
From 6 to 7 years                                       -               -               -              -               -
From 7 to 8 years                        -              -               -               -              -               -
From 8 to 9 years                        -              -               -               -              -               -
From 9 to 10 years                       -              -               -               -              -               -
Over 11 years                6,687,212 (2)  7,015,064 (2)               -               -              -               -
                            -------------- -------------- --------------- --------------- -------------- ---------------

Subtotal                       316,518,910    223,776,223     839,009,063     891,156,080  1,600,250,281   1,865,341,835

Other items that are not to
 be collected or paid in
 cash                                    -              -       7,232,112      12,183,347              -               -
                            -------------- -------------- --------------- --------------- -------------- ---------------

Total                          316,518,910    223,776,223     846,241,175     903,339,427  1,600,250,281   1,865,341,835
                            ============== ============== =============== =============== ============== ===============

                                        Loans
                            ------------------------------
                              06/30/2007     12/31/2006
                            -------------- ---------------

Total amount without an
 established term                        -               -

To become due:

Up to 3 months                 954,814,445     793,674,710
From 3 to 6 months               5,381,820      12,719,548
From 6 to 9 months             523,969,818      59,108,848
From 9 to 12 months             36,144,798      11,519,244
From 1 to 2 years              234,844,135     614,032,179
From 2 to 3 years              411,670,190     420,959,321
From 3 to 4 years              490,580,730     111,306,762
From 4 to 5 years              490,580,730     485,663,820
From 5 to 6 years               34,363,230     485,663,820
From 6 to 7 years               34,363,230      34,018,820
From 7 to 8 years               34,394,160      34,018,820
From 8 to 9 years               46,395,000      34,049,440
From 9 to 10 years                       -      45,930,000
Over 11 years                            -               -
                            -------------- ---------------

Subtotal                     3,297,502,286   3,142,665,332

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

Total                        3,297,502,286   3,142,665,332
                            ============== ===============
*T

(1) It includes $ 1,759,721 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.

 Translation from the original prepared in Spanish for publication in Argentina

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH) EXHIBIT H

Balance sheet as of June 30, 2007 and as of December 31, 2006 (Cont.)

TERMS, INTEREST RATES AND ADJUSTMENT CLAUSES OF SHORT-TERM INVESTMENTS, LOANS,
RECEIVABLES AND PAYABLES (in pesos)

-0-
*T
                                       Investments                             Receivables
                           ------------------------------------ -----------------------------------------
                                  06/30/2007     12/31/2006        06/30/2007           12/31/2006
                           ----------------- ------------------ ----------------- -----------------------
                           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$       -           -     -            -     -           -     8.00      2,362,909
CER plus annual fixed rate
 in $                       4.00   4,438,038     -            -     -           -        -              -
Average annual variable
 rate in $                     -           -     -            -  8.00   9,269,332     8.00      7,906,016
Average annual variable
 rate in $                     -           -     -            -     -           -        -              -
Annual fixed rate in US$                                            -           -        -              -
Annual fixed rate in US$                                         8.50   1,844,064      8.5      1,079,127
Average annual variable
 rate in US$                   -           -     -            -     -           -        -              -
Average annual fixed rate
 in US$                                          -            -     -           -        -              -
Annual variable rate in
 US$                        5.23 296,869,195  5,26  215,056,665  4.50      21,432     4.50         28,574
Annual variable rate in
 US$                        4.29   6,762,744     -                              -                       -
Annual fixed rate in $
 plus CER                   5.83   6,687,212  5,83    7,015,064     -           -        -              -
Non-interest bearing           -   1,761,721     -    1,704,494     - 835,106,347        -    891,962,801
                                 -----------       ------------       -----------          --------------

Total                            316,518,910        223,776,223       846,241,175             903,339,427
                                 ===========       ============       ===========          ==============

                                                 Payables                                     Loans
                                   ------------------------------------- -----------------------------------------------
                                       06/30/2007         12/31/2006           06/30/2007              12/31/2006
                                   ------------------ ------------------ ----------------------- -----------------------
                                   Rate     Pesos     Rate     Pesos     Rate        Pesos       Rate        Pesos
                                   ---- ------------- ---- ------------- ----- ----------------- ----- -----------------

