Repsol settlement

Andes Energia plc

("Andes" or "the Company")

Argentina - Repsol settlement for expropriation of YPF

The Board of Andes (AIM: AEN; BCBA: AEN) is pleased to note the announcements by the Argentine Government and Repsol regarding the proposed agreement reached with Repsol for compensation following the expropriation of YPF last year.

Settlement

The Argentine Government and Repsol have announced that they have reached an agreement in principle for compensation for the expropriation of YPF last year. The proposed settlement will consist of a payment to be satisfied by the issue of Argentine bonds with both parties agreeing to drop all legal claims. Press reports have indicated that Repsol has been offered a US$5 billion 10 year bond.

Nicolas Mallo Huergo, Chairman of the Company, commented:"This news represents a dramatic positive change for the Argentine oil and gas business environment. Together with the recent settlement of the CIADI claims of Vivendi Universal S.A., National Grid PLC, Continental Casualty Company, Bank of America Corp. and Azurix, this represents a considerable commitment to establish Argentina's presence in the international financial markets. We believe these steps will stimulate substantial foreign investment in the country, particularly in the oil and gas sector. Andes has an extensive and high quality land position for conventional and unconventional resources and a recognized management team with the proven ability to develop projects with success."

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Note to Editors:

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