Petro Andina Resources Inc.

Petro Andina Resources Inc.

June 26, 2008 15:57 ET

Petro Andina Announces Completion of Crude Oil Sales Pipeline

CALGARY, ALBERTA--(Marketwire - June 26, 2008) -


Petro Andina Resources Inc. (TSX:PAR) ("Petro Andina" or the "Company") is pleased to announce that construction work has now been completed on the 82 kilometer, 12 inch diameter sales pipeline to move the Company's crude oil production from the central production facility at El Corcobo Norte ("ECN") to market. The rated gross capacity of the pipeline with the current pump installation is approximately 6,600 cubic meters of oil per day (40,000 barrels of oil per day gross or 20,000 barrels of oil per day net).

Final welds on the suspended river crossing were completed on June 23, 2008 and the last permit required to commence operation of the pipeline was received on June 20, 2008. Commissioning activity commenced in advance of completion of the crossing with successful testing of pumps and measurement equipment at the head end of the line located at ECN. Pre-commissioning of all powered equipment including pumping and measuring units has now been completed at all shipping and receiving stations along the line.

The Company commenced first operations today by running a line inspection device, (a "caliper pig"), through the pipeline with air to identify any minor constrictions in line diameter. Conducting this operation with air will allow repairs, if any are required, to be conducted simply and quickly. The caliper pig is scheduled to arrive at the Company's receiving facilities located at Repsol-YPF's Puesto Hernandez complex on June 28th. Should no indications of problems exist, line fill with oil will commence immediately and first oil to market is anticipated to follow approximately three days later. Pursuant to the Company's continuous disclosure documents, the line fill is approximately 6,000 cubic meters or 38,000 barrels of oil gross (3,000 cubic meters or 19,000 barrels of oil net) and will be accounted for as a capital addition.

As pipeline operations become routine, which is anticipated to take approximately two to three months, costs of trucking Petro Andina's crude oil to the oil sales terminal at Medanito will be progressively reduced. As cited in the Company's continuous disclosure documents, some trucking operations will continue in-field to service remote single well batteries, and Petro Andina anticipates operating cost savings in the range of approximately $1.50 to $2.00 per barrel of oil, the full positive financial impact of which is not expected to be reflected in the Company's financial statements until the fourth quarter of 2008.

About Petro Andina Resources Inc.

Petro Andina is engaged in the exploration for and development and production of oil and natural gas in South America and the Caribbean. The Corporation recently announced the execution of a Joint Venture Agreement allowing Petro Andina to explore blocks in Trinidad and Tobago. The Corporation is continuing to develop its existing reserves and to conduct appraisal and exploration drilling on its 529,000 acre (297,000 acre net) land position in the Neuquen basin of Argentina. Petro Andina is headquartered in Calgary, Canada.

This news release does not constitute an offer to sell securities, nor is it a solicitation of an offer to buy securities, in any jurisdiction. All sales will be made through registered securities dealers in jurisdictions where the offering has been qualified for distribution. The securities offered are not, and will not be, registered under the securities laws of the United States of America, nor any state thereof and may not be sold in the United States of America absent registration in the United States or the availability of an exemption from such registration.

Forward-Looking Statements

Certain statements regarding Petro Andina Resources Inc. including management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities laws and necessarily involve known and unknown risks and uncertainties, most of which are beyond Petro Andina's control. These risks may cause actual financial and operating results, performance, levels of activity and achievements to differ materially from those expressed in, or implied by, such forward-looking statements.

Such risks and uncertainties include, but are not limited to: the impact of general economic conditions in Canada and Argentina, industry conditions including changes in laws and regulations including adoption of new environmental laws and regulations, and changes in how they are interpreted and enforced, both in Canada and Argentina, competition, the lack of availability of qualified personnel, fluctuations in commodity prices, the results of exploration and development drilling and related activities, imprecision in reserve estimates, the production and growth potential of Petro Andina's assets, fluctuations in foreign exchange or interest rates, the ability to access sufficient capital from internal and external sources, and obtaining required approvals of regulatory authorities, both in Canada and Argentina. Many of these risk factors are discussed in further detail in the Corporation's Annual Information Form dated March 28, 2008 on file with Canadian securities commissions. Readers are also referred to the risk factors described in other documents that Petro Andina files from time to time with securities regulatory authorities.

Accordingly, Petro Andina gives no assurance nor makes any representations or warranty that the expectations conveyed by the forward-looking statements will prove to be correct and actual results may differ materially from those anticipated in the forward looking statements. Petro Andina undertakes no obligation to publicly update or revise any forward-looking statements.

The Toronto Stock Exchange has not received and does not accept responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Petro Andina Resources Inc.
    Melesia Kasha
    Investor Relations
    (403) 237-1700
    (403) 265-8216 (FAX)
    Petro Andina Resources Inc.
    Kenneth G. Pinsky
    Vice President, Finance and Chief Financial Officer
    (403) 517-1729
    (403) 265-8216 (FAX)