Annual fixed rate in US$              -             -    -             -     -                 -  6.75       306,200,000
Annual fixed rate in US$              -             -    -             - 7.125       309,300,000 7.125       306,200,000
Annual fixed rate in US$              -             -    -             -     -                 -  7.00         4,172,594
Annual fixed rate in US$              -             -    -             -  5.45         3,708,328  5.45         5,565,507
Annual fixed rate in US$              -             -    -             -  6.18          126,,114  6.18           187,272
Annual fixed rate in US$              -             -    -             -  7.56       292,118,385  7.56       306,200,000
Annual fixed rate in US$              -             -    -             -  6.97       382,758,750  6.97       413,370,000
Annual fixed rate in US$              -             -    -             -  5.66        46,395,000  5.66        45,930,000
Annual fixed rate in US$              -             -    -             -  8.00        30,930,000  8.00        30,620,000
Annual fixed rate in US$              -             -    -             -     -                 -  5.00        76,550,000
Annual fixed rate in US$              -             -    -             -  7.75       773,250,000  7.75       765,500,000
CER plus annual fixed rate in $       -             -    -             -     -                 -     -                 -
Average annual variable rate in $     -             -    -             -  8.00       432,789,544  7.78       275,057,276
Average annual variable rate in $     -             -    -             -  8.25       469,672,203 10.25       446,709,189
Annual fixed rate in US$              -             -    -                 5.9       269,340,437     -                 -
Annual fixed rate in US$              -             -    -                   -                 -     -                 -
Average annual variable rate in
 US$                                  -             -    -             -  6.59        79,796,380  6.48        94,916,582
Average annual fixed rate in US$      -             -    -             -  5.67       154,650,000     -                 -
Annual variable rate in US$           -             -    -                   -                 -     -                 -
Annual variable rate in US$           -             -    -                   -                 -     -                 -
Annual fixed rate in $ plus CER       -             -    -             -     -                 -     -                 -
Non-interest bearing                  - 1,600,250,281    - 1,865,341,835     -                 -     -                 -
                                        -------------      -------------       -----------------       -----------------

Total                                   1,600,250,281      1,865,341,835       (1) 3,244,835,141       (1) 3,077,178,420
                                        =============      =============       =================       =================
*T

(1) It only includes the principal at face value.

EXHIBIT I

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

Balance sheet as of June 30, 2007 and as of December 31, 2006

PARTICIPATION IN JOINT VENTURES (in pesos)

-0-
*T
                                                                                                               Estancia
                Lindero     Lindero     Aguada      Aguada        San         San                                La
              Atravesado  Atravesado    Pichana     Pichana      Roque       Roque     Acambuco    Acambuco    Escondida
                62,50%      62,50%      18,18%      18,18%      16,47 %     16,47 %     52,00 %     52,00 %     25,00%
              06/30/2007  12/31/2006  06/30/2007  12/31/2006  06/30/2007  12/31/2006  06/30/2007  12/31/2006  06/30/2007
              ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
Balance sheet
-------------

ASSETS
-------------
CURRENT
 ASSETS
-------------
Cash on hand
 and in banks     502,927       8,006     133,914     132,325     104,999      46,796   3,169,810     681,589        632
Other
 receivables      785,697     885,345   3,828,151   1,608,315   1,351,363      27,819     523,820   2,503,876    360,693
Inventories     5,917,269   5,608,560   7,273,258  10,779,553   9,011,693   8,325,385   2,599,929   1,881,612    163,508
              ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------

Total current
 assets         7,205,893   6,501,911  11,235,323  12,520,193  10,468,055   8,400,000   6,293,559   5,067,077    524,833
              ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------

NON CURRENT
 ASSETS
-------------
Property,
 plant and
equipment     118,779,170 100,752,309 248,357,652 210,261,214 235,280,846 211,498,427 620,725,083 599,158,484  5,111,645
Intangible
 assets                 -           -           -       8,059           -           -           -           -    208,642
              ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------

Total non
 current
 assets       118,779,170 100,752,309 248,357,652 210,269,273 235,280,846 211,498,427 620,725,083 599,158,484  5,320,287
              ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------

Total assets  125,985,063 107,254,220 259,592,975 222,789,466 245,748,901 219,898,427 627,018,642 604,225,561  5,845,120
              =========== =========== =========== =========== =========== =========== =========== =========== ==========

