1st Quarter Results

BUENOS AIRES--(BUSINESS WIRE)--

Translation from the original prepared in Spanish for publication in Argentina

PAN AMERICAN ENERGY LLC
(ARGENTINE BRANCH)

FINANCIAL STATEMENTS AS OF MARCH 31, 2011
AND COMPARATIVE INFORMATION

CONTENTS	Page
Limited review report on interim financial statements	2
Legal information	4
Balance sheet	5
Statement of income	6
Statement of cash flows	7
Notes to the financial statements	8
Exhibits A, B, C, D, E, F, G, H and I	23
Reporting summary 36
Supplementary information required by the Buenos Aires Stock Exchange	41

REVIEW REPORT ON INTERIM FINANCIAL STATEMENTS

To the Legal Representative of
Pan American Energy LLC (Argentine Branch)
Av. Leandro N. Alem 1180 – 11^th floor
Buenos Aires, Argentina

We reviewed the accompanying balance sheet of Pan American Energy LLC (Argentine Branch) as of March 31, 2011, and the related statements of income and cash flows, notes 1 to 18 and exhibits A, B, C, D, E, F, G, H and I for the three-month period then ended, comparative with the same period of the prior year, and in the case of the balance sheet and the related notes and exhibits, with the financial statements as of December 31, 2010. The preparation of these financial statements is the responsibility of the Legal Representative of the Branch.

We conducted our review in accordance with auditing standards in force in the Republic of Argentina applicable to a review of interim financial statements. These standards consist principally in applying analytical procedures to the financial data and inquiring of the individuals responsible for their preparation. A review is substantially less in scope than an audit of financial statements, of which express an opinion on the financial statements taken as a whole. Therefore, we do not express such opinion.

The accompanying consolidated financial statements were translated into the English language from those issued in Spanish in conformity with the regulations of the National Securities Commission (“CNV”) of Argentina. Certain accounting practices applied by the Branch that conform to the accounting standards set forth by the CNV do not conform to accounting principles generally accepted in the United States. The effects of these differences have not been quantified by the Company.

Based on our review, we report that the financial statements as of March 31, 2011 and for the three months then ended referred to in the first paragraph consider all the significant facts and circumstances of which we became aware during our review and in relation to them we have no significant observations.

In relation to the financial statements as of December 31, 2010, presented for comparative purposes, we issued an unqualified opinion on March 10, 2011. In addition, on May 11, 2010, we issued an unmodified review report on the financial statements for the three months ended March 31, 2010, also presented for comparative purposes.

In compliance with rules and regulations in force, we report that:

a) the financial statements referred to in paragraph 1. comply with the provisions of the Companies Law and the regulations on accounting documentation of the CNV, are transcribed into the Inventory Book and arise from the accounting records of the Branch in Argentina which, in their formal aspects, are kept pursuant to the legislation in force. The filing of the special report required under section 287 of Resolution No. 7/2005 is pending approval from the Supervisory Board of Companies. The information systems used to generate the information included in the financial statements are kept under the security and integrity conditions based on which they were duly authorized;

b) we read the reporting summary (sections “Balance sheet items”, “Income statement items”, and “Ratios”) and the supplementary information to the financial statements required by section 68 of the regulations of the Buenos Aires Stock Exchange, based on which, as far as it relates to our area of responsibility, we have no observations, and

c) as of March 31, 2011, the accrued liability for retirement and pension contributions payable to the Argentine Pension Fund System arising from the accounting records amounted to $ 30,672,065.19, no amounts being due as of that date.

City of Buenos Aires, May 12, 2011

SIBILLE

Néstor R. García
Partner

PAN AMERICAN ENERGY LLC (ARGENTINE BRANCH)

FINANCIAL STATEMENTS as of March 31, 2011 for the three-month period beginning January 1, 2011 and ended March 31, 2011, comparatively presented.

Stated in pesos

Legal address of the Branch: Av. Leandro N. Alem 1180 - 11^th floor - Buenos Aires

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

Subscribed capital (paid in full): $ 221,779,007 (See Note 8)

HEAD OFFICE

Name: Pan American Energy LLC

Legal address: The Corporation Trust Company, Trust Corporation Center, 1209 Orange Street, Wilmington, Delaware - 19801 - United States of America

Main activity: Oil and gas exploration and production

BALANCE SHEET as of March 31, 2011 and December 31, 2010 (in pesos)

	03/31/2011	12/31/2010
ASSETS
CURRENT ASSETS
Cash and banks (Note 4 a)	33,212,340	27,075,883
Investments (Exhibit C)	762,816,926	928,205,671
Accounts receivable (Note 4 b)	1,721,282,361	1,196,699,783
Other receivables (Note 4 c)	185,767,565	198,941,399
Inventories (Note 4 d)	220,919,817	245,421,453
Total current assets	2,923,999,009	2,596,344,189
NON CURRENT ASSETS
Other receivables (Note 4 e)	115,421,195	117,243,114
Investments (Exhibit C)	130,685,394	136,064,539
Property, plant and equipment (Exhibit A)	14,496,328,689	14,000,122,687
Intangible assets (Exhibit B)	294,985	300,830
Total non current assets	14,742,730,263	14,253,731,170
Total assets	17,666,729,272	16,850,075,359
LIABILITIES
CURRENT LIABILITIES
Accounts payable (Note 4 f)	986,555,174	991,253,765
Loans (Note 4 g)	995,612,774	873,455,876
Financial bonds (Note 4 h)	569,472,247	544,513,784
Payroll and social security contributions	169,941,984	184,240,683
Taxes payable (Note 4 i)	988,101,628	396,405,076
Other liabilities (Note 3 2 j)	38,333,365	38,333,365
Provision for future compensation to personnel (Exhibit D)	3,420,000	3,420,000
Total current liabilities	3,751,437,172	3,031,622,549
NON CURRENT LIABILITIES
Accounts payable (Note 4 j)	74,006,747	71,834,795
Loans (Note 4 k)	3,389,356,827	2,999,919,832
Financial bonds (Note 4 l)	2,027,000,000	2,478,612,556
Taxes payable (Note 4 m)	52,277,819	54,122,919
Other liabilities (Note 3 2 j)	236,570,532	233,779,130
Deferred tax (Note 11)	136,190,292	139,165,184
Provision for future compensation to personnel (Exhibit D)	26,099,851	26,838,820
Provision for environmental remediation (Exhibit D)	464,278,484	458,587,401
Accruals for lawsuits (Exhibit D)	17,869,794	17,482,881
Total non current liabilities	6,423,650,346	6,480,343,518
Total liabilities	10,175,087,518	9,511,966,067
Account with Head Office (Note 7)	7,030,402,747	6,876,870,285
Capital allocated to the Branch (Note 8)	221,779,007	221,779,007
Capital adjustment	239,460,000	239,460,000
Total	17,666,729,272	16,850,075,359

The accompanying notes and exhibits are an integral part of these financial statements.

STATEMENT OF INCOME for the three-month period beginning January 1, 2011 and ended March 31, 2011 comparative with the same period of the prior year (in pesos)

	2011				2010
	(three months)				(three months)
Sales (Note 4 n)			2,953,264,996				2,626,003,195
Cost of sales (Exhibit E)			(1,419,123,455	)			(1,310,017,369	)
Gross profit			1,534,141,541				1,315,985,826
Administrative expenses (Exhibit G)			( 130,213,731	)			( 104,350,199	)
Operating income			1,403,927,810				1,211,635,627
Financial results
Generated by assets
Interest	7,927,812				5,779,591
Exchange gains	34,666,410				38,110,536
Other financial results	( 812,145	)	41,782,077		312,386		44,202,513
Generated by liabilities
Interest	(106,583,793	)			( 79,438,531	)
Exchange losses	(140,055,086	)			(117,517,823	)
Other financial results	( 27,391,186	)	( 274,030,065	)	( 35,946,830	)	( 232,903,184	)
Other income and expenses – net			9,932,661				23,531,787
Income before income tax			1,181,612,483				1,046,466,743
Income tax expense - current (Note 11)			( 424,484,913	)			( 376,209,247	)
Income tax benefit - deferred (Note 11)			2,974,892				3,762,815
Net income (Note 7)			760,102,462				674,020,311

The accompanying notes and exhibits are an integral part of these financial statements.

STATEMENT OF CASH FLOWS for the three-month period beginning January 1, 2011 and ended March 31, 2011 comparative with the same period of the prior year (in pesos)

	2011		2010
	(three months)		(three months)
Cash provided by operations:
Net income	760,102,462		674,020,311
Adjustment to reconcile net income with the cash provided by operations
Depreciation of property, plant and equipment	342,345,599		288,500,438
Amortization of intangible assets	5,845		6,491
Income tax expense	424,484,913		376,209,247
Increase (decrease) in allowances for bad debtors, lawsuits and obsolescence of materials	2,226,191		( 898,404	)
Loss on property, plant and equipment	2,918,185		402,645
Increase in provision for future compensation to personnel	1,710,376		1,898,949
Net increase in the provision for environmental remediation	6,817,283		8,278,976
Other non-cash items (1)	235,932,614		180,306,644
Changes in assets, liabilities and account with Head Office:
(Increase) decrease in accounts receivable	( 526,421,856	)	61,190,126
Decrease in inventories	24,501,636		55,732,851
Decrease in other current receivables	13,173,834		71,301,068
Decrease (increase) in other non current receivables	1,821,919		( 13,708	)
Increase (decrease) in accounts payable, payroll and social security contributions, taxes payable net of provisions and other liabilities	474,422,812		( 181,864,342	)
Compensation paid to personnel for benefit plans	( 2,449,345	)	( 793,165	)
Use and recovery of provision for environmental remediation	( 4,652,536	)	( 3,920,435	)
Income tax paid	( 323,090,209	)	( 159,112,889	)
Net cash provided by operations	1,433,849,723		1,371,244,803
Cash used in investing activities:
Decrease (increase) in long-term investments	5,360,173		( 4,526,936	)
Acquisition of property, plant and equipment	( 837,943,450	)	( 665,422,879	)
Cash used in investing activities	( 832,583,277	)	( 669,949,815	)
Cash used in financing activities
Increase (decrease) in loans (net)	380,504,977		( 136,307,476	)
Decrease in financial bond (net)	( 534,472,683	)	( 37,209,687	)
Net activity with Head Office (Note 7)	( 606,570,000	)	( 150,349,000	)
Cash used in financing activities	( 760,537,706	)	( 323,866,163	)
Net (decrease) increase in cash	( 159,271,260	)	377,428,825
Cash at the beginning of the year	941,510,699		766,142,783
Cash at period-end	782,239,439		1,143,571,608
(1) It is made up of:
Exchange gains/losses and other financial results
relating to loans and other	238,907,506		184,069,459
Deferred income tax benefit	( 2,974,892	)	( 3,762,815	)
Total	235,932,614		180,306,644

The accompanying notes and exhibits are an integral part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS as of March 31, 2011 and comparative information (in pesos)

NOTE 1 - THE BRANCH

Pan American Energy LLC (Argentine Branch) is engaged in the exploration, development and production of hydrocarbons.

NOTE 2 - OPERATIONS OF THE BRANCH

The following table summarizes the main operations, blocks and joint ventures in which the Branch is or was involved during the three-month period ended March 31, 2011.

