PGR.L Regulatory News (PGR)

9 July 2012

Andes Energia plc

("Andes" or "the Company")

Demerger Update

The Board of Andes Energía PLC (AIM:AEN; BCBA:AEN), the Latin American energy group, is pleased to announced that Andes is on track to complete the demerger as detailed in the circular posted to shareholders on 9 June 2012 and available from the Company's website (the "Circular").

All Shareholders and Warrantholders resolutions have been passed and the Court Hearing to confirm the Reduction of Capital, to be held on 11 July 2012, is the last step required to complete the Demerger.

As set out in more detail in Part III of the Circular, the demerger will result in a Shareholder receiving for each Andes Share held before the demerger, 0.674 New Andes Shares and 0.326 Andina Shares. As an example, a Shareholder holding 1,000 Andes Shares prior to the Capital Reorganisation Record Time will hold 674 New Andes Shares and 326 Andina Shares following the Effective Date.

The total number of Andes Shares currently in issue is 294,957,402. Following the demerger the total number of New Andes Shares in issue will be approximately 198,801,289 and the total number of Andina Shares in issue will be approximately 96,156,113. The total number of New Andes Shares and Andina Shares in issue following the demerger will, therefore, be 294,957,402, the same number of Andes Shares in issue before the demerger.

Capitalised terms used in this announcement are defined in the Circular, unless the context requires otherwise.

Enquiries:

Note to Editors:

Andes is a Latin American energy group, with oil and gas, electricity distribution and hydro-electric power interests in Argentina. The Company's focus is on the Argentinean energy sector, which it believes offers premium assets at undervalued prices.