Pan Andean Resources Completes Fund Placement

Pan Andean Resources has completed a Placing which raised £2.84 million from institutional and private investors. A total of 21,845,754 new ordinary 1p shares were placed at a price of 13p. In line with its stated strategy of developing its production and exploration assets, the funds will be used to drill three new wells - one offshore in the Gulf of Mexico, a second onshore in Texas and a third in Bolivia.

Offshore a 4,000 ft. well will be drilled on High Island 68 to access an estimated 1 to 10 billion cubic feet of gas. Drilling is expected to commence the week of June 21, 2004. The principal exploration target is Danbury Dome onshore Texas. The target is 50 bcf of gas and associated liquids at a depth of 13,000 ft. Discussions with potential farm-in partners will be completed shortly.

In Bolivia, our partner on El Dorado, BP (Chaco), proposes to drill a 14,000 ft. well costing US$7m. Pan Andean has a 10% Interest.

Application has been made for the new shares to be admitted to AIM and it is expected that Admission will take place and dealings will commence on June 18, 2004.