                                                       Costa      Costa      Costa      Costa
                     Estancia                          Afuera     Afuera     Afuera     Afuera
                       La                            Argentina  Argentina  Argentina  Argentina  Anticlinal Anticlinal
                     Escondida Bandurria  Bandurria  Bloque 40  Bloque 40  Bloque 46  Bloque 46    Funes      Funes
                      25,00%     18,18%     18,18%     50,00%     50,00%     50,00%     50,00%     80,00%     80,00%
                    12/31/2006 06/30/2007 12/31/2006 06/30/2007 12/31/2006 06/30/2007 12/31/2006 06/30/2007 12/31/2006
                    ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Balance sheet
------------------

ASSETS
------------------
CURRENT ASSETS
------------------
Cash on hand and
 in banks                1,384    287,708     88,614          -          -          -          -      1,332      1,644
Other receivables      395,342        144     31,301     63,424     65,562     29,264     29,264  1,425,586  1,087,844
Inventories             76,352          -          -          -          -          -          -          -          -
                    ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

Total current
 assets                473,078    287,852    119,915     63,424     65,562     29,264     29,264  1,426,918  1,089,488
                    ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

NON CURRENT ASSETS
------------------
Property, plant
 and
equipment            5,090,205  1,868,518  4,519,810 13,835,541 11,175,237    599,770    588,337  4,097,403  2,262,167
Intangible assets      210,418          -          -          -          -          -          -          -          -
                    ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

Total non current
 assets              5,300,623  1,868,518  4,519,810 13,835,541 11,175,237    599,770    588,337  4,097,403  2,262,167
                    ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

Total assets         5,773,701  2,156,370  4,639,725 13,898,965 11,240,799    629,034    617,601  5,524,321  3,351,655
                    ========== ========== ========== ========== ========== ========== ========== ========== ==========
*T

EXHIBIT I

(Cont.)

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

Balance sheet as of June 30, 2007 and as of December 31, 2006

PARTICIPATION IN JOINT VENTURES (in pesos)

-0-
*T
                                                                                                               Estancia
                Lindero     Lindero     Aguada      Aguada        San         San                                La
              Atravesado  Atravesado    Pichana     Pichana      Roque       Roque     Acambuco    Acambuco    Escondida
                62,50%      62,50%      18,18%      18,18%      16,47%      16,47%      52,00%      52,00%      25,00%
Balance sheet 06/30/2007  12/31/2006  06/30/2007  12/31/2006  06/30/2007  12/31/2006  06/30/2007  12/31/2006  06/30/2007
------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------

LIABILITIES
--------------
CURRENT
 LIABILITIES
--------------
Accounts
 payable       10,689,400   3,103,235  40,147,067  39,892,511  15,019,847  14,087,777  38,500,126  71,445,119    486,604
Payroll and
 social
security
 contributions    350,798     500,717           -           -           -           -     260,208     574,386          -
Taxes payable     184,276      85,849           -           -      16,298     307,032     458,325     899,221    125,395
              ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------

Total current
 liabilities   11,224,474   3,689,801  40,147,067  39,892,511  15,036,145  14,394,809  39,218,659  72,918,726    611,999
              ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------

NON CURRENT
LIABILITIES
--------------
Accounts
 payable        2,246,753   2,036,355     219,132     219,132     876,528     876,528   1,715,931   1,521,884          -
Provision for
environmental
 remediation   11,066,029   9,177,151   5,407,352   3,737,323   8,426,473   7,186,139   3,062,922   2,928,406     56,094
Accruals        5,232,045   5,137,832     287,666     365,027     517,586     325,076   2,253,969   2,098,309          -
              ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------

Total non
 current
liabilities    18,544,827  16,351,338   5,914,150   4,321,482   9,820,587   8,387,743   7,032,822   6,548,599     56,094
              ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------

              -----------
Total
 liabilities   29,769,301  20,041,139  46,061,217  44,213,993  24,856,732  22,782,552  46,251,481  79,467,325    668,093
              ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------

Owners' equity 96,215,762  87,213,081 213,531,758 178,575,473 220,892,169 197,115,875 580,767,161 524,758,236  5,177,027
              ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------

Total         125,985,063 107,254,220 259,592,975 222,789,466 245,748,901 219,898,427 627,018,642 604,225,561  5,845,120
              =========== =========== =========== =========== =========== =========== =========== =========== ==========

                                                     Costa      Costa      Costa      Costa
                  Estancia                           Afuera     Afuera     Afuera     Afuera
                     La                            Argentina  Argentina  Argentina  Argentina  Anticlinal Anticlinal
                  Escondida  Bandurria  Bandurria  Bloque 40  Bloque 40  Bloque 46  Bloque 46    Funes      Funes
                   25,00%      18,18%     18,18%     50,00%     50,00%     50,00%     50,00%     80,00%     80,00%
 Balance sheet   12/31/2006  06/30/2007 12/31/2006 06/30/2007 12/31/2006 06/30/2007 12/31/2006 06/30/2007 12/31/2006
---------------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

