PGR.L Regulatory News (PGR)

 30 September 2013

ANDES ENERGIA PLC

("Andes" or the "Company" or with its subsidiaries the "Group")

ANDES ENERGIA PLC - UNAUDITED 2013 INTERIM RESULTS

Andes (AIM: AEN; BCBA: AEN), the Latin American E&P group, announces its unaudited interim results for the six month period ending 30 June 2013.

Operational highlights

· Acquisition of Kilwer S.A. ("Kilwer") and Ketsal S.A. ("Ketsal")

· Conversion of loan notes issued on acquisition of Kilwer and Ketsal

· New management team

· JV agreement with company with interests in Brazil

· Acquisition of MGM International S.R.L. ("MGM")

· Current production approximately 1,400 bopd

Nicolas Mallo Huergo, Chairman, said: "During the period we completed successfully the acquisitions of Kilwer, Ketsal and MGM and entered into a JV agreement with a Brazilian company with exploration and production assets in Brazil. We now have a diversified portfolio of exploration, development and production assets with significant hydrocarbon potential represented chiefly by our 600 million boe of risked prospective resource and 19.6 million bbls of 2P reserves. Our current production is 1,400 bopd and we continue to develop our portfolio of assets, which we believe has significant potential for future conventional and unconventional production. The new management team has the experience and technical capability to take us through the next stage of our development and growth.".

Enquiries:

Note to Editors:

Andes is a Latin American oil and gas group, with interests in Argentina, Colombia, Brazil and Paraguay. The Company's focus is on the oil and gas sector in South America, which it believes offers premium assets at undervalued prices.

Chief Executive Officer's Review

Alejandro Jotayan, CEO, commented: "During the period, we successfully completed several transactions in Latin America, making the company more stable through the diversification of our asset portfolio. We have expanded our interests into Brazil and we continue to work on the development of our assets together with our partners with a hundred percent success record for new wells drilled. Both strategies, organic and inorganic growth, have produced an increase in production (6 times 2012 production) and a self-financing company with positive cash flow and highly prospective resources potential. We expect to continue to pursue the same objectives for the balance of the year in order to further increase Andes´s production.".

Oil and Gas interests

Argentina

As part of our exploratory commitments in Ñirihuau Sur, Chubut Province, a first stage geochemical survey was conducted. The objective of this program was to detect surface hydrocarbon seepage and its concentration and composition on a regional scale; this has been accomplished successfully. All soil gas samples collected by Andes were analysed by Geofrontier in Dallas, Texas, USA. The results were highly promising and in particular, a high concentration of methane and ethane was detected in an area in the northeast of the block, which indicates the presence of hydrocarbons underground.

As part of the farm-out agreement with YPF in May 2013 the MdVx-1 well (Mirador del Valle x-1) in the El Manzano West block was successfully drilled and cased at depth of 1,740 metres (5,708 ft). Several oil shows were detected in the lower Neuquén formation and the petro physical assessment has enabled us to develop a completion program and we are waiting currently for the availability of a completion rig and fracturing equipment.

In June 2013 a 49.92% interest was acquired in a JV that operates the Chañares Herrados and Puesto Cercado producing oilfields. Following the acquisition a well intervention program was undertaken with the main aim to stimulate producing layers and perforate new horizons. As a result of this work production from the two wells, which have been worked over, has increased by 134 bopd. We are planning to continue and expand this work over program.

During the month of June the wells EMa4 and EMx2 in the El Manzano West block were intervened with the aim to stimulate the producing horizons of the Agrio formation. As a result of this work production has increased by 90 bopd. We are currently reinterpreting 3d seismic data to define a new drilling site to develop the Agrio formation.

After a oil discovery from Cycle 2 of the Rayoso formation in the Chachahuen block, in which Andes has a 20% working interest, appraisal drilling was conducted by YPF following which fourteen wells were drilled and completed. All wells came on stream successfully. The current average production is 750 bopd (net to Andes 150 bopd). The comprehensive data gathered from these wells is being used to define a development plan.

