2012 Half-yearly Results

Afren plc 2012

Half-yearly Results

Record first half revenue and cash flow; significant exploration success; and production in line with expectations

21 August 2012 - Afren plc ("Afren" or the "Company") (LSE: AFR, FTSE 250 index), an independent exploration and production company announces its Half-yearly Results for the six months ended 30 June 2012.

2012 Half-yearly Results Summary

Afren has had an excellent first half. Record financial results were driven by the year-on-year increase in net production from the Ebok field offshore Nigeria. Production operations have also commenced at the Barda Rash field in the Kurdistan region of Iraq, just one year following the acquisition. The Company is developing an excellent exploration track record with successful wells in Nigeria adding significant reserves and a world class discovery in the Kurdistan region of Iraq. Notably, development drilling on the Okoro East field has commenced only eight months after the initial discovery.

Financial highlights

* Before movements in working capital

** See note 4 of the condensed financial statements

*** Net working interest including natural gas liquids and associated volumes from First Hydrocarbon Nigeria Limited (FHN)

Key Highlights

·; Record sales revenue of US$771.7 million and operating cash flow before movements in working capital of US$558.3 million, driven by 218% year-on-year increase in net production

·; Strong financial position:

- Cash at bank US$443.7 million (1H 2011: US$320.9 million)

- Net debt US$582.5 million (1H 2011: US$343.0 million) with majority long dated (2016-2019)

·; Production in line with expectations; firmly on track for 2012 production guidance of 42,000 to 46,000 boepd

- Ebok performing in line with prognosis

- BR-1 well at Barda Rash successfully tested 6,000 bopd of 28° to 32° API oil

- Early development drilling underway at Okoro East

·; Excellent exploration success

- Significant reserves additions from Okoro East and Ebok North Fault Block discoveries

- World class discovery at the Simrit-2 well in Kurdistan region of Iraq - first three out of a planned 12 DSTs completed have flowed at 13,584 bopd

- Ongoing active exploration programme

·; Significant resource upgrade in East Africa from net mean prospective resources of 2,113 mmboe to 5,838 mmboe, following portfolio maturation since Black Marlin acquisition

- New plays identified offshore Kenya and Tanzania

Commenting today, Osman Shahenshah, Chief Executive of Afren plc, said:

"The first half of 2012 has been a period of notable success for Afren across all fronts. The strong financial results, with over seven hundred million dollars of revenue and half a billion dollars of net operating cash flow, all from Afren's greenfield developments, is testimony to our strong and established operating track record. The Okoro East and Ebok North Fault Block discoveries in Nigeria and Simrit-2 discovery in the Kurdistan region of Iraq will add significantly to the already material 2P reserves base of 185 million barrels and 2P/2C base of 995 million barrels of oil equivalent. In East Africa, the on-going maturing of the portfolio has resulted in a mean prospective resources upgrade to 5,838 million barrels of oil equivalent (from 2,113 million barrels of oil equivalent). With a number of high impact exploration wells to be drilled in both West and East Africa and the Kurdistan region of Iraq, and the growing production base, Afren is well placed for continued success".

Analyst Presentation

There will be a presentation to analysts at 09:00 BST at the Grosvenor House Hotel, Park Lane, London, W1K 7TN.

The presentation will also be broadcast live at www.afren.com where the accompanying presentation will be available, and on playback from 14:00 BST.

Operations Review

Net working interest production during 1H 2012 was in line with expectations and reflects the management of ongoing development work, simultaneous operations and associated downtime at the Ebok field.

*Afren is a 45% shareholder in First Hydrocarbon Nigeria Limited (FHN) which owns a 45% interest in OML 26

** Pre/post cost recovery

Production and Development

Nigeria

Okoro and Okoro East

The Company announced on 17 January 2012 that the Okoro East well (Okoro-13) had encountered 549 ft true vertical thickness (TVT) of net oil pay and 41 ft of net gas pay in excellent quality reservoir sands. The well reached a total measured depth of 8,751 ft (8,016 ft true vertical depth) and successfully encountered oil in Tertiary reservoir sands equivalent to those that have been developed and are in production at the Okoro main field, in addition to previously unexplored reservoirs within a deeper horst block structure - a play concept that has not previously been tested on the block. In March 2012, three drill stem tests ("DSTs") were undertaken and completed. The purpose of the tests was to obtain fluid samples and pressure data in order to establish reservoir connectivity, heterogeneity and quantify permeability and porosity. The tests successfully confirmed a high quality 38° to 40° API oil, multi Darcy permeabilities and average porosity of between 30% to 35%, in the subject reservoirs. The pressure data also obtained has helped with the Company's structural understanding of the field and supports the pre drill volumetric estimates (Pmean STOIIP of 157 mmbbls).

