The bonds become due in five yearsOctober 27 2009 with a 7

j) Defined benefit pension plans The Branch implemented a pension plan for the benefit of its personnel called"Plan Puente" or "Bridge Plan". Such amount is made up of $ 265,216,601 of nominal valueless $ 115,292,099 corresponding to the financial effect from the discount topresent value and payments in the amount of $ 659,569. k) Revenue recognition Revenue derived from the sale of hydrocarbons is recognized when the significantrisks and rewards of ownership have been transferred to the purchaser. In those cases where the Branch has a shared interest with other producers,revenues are recorded upon the basis of the interest held in each joint venture.In order to recognize revenues from the sale of gas, the Branch uses the salesmethod, whereby these revenues are recorded on the basis of the actual volumesdelivered to purchasers irrespective of whether they result form the Branchsown output or from the output shared with other producers. l) Lease agreements The Branch leases the space occupied by its offices, which agreements are of anoperating nature and, therefore, the expenses incurred are recognized in theStatement of income to the extent they are accrued.

The amount of the leases, broken down by maturity dates, is reported below: Nominal valueUp to one year US$ 2,908,100 and $ 2,041,586 Over one year and up to five years US$ 515,000 and $ 2,475,077 During the nine-month period ended September 30, 2008, the Branch recognized anexpense of $ 7,556,684 related to such lease agreements presented in the lineBuildings Rentals and Maintenance in Exhibit G. NOTE 4 - BREAKDOWN OF CERTAIN BALANCE SHEET ACCOUNTS AND THESTATEMENT INCOME 09/30/2008 12/31/2007ASSETS CURRENT ASSETSa) Cash and banksCash on hand in local currency 220,594219,522Cash on hand in foreign currency (Exhibit F) 83,016 185,683Cash in banks in local currency2,738,86533,403,569 Cash in banks in foreign currency (Exhibit F)308,922178,834 Total3,351,39733,987,608b) Accounts receivable Accounts receivable in local currency109,762,284120,830,313Allowance for bad debtors in local currency (Exhibit D)(10,197,186) (10,197,186) Accounts receivable in foreign currency (Exhibit F)314,983,925387,251,549Affiliated companies in foreign currency (Note 9 and Exhibit F) 2,649,265- Total417,198,288497,884,676c) Other receivablesLoans to personnel 12,174,751 9,436,752Tax credits63,086,004 11,845,980 Expenses recoverable in local currency 10,279,655 5,105,747Expenses recoverable in foreign currency (Exhibit F) 3,152,7151,923,308Prepaid expenses in local currency 26,745,355 14,164,348 Miscellaneous in local currency43,243,157 34,220,853 Miscellaneous in foreign currency (Exhibit F)7,475,9159,476,145Affiliated companies in foreign currency (Note 9 and Exhibit F) 12,011,291 2,286,719 Total178,168,84388,459,852 d) InventoriesCrude oil in stock 136,327,618116,679,969Spare parts, materials and raw materials 76,012,405 56,281,193Subtotal (Exhibit E) 212,340,023172,961,162 Allowance for obsolescence of materials (Exhibit D)(2,769,624)(3,309,418) Subtotal 209,570,399169,651,744 Goods in transit 20,138,661 14,921,350 Advances to suppliers in local currency4,931,4464,333,388Advances to suppliers in foreign currency (Exhibit F)268,030572,715 Total234,908,536189,479,197e) Other receivables Loans to personnel 15,212,973 11,037,708 Prepaid expenses in local currency 3,165,0921,377,539Miscellaneous in local currency26,102,147 26,419,281 Miscellaneous in foreign currency (Exhibit F)13,441,647 14,304,701Total57,921,859 53,139,229 LIABILITIES CURRENT LIABILITIES f) Accounts payableTrade payables in local currency 463,030,849440,920,083Trade payables in foreign currency (Exhibit F) 150,141,734159,701,798Expenses payable in local currency 21,921,992 39,244,409 Affiliated companies in foreign currency (Note 9 and Exhibit F) 2,418,9905,183,546 Total637,513,565645,049,836g) Loans Unsecured notes payable in local currency77,197,458 263,824,044Unsecured notes payable in foreign currency(Exhibit F)970,301,650405,650,487Interest accrued on bonds and notes payable in foreign currency (Exhibit F) 77,308,517 75,833,146Total1,124,807,625745,307,677h) Taxes payable Income tax provision net of advanced payments224,645,672174,142,115Tax on sales and production101,384,12187,217,728 Other34,268,807 9,793,596 Total360,298,600271,153,439NON CURRENT LIABILITIES i) Accounts payableMiscellaneous liabilities in local currency36,760,403 31,777,958 Miscellaneous liabilities in foreign currency (Exhibit F)17,274,314 17,351,455Total54,034,717 49,129,413 j) Loans Bonds in foreign currency (Exhibit F)1,097,250,0001,102,150,000Unsecured notes payable in foreign currency(Exhibit F)2,722,026,4501,882,409,219 Total3,819,276,4502,984,559,219STATEMENT OF INCOME k) Sales Gross sales6,514,735,9754,438,906,534Export tariffs (1,782,597,794)(439,425,245) Total4,732,138,1813,999,481,289NOTE 5 - ISSUANCE OF BONDSOn February 11, 1997, Amoco Argentina Oil Company (Argentine Branch) issued theSecond Series of bonds in the amount of US$ 100,000,000 due in ten years, at anannual 6.75 rate The bonds were paid upon maturity on February 1, 2007. Suchissuance was made under the short and medium term bond program for a totalmaximum amount of US$ 200,000,000 authorized by the CNV through Resolution No.10982 on July 13, 1995. As a result of the transfer of assets and liabilities referred to in the secondparagraph of Note 1 to these financial statements, Amoco Argentina Oil Company(Argentine Branch) transferred the above mentioned bonds to Pan American EnergyLLC (Argentine Branch) Such bonds were guaranteed by BP Company North AmericaInc until repayment in February 2007 On February 21, 2002, through Resolution No.