Activity	Operations	Interest	Participation
Oil and gas production and development	Cerro Dragón (1)	100.00%	Operator
	Piedra Clavada (1)	100.00%	Operator
	Koluel Kaike (1)	100.00%	Operator
	Lindero Atravesado (2)	62.50%	Operator
	Anticlinal Funes	80.00%	Operator
	Acambuco	52.00%	Operator
	Aguada Pichana (2)	18.18%	Non operator
	San Roque (2)	16.47%	Non operator
	Estancia La Escondida	25.00%	Non operator
Oil and gas exploration and development	Acambuco "B" (3)	100.00%	Operator
	Bandurria	18.18%	Non operator
	Costa Afuera Argentina “CAA-40”	33.50%	Non operator
	Costa Afuera Argentina “CAA-46”	33.50%	Non operator
	Centro Golfo San Jorge Marina Chubut	90.00%	Operator
	Centro Golfo San Jorge Marina Santa Cruz	90.00%	Operator
	Nueva Lubecka (4)	0.00%	Operator
	Paso de Indios	100.00%	Operator
	Paso Moreno	100.00%	Operator

Explanations:

(1) See Note 15.1.
(2) See Note 15.2.
(3) Corresponds to the Macueta Oeste and San Pedrito Sur fields.
(4) On December 24, 2010, the Branch relinquished the Nueva Lubecka area in the province of Chubut.

NOTE 3 - ACCOUNTING PRINCIPLES

3.1 Reporting currency

In accordance with Decree 664/2003 and General Resolution No. 441/2003 of the National Securities Commission (“Comisión Nacional de Valores” or CNV), the Branch discontinued the application of inflation accounting as from March 1, 2003.

From January 1, 2002 to February 28, 2003, the Branch applied the inflation accounting methodology set forth by Technical Resolution No. 6, amended by Technical Resolutions Nos. 17 and 19 of the Argentine Federation of Professional Councils of Economic Sciences (FACPCE) and by the Professional Council of Economic Sciences of the City of Buenos Aires (CPCECABA), using indexes derived from the Internal Wholesale Price Index.

3.2 Presentation and valuation principles

a) Presentation

The financial statements are presented in accordance with the presentation principles established by the accounting standards generally accepted in the Republic of Argentina and pursuant to the provisions of the CNV.

The accompanying financial statements were translated into the English language from those issued in Spanish in conformity with the regulations of the National Securities Commission (“CNV”) of Argentina. Certain accounting practices applied by the Branch that conform to the accounting standards set forth by the CNV do not conform to accounting principles generally accepted in the United States. The effects of these differences have not been quantified by the Company.

Investments to become due or to be realized in the short term (within 3 months of period-end) are considered a cash equivalent in the statement of cash flows.

Certain reclassifications were made to the financial statements presented as comparative information to conform them to the presentation used in this period.

b) Participating interest in joint ventures

The Branch is engaged in exploration and production activities in certain areas through its participation in joint ventures with other companies. The account balances reflecting the joint ventures’ assets, liabilities, income and expenses are proportionately consolidated in these financial statements.

c) Foreign currency

Assets and liabilities denominated in foreign currency as listed in Exhibit F have been stated in Argentine Pesos at the exchange rate prevailing at the end of each period. The resulting exchange gains/losses are presented in the financial results line (provided by either assets or liabilities, as applicable) of the Statement of Income.

d) Inventories

Crude oil is stated at reproduction cost. Spare parts, materials and raw materials commonly used have been stated at replacement cost, while spare parts, materials and raw materials of slow turnover have been stated at the latest acquisition value, as indicated in Note 3.1. Goods in transit have been stated at acquisition cost plus import expenses, while advances to suppliers are valued at cost effectively incurred.

After considering the allowance for obsolescence set up (see note 3.2.g), the book value of inventories, taken as a whole, does not exceed their recoverable value.

e) Property, plant and equipment

Property, plant and equipment are stated at acquisition cost as indicated in Note 3.1., less the related accumulated depreciation. The acquisition cost includes all the necessary costs incurred in order to put the assets in working condition.

Depreciation is calculated by applying the straight-line method over the estimated useful lives of the assets and/or the duration of the contracts, as applicable, except for production wells, equipment and services, which are depreciated as per the units of production method.

The pre-operating costs of the properties in the exploration stage, except for geology and geophysics related expenses that are charged to the Statement of Income as incurred, remain capitalized for a given period based on the characteristics of each property, without exceeding five years considered as from the completion of the exploration stage or, if applicable, as from production interruption, unless:

1. it is expected that explored areas will proceed to the commercial production stage, in which case the referred costs remain capitalized, or

2. during the referred five year period, management estimates that commercial production will not be feasible, in which case, the referred costs are expensed.

For Property, plant and equipment existing as of January 6, 2002, the acquisition or construction of which resulted in outstanding liabilities denominated in foreign currency - exchange gains/losses resulting from restating such liabilities totaling $ 1,832,303,600 through July 28, 2003 were capitalized pursuant to specific accounting principles, based on the determination of the direct or indirect ratio between the assets subject to capitalization and the outstanding liabilities in foreign currency. The assets or group of assets eligible for the capitalization of exchange gains/losses have remained unchanged. Such capitalization of exchange gains/losses was performed in proportion to the balance of the original value of the referred assets not subject to depreciation. Additionally, exchange gains and losses were capitalized up to the limit arising from the comparison between the replacement or reproduction cost of the assets and their recoverable value.

For the purposes of presenting the financial statements in constant currency (see Note 3.1), the capitalized exchange gains/losses amounting to $ 1,832,303,600 are considered an anticipated inflation adjustment until such differences are absorbed thereby. The excess of capitalized exchanges losses over the amounts in constant currency totals $ 85,358,131 as of March 31, 2011 (see Note 3.1).

The net carrying value of property, plant and equipment, taken by group of assets of similar characteristics, does not exceed their estimated value in use based on the information available as of the date of issuance of the financial statements.

f) Intangible assets

These are pre-production geological expenditures and acquisition cost of blocks valued at restated cost as indicated in Note 3.1, less the related accumulated amortization. Amortization is calculated as per the units of production method.

g) Allowances, Accruals and Provisions

Allowances deducted from assets:

- For bad debtors: they are determined following the detailed analysis of the credit status of each customer.

- For obsolescence of materials: the Branch creates an allowance for those assets evidencing significant slow movement based on a specific analysis.

Provisions and accruals:

- For lawsuits: they are determined considering the potential costs of those lawsuits filed against the Branch based on the opinion of the legal counsels.

- For future compensation to personnel: they are estimated as a percentage of compensation paid, calculated based on actuarial methods, and will be applied to compensate employees of the Branch who have complied with certain seniority and age requirements defined by the Branch. Payments are debited from the related provision.

- For environmental remediation: calculated on the basis of well-abandonment forecasts until the expiration of concession agreements, at the present value of the related expenses to be incurred.

Changes in allowances and provisions are disclosed in Exhibit D.

h) Income tax

The Branch applies the deferred tax method to account for income tax. Based on the referred method, the current income tax is calculated by applying the rates prevailing (35%) as of March 31, 2011 and 2010 on taxable income; and the future tax effect of the temporary differences in the book and tax values of assets and liabilities and the tax loss carryforwards, if any, are recognized as deferred tax assets or liabilities. The adjustment for inflation of property, plant and equipment is considered to be a temporary difference for deferred tax computations making use of the option established in the General Resolution No. 487/06 of the CNV.

The deferred tax assets are recognized only to the extent of their recoverability.

i) Use of estimates

The preparation of the financial statements in accordance with generally accepted accounting principles requires that the Branch management makes estimates about the value of certain assets and liabilities, including contingent liabilities, as well as the amounts informed of certain income and expenses generated during the period.

The final amounts may differ from the estimates used in the preparation of the financial statements.

j) Defined benefit and contributions plans granted by the Branch to its personnel

As from July 1, 2009, the Branch discontinued the pension plan for the benefit of its personnel called “Plan Puente” with no significant impact on the Branch’s financial position and the results of operations. Consequently, up to the settlement thereof, such plan will not accrue further years of service and the liability will only be increased as a result of general salary increases in pesos granted by the Branch to its personnel. Most of the employees have already chosen to change the benefit accrued for a personal savings plan (defined Branch’s contribution). Additionally, each employee is entitled to contribute a portion of their salaries to such savings plan. In turn, the Branch makes its own contribution and transfers such amounts to a trust fund.

The debt balance accrued as of March 31, 2011 in relation to the different defined benefit plans amounts to $ 350,005,937 ($ 344,868,857 as of December 31, 2010) which is recorded in the accounts payable, other liabilities and provisions for future personnel compensation lines.

k) Revenue recognition

Revenue derived from the sale of hydrocarbons is recognized when the significant risks and rewards of ownership have been transferred to the purchaser. Sales thus determinated are presented net of export tariffs and tax credit certificates applied to its payment related to the program set forth by Decree 2014/08 (see Note 14) created for the purposes of incentivizing the production and addition of oil reserves.

The Branch uses the production method to recognize revenues from the sale of oil. 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 sales method, whereby these revenues are recorded on the basis of the actual volumes delivered to purchasers irrespective of whether they result form the Branch’s own 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 an operating nature and, therefore, the expenses incurred are recognized in the Statement of income to the extent they are accrued.

The amount of the present agreements, broken down by maturity dates, is reported below:

		Nominal value
Up to one year	U$S	487,600 and $ 2,358,074
Over one year and up to five years	U$S	421,800 and $ 2,762,001

During the three-month period ended March 31, 2011, the Branch recognized an expense of $ 3,928,761 related to such lease agreements presented in the line Buildings Rentals, Maintenance and others in Exhibit G.

