PGR.L Regulatory News (PGR)

14 November 2013

Andes Energia plc

("Andes" or "the Company")

The Board of Andes (AIM: AEN; BCBA: AEN), is pleased to announce an update on its operations and exploration activities in Latin America:

Highlights:

· Mirador del Valle x-1 exploration well delivered a conventional light oil discovery in the Neuquen Group - 15 million barrels of resources, 6 million barrels net to Andes, tested at 535 bopd, 214 bopd net to Andes, production test on natural flow

· 10 new successful development wells drilled

· 5 successful workovers increasing production rates

· Granted 25 year right to exploit the Chachahuen Sur oil field

· Extension and revamping of treatment facilities in Mendoza

· Integration and consolidation of Ketsal, Kilwer and MGM operations resulting in organisational efficiency improvements

· Successful presentations to Colombian regulatory authorities enabling Operational Phase 1 to begin

Operational update

In the last six months, a number of activities have been undertaken to: increase production and efficiency; consolidate operations after the acquisitions of Ketsal, Kilwer and MGM; develop reserves; and progress the exploration and development phases of licenses in Colombia and Argentina. These activities include; the successful drilling of 10 new developments wells and 1 exploration well; the successful completion of 5 workovers; the revamping of a treatment facility; the integration and consolidation of recent acquisitions with a resultant improvement in organizational efficiency; and presentations to regulatory authorities for approval of exploitation rights.

As a result of these activities: the net production to Andes has increased six times over 2012 levels to 1,400 bopd; a 25 year right to exploit the Chachahuen Sur oil field has been granted; and the right to initiate exploration activities in six exploration blocks in Colombia has been approved.

Argentina

El Manzano West

As announced earlier this morning, the exploration well Mirador del Valle x-1 by YPF (Andes has a 100% working interest in the Agrio formation and a 40% carried interest in the other formations) made a light oil discovery in the Neuquen Group formation and tested at an initial production rate of 535 bopd, with the field estimated to contain 15 million barrels of resources. The Vaca Muerta formation lies 1,000 meters below the Neuquen Group formation and was the source rock to this discovery, de-risking the Vaca Muerta oil shale play. A further exploration well is planned through the Neuquen Group formation and into the Vaca Muerta formation, exposing shareholders to both conventional and shale oil plays (Andes is fully carried).

Additionally, an extension and revamping of the tank battery on the "El Manzano West" block is currently being conducted; completion is scheduled for the end of December and commissioning in January 2014. The new facilities are designed to treat the crude oil to reach sales specification on site, reducing in-field trucking requirements and leading to greater oil and water handling capabilities.

Puesto Pozo Cercado and Chañares Herrados

Encouraged by the results of workovers in wells PPC-1006 and PPC-1011, in which interventions in the "Victor Oscuro" were successful, together with new production from "Victor Gris" (two different sands in the Rio Blanco formation), further workovers were undertaken in wells CH-1007, CH-1022 and PPC-1012. The workovers were completed successfully and after one month, the total incremental increase in production from these three wells was 132 bopd. Puesto Pozo Cercado and Chañares Herrados are oilfields located in the Cuyo basin, Province of Mendoza, Argentina, in which Andes holds a 49.92% interest in the joint venture.

Chachahuen

The Province of Mendoza has granted to a joint venture of Andes, YPF (the state-run energy company) and a local firm Energia Mendocina, a 25 year right to exploit the "Chachahuen Sur" oil field located in the Chachahuen block. The JV has been granted the right to exploit an area of 72 km² in the south of the Chachahuen block that borders the energy-rich Neuquén Province. The grant was approved following the presentation, to the regulatory authorities, of the results of the successful drilling of 3 exploration wells and 2 appraisal wells during 2012 and 2013. Andes has a 20% carried interest in the JV.

A total of 17 wells are currently on stream producing approximately 1,000 bopd. An additional drilling and completion rig have been brought to the field to accelerate the drilling program, with a further 30 wells estimated to be drilled in the next twelve months.

Apart from the Chachahuen Sur field, exploration activities on the rest of the block (almost 4,000 km²) continue. An exploration well Chus.xp-44, was spudded on 10 October, reaching a total measured depth of 1,647 metres on 27 October. As well as a new pinch-out play within the Rayoso formation, the well was directionally drilled to target the deeper Mulichinco formation. Oil shows were observed at both these target levels and the well is currently awaiting completion.

Colombia

In six out of the eight areas that Andes holds in Colombia (VMM-8, LLA-79, LLA-12, LLA-2, LLA-49 and LLA-28), the country regulatory authority ANH, has approved the beginning of Operational Phase 1. This means Andes can now start the operations needed to realize the potential of these areas. These activities will include the recording of new seismic data, the reprocessing of existing data using new technologies and the evaluation of existing wells in the area. Data from recent discoveries in nearby areas will be incorporated into the Andes's regional database to evaluate similar features within Andes's acreage.

Alejandro Jotayan, CEO of the Company, commented: "The results of recent activities in Argentina and Colombia has encouraged us to expand our exploration and development program, focusing on the increase of production and the development of our reserves base, to sustain profitable growth.".

For further information please contact:

Qualified Person Review

In accordance with AIM guidance for mining, oil and gas companies, Mr. Juan Carlos Esteban has reviewed the information contained in this announcement. Mr. Juan Carlos Esteban, an Officer of the Group, is a petroleum engineer with over 20 years of experience and is a member of the SPE (Society of Petroleum Engineers).

Note to Editors:

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