Neuquen Farm-In Agreement

2 November 2010

Andes Energia plc

("Andes" or the "Company")

Neuquen Farm-In

Andes is pleased to announce the successful conclusion of a farm-in agreement with YPF S.A. ("YPF") for the Corralera and Mata Mora blocks in the province of Neuquen. The agreement is subject to the province approving a 1 year extension to the exploration period and the formalisation of new UTEs. Andes previously held a 20% working interest in the blocks and will now hold a 13.5% carried interest following completion. Under the agreement, YPF will fund exploration work program commitments up to the stage of commercial discovery.

Juan Carlos Esteban, CEO of Andes's oil and gas operations said, "We are extremely pleased to have secured an agreement with YPF in respect of our Neuquen licences. These two licenses are well located in terms of current gas production, within the largest gas producing basin in Argentina. The Vaca Muerta source rock, present in these licenses, could eventually be found to be holding unconventional reserves. YPF is the largest oil company in Argentina. We believe our association with them will bring huge benefits to our oil and gas operations and we hope to be able to develop our relationship with them on other licensed areas."

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Note to Editors:

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.

YPF is Argentina's largest oil company and is controlled by Repsol YPF, S.A. ("Repsol"), Spain's largest oil gas company. Repsol has operations in Europe, Latin America, North America, the Middle East, Asia and North Africa and explores for and produces oil and natural gas, refines petroleum and transports petroleum products and liquefied petroleum gas. At the end of 2009 YPF had estimated aggregate proved reserves of 1,013 million barrels of oil equivalent according to its filings with the NYSE.