NOTE 4 - BREAKDOWN OF CERTAIN BALANCE SHEET AND STATEMENT OF INCOME ITEMS

	03/31/2011		12/31/2010
ASSETS
CURRENT ASSETS
a) Cash and banks
Cash on hand in local currency	71,138		71,138
Cash on hand in foreign currency (Exhibit F)	175,935		201,521
Cash in banks in local currency	30,285,353		10,768,165
Cash in banks in foreign currency (Exhibit F)	2,679,914		16,035,059
Total	33,212,340		27,075,883
b) Accounts receivable
Accounts receivable in local currency	116,808,187		110,861,995
Accounts receivable in foreign currency (Exhibit F)	1,140,591,675		1,078,668,938
Allowance for bad debtors in local currency (Exhibit D)	( 18,267,923	)	( 14,221,288	)
Allowance for bad debtors in foreign currency (Exhibits D and F)	( 5,503,888	)	( 7,711,245	)
Notes receivable in foreign currency (Exhibit F)	24,881,442		25,732,238
Affiliated companies in foreign currency (Note 9 and Exhibit F)	462,772,868		3,369,145
Total	1,721,282,361		1,196,699,783
c) Other receivables
Loans to personnel	27,562,113		23,764,899
Tax credits	11,284,747		55,173,581
Recoverable expenses in local currency	4,545,249		4,618,533
Recoverable expenses in foreign currency (Exhibit F)	244,816		244,806
Prepaid expenses	30,791,241		23,779,941
Miscellaneous in local currency	73,562,810		64,775,932
Miscellaneous in foreign currency (Exhibit F)	13,881,757		4,318,289
Affiliated companies in local currency (Note 9)	98,614		1,715,405
Affiliated companies in foreign currency (Note 9 and Exhibit F)	23,796,218		20,550,013
Total	185,767,565		198,941,399
d) Inventories
Crude oil in stock	73,571,639		118,301,715
Spare parts, materials and raw materials	83,746,568		82,880,311
Subtotal (Exhibit E)	157,318,207		201,182,026
Allowance for obsolescence of materials (Exhibit D)	( 5,989,499	)	( 5,989,499	)
Subtotal	151,328,708		195,192,527
Goods in transit	54,330,651		39,981,242
Advances to suppliers in local currency	14,505,765		8,962,005
Advances to suppliers in foreign currency (Exhibit F)	754,693		1,285,679
Total	220,919,817		245,421,453
NON CURRENT ASSETS
e) Other receivables
Loans to personnel	21,263,922		19,443,157
Prepaid expenses	45,093,874		48,336,896
Miscellaneous in local currency	34,627,765		35,111,125
Miscellaneous in foreign currency (Exhibit F)	14,435,634		14,351,936
Total	115,421,195		117,243,114
LIABILITIES
CURRENT LIABILITIES
f) Accounts payable
Trade payables in local currency	668,759,106		687,666,489
Trade payables in foreign currency (Exhibit F)	259,608,135		221,482,105
Expenses payable in local currency	32,997,600		31,021,801
Personnel compensation (Note 3.2.j.)	5,889,789		5,889,789
Affiliated companies in local currency (Note 9)	1,500,782		2,601,613
Affiliated companies in foreign currency (Note 9 and Exhibit F)	17,799,762		42,591,968
Total	986,555,174		991,253,765
g) Loans
Uncollateralized in foreign currency (Exhibit F)	934,430,784		816,881,127
Interest accrued on uncollateralized loans in foreign currency (Exhibit F)	61,181,990
			56,574,749
Total	995,612,774		873,455,876
h) Financial bonds
Financial bonds in foreign currency (Exhibit F)	500,237,249		490,612,556
Interest accrued on financial bonds in foreign currency
(Exhibit F)	69,234,998		53,901,228
Total	569,472,247		544,513,784
i) Taxes payable
Export tariffs	486,400,218		41,665,847
Income tax provision net of advances and withholdings	279,913,732		176,138,845
Tax on sales and production	179,118,318		130,331,546
Installment plan (Law No. 26,476)	7,380,398		7,380,398
Other	35,288,962		40,888,440
Total	988,101,628		396,405,076
NON CURRENT LIABILITIES
j) Accounts payable
Miscellaneous liabilities in local currency	11,976,208		13,318,694
Miscellaneous liabilities in foreign currency (Exhibit F)	22,338,139		21,908,348
Personnel compensation (Note 3.2.j)	39,692,400		36,607,753
Total	74,006,747		71,834,795
k) Loans
Uncollateralized in foreign currency (Exhibit F)	3,389,356,827		2,999,919,832
Total	3,389,356,827		2,999,919,832
l) Financial bonds
Financial bonds in foreign currency (Exhibit F)	2,027,000,000		2,478,612,556
Total	2,027,000,000		2,478,612,556
m) Taxes payable
Installment plan (Law No. 26,476)	52,277,819		54,122,919
Total	52,277,819		54,122,919

	2011		2010
	(three months)		(three months)
STATEMENT OF INCOME
l) Net sales
Gross sales	3,799,711,720		3,182,661,017
Export tariffs – net	( 846,446,724	)	( 556,657,822	)
Total	2,953,264,996		2,626,003,195

NOTE 5 - FINANCIAL BONDS

In February 2002, the CNV authorized the Branch’s Global Program for the Issuance of Financial Bonds (“ON”) in the medium term (the “2002 Program”) for a five-year term, in the total amount of US$ 1,000,000,000. Under this program, the Branch issued four series of non-convertible financial bonds. The ON series 1 and 2 were paid upon maturity. The ON series 3, with final maturity in October 2009 (US$ 100,000,000 at an annual fixed interest rate of 7.125%) were paid upon maturity, and ON series 4 were issued on August 9, 2006 (US$ 250,000,000 at an annual fixed interest rate of 7.75%), payable in two equal installments and becoming due in 2011 and 2012. These ON were issued by the Branch and are secured by Pan American Energy LLC. In June 2010, ON series 4 were repurchased in the amount of US$ 3,213,000. In February 9, 2011 the first installment in the amount of US$ 123,393,500 was paid, and as of March 31, 2011, there was an outstanding balance of US$ 123,393,500.

On February 6, 2009, the CNV authorized a new program in the amount of U$S 1,200,000,000, (the “2009 Program”), whereby the Branch is authorized to issue ON during a 5-year period commencing on that same date. ON to be issued under this program will be guaranteed by Pan American Energy LLC.

On April 30, 2010, the Branch placed ON Series 1 under the “2009 Program”, with a nominal value of U$S 500,000,000, final maturity in 2021 (an effective average period of 10 years), a nominal fixed annual interest rate of 7.875% and an issuance price of 98.204%. The funds raised through the issuance of these bonds have been applied to the financing of part of the Branch’s investment program and to debt refinancing.

NOTE 6 - LOANS

On July 11, 2005, the Branch entered into a loan agreement with the International Finance Corporation (“IFC”) in the total amount of U$S 250,000,000. This loan, which is guaranteed by Pan American Energy LLC, consists of three tranches of U$S 135,000,000, U$S 100,000,000 and U$S 15,000,000, with final maturities in July 2012, July 2015 and July 2016, respectively. The balances as of March 31, 2011 of such tranches are U$S 33,750,000, U$S 50,005,000 and U$S 15,000,000, respectively. In relation to the outstanding balances of the first two tranches of the loan, the LIBO interest rate payable every 9 months (floating rate) was effectively fixed through an interest rate swap agreed with IFC, thus resulting in annual fixed rates of 6.97% and 7.56%, respectively. A fixed interest rate was set for the third tranch.

On July 13, 2007, the Branch entered into a loan agreement with IFC in the amount of U$S 550,000,000 (at a floating LIBO rate payable every 6 months). This loan, which is guaranteed by Pan American Energy LLC, consists of three tranches of U$S 158,500,000, U$S 241,500,000 and U$S 150,000,000, with final maturities in April 2014, April 2015 and April 2018, respectively. The balances as of March 31, 2011 of the referred tranches amounted to U$S 100,900,000, U$S 167,100,000 and U$S 118,400,000, respectively. In relation to the tranches of this loan, the LIBO interest rate payable every 6 months (floating rate) was effectively fixed through an interest rate swap agreed by the Branch on August 14, 2009 with three financial institutions, thus resulting in annual fixed rates of 4.13%, 4.49% and 5.46%, respectively.

On May 21, 2008, the Branch entered into a U$S 200,000,000 loan agreement with an international bank syndicate, which is guaranteed by Pan American Energy LLC. This loan was to be repaid in three equal installments with maturities in May 2010, November 2010 and May 2011. On December 30, 2009 and May 3, 2010, the Branch entered into an agreement in respect of this loan which amended the maturities originally agreed upon. Pursuant to this amendment, the final maturity of this loan was extended from its original maturity to two installments of U$S 100,000,000 each, payable in November 2012 and May 2013.

On September 1, 2009, the Branch entered into a loan agreement with IFC in the amount of U$S 153,000,000. This loan, which is guaranteed by Pan American Energy LLC, consists of three tranches of U$S 103,000,000, U$S 10,000,000 and U$S 40,000,000 with final maturities in August 2013, August 2015 and August 2017, respectively.

On December 10, 2009, the Branch entered into a loan agreement with Corporación Andina de Fomento (“CAF”) in the amount of U$S 30,000,000. This loan is guaranteed by Pan American Energy LLC and its final maturity is in August 2015.

On December 23, 2010, the Branch entered into a loan agreement with an international bank syndicate in the amount of US$ 320,000,000, the final maturity of which is on March 23, 2015. The loan will be repaid in four semiannual installments as from September 23, 2013, accruing interest at a variable rate, based on LIBO, payable on a quarterly basis. On February 7, 2011, the first disbursement of US$ 123,393,498 was made. This loan is guaranteed by Pan American Energy LLC.

The Branch considers that its access to credit lines is appropriate in order to meet its commercial and financial obligations, even though it presents a negative working capital.

NOTE 7 - ACCOUNT WITH HEAD OFFICE

The changes in the account with Head Office during the three-month period ended March 31, 2011 and 2010 are as follows:

	Three-month period ended
	03/31/2011		03/31/2010
Balance at beginning of fiscal year of the account with Head Office	6,876,870,285		5,438,521,753
Net activity with Head Office	( 606,570,000	)	( 150,349,000	)
Net income	760,102,462		674,020,311
Net changes for the period	153,532,462		523,671,311
Balance at period-end of the account with Head Office (1)	7,030,402,747		5,962,193,064

(1) As of March 31, 2011 and March 31, 2010, balances are in local currency.

NOTE 8 - CAPITAL ALLOCATED TO THE BRANCH

Pan American Energy LLC allocated capital to the Branch in the amount of $ 221,779,007. Such capital is registered with the Public Registry of Commerce.

NOTE 9 - TRANSACTIONS AND BALANCES WITH AFFILIATED COMPANIES

The transactions and balances with Pan American Energy LLC, the Branch’s Head Office, are disclosed in Note 7.

The transactions and balances with affiliated companies are detailed below:

	2011	2010
	(3 months)	(3 months)
TRANSACTIONS
Pan American Sur S.A.
Purchases of gas	475,123	2,590,029
Contracted services	5,161,937	2,391,907
PAE E & P Bolivia Ltd, (Bolivian Branch)
Contracted services	515,847	430,166
PAE Oil & Gas Bolivia Ltda.
Contracted services	903,174	389,434
Pan American Energy Chile Limitada
Contracted services	1,571,206	1,286,515
BP West Coast Products LLC (See Note 17)
Sales	801,185,549	-
BP America Production Company (See Note 17)
Contracted services	159,957	169,008
Other related parties
Contracted services	12,483,042	7,602,770

	03/31/2011	12/31/2010
BALANCES
BP West Coast Products LLC (See Note 17)
Current accounts receivable	462,772,868	3,369,145
Current accounts payable	13,831,276	13,635,775
PAE E & P Bolivia Ltd. (Bolivian Branch)
Other current receivable	1,144,906	629,059
PAE Oil & Gas Bolivia Ltda.
Other current receivable	8,356,906	7,453,732
Pan American Energy Chile Limitada
Other current receivable	14,038,428	12,467,222
BP America Production Company (See note 17)
Current accounts payable	2,590,942	1,841,681
Pan American Sur S.A.
Other current receivable	49,383	1,369,603
Current accounts payable	221,177	1,751,594
Other related parties
Other current receivable	305,209	345,802
Current accounts payable	2,657,149	27,964,531

NOTE 10 - GUARANTEES AND OTHER COMMITMENTS

In terms of investment commitments, the Branch has not offered any guarantees as of March 31, 2011.

The terms agreed in certain loan and issuance of ON agreements include commitments assumed by the Branch referring to the maintenance of certain indebtedness and debt service ratios. As of March 31, 2011 and 2010, the Branch complied with all the commitments assumed in loan and ON agreements.

Once the transaction described in Note 17 is completed and as a consequence of the ownership interest changes informed, there would be a change of control pursuant to the terms and conditions set up in certain loan and ON issuance agreements.

Under the referred loan agreements, in that case, creditors will be entitled to request payment in advance. The Branch considers, based on the inquiries made, that almost all of the creditors will not exercise such right.

In the case of ON, holders will be entitled to request that the Branch repurchase their holdings, in full or in part, at a price equivalent to 101% of the nominal value. The Branch considers that, based on the ON current quotation, the exercise of such right is unlikely.

