Drilling Report

Pan Andean Resources PLC
28 August 2007

Gas Discovery on HI52 in Gulf of Mexico



Pan Andean Resources Plc is pleased to announce the successful drilling of an
exploration well on Block High Island 52.  The well was drilled to the target
depth of 8700ft and encountered 3 zones of gas bearing sands.  Production casing
is now being set prior to testing.



The well was drilled by our farm in partner Phoenix Exploration.  Pan Andean
holds a 2.15% revenue royalty.



The announcement has been approved by Mr Ivan Sandrea, Director Pan Andean.  Mr
Sandrea has more than 10 years of international E&P experience.





Contacts:


Pan Andean Resources Plc
John Teeling (Chairman)                               [phone]
James Finn (Director)                                 [phone]


College Hill
Paddy Blewer                                          [phone]


Blue Oar Securities
John Wakefield                                        [phone]





Note to Editors



Pan Andean was established in 1988 to explore for oil and gas in Bolivia, where
it currently produces from the Monteagudo Field where the company is in
partnership with Repsol and Petrobras.  Pan Andean has a Bolivian joint venture
with BP over the large El Dorado gas discovery.



In the US Pan Andean produces onshore in Texas from a number of small wells and
offshore in the Gulf of Mexico.



Pan Andean has an existing Revenue Royalty on HI Island 52, the location of the
latest discovery, and expects to recommence oil and gas production within weeks
on HI Island 30.  The company is profitable, debt free and cash positive.  At
12.25p per share price the market capitalisation is £14.6m.






                      This information is provided by RNS
            The company news service from the London Stock Exchange