Issue of Equity

Pan Andean Resources PLC
17 June 2004



Pan Andean Resources plc, explorers and producers of oil and gas in South
America and the Gulf of Mexico, is pleased to announce the completion of 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. We have 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 18 June
2004.


Contacts:


David Horgan or Jim Finn, Pan Andean Resources - Tel. [phone]
Barrie Newton - Managing Director, Rowan Dartington - Tel. + 44 (0)117 933 0011
Emma Kane - Chief Executive, Redleaf Communications - Tel.  [phone]





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