NOTE 11 - INCOME TAX

The breakdown of the main deferred tax assets and liabilities is as follows:

	03/31/2011	12/31/2010
Deferred tax assets
Allowance for obsolescence of materials	2,096,325	2,096,325
Provision for future personnel compensation	18,136,220	17,842,412
Accrual for lawsuits	6,313,129	6,252,995
Provision for environmental remediation	61,866,689	58,278,803
Other provisions and allowances	26,602,867	24,792,822
Defined benefit pension plan	95,979,097	95,038,147
Total deferred tax assets	210,994,327	204,301,504
Deferred tax liabilities
Inventories - materials and spare parts	1,237,314	1,237,314
Property, plant and equipment and intangible assets	345,947,305	342,229,374
Total deferred tax liabilities	347,184,619	343,466,688
Net deferred tax liabilities	136,190,292	139,165,184

The reconciliation between the income tax expense for the three-month period ended March 31, 2011 and 2010 and that resulting from applying the prevailing tax rate to income before tax is as follows:

	2011		2010
	(3 months)		(3 months)
Net income of the period before taxes	1,181,612,483		1,046,466,743
Prevailing tax rate	35	%	35	%
Net income of the period at the prevailing tax rate	( 413,564,369	)	( 366,263,360	)
Permanent differences at the tax rate:
Miscellaneous - net	( 7,945,652	)	( 6,183,072	)
Subtotal permanent differences at the tax rate	( 7,945,652	)	( 6,183,072	)
Income tax expense - total	( 421,510,021	)	( 372,446,432	)
Current income tax expense	( 424,484,913	)	( 376,209,247	)
Deferred income tax benefit	2,974,892		3,762,815
	( 421,510,021	)	( 372,446,432	)

NOTE 12 - RESTRICTED ASSETS

There are no restricted assets as of March 31, 2011.

NOTE 13 - INFORMATION ON LITIGATION AND OTHER SUPPLEMENTARY MATTERS

Some lawsuits were filed against the Branch. Besides, there are some pending administrative proceedings. Based on the information available, the Branch’s Management and legal advisors consider that the contingent liability that might arise from such lawsuits and administrative proceedings would not have a material adverse effect on the financial position of the Branch and on the results of its operations.

NOTE 14 - PROGRAMS ESTABLISHED BY RESOLUTION No. 24/2008 ISSUED BY THE SECRETARY OF ENERGY (as amended by Resolutions Nos. 1031/2008 and 695/2009) AND DECREE No. 2014/2008

In March 2008, the Secretary of Energy through resolution SE N° 24/2008 and its amendments set up a program aimed at increasing domestic gas production. This new regime establishes higher prices than those obtained currently in the domestic market for newly discovered natural gas, gas reservoirs qualifying as “tight gas” or from high investment projects, among others. The Secretary of Energy approved nine projects submitted by the Branch under this program: four in Branch operated areas and five in partner operated areas.

On November 26, 2008, Decree No. 2014/2008 issued by the Argentine Executive was published in the Official Bulletin, whereby a program relating to oil production and reserves was created. This program, which does not have an expiration date, provides for the giving of tax credit certificates, which may be used to pay tariffs on the export of oil, LPG and by-products. This program stimulates investments in exploration and development projects for oil reserves replacement and production growth. On December 15, 2008, the Branch filed its first applications for tax credit certificates with the Secretary of Energy. Having increased production and having more than replaced the reserves produced, the Branch has qualified for the program and has been receiving tax credit certificates since January 2009. The tax credit certificates have been applied to pay tariffs on the export of oil and LPG.

NOTE 15 - AGREEMENTS WITH THE PROVINCES

15.1) Agreements with the Provinces of Chubut and Santa Cruz

Under the provisions of law N° 26,197, known as “Hydrocarbons Short Law”, the Branch entered into with the Argentine provinces of Chubut (on April 27, 2007) and Santa Cruz (on June 25, 2007) two investment commitments and agreements for the extension of the concession term for hydrocarbon production for a ten-year period in the blocks known as Cerro Dragón, the area of which extends into the territories of both provinces, and Piedra Clavada and Koluel Kaike in the province of Santa Cruz. Before the extension, these concessions had an initial expiring date between 2016 and 2017.

These agreements provide for, among other obligations, minimum capital expenditures of U$S 2,000,000,000 in the province of Chubut and of U$S 500,000,000 in the province of Santa Cruz, to be made by the Branch through 2016. Further expenditures of U$S 1,000,000,000 in the Province of Chubut and of U$S 300,000,000 in the province of Santa Cruz are to be made from 2017 through 2026.

Besides, the Branch entered into two operation agreements executed with the state-owned companies Petrominera Chubut S.E. (“Petrominera Chubut”) (in the case of Chubut) and Fomento Minero de Santa Cruz Sociedad del Estado (“Fomicruz”) (in the case of Santa Cruz) within the scope of the Hydrocarbons Law referred to above, which will come into effect as from the years 2026 and 2027 through 2046 and 2047 respectively, subject to the Branch’s compliance with the investment requirements and to the exploration success, which will allow Pan American Energy to prove whether it has developed sufficient reserves to continue with the field production in those areas as from 2026 and 2027 respectively.

The agreements also provide for a U$S 80,000,000 investment commitment for offshore exploration, at the sole risk of the Branch, through two joint ventures (“UTEs”) with Petrominera Chubut and Fomicruz. If the Branch were to make commercial discoveries, an additional investment commitment would be required in the amount of U$S 500,000,000 for the development of such offshore fields.

As a consequence of said agreements, the Branch undertook the obligation to pay during the remaining period of the concessions, to the respective provinces an additional amount equivalent to 3% of its revenues from sales, net of certain items indicated in the agreements.

It will also disburse certain amounts for infrastructure development and economic diversification in the Provinces of Chubut and Santa Cruz, and carry out other complementary actions, reaffirming its corporate responsibility in the areas in which it operates.

15.2) Agreements with the Province of Neuquén

On January 28, 2009, the Province of Neuquén and the partners in the Aguada Pichana and San Roque blocks, in which the Branch has an interest of 18.18% and 16.47%, respectively (see Note 2), agreed on a 10-year extension of the terms of the concessions for hydrocarbon production from 2017 to 2027.

The Branch assumed a U$S 153,000,000 commitment to invest and incur expenses in the Aguada Pichana and San Roque blocks, as a whole, from September 2008 through 2027, which includes U$S 23,000,000 between both blocks in exploration, particularly for gas.

In addition, the Branch committed to pay to the province the amounts of US$ 11.2 million for Aguada Pichana and US$ 4.7 million for San Roque, which have already been paid. The Branch also agreed to pay an extraordinary amount equivalent to 3% of value of the area monthly production, net of certain items.

Under the terms of the referred agreement, the Branch made donations to the province in the total amount of US$ 1.3 million for Aguada Pichana and US$ 0.5 million for San Roque.

On May 22, 2009, the Province of Neuquén and the partners in the Lindero Atravesado block, in which the Branch has a 62.5% interest and is the operator (see Note 2), agreed on a 10-year extension of the terms of the concessions for hydrocarbon production from 2016 to 2026.

The Branch assumed a U$S 82.4 million commitment to invest and incur expenses from 2009 through 2026, which includes U$S 12.6 million in exploration, particularly for gas.

In addition, the Branch committed to pay to the province the amount of US$ 4.9 million, which have already been paid. The Branch also agreed to pay a monthly extraordinary amount equivalent to 3% of value of the area monthly production, net of certain items.

Under the terms of the referred agreement, the Branch made donations to the province in the total amount of US$ 0.6 million.

Within the framework of these negotiations with the Province of Neuquén to extend the terms of the concessions, on January 28, 2009, the Branch entered into a Settlement Agreement with the province, whereby all administrative and judicial claims and controversies between them were terminated.

NOTE 16 - PLAN FOR THE IMPLEMENTATION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS

On December 29, 2009, the CNV, through Resolution No. 562/09, established the application of Technical Resolution No. 26 of the FACPCE, which adopts the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) for certain entities falling within the scope of the public offering regime set forth by Law No. 17811, because of the public offering of their capital stock or financial bonds or because they applied for the referred regime. The application of these standards by the Branch will be mandatory as from the fiscal year beginning January 1, 2012.

On April 29, 2010, the Branch’s Legal Representative approved the specific implementation plan. In compliance with the referred plan, the effects of the adoption of IFRS are under evaluation and all the personnel involved in the accounting registration process have received appropriate training.

The implementation plan was developed as expected and the diagnostic stage was completed, thus fulfilling the objectives set up, not resulting from the monitoring signs of any deviations in respect of the plan or dates established for the implementation.

Resolution No. 576/10 issued by the CNV on July 1, 2010 and its clarifications extended the provisions of Resolution No. 562/09, and will be considered for the purposes of implementing the new standards by the Branch.

NOTE 17 - CHANGES IN THE OWNERSHIP INTERESTS HELD IN THE BRANCH’S HEAD OFFICE

On November 28, 2010, Bridas Corporation, one of Pan American Energy LLC’s members, entered into an agreement with BP Argentina Exploration Company and BP Alternative Energy North America Inc. to acquire its 60% interest in the Head Office.

Upon completion of such transaction, the shareholders of Head Office will be: Bridas Corporation (99.60%) and Bridas Investments Ltd. (0.40%).

Bridas Corporation is a company in which Bridas Energy Holdings Limited and CNOOC International Limited hold equal ownership interests.

NOTE 18 - SUBSEQUENT EVENTS

No events or transactions have occurred from period-end through the date of issuance of these financial statements that would have a material effect on the financial position of the Branch or the results of its operations as of the period-end date.

EXHIBIT A

PROPERTY, PLANT AND EQUIPMENT (in pesos)
as of March 31, 2011 and December 31, 2010

	Original values						Depreciation
Main account	At the beginning of the fiscal year	Increases for the period	Transfers		Decreases	At period-end	Accumulated at the beginning of the fiscal year	Increases	Decreases	Accumulated at period-end	Net as of 03/31/11	Net as of 12/31/10
								(1) (2)
Land and buildings	137,691,098	-	135,616		-	137,826,714	42,893,657	1,912,715	-	44,806,372	93,020,342	94,797,441
Plants, wells and exploration and production facilities	23,058,267,060	66,440,808	338,564,941		3,267,707	23,460,005,102	10,591,199,483	332,374,052	652,526	10,922,921,009	12,537,084,093	12,467,067,577
Furniture and office supplies	9,264,443	-	-		-	9,264,443	8,873,015	81,855	-	8,954,870	309,573	391,428
Equipment	244,454,672	-	4,371,480		-	248,826,152	194,097,192	6,393,463	-	200,490,655	48,335,497	50,357,480
Vehicles	58,491,641	-	228,591		-	58,720,232	48,477,072	1,583,514	-	50,060,586	8,659,646	10,014,569
Work in progress	1,320,466,711	753,430,569	(338,850,023	)	3,570,711	1,731,476,546	-	-	-	-	1,731,476,546	1,320,466,711
Advances to suppliers	57,027,481	24,866,116	( 4,450,605	)	-	77,442,992	-	-	-	-	77,442,992	57,027,481
Total as of 03/31/2011	24,885,663,106	844,737,493	-		6,838,418	25,723,562,181	10,885,540,419	342,345,599	652,526	11,227,233,492	14,496,328,689
Total as of 12/31/2010	21,521,302,983	3,424,613,706	-		60,253,583	24,885,663,106	9,663,897,941	1,225,599,304	3,956,826	10,885,540,419		14,000,122,687

(1) See Exhibit G.