LIABILITIES
----------------
CURRENT
 LIABILITIES
----------------
Accounts payable     250,581  1,026,168    823,060          -          -          -     13,283  2,010,926  1,376,434
Payroll and
 social
security
 contributions             -          -          -          -          -          -          -      2,001      1,928
Taxes payable         95,443      6,793          -          -          -          -          -      2,696     10,000
                 ----------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

Total current
 liabilities         346,024  1,032,961    823,060          -          -          -     13,283  2,015,623  1,388,362
                 ----------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

NON CURRENT
LIABILITIES
----------------
Accounts payable           -          -          -          -          -          -          -          -          -
Provision for
environmental
 remediation          92,200          -          -          -          -          -          -    749,377    972,617
Accruals                   -          -          -          -          -          -          -          -          -
                 ----------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

Total non
 current
liabilities           92,200          -          -          -          -          -          -    749,377    972,617
                 ----------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

Total
 liabilities         438,224  1,032,961    823,060          -          -          -     13,283  2,765,000  2,360,979
                 ----------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

Owners' equity     5,335,477  1,123,409  3,816,665 13,898,965 11,240,799    629,034    604,318  2,759,321    990,676
                 ----------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

Total              5,773,701  2,156,370  4,639,725 13,898,965 11,240,799    629,034    617,601  5,524,321  3,351,655
                 =========== ========== ========== ========== ========== ========== ========== ========== ==========
*T

EXHIBIT I

(Cont.)

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

Statement of income for the period beginning January 1 and ended June 30, 2007,
comparative with the same period of the prior year

PARTICIPATION IN JOINT VENTURES (in pesos)

-0-
*T
                    Lindero      Lindero       Aguada        Aguada        San          San
                   Atravesado   Atravesado     Pichana      Pichana       Roque        Roque       Acambuco
                     62,50%       62,50%       18,18%        18,18%       16,47%       16,47%       52,00%
                      2007         2006         2007          2006         2007         2006         2007
                  ------------ ------------ ------------- ------------ ------------ ------------ ------------
                   (6 months)   (6 months)   (6 months)    (6 months)   (6 months)   (6 months)   (6 months)
STATEMENT OF INCOME
------------------------------
Sales (1)                    -            -             -            -            -            -            -
Cost of sales     (25,855,061) (22,587,980) ( 72,201,091) (31,989,639) (27,564,671) (21,440,430) (84,592,589)
                  ------------ ------------ ------------- ------------ ------------ ------------ ------------

Gross result      (25,855,061) (22,587,980) ( 72,201,091) (31,989,639) (27,564,671) (21,440,430) (84,592,589)
Administrative
 expenses                    -            -             -            -            -            -            -
                  ------------ ------------ ------------- ------------ ------------ ------------ ------------
Operating result  (25,855,061) (22,587,980) ( 72,201,091) (31,989,639) (27,564,671) (21,440,430) (84,592,589)

Financial
 results - net       ( 218,201   ( 401,365)    ( 107,439)    ( 74,277)   ( 206,956)   ( 170,400)        8,086
Other income and
 expenses - net        950,357 ( 1,841,478)     6,084,434    ( 13,545)       46,493   ( 220,867) (13,233,421)
                  ------------ ------------ ------------- ------------ ------------ ------------ ------------

Net result         (25,122,905 (24,830,823)  (66,224,096) (32,077,461) (27,725,134) (21,831,697) (97,817,924)
                  ============ ============ ============= ============ ============ ============ ============

                                                                                         Costa      Costa      Costa
                                           Estancia    Estancia                           Afuera     Afuera     Afuera
                                              La          La                            Argentina  Argentina  Argentina
                               Acambuco    Escondida   Escondida   Bandurria  Bandurria Bloque 40  Bloque 40  Bloque 46
                                52,00%      25,00%      25,00%      18,18%     18,18%%   50,00%     50,00%     50,00%
                                 2006        2007        2006        2007       2006      2007       2006       2007
                            ------------- ----------- ----------- ----------- --------- --------- ----------- ---------
                                                                                 (6        (6                    (6
                              (6 months)  (6 months)  (6 months)  (6 months)   months)   months)  (6 months)   months)
STATEMENT OF INCOME
----------------------------------------
Sales (1)                               -           -           -           -         -         -           -         -
Cost of sales                (87,153,035) (1,380,001) (2,548,956)           -         -         -           -         -
                            ------------- ----------- ----------- ----------- --------- --------- ----------- ---------

