Area of Operations

Petro Andina’s Argentine acreage is located in the Northeast Platform portion of the Neuquén Basin. Among the petroleum producing regions of Argentina, the Neuquén Basin is the leading producer of hydrocarbons. According to current Argentine Institute of Oil and Gas (Instituto Argentino de Petróleo y del Gas – IAPG) statistics, average daily production in July 2008 exceeds 283,352 bbls/d and 2.94 BCF/day of gas. The Neuquén Basin was drilled initially in the 1920's and currently has over 177 producing oil and natural gas fields.

The Company's interests include a 50 percent working interest in the operated 264,000 acre CNQ-7/A Concession and a 47.48 percent working interest in the contiguous 65,000 acre CNQ-7 Concession. Petro Andina has a 47.48 percent operating interest in CNQ-7 and partners Petrobras Energia S.A. and Repsol-YPF hold respectively 22.51 percent and 30.01 percent interest. CNQ-7 also contains the 5,300 acre Cerra Hamaca Norte area in which Petro Andina has a 7.5 percent working interest.

Petro Andina is the beneficial owner of a 100 percent interest in the CN-VI A/B Exploration Concessions comprising 38,800 acres. These Concessions are located in Mendoza Province to the northeast of the Company's CNQ-7/A and CNQ-7 Concessions. The Company is currently not conducting any activity on these Concessions.

In 2007, the Company added to its land holdings with the addition of the 70 percent working interest in the 82,800 acre Gobernador Ayala III Concession and a 50 percent working interest working interest in the 72,400 acre Gobernador Ayala I Concession. These Company’s land holdings encompass an area approximately equivalent to 21 townships of petroleum and natural gas rights in western Canada. The Concessions contain oil fields at ECN, JCP, PP, CoHS, El Renegado, Gobernador Ayala Este and CHN. The Concessions also contain natural gas discoveries at Pampa Verde, La Alpargata Sur, and at ECN and JCP in shallower horizons above the Centenario formations.

In July 2008, Petro Andina negotiated a farm-in agreement for the La Banda Exploration Concession in the province of Neuquén with YPF S.A., its partner in the CNQ-7/A Concession. Petro Andina will earn a 50 percent working interest in the 99,000-acre (gross) Concession, located approximately 25 kilometres southwest of the Company’s existing acreage.

The Company expanded its area of operations to Trinidad and Tobago in 2008 where it will operate the Central Range Shallow and Deep Blocks for its partner Voyager Energy Ltd. (Voyager). The total surface area covered by the two exploration Blocks is approximately 214,000 gross acres (107,000 net). The Blocks were awarded to Voyager, by the Government of the Republic of Trinidad and Tobago in January 2008 under the terms of Production Sharing Contracts (PSCs). Voyager will be the holder of the remaining 50 percent working interest during the exploration phase. The Petroleum Company of Trinidad and Tobago (Petrotrin) has the right to participate for a 35 percent working interest in any development on the Central Range Shallow Block and for a 20 percent working interest in any development on the Central Range Deep Block. The PSCs provide for an initial exploration phase of four years with the option for the parties to enter into two single year exploration phases beyond the initial phase.