1 For 11 Open Offer to Shareholders Raises £0.9m

Pan Andean Resources PLC 2 December 1999 PAN ANDEAN, THE AIM LISTED IRISH OIL EXPLORER, COMPLETES £4.8 MILLION STG FUNDING WITH £900,000 1 FOR 11 OPEN OFFER TO SHAREHOLDERS Highlights - Pan Andean raising £900,000stg in 1 for 11 open offer. - The funds together with the £3.75m stg raised in November will be issued to drill one or more wells in Bolivia. - Drilling will commence early in 2000. - The target area is oil prone though gas has been discovered in the surrounding area. Following the announcement on 17 November 1999 that the Company had raised £3.75m, in a private placing of 17 million, Pan Andean is now raising £900,000 after expenses, through an open offer of 4.36 million shares at 22p per share. This is 1 for every 11 shares held. The Company is posting a Prospectus and Open Offer application form on 6 December 1999. Since acquiring the Chapare oil concession in central Bolivia in 1993, Pan Andean and partners have spent approximately $32 million on seismic, geophysical and geochemical studies of the hydrocarbon opportunities. The work to date has identified at least ten targets in the southern third of the block. We now intend to drill at least one well at Chipiriri some 22km north of Pan Andean's first well at Todos Santos. A suitable rig will shortly become available and Pan Andean expects to spud the well in early 2000. The total target depth is 3.75km metres and the expected drilling time is fifty days. Road, platform and well design is already underway. Since Chipiriri lies in virgin forest our civil construction partners must drive a road through to the well site. Pan Andean believes that the Chapare region is oil prone, with associated gas. Should we encounter commercial hydrocarbons, Pan Andean expects to extend an existing pipeline and refine liquids at the nearby refinery. There is export capacity in the existing products pipeline. A newly completed gas pipeline now provides access to the large and rapidly growing Brazilian market. Pan Andean has also studied gas markets within Bolivia and in neighbouring Argentina. Funds raised will be used to drill one or more wells in the Chapare block. The Open Offer is being made by Rowan Dartington & Co Limited on behalf of the Company. Under the Open Offer, up to 4,368,810 New Ordinary Shares are being offered to Qualifying Shareholders at 22p per share, payable in full on application, on the following basis: 1 New Ordinary Share for every 11 Existing Ordinary Share held at the close of business on 17 November 1999. Application forms, together with remittances for the full amount subscribed, must be received by the Company's registrars, Computershare Services (Ireland) Limited not later than 3.00p.m. on 23 December 1999. Application forms may be split, but only to satisfy bona fide market claims, up to 3.00 p.m. on 21 December 1999. To the extent to which New Ordinary Shares are not applied for, Qualifying Shareholders should note that their entitlements will lapse and the Directors may instruct Rowan Dartington to place such new Ordinary Shares with other investors. Application has been made for all the New Ordinary Shares to be issued pursuant to the Open Offer to be admitted to listing on the Alternative Investment Market of the London Stock Exchange Limited. It is expected that admission to the Alternative Investment Market will become effective and that dealings will commence on 4 January 2000. Contact David Horgan: +353 87 292 3500(mobile) +353 1 833 2833 (ph) Email: panand@iol.ie Website:www.panandeanresources.com