Petro Andina Resources Inc.

Petro Andina Resources Inc.

July 03, 2009 08:00 ET

Petro Andina Board of Directors Rejects Pluspetrol's Inadequate Offer

CALGARY, ALBERTA--(Marketwire - July 3, 2009) - Petro Andina Resources Inc. (TSX:PAR) (Petro Andina or the Company) announced today that its Board of Directors (the Board) unanimously recommends that shareholders reject 1462627 Alberta Ltd's., a wholly-owned subsidiary of Pluspetrol Resources Corporation N.V., unsolicited offer (Pluspetrol Offer) to acquire Petro Andina. The Board, after a thorough review and evaluation of the June 19, 2009 unsolicited take-over bid and after consultation with its financial and legal advisors, determined that the Pluspetrol Offer is inadequate from a financial point of view. The Board therefore recommends that Petro Andina shareholders reject the Pluspetrol Offer and not tender their shares to the Pluspetrol Offer.

Among the reasons the Petro Andina Board believes shareholders should reject the Pluspetrol Offer are:

- The sum of the net present value of future net revenue from Petro Andina's proved plus probable oil and natural gas reserves in Argentina and Petro Andina's net working capital significantly exceeds the value of the Pluspetrol Offer before attributing any value to Petro Andina's Argentine Possible Reserves, Petro Andina's Argentine resource potential, Petroleum Plus benefits, significant synergies available to Pluspetrol and Petro Andina's interests in Colombia and Trinidad and Tobago.

- The Pluspetrol Offer is opportunistic in light of the timing of Petro Andina's resource development.

- Precedent transactions suggest that greater value should be obtained for Petro Andina shareholders.

- Research analysts suggest that the Pluspetrol Offer is inadequate.

- Superior alternatives delivering greater value for Petro Andina shareholders may emerge.

- Petro Andina's common shares are trading substantially above the $8.10 price offered in the Pluspetrol Offer.

- The Pluspetrol Offer is highly conditional and not a firm offer.

- Petro Andina's financial advisors have each delivered a written opinion that the Pluspetrol Offer is inadequate, from a financial point of view, to shareholders.

"This is an inadequate and opportunistic offer that fails to recognize the full value of Petro Andina," said Wayne Foo, President of Petro Andina.

The Board in consultation with its financial advisors, FirstEnergy Capital Corp. and Scotia Waterous Inc., has commenced an evaluation of various initiatives in the best interests of Petro Andina and its shareholders with the objective of maximizing value for shareholders. The financial advisors have established data rooms in Calgary, Houston, and Buenos Aires, which are being made available to qualifying companies.

A copy of the Directors' Circular, which sets forth in greater detail the Board's recommendation and the reasons it has recommended shareholders reject the Pluspetrol Offer, will be mailed to all Petro Andina shareholders. Shareholders are advised to read the Petro Andina Directors' Circular as it contains important information about the Pluspetrol Offer. Shareholders will be able to obtain a copy of the Directors' Circular from the Company's website at as soon as it is available and copies will also be available under the Company's profile at the SEDAR website at

Petro Andina has retained Kingsdale Shareholder Services Inc. to act as information agent. Any questions or requests for assistance may be directed to them at 1-866-581-0508 or email

About Petro Andina Resources Inc.

Petro Andina is engaged in oil and natural gas exploration, development and production in South America and the Caribbean region. The Company is continuing to develop its existing reserves and to conduct appraisal and exploration drilling on its 628,000 acre (346,000 net acre) land position in the Neuquen Basin of Argentina. Exploration activities have also begun on its 495,000 acre (247,500 net acre) holdings in the Llanos Basin of Colombia and 211,000 acre (105,000 net acre) holdings onshore Trinidad & Tobago. Petro Andina is headquartered in Calgary, Canada.

Forward-Looking Statements

Certain statements regarding Petro Andina including statements with respect to the Pluspetrol Offer and 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, Argentina, Colombia and Trinidad & Tobago, 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, in Canada, Argentina, Colombia and Trinidad & Tobago, 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, in Canada, Argentina, Colombia and Trinidad & Tobago. Many of these risk factors are discussed in further detail in the Company's Annual Information Form dated March 31, 2009 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, except as may be required by applicable securities law.

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

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