After signing eight exploration contracts in December of 2012, Andes has developed a geological program to study the blocks. Permission has been granted to access the blocks (LLA 12 and VMM 8), in respect of which the company is carried on the Phase 1 works, after carrying out an environmental study. In the last six months several discoveries have been made by other operators in surrounding blocks, de-risking significantly Andes's portfolio. Five of the eight blocks have been farmed-out and the remaining three are currently under consideration for farm-in by large operators in the region. In February of 2013 Andes established a branch office in Colombia.

In May of 2013, the company signed a JV with Imetame Energia, a Brazilian E&P company with a proven track record as operator in different basins in the country. Imetame participated in the 2013 Brazil bidding round and was awarded 7 blocks in the Potiguar, the Sergipe-Alagoas and the Reconcavo basins. Our partner has recently formalised the seven block contracts with the ANP (the local authority that regulates the industry) and will request the assignment of 50% of the working interest to Andes by them. Andes has recently established a branch office in Brazil.

Paraguay

As part of its exploration commitment, Andes conducted a geochemical survey in the Repatriacion block, which lies in the Chaco-Parana basin. The object of this survey was to detect surface hydrocarbon seepage and determine its concentration and composition on a regional scale, which has been accomplished successfully. A total of 300 soil gas samples were collected by Andes in pre-evacuated glass vials and shipped to the laboratory. Samples were analyzed by GeoFrontiers, Dallas, Texas, USA for C1 to C4 hydrocarbon gas concentrations. The results of this regional survey were very promising with positive indication of both oil and gas. These results will be integrated with the geological framework and 2D seismic, which is currently being reprocessed.

Andes has applied for two additional concessions to the local authorities and the response should be received before the end of the current year.

Alejandro Jotayan

Chief Executive Officer

30 September 2013

Group income statement for the six months ended 30 June 2013

** Restated to recognise a deferred tax provision on the acquisition of Andes Hidrocarborus Investments S.A. in the six month period ending 30 June 2012

Consolidated statement of financial position as at 30 June 2013

*Restated to reflect the prior year adjustment to recognise a deferred tax provision on the acquisitions of AEN Energy Holdings SPC and Grecoil y Cia. S.A. in 2011

** Restated to recognise a deferred tax provision on the acquisition of Andes Hidrocarborus Investments S.A. in the six month period ending 30 Jun 2012

Consolidated statement of changes in equity for the six months ended 30 June 2013

*Restated to reflect the prior year adjustment to recognise a deferred tax provision on the acquisitions of AEN Energy Holdings SPC and Grecoil y Cia. S.A. in 2011

** Restated to recognise a deferred tax provision on the acquisition of Andes Hidrocarborus Investments S.A. in the six month period ending 30 Jun 2012

Consolidated cash flow statement for the six months ended 30 June 2013

Notes

1. Basis of preparation

The Group consolidates the financial statements of the Company and its subsidiary undertakings.

The financial information has been prepared under the historical cost convention in accordance with International Financial Reporting Standards (IFRSs). The financial information set out in this half-yearly report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The same accounting policies, presentation and methods of computation are followed in this interim condensed consolidated report as were applied in the Group's annual financial statements for the year ended 31 December 2012. The auditor's report on those financial statements was unqualified and did not contain any statements under section 498(2) or section 498(3) of the Companies Act 2006.

2. Segmental analysis

In the opinion of the Board the operations of Andes comprise one class of business, oil and gas exploration, development and production and the sale of hydrocarbons and related activities. An operating segment is a component of an entity that engages in business activities from which it may earn revenue and incur expenses and whose results are regularly reviewed by the Board. The Board considers and reviews operating segments by reference to geographic location. Whilst the Group now holds interests in licences in Argentina, Colombia, Brazil and Paraguay, during the period under review the primary reportable geographic segment was Argentina and the results and the assets of the other segments (including unallocated items) are immaterial.

3. (Loss)/ earnings per share

Basic earnings/(loss) per share is calculated by dividing the net profit/(loss) for the period attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the period. The basic and diluted earnings/(loss) per share are the same as there are no instruments that have a dilutive effect on earnings. Adjusted basic and diluted earnings/(loss) per share are presented after adjustment of exceptional items.

4. Cash generated from operations

5. Other

A copy of the interim report will be made available on Andes's website at www.andesenergiaplc.com.ar