(2) See depreciation policies in Note 3.2.e.

EXHIBIT B

INTANGIBLE ASSETS (in pesos)

as of March 31, 2011 and December 31, 2010

	Original values			Amortization
Main account	At the beginning of the fiscal year	Increases for the period	At period-end	Accumulated at the beginning of the fiscal year	For the period	Accumulated at period-end	Net as of 03/31/11	Net as of 12/31/10
					(1) (2)
Preoperating expenses	48,740,915	-	48,740,915	48,440,085	5,845	48,445,930	294,985	300,830
Acquisition cost of blocks	6,487,247	-	6,487,247	6,487,247	-	6,487,247	-	-
Deferred charges	63,488,027	-	63,488,027	63,488,027	-	63,488,027	-	-
Total as of 03/31/2011	118,716,189	-	118,716,189	118,415,359	5,845	118,421,204	294,985
Total as of 12/31/2010	118,716,189	-	118,716,189	118,389,201	26,158	118,415,359		300,830

(1) See Exhibit G.

(2) See amortization policies in Note 3.2 f.

EXHIBIT C

OTHER INVESTMENTS (in pesos)
as of March 31, 2011 and December 31, 2010

	Book value	Book value
Main account	03/31/2011	12/31/2010
Short-term investments
Mutual funds in local currency
Class: Banco Itaú (Goal Pesos) Class B
Quantity: 14,757,120 units of interest
Quoted value of the unit of interest: $ 3.331578	49,164,496	10,373,063
Mutual funds in
foreign currency (Exhibit F)
Class: Citi Institutional Liquid Reserves
Quantity: 385 units	1,545	1,515
Government securities
Certificates evidencing payment of tax liability
(Government of the Province of Chubut)	-	992,850
Fiduciary fund (Exhibit F)
Fideicomiso Central Termoeléctrica Manuel Belgrano and
Central Termoeléctrica Timbúes
Debt Securities – Fiduciary, Class A U$S
Quantity: 417,343	1,675,215	1,607,940
Nación Fideicomiso S.A.
Debt securities – “VRDA OBRA – 4 Estrecho Definitivo”
Supplementary agreement to “Fideicomiso Financiero de Obra
Gasoducto Sur 2006-2008”
Quantity: 21,284,851	21,284,851	17,598,896
Time deposits (Exhibit F)	125,936,912	21,393,030
Special savings accounts (Exhibit F)	564,753,907	876,238,377
Total short-term investments	762,816,926	928,205,671
Long-term investments
Government securities:
Bonos de la República Argentina - Discount bonds
in pesos 5.83% final maturity in 2033
Quantity: 4,821,350
Face value: $ 1
Quoted: $ 1.6226	7,823,122	9,040,031
GDP coupon pesos
Quantity: 14,306,676
Face value: $ 1
Quoted: $ 0.1658	2,372,047	2,127,403
Fiduciary fund
Fideicomiso Central Termoeléctrica Manuel Belgrano and
Central Termoeléctrica Timbúes
Debt Securities – Fiduciary, Class A U$S
Quantity: 2,351,351
(Exhibit F)	9,438,324	9,574,054
Nación Fideicomiso S.A.
Debt securities – “VRDA OBRA – 4 Estrecho Definitivo”
Supplementary agreement to “Fideicomiso Financiero de Obra
Gasoducto Sur 2006-2008”
Quantity: 111,049,901	111,049,901	115,321,051
Shares:
Garantizar S.A.
Quantity: 2,000
Class: B
Face value: $ 1	2,000	2,000
Total long-term investments	130,685,394	136,064,539
Total investments	893,502,320	1,064,270,210

EXHIBIT D

ALLOWANCES, PROVISIONS AND ACCRUALS (in pesos)
as of March 31, 2011 and December 31, 2010

Main account	Balances at beginning of the fiscal year	Increases for the period		Decreases for the period		Balances as of 03/31/11
Deducted from current assets:
Allowance for bad debtors in local Currency	14,221,288	4,046,635	(1)	-		18,267,923
Allowance for bad debtors in foreign Currency	7,711,245	152,815	(2)	2,360,172	(3)	5,503,888
Allowance for obsolescence of Materials	5,989,499	-		-		5,989,499
Total deducted from assets	27,922,032	4,199,450		2,360,172		29,761,310
Included in current liabilities:
Provision for future compensation to personnel	3,420,000	2,449,345	(4)	2,449,345	(5)	3,420,000
Subtotal current liabilities	3,420,000	2,449,345		2,449,345		3,420,000
Included in non current liabilities:
Accrual for lawsuits	17,482,881	386,913	(6)	-		17,869,794
Provision for environmental Remediation	458,587,401	13,611,326	(7)	7,920,243	(8)	464,278,484
Provision for future compensation to personnel	26,838,820	1,710,376	(9)	2,449,345	(10)	26,099,851
Subtotal non current liabilities	502,909,102	15,708,615		10,369,588		508,248,129
Total included in liabilities	506,329,102	18,157,960		12,818,933		511,668,129

(1) Charges for the period included in the Administrative expenses line (See Exhibit G) of the Statement of Income.
(2) Charges for the period included in the Financial Results provided by Assets-exchange gains/losses in the statement of income.
(3) Recoveries for the period included in Other income and expenses line of the Statement of Income.
(4) Transfer from non current provisions for future compensation to personnel.
(5) Compensations paid during the period.
(6) Charges for the period. It is made up of $ 381,785 included in Production Costs (see Exhibit G) and $ 5,128 included in Administrative expenses (see Exhibit G) of the Statement of Income.
(7) Charges for the period, It is made up of $ 6,817,283 included in Financial results provided by liabilities - other financial results and $ 6,794,043 included in Property, plant and equipment.
(8) It is made up of a decrease in property, plant and equipment of $ 3,267,707, utilizations for the period of $ 3,782,536 and recoveries for the period of $ 870,000 included in Other income and expenses line of the Statement of Income.
(9) Charges for the period. It is made up of $ 603,250 included in Administrative expenses - Defined benefit plans for personnel (see Exhibit G) and $ 1,107,126 included in Other financial results generated by liabilities of the Statement of Income.
(10) Transfer to current provision for future compensation to personnel for the period.

EXHIBIT E

COST OF SALES (in pesos)
for the three-month period beginning January 1, 2011 and ended March 31, 2011, comparative with the same period of the prior year

	2011		2010
	(3 months)		(3 months)
Inventories at the beginning of the fiscal year	201,182,026		239,113,246
Purchases	115,366,470		93,039,466
Production costs (Exhibit G)	1,259,893,166		1,156,045,104
Inventories at period-end	( 157,318,207	)	( 178,180,447	)
Cost of sales	1,419,123,455		1,310,017,369

EXHIBIT F

ASSETS AND LIABILITIES IN FOREIGN CURRENCY
as of March 31, 2011 and December 31, 2010

	Amount and type of foreign currency			Exchange		Amount in local currency as of		Amount and type of foreign currency				Amount in local currency as of
Item	as of 03/31/2011			rate		03/31/2011		as of 12/31/2010				12/31/2010
	U$S		Euros	$				U$S		Euros
ASSETS
CURRENT ASSETS
Cash and Banks
Cash	-		4,370	5.6959	24,891			-		4,370	22,807
	37,629			4.014	151,044	175,935		45,405			178,714	201,521
Banks	667,642			4.014		2,679,914		4,073,948				16,035,059
Investments
Time deposits	31,374,418			4.014		125,936,912		5,435,221				21,393,030
Mutual funds	385			4.014		1,545		385				1,515
Special deposit account	140,696,041			4.014		564,753,907		222,621,539				876,238,377
Fiduciary Fund	417,343			4.014		1,675,215		408,521				1,607,940
Accounts receivable
Accounts receivable	284,153,382			4.014		1,140,591,675		274,052,068				1,078,668,938
Allowance for bad debtors	( 1,371,173	)		4.014		( 5,503,888	)	( 1,959,158	)			( 7,711,245	)
Notes receivable	6,198,665			4.014		24,881,442		6,537,662				25,732,238
Affiliated companies	115,289,703			4.014		462,772,868		855,982				3,369,145
Other receivables
Recoverable expenses	60,991			4.014		244,816		62,197				244,806
Miscellaneous	3,458,335			4.014		13,881,757		1,097,126				4,318,289
Affiliated companies	5,928,305			4.014		23,796,218		5,221,040				20,550,013
Inventories
Advances to suppliers	188,015			4.014		754,693		326,646				1,285,679
Total current assets	587,099,681		4,370			2,356,643,009		518,778,582		4,370		2,041,935,305
NON CURRENT ASSETS
Other receivables
Miscellaneous	3,596,321			4.014		14,435,634		3,646,325				14,351,936
Investments
Fiduciary Fund	2,351,351			4.014		9,438,324		2,432,432				9,574,054
Total non current assets	5,947,672					23,873,958		6,078,757				23,925,990
Total assets	593,047,353		4,370			2,380,516,967		524,857,339		4,370		2,065,861,295

U$S= US dollar

EXHIBIT F (cont.)

ASSETS AND LIABILITIES IN FOREIGN CURRENCY
as of March 31, 2011 and December 31, 2010

	Amount and type of foreign currency	Exchange	Amount in local currency as of	Amount and type of foreign currency	Amount in local currency as of
Item	as of 03/31/2011	rate	03/31/2011	as of 12/31/2010	12/31/2010
	U$S	$		U$S
CURRENT LIABILITIES
Accounts payable
Trade	64,037,527	4.054	259,608,135	55,704,755	221,482,105
Affiliated companies	4,390,667	4.054	17,799,762	10,712,265	42,591,968
Loans
Uncollateralized	230,496,000	4.054	934,430,784	205,453,000	816,881,127
Interest accrued on
uncollateralized loans	15,091,759	4.054	61,181,990	14,229,062	56,574,749
Financial bonds
Financial bonds	123,393,500	4.054	500,237,249	123,393,500	490,612,556
Interest accrued on financial bonds	17,078,194	4.054	69,234,998	13,556,647	53,901,228
Total current liabilities	454,487,647		1,842,492,918	423,049,229	1,682,043,733
NON CURRENT LIABILITIES
Accounts payable
Miscellaneous liabilities	5,510,148	4.054	22,338,139	5,510,148	21,908,348
Loans
Uncollateralized	836,052,498	4.054	3,389,356,827	754,507,000	2,999,919,832
Financial bonds
Financial bonds	500,000,000	4.054	2,027,000,000	623,393,500	2,478,612,556
Total non current liabilities	1,341,562,646		5,438,694,966	1,383,410,648	5,500,440,736
Total liabilities	1,796,050,293		7,281,187,884	1,806,459,877	7,182,484,469

U$S= US dollar

EXHIBIT G

INFORMATION REQUIRED BY ART. 64. CLAUSE 1b) OF LAW 19550, for the three-month period beginning January 1, 2011 and ended March 31, 2011, comparative with the same period of the prior year (in pesos)