Gross result                 (87,153,035) (1,380,001) (2,548,956)           -         -
Administrative expenses                 -           -           -           -         -         -           -         -
                            ------------- ----------- ----------- ----------- --------- --------- ----------- ---------
Operating result             (87,153,035) (1,380,001) (2,548,956)           -         -         -           -         -

Financial results - net        ( 165,886)      19,755   ( 16,270)         505 ( 19,771)         -           -         -
Other income and expenses -
 net                               87,424           -           - (2,710,948) (387,010)   410,028 (1,337,411)  (12,404)
                            ------------- ----------- ----------- ----------- --------- --------- ----------- ---------

Net result                   (87,231,497) (1,360,246) (2,565,226) (2,710,443) (406,781)   410,028 (1,337,411)  (12,404)
                            ============= =========== =========== =========== ========= ========= =========== =========

                                Costa
                                 Afuera
                               Argentina  Anticlinal  Anticlinal
                               Bloque 46     Funes       Funes
                                50,00%      80,00%      80,00%
                                 2006        2007        2006
                  ----------------------- ----------- -----------
                              (6 months)  (6 months)  (6 months)
STATEMENT OF INCOME
------------------------------
Sales (1)                               -           -           -
Cost of sales                           - (2,915,584) (6,451,242)
                  ----------------------- ----------- -----------

Gross result                            - (2,915,584) (6,451,242)
Administrative
 expenses                               -           -           -
                  ----------------------- ----------- -----------
Operating result                        - (2,915,584) (6,451,242)

Financial
 results - net                          -  ( 219,431)   ( 22,855)
Other income and
 expenses - net               (2,052,939)           -           -
                  ----------------------- ----------- -----------

Net result                    (2,052,939) (3,135,015) (6,474,097)
                  ----------------------- =========== ===========
*T

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

Translation from the original prepared in Spanish for publication in Argentina

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

FINANCIAL STATEMENTS AS OF JUNE 30, 2007

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.

During the first six-month period of 2007, with a daily average production of
216.4 thousand barrels of oil, the Branch together with subsidiaries of Head
Office that develop their activities in the country, rank second in the
production of natural gas and oil in Argentina.

1.2. Issuance of bonds

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, at a
6.75% rate per annum. The bonds were paid upon maturity on February 1, 2007.
This issuance completes the maximum amount of the short and medium term bond
program of US$ 200,000,000 approved by the National Securities Commission
through Resolution No. 10982 dated July 13, 1995.

As a result of the transfer of assets and liabilities referred to in the second
paragraph of Note 1 to these financial statements, Amoco Argentina Oil Company
(Argentine Branch) transferred the above mentioned bonds to Pan American Energy
LLC (Argentine Branch). Such Bonds were guaranteed until repayment, in February
2007, by BP Company North America Inc.

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.

On October 27, 2004, the Branch issued Bonds Class 3 in the amount of US$
100,000,000 under the Global Program. The bonds become due in five years
(October 27, 2009) with a 7.125% annual fixed interest rate to be paid on a
half-yearly basis. 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
an annual fixed 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, with interest accruing at an annual
fixed rate of 7.56%, through an interest rate swap with IFC, amortizable on
six-month installments 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 installments
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%
plus additional interest calculated in relation to Head Office's economic
performance, becoming due in July 2016.

As of December 31, 2005, the amount of the loans had been fully disbursed.

The first principal installment for tranches 'A' and 'B' was paid on January 15,
2007.

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

On July 13, 2007, the Branch obtained from the International Finance Corporation
(IFC) a loan in the amount of U$S 550,000,000, consisting of two tranches:

- 'A' in the amount of US$ 150,000,000, amortizable on a six-month installments
basis and becoming due in April 2018; and

- 'B', Tranch '1' in the amount of US$ 158,500,000, amortizable on a six-month
installments basis and becoming due in April 2014, and Tranch '2' in the amount
of US$ 241,500,000, amortizable on a six-month installments basis and becoming
due in April 2015.

The loan is guaranteed by Head Office and the funds obtained shall be destined
to partially finance the investment program that the Company is planning to
launch in Cerro Dragón, in the San Jorge Gulf basin, located in the provinces of
Santa Cruz and Chubut.

