Operational Update

14 January 2013

Andes Energia plc

("Andes" or "the Company")

Operational Update

The Board of Andes (AIM: AEN; BCBA: AEN), the Latin American E&P company, is pleased to give an operational update after the first production optimisation campaign undertaken by the company as operator of the "La Brea" block.

On 20 November 2012 the well PMu-x7 was producing 6 bopd from the Agrio formation prior to a pulling operation. When returned to production, this well reached 100 barrels of oil per day ("bopd") for the first four days then, after a week, dropped to 13 bopd and after a month, production stabilised at this level.

On 3 December 2012 the well PMu-x2, where production was 22 bopd, was worked-over in the Agrio formation. After a month, following the work over, oil production stabilised at 107 bopd.

The results from these operations indicate an Agrio formation with low-oil-permeability indicative of a tight-oil behaviour. When integrated with other field information, it suggests that the Agrio formation could become an important oil producer in a tight-oil formation. Further studies will be conducted to properly address the Agrio Formation reservoir behaviour and the well production decline curves.

Nicolás Mallo Huergo, Chairman of the Company, commented; "The results of this production optimisation campaign shows the potential the "Puesto Muñoz" field holds and the quality of the work performed by our technical team. In the northern region of the Neuquen Basin, the Agrio Formation could add several hundred million barrels to the basin resources pool and may have a significant positive impact on Andes's reserves and resources estimates.".

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).

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Note to Editors:

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