On October 27, 2004, the Branch issued the Bonds Class 3 in the amount ofUS$100,000,000 under the Global Program. The bonds become due in five years(October 27, 2009) with a 7.125 annual fixed interest rate to be paid on ahalf-yearly basis. The price of the issuance was 99.483 of the nominal value.The funds obtained from this issuance were allocated to investments in property,plant and equipment and repayment of loans. The funds obtained fromthis issuance were allocated to investments in property, plant and equipment andrepayment of loans. NOTE 6 - OTHER FINANCIAL LIABILITIESOn July 11, 2005, the Branch obtained from the International Finance Corporation(IFC) a loan in the amount of US$ 250,000,000 guaranteed by Pan American EnergyLLC and consisting of three tranches: - "A" in the amount of US$ 100,000,000, with interest accruing at an annualfixed rate of 7.56, through an interest rate swap with IFC, amortizable on asix-month installments basis and becoming due in July 2015; - "B" in the amount of US$ 135,000,000, at an annual fixed rate of 6.97,through an interest rate swap with IFC, amortizable on a six-month installmentsbasis, and becoming due in July 2012, and - "C" in the amount of US$ 15,000,000, at an annual fixed base rate of 5.66plus additional interest calculated in relation to Pan American Energy LLCseconomic performance, becoming due in July 2016. The first repayment of principal for tranches "A" and "B" was made on January15, 2007. The funds obtained were used to partially fund the 2005 investment program inSan Jorge Gulf.

On July 13, 2007, the Branch obtained from IFC a loan in the amount of US$550,000,000, consisting of two tranches that accrue interest at a variable rate:- "A" in the amount of US$ 150,000,000 amortizable on a six-month installmentsbasis and becoming due in April 2018; and - "B", Sub-tranch "1" in the amount of US$ 158,500,000 amortizable on asix-month installments basis and becoming due in April 2014 and Sub-tranch "2"in the amount of US$ 241,500,000 amortizable on a six-month installments basisand becoming due in April 2015. The loan is guaranteed by Pan American Energy LLC and the funds obtained arebeing applied to partially fund the investment program that the Company willundertake in the Cerro Dragón area in San Jorge Gulf basin located in theprovinces of Santa Cruz and Chubut. On May 21, 2008, the Branch, obtained a loan from an international banksyndicate in the amount of U$S 200,000,000, the final maturity of which is onMay 23, 2011. The loan will be repaid in 3 semiannual principal installments asfrom the second year, accruing interest at a variable Libor rate payable everysix months. The bank syndicate was led by Calyon New York Branch, JP Morgan Securities Inc.and ABN AMRO Bank N.V., whereas Banco Itaú Buen Ayre S.A acts as the localintermediary bank. The loan is guaranteed by Pan American Energy LLC and the funds obtained must beapplied to the payment of property, plant and equipment and inventories. The Branch considers that its access to credit lines is appropriate in order tomeet its commercial and financial obligations, even though it presents anegative working capital.