In July, Afren and partner Amni International Petroleum Development Ltd. ("Amni") commenced early development drilling at the Okoro East field. The Okoro-14 development well is being drilled from the existing Okoro main field Wellhead Platform ("WHP") with the intention of establishing initial production from Okoro East, located approximately 2km east of the Okoro main field, via the existing Okoro Floating Production Storage Offloading vessel ("FPSO"). This production information will allow Afren and Amni to finalise full field development options, which could potentially involve up to a further eight production wells under a full field development scenario.

Prior to spudding the Okoro-14 development well, Afren and Amni side-tracked the existing Okoro-5 production well on the Okoro main field. As part of the partners' ongoing reservoir management and production optimisation work, the objective of the side-track well was to access additional oil volumes in a previously un-swept area of the reservoir within the Okoro main field area. The Okoro-5 well was re-entered and side-tracked at a measured depth of 4,481 ft, and the side-track subsequently drilled to a total measured depth of 9,800 ft. The side-track successfully encountered oil pay in the target reservoir, in line with prognosis, and a 2,500 ft lateral drainage section within this pay zone was brought onstream on 22 July 2012 at a stabilised rate of approximately 2,000 bopd.

Ebok and Ebok North Fault Block

On 14 May 2012 the Company announced that the Ebok North Fault Block ("Ebok NFB") well had successfully encountered 370 ft (TVT) of good quality oil in the same Tertiary reservoir sands equivalent to those that have been developed and are in production at the main Ebok field development. The well reached a total depth of 4,230 ft and was targeting a separate fault block structure located approximately 2 km to the north of the main Ebok field. The discovery of significant oil pay at this location underlines the high-grade prospectivity that exists across the wider Ebok/Okwok/OML 115 area, and represents an important step towards unlocking the full volume and value potential of what is a core hub of Afren's portfolio.

Logging operations at the Ebok NFB well have been completed, with data obtained supporting a Pmean STOIIP in excess of 100 million barrels of oil, towards the upper end of Afren's pre-drill expectations. The well will now be suspended whilst Afren and Oriental determine the optimal development solution for Ebok NFB. This will likely incorporate synergies using the existing production, storage and offtake infrastructure at the main Ebok field and could involve the early drilling of new production wells from the existing wellhead platform at the Ebok West Fault Block, followed by a full field development of Ebok NFB.

Development work continued at the main Ebok field throughout the first half, and comprised of drilling and completing the Ebok-29 and 30 wells.

Okwok

Processing of the 348 km2 Ocean Bottom Cable 3D seismic survey that was acquired over the whole Ebok/Okwok/OML 115 area in late 2011 has been completed, and results have been integrated into the existing data set. The new data is assisting with the optimal placement of an appraisal well on the field to test upside potential, and assist in development planning prior to formal submission of a Field Development Plan to the Nigerian authorities. The most likely development scenario for Okwok comprises the installation of a separate dedicated production processing platform tied back to, and sharing, the existing 1.2 mmbbls capacity Ebok Floating Storage Offloading vessel ("FSO") located approximately 13 km to the west.

OML 115

The partners plan to drill an exploration well on the block during the fourth quarter of 2012 utilising the new OBC seismic data to define the best prospect. The Ufon structure is still the most likely target.

