PGR.L Regulatory News (PGR)

Andes Energia plc

("Andes" or the "Company")

Statement re: Vaca Muerta shale play developments

The Board of Andes notes with interest the drilling activities of ExxonMobil in its Bajo del Choique area, which is in close proximity to the Company's Corralera block. The Bajo del Choique x-2 well is reported to have been drilled to a total depth of about 4,570 metres, including 3,570 metres vertical with a 1000-metre lateral and to have flowed at an average rate of 770 barrels per day on a 4.7 millimetre choke. 

The Board also notes the recent Crown Point announcement that "it has drilled, logged, cased and rig released the La Hoyada x-1 exploration well as a potential Vaca Muerta oil discovery on the Cerro de los Leones Concession in the Neuquén Basin, Province of Mendoza, Argentina. The La Hoyada x-1 well was drilled to a total depth of 1,953 metres and encountered persistent oil and gas shows while drilling through the Vaca Muerta formation, which consisted of 125 metres of shale and 84 metres of imbedded fractured igneous intrusives.". This block lies close to the east border of Andes's Malargue block and 40 km to the east of Andes's La Brea block.

The Board continues to see substantial prospectivity in the Company's Vaca Muerta acreage, which is on trend with the reported flow rates from Exxon. 

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Note to Editors:

Andes Energia is an oil and gas company focussed on onshore South America with a market capitalisation of circa £250m. The Company has operations in Argentina, Colombia, Brazil and Paraguay, representing three of the largest economies and three of the four largest oil producing nations in South America.

The Company has 20MMbbls of conventional 2P reserves in Argentina and certified resources of 600MMBoe, primarily in the Vaca Muerta unconventional formation in Argentina and 7.5million acres across South America.

The Company has approximately 2 million net acres in unconventional plays including 213,000 net acres in the Vaca Muerta formation, which is the second largest shale oil deposit in the world and the only producing shale oil deposit outside of the USA. Over 250 wells have already been drilled and fracced in the Vaca Muerta formation.

Andes is the only AIM company on the London Stock Exchange with exposure to Vaca Muerta.

The Company currently produces 1,400 bbls per day in Argentina from 7 conventional fields, with positive cash flows generated. Andes Energia, with its partner YPF, has 30 wells planned over the next 12 months, which are fully funded by the field production cash flow.