PGR.L Regulatory News (PGR)

14 Jul 2008 07:00

Andes Energia plc

("Andes" or the "Company")

Drill Rig Contract

Exploration drilling in San Jorge basin to Commence in Q3 2008

The Board of Andes (AIM:AEN), the Latin American energy group, is pleased to announce that its joint venture consortium with Patagonia Oil & Gas S.A, Union Transitoria de Empresas ("UTEs"), has signed a drilling contract with San Antonio Internacional ("San Antonio"), a subsidiary of Pride International Inc.

Exploration drilling in the San Jorge basin will now commence in Q3 2008. This will initially focus on the Confluencia licence block and the first well will be drilled to a final depth of 1,456 metres. It is anticipated that it will take 20 days to drill to final depth.

Further to the announcement on 26 June 2008, this is the first of an initial four well exploration drilling program which is expected to be completed by March 2009.

Luis Alvarez Poli, Chief Executive Officer of AEN stated, "We are delighted to have secured a drilling rig from one of the most competitive operators in the region. We look forward to working closely San Antonio, which has a strong track record in Argentina." 

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Note to Editors:

Andes

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

San Jorge Basin

The San Jorge Basin is situated in the Chubut Province of Argentina. A Competent Person Report undertaken in April 2007, which covered just two of the licence blocks in this region showed a net attributable risked contingent resource figure of 22.4 million barrels of oil.

In February 2008, Andes announced that its joint venture partner Patagonia Oil & Gas had entered into a funding deal worth up to US$ 94.5 million with Petro Saudi International. The funding will be used to develop our seven licence blocks six of which are in the San Jorge basin.

UTEs

UTEs comprises seven licence blocks, six of which are onshore licences in the San Jorge basin. Andes' financial interest in these blocks comprises a 20 per cent. carried interest, a 3 per cent. working interest and a 20 per cent. royalty interest.