00Non operator Afuera ArgentinaCAA403 Costa 50

Alem 1180 - 11th floor - BuenosAires Main activity of the Branch: Oil and gas exploration and production Date of registration with the Public Registry of Commerce: October 17, 1997 Registration number with the Inspection Board of Legal Entities: 1868, Book 54,Volume B of Foreign Companies Capital registered with the Inspection Board of Legal Entities: $ 200,000,000under number 1257, Book 57, Volume B of Foreign Companies, and $ 21,779,007under number 2106, Book 58, Volume B of Foreign Companies (Note 8) Date of registration of capital with the Inspection Board of Legal Entities: $200,000,000 on July 11, 2003 and $ 21,779,007 on December 12, 2005 Subscribed capital (paid in full): $ 221,779,007 HEAD OFFICEName: Pan American Energy LLC Legal address: The Corporation Trust Company, Trust Corporation Center, 1209Orange Street, Wilmington, Delaware - 19801 - United States of America Main activity: Oil and gas exploration and production PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)BALANCE SHEET as of September 30, 2008 and as of December 31, 2007 (in pesos)09/30/200812/31/2007ASSETSCURRENT ASSETSCash on hand and in banks (Note 4 a) 3,351,397 33,987,608Investments (Exhibit C)1,025,030,111 451,093,477 Accounts receivable (Note 4 b) 417,198,288 497,884,676 Other receivables (Note 4 c) 178,168,843 88,459,852Inventories (Note 4 d) 234,908,536 189,479,197Total current assets 1,858,657,175 1,260,904,810NON CURRENT ASSETSOther receivables (Note 4 e) 57,921,85953,139,229Investments (Exhibit C)7,337,203 9,533,846 Property, plant and equipment (Exhibit A)9,004,729,627 7,383,251,413 Intangible assets (Exhibit B)364,374 390,469Total non current assets 9,070,353,063 7,446,314,957Total assets 10,929,010,2388,707,219,767LIABILITIES CURRENT LIABILITIES Accounts payable (Note 4 f)637,513,565 645,049,836 Loans (Note 4 g) 1,124,807,625 745,307,677 Payroll and social security contributions59,286,28242,426,954Taxes payable (Note 4 h) 360,298,600 271,153,439 Other liabilities (Note 3 2 j) 382,833 - Provision for future compensation to personnel (Exhibit D)2,476,055 2,461,743 Total current liabilities2,184,764,960 1,706,399,649NON CURRENT LIABILITIES Accounts payable (Note 4 i)54,034,71749,129,413Loans (Note 4 j) 3,819,276,450 2,984,559,219 Other liabilities (Note 3 2 j) 148,882,100 128,930,896 Deferred tax (Note 11) 359,916,945 389,697,321 Provision for future compensation to personnel (Exhibit D)16,782,62915,241,426Provision for environmental remediation (Exhibit D)88,093,00582,182,464Accruals (Exhibit D) 22,740,52020,217,498 Total non current liabilities4,509,726,366 3,669,958,237Total liabilities6,694,491,326 5,376,357,886Account with Head Office (Note 7)3,773,279,905 2,869,622,874 Capital allocated to the Branch (Note 8) 221,779,007 221,779,007 Capital adjustment 239,460,000 239,460,000Total10,929,010,2388,707,219,767The accompanying notes and exhibits are an integral part of thesefinancial statements. PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)STATEMENT OF INCOME for the nine-month period beginning January 1 and endedSeptember 30, 2008 comparative with the same period of the prior year (inpesos)20082007(nine months) (nine months)Sales (Note 4 k)4,732,138,181 3,999,481,289 Cost of sales (Exhibit E) (2,442,430,530) (1,968,713,012) Gross profit2,289,707,651 2,030,768,277 Administrative expenses (Exhibit G) ( 208,191,869)( 206,756,846)Operating income2,081,515,782 1,824,011,431 Financial results Generated by assets Interest 19,864,85827,417,126 Exchange gains (losses)( 33,825,009) 17,885,579 Other financial results( 384,087) ( 14,344,238)( 374,417) 44,928,288Generated by liabilitiesInterest (216,270,709) (195,209,659)Exchange gains (losses)24,588,970( 77,003,694)Other financial results( 33,784,758)( 225,466,497) ( 50,600,661)( 322,814,014)Other income and expenses - net ( 1,278,500)( 27,897,206) Income before income tax1,840,426,547 1,518,228,499 Income tax expense - current (Note 11)( 652,729,560)( 578,842,019)Income tax benefit - deferred (Note 11) 29,780,37650,822,677Net income (Note 7) 1,217,477,363 990,209,157The accompanying notes and exhibits are an integral part of these financialstatements. PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)STATEMENT OF CASH FLOWS for the nine-month period beginning January 1 and endedSeptember 30, 2008 comparative with the same period of the prior year (inpesos) 2008 2007(9 months) (9 months) Cash provided by operations:Net income1,217,477,363990,209,157Adjustment to reconcile net income with the cash provided by operationsDepreciation of Property, Plant and Equipment 613,818,481570,488,735 Amortization of intangible assets 26,095 1,483,656 Income tax expense652,729,560578,842,019 Net increase in allowances for bad debtors,lawsuits and obsolescence of materials2,319,18914,973,029(Loss) gain on property, plant and equipment( 378,738) 12,286,188Increase in provision for future compensation to personnel3,729,9913,529,800 Net increase in the provision for environmental remediation 8,398,2706,400,028 Other non-cash items (1)156,292,371155,200,083 Changes in assets, liabilities and account with Head Office:Decrease in accounts receivable 80,686,388 150,327,213 Increase in inventories ( 44,889,545)( 5,675,583)(Increase) decrease in other current receivables( 89,708,991)12,740,016(Increase) decrease in other non current receivables( 4,782,630) 607,797 Increase in accounts payable, payroll and social security contributions,117,091,03179,874,253taxes payable and other liabilitiesCompensation paid to personnel for benefit plans( 2,174,476) ( 1,677,658)Payments related to lawsuits( 335,961) ( 59,844) Use of provisions ( 5,300.905) ( 3,333,367)Income tax paid ( 646,113,032) ( 830,211,981)Net cash provided by operations 2,058,884,4611,736,003,541Cash used in investing activities: Decrease (increase) in long-term investments2,196,643( 1,179,269)Acquisition of property, plant and equipment(2,239,020,652)(1,619,452,383) Additions of intangible assets-( 67,390) Collection due to the sale of property, plant and equipment 6,915,87112,495,387Cash used in investing activities (2,229,908,138)(1,608,203,655) Cash provided by financing activities: Increase in loans (net) 1,028,144,43296,310,892Net activity with Head Office ( 313,820,332) ( 34,254,830) Cash provided by financing activities 714,324,10062,056,062 Net increase in cash543,300,423189,855,948Cash at beginning of period (2) 485,081,085249,407,237Cash at the end of the period (2) 1,028,381,508439,263,185 (1) It is made up of:Exchange gains/losses and other financial results 186,072,747206,022,760 relating to loans and other Deferred income tax benefit ( 29,780,376)( 50,822,677)Total 156,292,371155,200,083(2) Cash and banks plus investments becoming due in a period not exceeding three months. The accompanying notes and exhibits are an integral part of these financialstatements. NOTES TO THE FINANCIAL STATEMENTS as of September 30, 2008 and comparativeinformation (in pesos) NOTE 1 - THE BRANCHPan American Energy LLC (Argentine Branch) is engaged in the exploration,development and production of hydrocarbons.