Items	Production costs	Administrative expenses	Total 2011	Total 2010
			(3 months)	(3 months)
Fees and compensation for services	14,988,751	15,341,761	30,330,512	20,300,435
Salaries, wages and benefits to Personnel	110,163,481	22,570,023	132,733,504	106,603,124
Defined benefit plans to personnel (Note 3 2 j)	1,528,210	5,328,706	6,856,916	9,835,285
Social security contributions	18,433,220	5,347,771	23,780,991	19,007,004
Taxes, assessments and other contributions	460,687,417	59,935,898	520,623,315	451,065,696
Depreciation of property, plant and equipment (Exhibit A)	340,269,836	2,075,763	342,345,599	288,500,438
Intangible asset amortization (Exhibit B)	5,845	-	5,845	6,491
Transportation, freight and storage expenses	35,697,927	3,645	35,701,572	57,353,098
Contracted services	228,557,039	3,883,224	232,440,263	226,790,069
Travel and accommodation expenses	1,662,405	2,262,930	3,925,335	3,828,506
Building rentals, maintenance and others	19,788,421	8,024,573	27,812,994	21,226,984
Environmental remediation and rights of way	19,186,144	-	19,186,144	16,706,141
Bad debtors (Exhibit D)	-	4,046,635	4,046,635	3,016,592
Lawsuits (Exhibit D)	381,785	5,128	386,913	461,078
Dry wells	2,002,852	-	2,002,852	-
Geology and geophysics related expenses	1,878,822	-	1,878,822	6,772,384
Production and administrative general expenses	4,661,011	1,387,674	6,048,685	28,921,978
Total 2011 (3 months)	1,259,893,166	130,213,731	1,390,106,897
Total 2010 (3 months)	1,156,045,104	104,350,199		1,260,395,303

EXHIBIT H

Balance sheet as of March 31, 2011 and December 31, 2010
TERMS, INTEREST RATES AND ADJUSTMENT CLAUSES OF SHORT-TERM INVESTMENTS, LOANS, RECEIVABLES AND PAYABLES (in pesos)

	Investments		Receivables		Payables		Loans
	03/31/2011	12/31/2010	03/31/2011	12/31/2010	03/31/2011	12/31/2010	03/31/2011	12/31/2010
Total amount without any established term	2,374,047	2,129,403	115,575,611 (1)	129,998,125 (1)	937,145,905	930,205,330	-	-
To become due:
Up to 3 months	749,027,099	914,434,816	1,823,138,483	1,301,814,555	2,163,343,852	1,415,862,744	421,319,742	881,384,909
From 3 to 9 months	4,596,609	4,590,285	3,681,619	4,055,884	2,700,100	178,838,945	308,065,611	207,578,703
From 6 to 9 months	4,596,609	4,590,285	3,537,404	3,898,614	2,700,100	2,700,100	165,808,600	166,387,648
From 9 to 12 months	4,596,109	4,590,285	3,160,778	3,489,657	17,608,100	16,251,100	669,891,068	162,618,400
From 1 to 2 years	18,386,438	18,361,141	13,190,149	11,076,024	7,380,398	7,380,398	1,030,713,284	1,546,226,640
From 2 to 3 years	18,386,438	18,361,141	6,280,297	6,284,913	7,380,398	7,380,398	1,142,230,716	1,005,912,096
From 3 to 4 years	18,386,438	18,361,141	1,195,939	1,388,481	7,380,398	7,380,398	654,046,001	347,088,896
From 4 to 5 years	18,386,438	18,361,141	597,537	552,978	7,380,398	7,380,398	179,677,334	215,972,344
From 5 to 6 years	18,386,438	18,361,141	-	140,761	7,380,398	7,380,398	124,863,200	122,460,800
From 6 to 7 years	18,386,438	18,361,141	-	-	7,380,398	7,380,398	226,213,200	221,860,800
From 7 to 8 years	9,844,138	14,089,991	-	-	7,380,398	7,380,398	31,621,200	31,012,800
From 8 to 9 years	325,459	638,268	-	-	615,033	2,460,133	675,663,964	662,664,016
From 9 to 10 years	-	-	-	-	-	-	675,663,964	662,666,004
From 10 to 11 years	-	-	-	-	-	-	675,663,964	662,667,992
Over 10 years	7,823,122	9,040,031	-	-	-	-	-	-
Subtotal	893,502,320	1,064,270,210	1,970,357,817	1,462,699,992	3,175,775,876	2,597,981,138	6,981,441,848	6,896,502,048
Other items that are not to be collected or paid in cash	-	-	75,885,115	72,116,837	-	-	-	-
Total	893,502,320	1,064,270,210	2,046,242,932	1,534,816,829	3,175,775,876	2,597,981,138	6,981,441,848	6,896,502,048

(1) It includes the overdue receivables detailed in item 3.a of the Supplementary Information to the Financial Statements.

EXHIBIT H (cont.)

Balance sheet as of March 31, 2011 and December 31, 2010
TERMS, INTEREST RATES AND ADJUSTMENT CLAUSES OF SHORT-TERM INVESTMENTS, LOANS, RECEIVABLES AND PAYABLES (in pesos)

	Investments				Receivables				Payables				Loans
	03/31/2011		12/31/2010		03/31/2011		12/31/2010		03/31/2011		12/31/2010		03/31/2011		12/31/2010
	Rate	Pesos	Rate	Pesos	Rate	Pesos	Rate	Pesos	Rate	Pesos	Rate	Pesos	Rate	Pesos	Rate	Pesos
Annual fixed rate in U$S	-	-	-	-	-	-	-	-	-	-	-	-	7.875	2,027,000,000	7.875	1,988,000,000
Annual fixed rate in U$S	-	-	-	-	-	-	-	-	-	-	-	-	7.56	202,720,270	7.56	220,906,560
Annual fixed rate in U$S	-	-	-	-	-	-	-	-	-	-	-	-	6.97	136,822,500	6.97	178,920,000
Annual fixed rate in U$S	-	-	-	-	-	-	-	-	-	-	-	-	5.66 (2)	60,810,000	5.66 (2)	59,640,000
Annual fixed rate in U$S	-	-	-	-	-	-	-	-	-	-	-	-	8.00	40,540,000	8.00	39,760,000
Annual fixed rate in U$S	14.00 (3)	11,113,539	14,00 (3)	11,181,994	-	-	-	-	-	-	-	-	7.75	500,237,248	7.75	981,225,111
Annual fixed rate in U$S	-	-	-	-	-	-	-	-	-	-	-	-	4.13	409,048,600	4.13	401,178,400
Annual fixed rate in U$S	-	-	-	-	-	-	-	-	-	-	-	-	4.49	677,423,400	4.49	664,389,600
Annual fixed rate in U$S	-	-	-	-	-	-	-	-	-	-	-	-	5.46	479,993,600	5.46	470,758,400
Annual rate in U$S	-	-	-	-	-	-	-	-	-	-	-	-	(5)	620,262,000	(5)	608,328,000
CER plus annual fixed rate in $	-	-	4,00	992,850	-	-	-	-	-	-	-	-	-	-	-	-
Average annual variable rate in $	5.68	49,164,496	6,02	10,373,063	8,00	35,406,786	8,00	30,591,705	-	-	-	-	-	-	-	-
Average annual variable rate in U$S		-	-	-		-	-	-	-	-	-	-	4.21	1,432,657,242	4.45	914,480,000
Average annual fixed rate in U$S		-	-	-		-	-	-	-	-	-	-	0.98	263,510,000	1.38	258,440,000
Average annual variable rate in U$S	0.13	690,692,364	0,15	897,632,922		-	-	-	-	-	-	-	-	-	-	-
Annual variable rate in $ (CER plus 8%)	(4)	132,334,752	(4)	132,919,947		-	-	-	-	-		-	-	-	-	-
Annual fixed rate in $		-	-	-		-		-	9,00	59,658,217	9,00	61,503,317	-	-	-	-
Annual fixed rate in $ plus CER	5.83	7,823,122	5,83	9,040,031			-	-	-		-	-	-	-	-	-
Non-interest bearing		2,374,047	-	2,129,403		2,010,836,146	-	1,504,225,124	-	3,116,117,659	-	2,536,477,821	-	-	-	-
Total		893,502,320		1,064,270,210		2,046,242,932		1,534,816,829		3,175,775,876		2,597,981,138		6,851,024,860 (1)		6,786,026,071 (1)

(1) It only includes principal at face value.
(2) Plus additional interest calculated in relation to the economic performance of Pan American Energy LLC. During the year 2010 it was 3.05%.
(3) Fideicomiso Central Termoeléctrica Manual Belgrano and Central Termoeléctrica Timbúes.
(4) Nación Fideicomiso S.A. – “Fideicomiso Financiero de Obra Gasoducto Sur 2006-2008”.
(5) The weighted average rate was 7.27% as of 03/31/2011 and 7.37% as of 12/31/2010.

EXHIBIT I

Balance sheet as of March 31, 2011 and December 31, 2010
PARTICIPATION IN JOINT VENTURES (in pesos)

	Lindero Atravesado		Aguada Pichana		San Roque		Acambuco		Estancia La Escondida		Bandurria		Costa Afuera Argentina Bloque 40		Costa Afuera Argentina Bloque 46		Anticlinal Funes
	62.50%	62.50%	18.18%	18.18%	16.47 %	16.47 %	52.00 %	52.00 %	25.00%	25.00%	18.18%	18.18%	33.50%	33.50%	33.50%	33.50%	80.00%	80.00%
	03/31/2011	12/31/2010	03/31/2011	12/31/2010	03/31/2011	12/31/2010	03/31/2011	12/31/2010	03/31/2011	12/31/2010	03/31/2011	12/31/2010	03/31/2011	12/31/2010	03/31/2011	12/31/2010	03/31/2011	12/31/2010
Balance sheet
ASSETS
CURRENT ASSETS
Cash and banks	1,356,748	171,040	613,588	508,676	128,452	325,847	42,714	33,614	1,000,805	108,067	231,988	495,514	-	-	-	-	7,277	10,168
Other receivables	1,486,708	440,339	10,835,819	7,860,375	5,667,912	5,776,817	7,794,948	2,017,982	561,781	965,578	273,740	151,522	15,421,752	9,532,522	580,221	580,221	1,015,410	1,092,857
Inventories	6,045,037	6,415,617	10,106,100	10,192,806	6,378,866	6,403,843	9,953,651	11,512,108	118,056	102,582	-	-	-	-	-	-	-	-
Total current assets	8,888,493	7,026,996	21,555,507	18,561,857	12,173,230	12,506,507	17,791,313	13,563,704	1,680,642	1,176,227	505,728	647,036	15,421,752	9,532,522	580,221	580,221	1,022,687	1,103,025
NON CURRENT ASSETS
Other receivables	215,158	215,158	-	-	-	-	245,732	245,732	-	-	-	-	-	-	-	-	-	-
Property, plant and Equipment	125,861,124	130,415,412	318,940,334	320,613,232	138,666,895	140,020,504	861,293,467	853,588,977	6,023,683	6,063,112	7,219,899	8,787,758	30,597,580	21,571,597	269,574	269,574	5,143,048	5,653,686
Total non current assets	126,076,282	130,630,570	318,940,334	320,613,232	138,666,895	140,020,504	861,539,199	853,834,709	6,023,683	6,063,112	7,219,899	8,787,758	30,597,580	21,571,597	269,574	269,574	5,143,048	5,653,686
Total assets	134,964,775	137,657,566	340,495,841	339,175,089	150,840,125	152,527,011	879,330,512	867,398,413	7,704,325	7,239,339	7,725,627	9,434,794	46,019,332	31,104,119	849,795	849,795	6,165,735	6,756,711

EXHIBIT I (cont.)

