Petro Andina Resources Inc.
TSX : PAR

Petro Andina Resources Inc.

September 10, 2008 11:57 ET

Petro Andina Pipeline Operational Update

CALGARY, ALBERTA--(Marketwire - Sept. 10, 2008) -

NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Petro Andina Resources Inc. ("Petro Andina" or the "Company") (TSX:PAR) is pleased to announce that as of September 1, 2008 the Company's 82 kilometer oil sales pipeline is transporting all sales specification oil volumes from the Company's El Corcobo Norte ("ECN") and Jaguel Casa de Piedra ("JCP") facilities to the sales point at Puesto Hernandez.

Current total gross field treating capacity for all facilities is 3,200 m3/d (20,130 bbls/d). Capacity is projected to increase to 4,000 m3/d (25,160 bbls/d) upon completion of the first stage tank treatment expansion which is currently underway and scheduled for completion in November 2008. The second stage expansion, involving the installation of additional treater, desalter and free water knock-out vessels, remains scheduled for April 2009. Aggregate production from all treatment facilities plus volumes trucked from single-well batteries averaged 4,140 gross m3/d (26,046 bbls/d) for the last week of August 2008. Petro Andina's working interest share is approximately 50 percent, or 13,000 bbls/d.

The Company has now released approximately 40 percent of the peak trucking fleet and anticipates releasing another 30 percent by year-end. The remaining trucking fleet will serve two purposes: movement of in-field volumes from single-well batteries to the ECN and JCP facilities, and deliveries from single-well batteries to the Company's truck terminal at Medanito during periods when well productivity exceeds the capacity of the ECN and JCP facilities.

As pipeline operations are now considered to be in the routine stage, the Company anticipates that the go-forward financial impact of the oil sales pipeline will be to reduce production costs by approximately $1.50 to $2.00 per barrel of oil equivalent ("boe").

The Company reaffirms its 2008 exit rate guidance to be in excess of 15,000 boe/d, with average production expected to be no less than 12,200 boe/d, an increase of 100 percent from average production of 6,045 boe/d in 2007. Also, the Company advises that there are no plans at this time to raise additional equity given our strong balance sheet and coupled with future expectations of funds flow from operations, net of anticipated capital expenditures.

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 is continuing to develop its existing reserves and to conduct appraisal and exploration drilling on its 628,000 acre (346,000 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)
    or
    Petro Andina Resources Inc.
    Kenneth G. Pinsky
    Vice President, Finance and Chief Financial Officer
    (403) 517-1729
    (403) 265-8216 (FAX)