Agreement with Canacol

 16 November 2015

ANDES ENERGIA PLC

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

Collaboration Agreement with Canacol

Andes (AIM: AEN; BCBA: AEN), the Latin American E&P group, is pleased to announce that it has entered into a Collaboration Agreement with Canacol Energy Ltd ("Canacol") to develop the licences held by Interoil Exploration and Production ASA ("Interoil").

Canacol has agreed to acquire 49% of Andes's 51% interest in Interoil for a consideration of US$3.2 million. As a result of this transaction, Canacol will hold 49% of the shares in Andes Interoil Limited, the holding company for Andes' shares in Interoil, resulting in an indirect interest of 24.99% in Interoil.

In addition, Canacol has agreed to provide a guarantee of US$4.8 million to fulfil Interoil's guarantee obligations for the LLA-47 licence. As a result, the Colombian regulatory entity, Agencia Nacional de Hidrocarburos ("ANH"), will release Interoil from guarantees totalling US$3.6 million. Andes intends to use the proceeds of US$3.2 million from the transaction to continue the development of its Argentine and Colombian assets and for working capital purposes.

Alejandro Jotayan, Chief Executive Officer, commented: "We are very pleased to be able to enter into a partnership with Canacol, a leading exploration and production company focused on Colombia. This will allow us to accelerate the development of Interoil's Colombian assets and provide an opportunity to explore additional collaboration agreements with Canacol. Interoil's strengthened shareholder base will be of benefit to both Interoil and Andes."

Ends

Enquiries:

Note to Editors - Andes:

Andes Energia plc is an oil and gas exploration and production company focused on onshore assets in South America with a market capitalisation of circa £132m. The Company has its main operations in Argentina and Colombia.

The Company has approximately 25* MMbbls of conventional 2P reserves, and it also has certified prospective resources of 640 MMboe, primarily in the Vaca Muerta unconventional development in Argentina and over 7.5 million acres across South America.

The Company has approximately 250,000 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, currently producing 45,000 boepd. Over 300 wells have already been drilled and fracked in the Vaca Muerta formation.

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

The Company currently produces approximately 3,200* boepd in Argentina and Colombia from 6 conventional fields in Argentina and 2 in Colombia, with positive cash flows generated.

Note to Editors - Interoil:

Interoil Exploration and Production ASA is a Norwegian based exploration and production company - listed on the Oslo Stock Exchange - with focus on Latin-America. The company operates four production and exploration licences in Colombia. Interoil currently employs approximately 95 people and is headquartered in Oslo.

On 20 January 2015 Andes acquired a 51% interest in Interoil through a NOK 36.3 million (US$4.95 million) private placement. Under the conditions of the placement, bondholders of Interoil accepted a restructure of its NOK 310 million (US$42.2 million) corporate bond and the US$6.2 million debt due to a third party, Proseis AG. This debt was replaced with a new US$32.0 million bond issued by Interoil (the "New Bond"), denominated in US$ with a coupon of 6% per annum maturing in 2020 with the option to satisfy coupon payments in the first 2 years by issuing additional New Bonds to the equivalent value.

For the year ended 31 December 2014 turnover from continuing operations was US$41.3 million and profit before tax US$1.1 million. As at 31 December 2014 Interoil had gross assets of US$67 million. In the first half of 2015, Interoil generated average oil production of 930 bpd at an average net price of US$52.1/bbl and average gas production of 480 boepd at an average price of US$18.6 peb

Note to Editors - Canacol:

Formed in 2008, Canacol Energy Ltd. is a leading production and exploration company focused in Colombia. The Corporation has 80 MMboe in 2P reserves, 80% of which are natural gas. These assets have the longest reserve life in Colombia. Canacol has world-class exploration partners, including Ecopetrol, Petroecuador, ConocoPhillips, Sinochem, Schlumberger and Shell. The Corporation is listed on the Toronto Stock Exchange, the Colombia Stock Exchange, and the U.S. OTCQX under ticker symbol CNE, CNE.C, and CNNEF, respectively.

*Includes 100% of Interoil's net reserves and production