Petro Andina Closes $41 Million Private Placement

Petro Andina Resources

Petro Andina Resources Inc. has completed a private equity placement of 6,000,000 common shares for gross proceeds of Cdn.$39,000,000, at a price of Cdn.$6.50 per common share. FirstEnergy Capital Corp. acted as sole agent for the financing. A further 330,000 common shares have been purchased from treasury at a price of Cdn.$6.50 per share by employees of the Company, in a separate non-brokered transaction, raising total gross proceeds to Cdn.$41,145,000.

Prior to closing the private placement, Petro Andina completed a two for one stock split whereby each issued and outstanding Class A share of the Company was converted into two Class A shares. Following the placement, and giving effect to the stock split, Petro Andina will have approximately 31,515,000 issued and outstanding common shares and, on a fully diluted basis, 34,185,000 common shares.

The net proceeds from the offering will be used to fund ongoing exploration and development of the Company's operated CNQ-7/A Block in the Neuquén Basin of Argentina. Petro Andina's current net production from this acreage is 2,500 barrels per day. The Company now has two rigs engaged in a continuous drilling program, and has contracted a third rig to commence drilling in January 2007. Construction has commenced on additional treatment facilities scheduled to be commissioned mid-2007. This will increase the Company's processing capability to 15,200 barrels of oil per day (7,600 net to Petro Andina).

Petro Andina Resources Inc. is a private company headquartered in Calgary, Canada and operating in Argentina.