Balance sheet as of March 31, 2011 and December 31, 2010
PARTICIPATION IN JOINT VENTURES (in pesos)

	Lindero Atravesado		Aguada Pichana		San Roque		Acambuco			Estancia La Escondida			Bandurria		Costa Afuera Argentina Bloque 40			Costa Afuera Argentina Bloque 46		Anticlinal Funes
	62.50%	62.50%	18.18%	18.18%	16.47%	16.47%		52.00%	52.00%		25.00%	25.00%	18.18%	18.18%	33.50%	33.50%	33.50%		33.50%	80.00%	80.00%
Balance sheet	03/31/2011	12/31/2010	03/31/2011	12/31/2010	03/31/2011	12/31/2010		03/31/2011	12/31/2010		03/31/2011	12/31/2010	03/31/2011	12/31/2010	03/31/2011	12/31/2010	03/31/2011		12/31/2010	03/31/2011	12/31/2010
LIABILITIES
CURRENT LIABILITIES
Accounts payable	4,821,954	7,973,416	45,773,125	49,664,194	15,597,551	17,460,460		55,602,515	63,541,144		1,522,572	2,588,657	-	-	-	-	-		-	858,701	852,700
Payroll and social security contributions	791,283	1,437,104	-	-	-	-		2,751,757	3,205,720		-	-	-	-	-	-	-		-	-	-
Taxes payable	211,859	703,035	1,121,043	886,059	1,194,358	1,056,829		1,315,085	2,040,657		68,966	160,683	88,157	181,116	-	-	-		-	37,079	3,408
Provision for future compensation to personnel	1,584,175	1,584,175	-	-	-	-		1,454,597	1,454,597		-	-	-	-	-	-	-		-	-	-
Total current liabilities	7,409,271	11,697,730	46,894,168	50,550,253	16,791,909	18,517,289		61,123,954	70,242,118		1,591,538	2,749,340	88,157	181,116	-	-	-		-	895,780	856,108
NON CURRENT LIABILITIES
Accounts payable	4,439,376	4,087,546	-	-	2,417,323	2,417,323		3,195,031	3,077,540		-	-	-	-	-	-			-	-	-
Provision for environmental remediation	8,450,385	7,529,316	21,565,130	21,900,475	13,344,299	10,954,225		28,671,138	28,780,893		160,924	156,056	-	-	-	-	-		-	4,241,777	4,341,233
Accruals	2,512,248	2,449,616	42,490	150,722	64,577	165,735		3,966,029	3,876,743		-	-	-	-	-	-	-		-	-	-
Total non current liabilities	15,402,009	14,066,478	21,607,620	22,051,197	15,826,199	13,537,283		35,832,198	35,735,176		160,924	156,056	-	-	-	-	-		-	4,241,777	4,341,233
Total liabilities	22,811,280	25,764,208	68,501,788	72,601,450	32,618,108	32,054,572		96,956,152	105,977,294		1,752,462	2,905,396	88,157	181,116	-	-	-		-	5,137,557	5,197,341
Owner’s equity	112,153,495	111,893,358	271,994,053	266,573,639	118,222,017	120,472,439		782,374,360	761,421,119		5,951,863	4,333,943	7,637,470	9,253,678	46,019,332	31,104,119	849,795		849,795	1,028,178	1,559,370
Total	134,964,775	137,657,566	340,495,841	339,175,089	150,840,125	152,527,011		879,330,512	867,398,413		7,704,325	7,239,339	7,725,627	9,434,794	46,019,332	31,104,119	849,795		849,795	6,165,735	6,756,711

EXHIBIT I (cont.)

Statement of income for the three-month period beginning January 1, 2011 and ended March 31, 2011, comparative with the same period of the prior year
PARTICIPATION IN JOINT VENTURES (in pesos)

	Lindero Atravesado		Aguada Pichana		San Roque		Acambuco		Estancia La Escondida		Bandurria		Costa Afuera Argentina Bloque 40		Costa Afuera Argentina Bloque 46		Anticlinal Funes
	62.50%	62.50%	18.18%	18.18%	16.47%	16.47%	52.00%	52.00%	25.00%	25.00%	18.18%	18.18%	33.50%	33.50%	33.50%	33.50%	80.00%	80.00%
	2011	2010	2011	2010	2011	2010	2011	2010	2011	2010	2011	2010	2011	2010	2011	2010	2011	2010
	(3 months)	(3 months)	(3 months)	(3 months)	(3 months)	(3 months)	(3 months)	(3 months)	(3 months)	(3 months)	(3 months)	(3 months)	(3 months)	(3 months)	(3 months)	(3 months)	(3 months)	(3 months)
INCOME STATEMENT
Sales (a)		-		-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Cost of sales	(18,129,159)	(17,928,801)	(44,933,780)	(48,209,918)	(30,274,590)	(27,496,694)	(72,539,988)	(54,655,391)	(3,204,235)	(1,213,648)	-	-	-	-	-	-	(3,023,126)	(3,029,248)
Gross result	(18,129,159)	(17,928,801)	(44,933,780)	(48,209,918)	(30,274,590)	(27,496,694)	(72,539,988)	(54,655,391)	(3,204,235)	(1,213,648)	-	-	-	-	-	-	(3,023,126)	(3,029,248)
Administrative expenses	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Operating result	(18,129,159)	(17,928,801)	(44,933,780)	(48,209,918)	(30,274,590)	(27,496,694)	(72,539,988)	(54,655,391)	(3,204,235)	(1,213,648)	-	-	-	-		-	(3,023,126)	(3,029,248)
Financial results - net	( 1,130,488)	47,446	851,160	( 413,330)	( 171,035)	( 145,659)	38,094	( 436,214)	465	227	( 4,503)	( 1,411)	( 7,295)	266	1,730	( 208)	( 13,940)	( 58,279)
Other income and expenses - net	590	674,903	-	-	-	-	6,343	50,477	-	-	(231,173)	(557,969)	(2,630,786)	(3,018,737)	(117,409)	(942,246)	-	-
Net results	(19,259,057)	(17,206,452)	(44,082,620)	(48,623,248)	(30,445,625)	(27,642,353)	(72,495,551)	(55,041,128)	(3,203,770)	(1,213,421)	(235,676)	(559,380)	(2,638,081)	(3,018,471)	(115,679)	(942,454)	(3,037,066)	(3,087,527)

(a) No sales were recorded in the joint ventures because production is directly assigned to each participant.

FINANCIAL STATEMENTS AS OF MARCH 31, 2011

REPORTING SUMMARY REQUIRED BY RESOLUTION No. 290/97 OF THE NATIONAL SECURITIES COMMISSION

1. Comment on the Branch's activity

Operating activities:

Pan American Energy LLC Argentine Branch (“The Branch”) is mainly engaged in the exploration, development and production of hydrocarbons. The Head Office of the Branch is Pan American Energy LLC.

During the three-month period ended March 31, 2011, with a daily average production of 226.5 thousand barrels of oil, the Branch together with the subsidiaries of the Head Office that develop their activities in the country rank second in the production of natural gas and oil in Argentina.

2. Balance sheet items (in pesos)

	Balance sheet as of 03/31/2011	Balance sheet as of 03/31/2010	Balance sheet as of 03/31/2009	Balance sheet as of 03/31/2008	Balance sheet as of 03/31/2007
Current assets	2,923,999,009	2,605,271,544	1,990,934,383	1,878,053,939	1,492,662,570
Non current assets	14,742,730,263	12,578,017,250	10,372,576,983	7,873,222,768	6,169,807,720
Total	17,666,729,272	15,183,288,794	12,363,511,366	9,751,276,707	7,662,470,290
Current liabilities	3,751,437,172	4,016,175,613	3,315,261,161	1,956,000,052	2,647,403,167
Non current liabilities	6,423,650,346	4,743,681,110	4,868,856,117	4,075,682,957	2,559,598,063
Subtotal	10,175,087,518	8,759,856,723	8,184,117,278	6,031,683,009	5,207,001,230
Account with Head Office	7,030,402,747	5,962,193,064	3,718,155,081	3,258,354,691	1,994,230,053
Capital allocated to the Branch	221,779,007	221,779,007	221,779,007	221,779,007	221,779,007
Capital adjustment	239,460,000	239,460,000	239,460,000	239,460,000	239,460,000
Total	17,666,729,272	15,183,288,794	12,363,511,366	9,751,276,707	7,662,470,290

3. Income statement items (in pesos)

	Three-month period ended 03/31/2011		Three-month period ended 03/31/2010		Three-month period ended 03/31/2009		Three-month period ended 03/31/2008		Three-month period ended 03/31/2007
Ordinary operating income	1,403,927,810		1,211,635,627		752,901,915		701,141,054		626,183,792
Financial results	( 232,247,988	)	( 188,700,671	)	(478,280,190	)	( 92,817,301	)	( 78,310,627	)
Other income and expenses - net	9,932,661		23,531,787		20,136,490		( 2,065,569	)	( 1,977,433	)
Income before income tax	1,181,612,483		1,046,466,743		294,758,215		606,258,184		545,895,732
Income tax expense - current	( 424,484,913	)	( 376,209,247	)	(109,952,794	)	(212,349,112	)	(204,821,539	)
Income tax - deferred	2,974,892		3,762,815		7,945,974		( 5,177,255	)	18,218,711
Net income	760,102,462		674,020,311		192,751,395		388,731,817		359,292,904

4. Statistical data

	Three-month	Three-month	Three-month	Three-month	Three-month
	period ended	period ended	period ended	period ended	Period ended
	03/31/2011	03/31/2010	03/31/2009	03/31/2008	03/31/2007
	in cubic meters	in cubic meters	in cubic meters	in cubic meters	in cubic meters
Production of crude oil (1)	1,601,069	1,642,536	1,582,215	1,538,988	1,520,676
Sale of crude oil	1,724,330	1,774,236	1,700,470	1,446,579	1,608,722
	in thousand cubic meters	in thousand cubic meters	in thousand cubic meters	in thousand cubic meters	in thousand cubic meters
Production of natural gas (2)	1,176,925	1,240,721	1,317,400	1,383,936	1,202,589
Sale of natural gas	1,099,756	1,207,510	1,298,942	1,406,037	1,256,209
Transportation of natural gas		-	-	-	2,756
	in tons	in tons	in tons	in tons	in tons
Production of L.P.G.	43,789	42,271	40,488	24,707	20,613
Sale of L.P.G.	43,504	47,521	42,673	24,179	31,629

(1) Includes gasoline from the gas processing plants of Transportadora de Gas del Sur S.A. (Gral. Cerri) and Refinería del Norte S.A.
(2) The production of natural gas is disclosed net of the amounts reinjected into the reservoir and used up in the operations and processed in the gas processing plants.

5. Ratios

	Financial statements as of 03/31/2011	Financial statements as of 03/31/2010	Financial statements as of 03/31/2009	Financial statements as of 03/31/2008	Financial statements as of 03/31/2007
Liquidity (1)	0.78	0.65	0.60	0.96	0.56
Indebtedness (2)	1.36	1.36	1.96	1.62	2.12
Tied –up funds (3)	0.83	0.83	0.84	0.81	0.81
Solvency (4)	0.74	0.73	0.51	0.62	0.47

(1) Total current assets / Total current liabilities
(2) Total liabilities / Account with Head Office plus Capital allocated to the Branch plus Capital adjustment
(3) Non current assets / Total assets
(4) Account with Head Office plus Capital allocated to the Branch plus Capital adjustment / Total liabilities

6. Supplementary Information to the Financial Statements as of March 31, 2011

Information on oil and gas reserves

In compliance with General Resolution N°. 541/2008 of the Argentine Securities and Exchange Commission, below are the proved reserves of oil and gas of the Issuer as of December 31, 2010.