2. Balance sheet items as of June 30, 2007 (in pesos)


-0-
*T
                           Balance         Balance         Balance         Balance         Balance
                            sheet           sheet           sheet           sheet           sheet
                           as of           as of           as of           as of           as of
                          06/30/2007      06/30/2006      06/30/2005      06/30/2004      06/30/2003

Current assets           1,241,264,332   1,400,149,379     822,786,081     480,892,411     498,432,663

Non current assets       6,460,834,780   5,312,707,727   4,512,698,737   3,852,458,770   3,893,491,238
                       --------------- --------------- --------------- --------------- ---------------

Total                    7,702,099,112   6,712,857,106   5,335,484,818   4,333,351,181   4,391,923,901
                       =============== =============== =============== =============== ===============

Current liabilities      2,438,176,072   2,030,663,667   1,503,369,064   1,271,582,377   1,179,446,102

Non current
 liabilities             2,480,443,659   1,797,361,149   1,354,502,641   1,375,804,599   1,571,451,555
                       --------------- --------------- --------------- --------------- ---------------

Subtotal                 4,918,619,731   3,828,024,816   2,857,871,705   2,647,386,976   2,750,897,657
Account with Head
 Office                  2,322,240,374   2,423,593,283   2,016,374,106   1,246,504,205   1,201,566,244

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

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

Total                    7,702,099,112   6,712,857,106   5,335,484,818   4,333,351,181   4,391,923,901
                       =============== =============== =============== =============== ===============
*T

3. Income statement items as of June 30, 2007 (in pesos)

-0-
*T
                              Six-month      Six-month      Six-month     Six-month      Six-month
                            period ended   period ended   period ended  period ended   period ended
                              06/30/2007     06/30/2006     06/30/2005    06/30/2004     06/30/2003

Ordinary operating income    1,231,110,911  1,427,616,376   801,494,558    689,942,200   486,381,538

Financial results           ( 129,906,478)  ( 56,737,316)     1,546,368  ( 62,877,489) (160,101,773)

Other income and expenses -
 net                         ( 28,169,970)  ( 33,934,774) ( 13,437,733)  ( 19,031,915) ( 29,641,640)
                            -------------- -------------- ------------- -------------- -------------

Income before taxes          1,073,034,463  1,336,944,286   789,603,193    608,032,796   296,638,125

Income tax/minimum deemed
 income tax                 ( 415,247,332) ( 499,445,409) (294,289,270)  (261,401,198) (145,929,632)

Deferred tax                    42,188,152     26,790,567    14,507,423    105,753,228   149,632,592
                            -------------- -------------- ------------- -------------- -------------

Net income                     699,975,283    864,289,444   509,821,346    452,384,826   300,341,085
                            ============== ============== ============= ============== =============
*T

4. Statistical data

-0-
*T
                        Six-month       Six-month       Six-month       Six-month       Six-month
                       period ended    period ended    period ended    period ended    period ended
                          06/30/2007      06/30/2006      06/30/2005      06/30/2004      06/30/2003
                      --------------  --------------  --------------  --------------  --------------
                        In cubic        In cubic        In cubic        In cubic        In cubic
                          meters          meters          meters          meters          meters
                      --------------  --------------  --------------  --------------  --------------
Production of crude
 oil                       3,063,799       2,988,022       2,935,635       2,805,429       2,530,863
Sale of crude oil          3,163,036       3,134,684       3,078,111       2,748,191       2,490,849
*T

4. Statistical data (cont.)

-0-
*T
                        Six-month       Six-month       Six-month       Six-month       Six-month
                       period ended    period ended    period ended    period ended    period ended
                          06/30/2007      06/30/2006      06/30/2005      06/30/2004      06/30/2003
                      --------------  --------------  --------------  --------------  --------------
                        In cubic        In cubic        In cubic        In cubic        In cubic
                          meters          meters          meters          meters          meters
                      --------------  -------------   --------------  --------------  --------------

Production of natural
 gas                       2,467,076      2,339,533        2,087,104       2,067,614       1,553,566
Sale of natural gas        2,508,143      2,238,184        2,140,738       2,015,552       1,405,564
Transportation of
 natural gas                   2,756          6,646          181,507         174,343         137,525

