Production Update

Pan Andean Resources PLC
12 October 2005


                            Pan Andean Resources plc

                               Production update

Pan Andean Resources (AIM: PRE), the oil and gas explorer and producer in South
America and the Gulf of Mexico, is pleased to provide an update on production
facilities in the Gulf following tropical storm Rita.
     
•    The gas production platform on High Island 52 and the High Island 30 oil 
     platform received minimal damage

•    The Gryphon platform on High Island 52, the source of the Pan Andean
     royalty, is reported to be intact
                                                                              
•    As far as is ascertainable, pipelines to shore are intact

•    The gas/oil gathering facilities being installed on High Island 24 are
     reported to be safe
     
•    The onshore facility in Johnson Bayou, Louisiana, which gathers and 
     distributes the gas from a number of offshore platforms including High 
     Island 52 and Gryphon was flooded and damaged. It may not be back in 
     operation before year end

The net effect of the storm is that Pan Andean production facilities are intact
but our monthly income from offshore Texas averaging $200,000 US a month will be
deferred for at least 3 months. It is also foreseeable that the restart of oil
production on High Island 30 will be further delayed as lift boats and crew
boats are diverted to emergency situations.

Jim Finn, Director, responsible for US operations, commented:

'Fortunately for Pan Andean, damage to our facilities is minimal. The deferral
of some revenue from our offshore facilities for three or four months is a
negative but, given the extraordinary high gas prices which are likely to last
well into next year, we will quickly recover our losses.

Meanwhile income from our onshore Texas production is more than sufficient to
cover ongoing costs.'

Contacts:

Pan Andean Resources                      Jim Finn          [phone]

Bell Pottinger Corporate & Financial      Nick Lambert      [phone]

Rowan Dartington & Co. Limited            Barrie Newton     [phone] 


                      This information is provided by RNS
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