The Branch’s reserves are located in the geographic area of Argentina.

The information on reserves is based on the estimates prepared by the international technical consultants RPS and Ryder Scott Company Petroleum Consultants.

Developed and undeveloped proved reserves
	Crude oil condensate and natural gas liquids (in m3)		Natural gas (in thousands of m3)		Total combined (in m3 of oil equivalent)
Reserves as of December 31, 2009	147,595,139		55,535,760		203,130,899
Addition (decrease) of reserves for the fiscal year	7,827,276		( 106,936	)	7,720,340
Production for the fiscal year	( 6,495,744	)	( 6,024,098	)	( 12,519,842	)
Reserves as of December 31, 2010	148,926,671		49,404,726		198,331,397

7. Progress in the compliance of the Plan for the implementation of International Financial Reporting Standards

On April 29, 2010, the Branch’s Legal Representative approved the implementation plan of International Financial Reporting Standards (IFRS) in compliance with the requirements of Resolution No. 562/09 issued by the Argentine Securities Commission.

Pursuant to the provisions of FACPCE Technical Resolution No. 26, paragraphs 17 (a) and (b), we report that: (i) in compliance with General Resolution No. 562/09 of the Argentine Securities Commission, the Branch will prepare the quarterly and annual financial statements for the fiscal year beginning January 1, 2012 and subsequent financial statements under IFRS; (ii) in compliance with the approved implementation plan, the effects of the adoption of IFRS are under evaluation and the training process for all the personnel involved in the accounting registration has been completed.

Pursuant to the provisions of Resolution No. 576/10, it is informed that the transition date adopted by the Branch is January 1, 2011.

As a result of monitoring the implementation plan, the Legal Representative informs that he has not become aware of any circumstance calling for any amendment of such plan, which is being executed in accordance with the objectives set.

8. Business prospects

The Branch is working to maintain and increase its operating efficiency in connection with the oil and gas exploration and production, to continue increasing its production and adding hydrocarbons reserves in Argentina, satisfying in this way the energy needs of the country as well as to comply with its pre-existing contractual obligations. The Branch strives to provide its personnel and contractors with healthy and safe working conditions while preserving the environment.

The Branch is strongly engaged with the communities where it operates, by developing different social responsibility programs (CSR).

The Branch’s total production of hydrocarbons during the first quarter of 2011 kept the levels of the same period of the prior year, despite of the impact of worker union’s strikes, which affected the productivity during the first quarter of 2011. The active investment program mentioned above has allowed the Branch to double its production of hydrocarbons between 1999 and 2010 and increase its reserves year by year throughout that period.

The global economic crisis, which arose in 2008 in the financial sector and later impacted the real economy, compelled the governments of many countries, including Argentina, to take actions intended to stimulate the global demand and the maintenance of employment.

During 2009 and 2010, stimulus policies continued to be applied. In the last quarter of 2009 the first recovery signs were evidenced both at a worldwide level and in our country. However, the global economy, particularly United States of America and Europe, has not yet managed to adopt a clear trend towards the increase in global demand and the level of employment. For this reason, new measures were taken in these countries to stimulate global demand. In our country, in 2010, the GDP recovered the sustained growth recorded in the 2003/2008 period. Indeed, it increased by 9.2% compared to the prior year.

As a result of the referred crisis, there were also significant reductions in the price of commodities, including oil: the price of the WTI type, for instance, decreased from a maximum amount of US$ 145.31 per barrel in July 2008 to less than one third of such amount in the first quarter of 2009 (US$ 43.10 per barrel). In the three-month period ended March 31, 2011, the WTI price was US$ 94.13 per barrel on average, 19.09 % higher compared to the same period of 2010, when the price per barrel was US$ 79.04, thus showing a higher worldwide demand for this commodity.

The Branch’s average sales price, net of taxes and contributions on oil sales and production, was US$ 34.9 per barrel in the first quarter of 2011 against US$ 35.1 per barrel in the same period of the prior year.

Over the last years, the revenues from sales of the oil & gas production sector have been affected by the regulations currently in force. In the case of oil, as from March 2002, export tariffs have been applied, which have also affected the prices in the domestic market. On November 15, 2007, the Ministry of Economy and Production issued Resolution 394/07, whereby such export tariffs were increased and an effective ceiling price for the export of crude, equivalent to US$ 42 per barrel, was set, which was ratified by Resolution 813/2010 of the Argentine Secretary of Energy. On the other hand, Resolution 1679/2004 of the Secretary of Energy, which provided for the mandatory registration of export transactions and their prior authorization, remains effective.

In the case of natural gas, after a four-year period (from 2002) in which the domestic market prices were successively redenominated into pesos and frozen, export tariffs and restrictions were imposed. On the other hand, an agreement for the “regularization of wellhead prices” was signed between the Secretary of Energy and natural gas producers, which expired on December 31, 2006. At the request of the related authorities, a new agreement was entered into, which will be in force until December 31, 2011 (confirmed by Resolution 599/07 issued by the Secretary of Energy). Under the referred agreement, producers (including the Branch) undertake to satisfy the domestic demand up to the levels reached in 2006 plus the growth of the priority demand (residential and commercial) during the validity thereof by setting out new guidelines for price evolution. On July 28, 2009 the national and provincial authorities, the representative of the main industry unions, together with gas producers, entered into an agreement aimed at restoring the balance of the oil & gas sector.

On September 28, 2010, Resolution No. 1410/2010 issued by the Argentine Gas Regulator (ENARGAS) was published in the Official Gazette. This resolution established a procedure for gas applications, confirmations and gas controls applicable to all the entities in the gas industry, including the Branch. The referred procedure is aimed at supplementing the guidelines for the dispatch of natural gas in force and preserving the operation of transport and distribution systems, prioritizing the consumption of the priority demand.

In September 2008, a regime to subsidize low-income liquefied petroleum gas (LPG) consumers was established, whereby funds obtained from the increase in the price of natural gas paid by certain categories of gas consumers are transferred to a fiduciary fund created for that purpose. This regime was established by Resolution No. 1070/2008 issued by the Secretary of Energy and extended until March 31, 2011 and then until December 31, 2011.

At a sector level, on November 18, 2010 the National Agreement for the Promotion of the Social Dialogue in the Hydrocarbons Industry was entered into by representatives of the Ministry of Federal Planning Public Investment and Services, the Ministry of Labor, Employment and Social Security, the hydrocarbon producing provinces, and the unions and producers. This Agreement is aimed at promoting the regional development and dialogue among the parties.

Regarding governmental programs to encourage the increase in oil and natural gas production and reserves, see Note 14 to the Financial Statements.

City of Buenos Aires, May 12, 2011

Rodolfo Berisso
Attorney-in-fact

FINANCIAL STATEMENTS AS OF MARCH 31, 2011

SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTS AS OF MARCH 31, 2011 REQUIRED BY SECTION 68 OF THE REGULATIONS OF THE BUENOS AIRES STOCK EXCHANGE

Overall issues about the Branch’s activity:

1. Specific and significant legal requirements which imply contingent suspensions or changes of benefits provided for by such regulations:

The Branch is not subject to specific and significant legal requirements, which may imply the contingent suspension or change of benefits provided for by such regulations, except as disclosed in notes to the financial statements.

2. Significant changes in the Branch’s activities or other similar circumstances that affect the comparison of the financial statements with prior years, or with those to be presented in future years.

There are no changes in the Branch’s activities that significantly affect the comparison of the financial statements as of March 31, 2011.

3. Breakdown of receivables and payables as per section 68, subsection 3.

3.a) The breakdown of receivables and payables based on the maturity thereof is disclosed in Exhibit H to the financial statements.

The following receivables without any established term included in the referred Exhibit H are overdue:

	Current receivables
	$
Due from January to March to 2011	17,326,187
Due from October to December 2010	14,389,402
Due from July to September 2010	9,629,322
Due from April to June 2010	4,709,354
Due from April 2009 and March 2010	12,261,965
Due from April 2008 and March 2009	4,923,849
Due from April 2007 and March 2008	2,887,742
Due from April 2006 and March 2007	270,400
Due from April 2005 and March 2006	86,099
Due from April 2004 and March 2005	3,307
Due from April 2001 and March 2002	24,585
Total	66,512,212

There are no overdue payables.

3.b) In connection with the receivables and payables in foreign currency, see Exhibit F to the financial statements. There are no significant receivables and payables to be cancelled in kind.

3.c) There are no receivables and payables subject to adjustment clauses.

3.d) In connection with the receivables and payables that accrue interest as of March 31, 2011, see Exhibit H to the financial statements.

4. Participation in Art. 33 Corporations Law No. 19550

None.

5. Trade accounts receivables or loans with directors, statutory auditors, and relatives including up to the second degree:

None as of the date of issuance of these financial statements.

6. Physical counts of inventories

Based on the nature of the activity, the Branch carries out physical counts of most of its inventories. There are no significant slow-moving inventories as of March 31, 2011 for which an allowance has not been set up.

7. Current values

The valuation method of inventories is disclosed in Note 3.2.d) to the financial statements.

8. Property, plant and equipment

No items of property, plant and equipment have been subject to technical revaluations.

To date, there are no property, plant and equipment items that are not in use due to obsolescence.

9. Interests in other companies

None. The Branch’s participating interests in joint operations are disclosed in Note 2 to the financial statements.

10. Recoverable value

The recoverable value of inventories and fixed assets, used as a limit to their valuation for financial reporting purposes, have been determined based on the net realizable values and values in use. the latter defined as the expected net cash flows that would result from both the use of the assets and the disposal thereof at the end of their useful life.

11. Insurance

		Covered
Insured assets	Insured risks	amount
		Thousand U$S
Equipment, facilities and pipelines
applied to exploitation and transportation	Physical damage	2,927,765 (*)
Third party damage caused by the Branch’s activities
or by the equipment, facilities and pipelines used
for exploration and production purposes	Liability insurance on - shore	100,000
	Liability insurance off - shore	100,000
Wells	Control, re-drilling, spill	(**)
Goods	Transportation	10,000

In addition, the Branch took out workers’ compensation and automobile liability insurance policies.

(*) It is the total amount disclosed in the policy in relation to this item. The referred amount is subject to limits and deductibles depending on the coverage.
(**) In compliance with the limits and deductibles applied to the different fields.

12. Negative and positive contingencies

All the evidence available and the likelihood of occurrence have been taken into account to evaluate contingencies. Regarding allowances, see Notes 3.2.g, 10 and 13 and Exhibit D to the basic financial statements.

13. Contingencies as of the date of the financial statements with non remote likelihood of occurrence, the financial effects of which have not been fully recorded as of March 31, 2011

None.

Irrevocable advances for future subscriptions

14. As of March 31, 2011 there are no irrevocable advances for future subscriptions.

15. There are no preferred shares as of March 31, 2011.

16. As of March 31, 2011 the Branch has no restrictions on the distributions of earnings, except as indicated in Note 10 to the financial statements.

City of Buenos Aires, May 12, 2011

Rodolfo Berisso
Attorney-in-fact

Category Code: QRF

Sequence Number: 287526

Time of Receipt (offset from UTC): 20110830T212525+0100