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

Production of L.P.G.          40,155         46,785           30,541          30,140          26,987
Sale of L.P.G.                47,701         41,129           36,522          34,837          29,399
*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
                         06/30/2007      06/30/2006      06/30/2005      06/30/2004      06/30/2003
                        -------------  --------------  --------------  --------------  --------------

Current ratio               0.51            0.69            0.55            0.38            0.42
Indebtedness                1.77            1.33            1.15            1.57            1.68
Tied - up funds             0.84            0.79            0.85            0.89            0.89
Solvency                    0.57            0.75            0.87            0.64            0.60
*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 hydrocarbon production in
Argentina, satisfying in this way the needs derived from a sustained growth rate
of the country's economy. The Branch strives to provide its personnel and
contractors with healthy and safe working conditions while preserving the
environment.

The Branch is strongly engaged with the concerns and challenges posed by the
communities where it operates, by developing different social responsibility
programs (CSR).

During the first six-month period of 2007, the Branch's oil production grew by
2.5% and natural gas production rose by 5.4% with respect to the same period of
the prior year. This growth results from the active investment program
implemented by the Branch in the last years, which has led it to double
hydrocarbon production from 1999 to 2006.

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 the first six-month period of 2007, the GDP went on growing at a sustained
rate, which indicates that a growing trend - initiated 21 quarters ago -
continues. It is estimated that the GDP will grow by 7.6% in 2007. The
unemployment rate is about 9.7%.

The National Government exceeded the primary fiscal surplus expected for the
first six-month period of 2007 by 29%, reaching a primary fiscal surplus of
14,325 million pesos, higher than 13.8% with respect to the same period of the
prior year. The level of foreign indebtedness as of March 31, 2007 increased
with respect to the same date of the prior year and amounted to US$ 112,281
million. The level of the country's international reserves rose to US$ 43,157
million as of June 30, 2007.

6. Business prospects (cont.)

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

As previously informed, 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, export
tariffs on exports and quantitative restrictions to them were established. In
April 2004, the Secretary of Energy and the natural gas producers signed an
agreement to tend to market the wellhead prices. This agreement terminated on
December 31, 2006 and at the request of the related authorities, a new agreement
which shall be in force until December 31, 2011 was reached.

The new agreement, approved last June by Resolution 599/07 of the Secretary of
Energy, obliges producers, among them the Branch, to satisfy the demand of the
domestic market up to the levels reached in 2006 plus the growth of the
residential market during the validity thereof by setting out new guidelines for
price changes.

In relation to export tariffs on gas exports, on July 25, 2006, the Ministry of
Economy, through Resolution No. 534/2006, increased them to US$ 2.2 per million
BTU.

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 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 Noreste pipeline is built.

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. On January 15, 2007, Law 26217
was passed which, besides extending for a five-year term the application of
export tariffs on the export of hydrocarbons in general, imposes that such
export tariffs be applied on the exports made from the referred Special Customs
Area. The oil companies operating in this province consider that pursuant to the
provisions of Law Nr. 19640 that establishes a special regime applicable to
economic activities in Tierra del Fuego, as well as other regulations provide,
including those that approved the concessions or other rights over the oil
areas, the application of export tariffs on future exports becomes a
challengeable issue and that the retroactive application of export tariffs
becomes absolutely invalid and therefore these companies have commenced all
actions before administrative authorities and the courts.

During the first six-month period of 2007, union claims for a salary increase to
be enjoyed by the personnel (both from the Private Oil Workers Union and
Hierarchy employees union exceeding 60%) were peacefully made by the unions to
the business chambers. As a result, no action measures affecting operations were
taken. Nonetheless, in July, the unions took direct action measures which
affected the normal functioning of tower equipment for several days and caused
some minor production interruptions in the oil fields. Towards the end of July,
several agreements were reached for a one-year term with the unions. The
agreements provide for a gradual salary increase of approximately 30%.

During fiscal year 2007, the Branch has continued with its investment plans with
a view to expanding its business and contributing to satisfying the growing
energy demand. The commitments assumed referred to in the following paragraphs
strengthen these expansion plans.

On December 6, 2006, Law Nr. 26197, known as Ley Corta de Hidrocarburos, was
passed. This rule enforced the constitutional mandate consisting in transferring
the ownership of the natural resources placed in the subsurface from the Federal
State to the producing provinces where the oil fields are located.