On May 1, 1998 a definitive agreement for the transfer of assets and liabilitieswas entered into between Pan American Continental S.R.L and the Branch, wherebyPan American Continental S.R.L. transferred to the Branch its businessconsisting of the assets and liabilities except for the name Pan AmericanContinental. NOTE 2 - OPERATIONS OF THE BRANCHThe following table summarizes the main operations, blocks and joint ventures inwhich the Branch is or was involved during the nine-month period ended September30, 2008. Activity Opera InterestParticipationtionsOil and gas production and development Cerro 100.00 Operator Dragón Piedr 100.00 Operator a ClavadaKolue 100.00 Operator l KaikeLinde 62.50Operator roAtravesadoAntic 80.00Operator linalFunesAcamb 52.00Operator uco Agua 18.18NonoperatordaPichanaSan16.47Non operator RoqueEstan 25.00Non operat cia LaEscondida(1)Oil and gas exploration and developmentAcamb 100.00 Operator uco "B" (2) Bandu 18.18Non operator rriaCosta 50.00Non operator Afuera Argentina"CAA-40"(3) Costa 50.00Non operator Afuera Argentina"CAA-46"(3) Centr 90.00Operator o GolfoSan JorgeMarina Chubut Centr 90.00Operator o GolfoSan JorgeMarina SantaCruzExplanations:(1) The Joint Venture agreement (UTE) governing the relationships between theholders of concession states that their participating interests in rights,obligations and interests inherent in the property including production, will bedistributed based on the depth from which production is obtained: in the deeparea, the Branch has a 75 interest and the co-holder has the remaining 25; inthe shallow area from which current total production is obtained, the Branch hasa 25 interest and the co-holder the remaining 75; and in the area"Descubrimiento El Zanjón", both parties hold a 50 interest.

The averageinterest described grants the Branch a 50 interest in the rights over theproperty, regardless the percentage thereof in the concession. (2) Corresponds to the Macueta Oeste and San Pedrito Sur fields (3) See Note 15 - Subsequent events NOTE 3 - ACCOUNTING PRINCIPLES3.1 Reporting currency In accordance with Decree 664/2003 and General Resolution No. 441/2003 of theNational Securities Commission ("Comisión Nacional de Valores" or CNV), theBranch discontinued the application of inflation accounting as from March 1,2003. From January 1, 2002 to February 28, 2003, the Branch applied the inflationaccounting methodology set forth by Technical Resolution No 6, amended byTechnical Resolutions Nos. 17 and 19 of the Argentine Federation of ProfessionalCouncils of Economic Sciences (FACPCE) and by the Professional Council ofEconomic Sciences of the City of Buenos Aires (CPCECABA), using indexes derivedfrom the Internal Wholesale Price Index.