Petro Andina Resources has announced that at the current fiscal regime, it projected a realized price of $31 per bbl when WTI was $45 per bbl. In the first quarter 2009, WTI averaged $43 per bbl and Petro Andina was able to realize an oil price of around $37 per bbl by negotiating higher prices from refiners.

Additionally Argentine oil pricing for Petro Andina Resources will be determined by the interaction of four factors comprising of pricing in the Argentine local market, prices in the world markets, the percentage of Petro Andina Resources production that is sold into the export market and the impact of the Petroleum Plus program.

Presently, Petro Andina Resources expects that when world oil prices approximate $50 per bbl, the company’s realized price for sales into the Argentine local market and excluding any benefit of the Petroleum Plus program, would remain at about $37 per bbl.

At first quarter of 2009, Petro Andina Resources has received an export license for 390,000 bbls. During the final week of April 2009, Petro Andina Resources accomplished an initial export shipment of about 260,520 bbls.

The export pricing formula was based on WTI pricing for a five day average prior to loading ($49 per bbl) less adjustments for basin and quality differentials. Petro Andina Resources believes that based on the experience of other exporters, the adjusted realized export oil price will be comparable to domestic pricing. A second oil export shipment is scheduled for early May 2009.

Petro Andina Resources has met with officials of the Argentine Secretariat of Energy and has applied for Petroleum Plus credits in respect of its 2008 fourth quarter production growth and 2008 reserves replacement. The potential value to Petro Andina Resources of the program for fiscal 2008 is calculated to be $46 million before income tax. Additionally, the value of the first quarter 2009 Petroleum Plus production growth credit is calculated to be $6.5 million before income tax. To date Petro Andina Resources has not received the Petroleum Plus credits related to 2008, nor has the company accrued the benefits of the program, if any, in its financial results.

Oil Production

First quarter 2009 production volumes were influenced by the following:

— low first quarter 2009 world oil prices and estimated higher future oil prices;

— Decreased Argentine local consumption because of economic slowdown and seasonal agricultural fuel demand; and

— Decreased refinery output as refiners reduced exports of finished product.

Petro Andina Resources’ production strategy for the first quarter 2009 was to pump the maximum volume that the Argentine market could absorb and any additional volumes that Petro Andina Resources could reasonably store. Additionally, Petro Andina Resources deferred capital expenditures related to exploration and non-essential facilities enhancement.

Given current oil pricing and economic conditions in Argentina, Petro Andina Resources hopes its year-end exit rate production to be at the lower end of its guidance of 18,500 to 20,000 bbls/d.

During the first quarter 2009 not all production volumes could be sold locally. Petro Andina Resources has completed its first crude oil export shipment of around 260,520 bbls, which has cleared excess oil inventory. The company expects to apply for and receive additional export licenses in the future.

The benefits of exporting are twofold. Upon being received, the Petroleum Plus tax credits will be utilized to offset the export taxes that would be payable on the export volumes. Export shipments will thereby have transparency with world oil prices. A second benefit of exporting is it allows Petro Andina Resources to better manage foreign exchange risk since export sales are paid in US dollars.

Operations

Petro Andina Resources is responding to the current local market environment by deferring a portion of its 2009 Argentine capital expenditures into later quarters and accelerating programs in other jurisdictions, especially exploration in Colombia and Trinidad & Tobago. Petro Andina Resources has the flexibility to respond to improved Argentine oil prices when the benefits of the Petroleum Plus program are realized or as world oil prices increase. Petro Andina Resources presently has three drilling rigs and four service rigs operating in Argentina. During the first quarter 2009, Petro Andina Resources moved a rig from the La Banda exploration concession to the main operating area and now has three rigs dedicated to development drilling.

The expansion of the El Corcobo Norte oil treatment facility is on track for accomplishment at the end of April 2009 with commissioning in May 2009. This will lead to greater oil and water handling capabilities which will further reduce in-field treating and trucking requirements. The company is now operating a total of 20 trucks for in-field operations. The facility expansion will bring water handling capability to around 100,000 bbls/d.

Exploration

During the fourth quarter 2008 the company’s most significant exploratory success was at Cerro Huanul Sur (50% working interest). Petro Andina Resources has continued to further delineate the UC50 member of the Upper Centenario formation, which is the highest stratigraphic unit proven productive till date, and plans to implement water flood throughout the second half of 2009.

The second exploratory well drilled under the terms of the farm-in agreement with Repsol-YPF on the La Banda Concession was drilled and found oil and gas bearing sands. The primary objective tested 160 bbls/d of light oil, representing 20% oil cut on 800 bbls/d of total fluid. A delineation drilling program to find out commerciality is scheduled for the fourth quarter of 2009.

On March 17, 2009, Petro Andina Resources was officially assigned a 50% working interest and operator ship of the Central Range Shallow and Central Range Deep blocks in Trinidad & Tobago. During the first quarter 2009, the airborne geophysical survey over the entire Central Range block area was completed. Work on the first phase of the two dimensional seismic program is also underway.

Following the company’s successful bids on four exploration blocks totaling 495,000 acres in the Colombia Mini-Round 2008, Petro Andina Resources and its partner, Columbus Energy Sucursal Colombia, were formally awarded the blocks by the Colombia National Hydrocarbons Agency on April 20, 2009. Preliminary plans are to conduct a three dimensional seismic program and to drill the first exploration well in late fourth quarter of 2009 or first quarter of 2010.

Petro Andina Resources continues to maintain vital cash reserves, which along with expected internally generated cash flow, is available to fund the company’s continued expansion in Argentina, exploration work commitments in Trinidad & Tobago and Colombia, and planned bank debt amortization payments.