6. Business prospects (cont.)

Consequently, the Branch entered into with the provinces of Chubut (04/27/2007)
and Santa Cruz (06/25/2007) sound investment agreements and contracts for the
extension of the hydrocarbon exploration and production concession for a
ten-year period in the blocks known as Cerro Dragón, the area of which is
extended in the territory of both provinces, and Piedra Clavada and Koluel Kaike
in the province of Santa Cruz. The agreements expired between 2016 and 2017.

These agreements provided for minimum investments of US$ 2,000,000,000 in the
Province of Chubut and of US$ 500,000,000 in the Province of Santa Cruz. These
investments are to be made before 2017 and are destined to onshore activities.
Other investments of US$ 1,000,000,000 in the Province of Chubut and of US$
300,000,000 in the Province of Santa Cruz are to be made before 2027.

The agreements also set forth an investment of US$ 80,000,000 to explore in the
sea, at the company's own expense. To this end, joint ventures with the
state-owned companies Petrominera (in the case of Chubut) and Fomicruz (in the
case of Santa Cruz) will be created. The eventual success of the exploration and
the related commerciality entail an additional investment of US$ 500,000,000 for
the purpose of developing the offshore fields that are to be discovered.

The creation of the joint ventures referred to in the preceding paragraph is
consistent with the provisions of sections 11 and 95 of the Hydrocarbon Law,
which allows state-run companies to enter into agreements and create companies,
partnerships or other associations with individuals or entities for the
development of their activities.

The Operation Agreements are included in the aforesaid Law. These agreements are
signed with the same state-run companies and shall be in force in 2027, subject
to the compliance with the investments and to Pan American Energy's exploration
success, which will allow it to show that it has developed sufficient reserves
for the purpose of maintaining production in the fields as from that year.

Other commitments assumed by the Branch are as follows:

    --  Contribute the amount of US$ 120,000,000 to the Province of Chubut and
        the amount of US$ 40,000,000 to the Province of Santa Cruz. The referred
        amounts shall be allocated by halves in both cases in order to set up
        several provincial funds. The amounts shall be paid by the Branch in
        four equal and consecutive installments on an annual basis; and

    --  Since the period during which the agreements are in force, the Branch
        shall make a Special Contribution of 3% on net income generated by the
        concessions to the Province of Chubut and the Province of Santa Cruz,
        and

    --  In the field of Corporate Social Responsibility, the Branch will extend
        its considerable commitments on education and development of regional
        small and medium-sized companies by means of a number of university
        scholarship programs in the country and abroad and a significant
        extension of its development programs for domestic companies.

The agreement with the Province of Chubut was ratified by provincial law Nr.
5616 of the Legislature of the aforesaid province on May 24, 2007.

Provincial Law Nr. 5616 was promulgated by decree Nr. 500/2007 and published in
the Official Gazette on May 28, 2007.

The Government of the Province of Santa Cruz has sent the agreement to the
Provincial Legislature for the related approval.

These agreements involve a new horizon to sustain the increase in production and
reserves in oil fields such as Cerro Dragón, Piedra Clavada and Koluel Kaike,
and the new off shore operations in the Gulf. This new horizon shall allow
addressing long-term projects requiring sound investments, new technologies and
teams working for the future.

Buenos Aires, August 10, 2007

Daniel Grinstein

Attorney in-fact

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

FINANCIAL STATEMENTS AS OF JUNE 30, 2007

SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTS AS OF JUNE 30, 2007
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 June 30, 2007.

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 overdue:

-0-
*T
                                             Current receivables
                                                      $
Due from April to June 2007                           11,495,399
Due from January to March 2007                         3,541,311
Due from October to December 2006                     13,432,001
Due from July to September 2006                        2,530,712
Due from July 2005 to June 2006                       10,737,966
Due from July 2004 to June 2005                        9,113,326
Due from July 2003 to June 2004                        2,077,405
Due from July 2002 to June 2003                        1,051,947
Due from July 2001 to June 2002                           63,417
Due from July 2000 to June 2001                          105,600

                   Total                              54,149,084
                                             ===================
*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
June 30, 2007, 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
June 30, 2007 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 June 30, 2007 the insurance taken on the Branch's assets are as follows:

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

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

Equipment, facilities and pipelines        Liability insurance
applied to exploitation and transportation                                                 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).

13. 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 June 30, 2007

None.

Irrevocable advances for future subscriptions

14. As of June 30, 2007, there are no irrevocable advances for future
subscriptions.

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

16. 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.

Buenos Aires, August 10, 2007

Daniel Grinstein

Attorney in-fact
                                                                                                                                                                                    

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