OML 26

During the first half of 2012, output at OML 26 was restricted to a capacity of 5,000 bopd owing to gaslift compressor outage and maintenance and repair work on the SPDC operated Trans Forcados Trunkline. Full gas compression was restored by the end of June, following which production rates of ca. 10,500 bopd have been restored. Following a review of gaslift compression strategy at the field, the partners have approved the procurement and installation of a new compressor unit in the third quarter. The partners are also embarking on studies to upgrade the flowstation capacity as well as to evaluate reactivation and workover opportunities on existing wells prior to the planned commencement of drilling new horizontal wells in 2013, with the objective of ultimately increasing gross production to 50,000 bopd.

Kurdistan region of Iraq

Barda Rash

Extensive testing commenced at the BR-1 well on 7 July 2012 and has yielded oil rates in excess of 6,000 bopd of 28° to 32° API oil, as well as valuable information on the production characteristics of the Mus/Adiayah reservoir. The well is currently being completed for long term production. Produced oil to the required sales specification will flow to storage tanks that have been installed as part of the initial development phase ahead of sale into the domestic market.

As part of the ongoing development of the Barda Rash field, the Company will next seek to re-enter, workover, test and commission the existing BR-2 and BR-3 wells which will be tied back to the Early Production Facility ("EPF") at the central BR-1 well location, and remains on track to deliver gross production from the initial three wells of between 10,000 to 15,000 bopd by the year end.

Post completion of this initial phase, the Company will commence the drilling and completion of multiple new development wells with the intention of increasing production to a planned trucking capacity of 35,000 bopd and ultimately to a targeted 125,000 bopd by 2017. Following this, the Company will focus on the development and production of the heavier oil resources, which will offer further large scale production growth.

Ain Sifni

On 17 April 2012, the Company announced that the Simrit-2 exploration well had successfully encountered an estimated 1,342 ft of net oil pay in Cretaceous, Jurassic and Triassic age reservoirs. An estimated 1,024 ft of which is interpreted as containing light oil. The objective of the Simrit-2 exploration well was to test the western extent of the Simrit anticline. The well was initially drilled to its prognosed total measured depth of 12,139 ft (12,129 ft true vertical depth). As there were continuing strong hydrocarbon shows, Afren and operator Hunt Oil Middle East elected to deepen the well and continue drilling to a revised total depth of 12,467 ft to test additional zones of prospectivity. Analysis of data collected over the deepened section of the well indicates the continual presence of light oil shows, and extends the estimated net pay encountered by the well to 1,509 ft. No oil water contact has been encountered in the target reservoirs.

It is the partners' intention to conduct up to 12 separate drill stem tests ("DSTs") throughout the Cretaceous, Jurassic and Triassic aged reservoir, which commenced in June. To date, three DSTs have been completed at separate zones within the Triassic age Kurra Chine Formation, yielding an aggregate flow rate of 13,584 bopd of 39° API gravity oil.

Following completion of this first batch of DSTs, the partners switched the Viking-11 drilling unit for a work-over rig at the Simrit-2 location in order to complete the remaining nine planned DSTs. The Viking-11 drilling rig was then mobilised to commence drilling of the Simrit-3 exploration well.

Côte d'Ivoire

CI-11 and Lion gas Plant

Average gross production during the period at CI-11 was 23.9 mmcfd and 833 bopd, with 745 boepd of Natural Gas Liquids ("NGL") production at the Lion Gas Plant. Production operations continue uninterrupted at the Company's assets in Côte d'Ivoire and remain in line with expectations.

CI-01

The partners on Block CI-01 plan to acquire additional 3D seismic to augment the existing well and seismic dataset. It is believed that the Cretaceous accumulations may be significantly larger than originally mapped.

West Africa exploration

Nigeria São Tomé & Príncipe JDZ

Block 1

The Obo-2 and Enitimi-1 wells were drilled during the period March to June. Both wells encountered oil and gas pay, and the operator Total continues to evaluate the results and commercial viability.

Congo Brazzaville

La Noumbi

Following interpretation of depth processed 2D data on the block, two prospects have been identified and the operator plans to drill these in the second half of 2012.

Nigeria

OPL 310

Afren has identified several prospects that lie in the same Senonian, Turonian and Albian sandstone intervals that have yielded significant discoveries along the West African Transform Margin in Ghana and Côte d'Ivoire. Detailed technical work and well planning continues in preparation for an exploration well in 2H 2012.

OPL 907/917

The Company is continuing to evaluate the potential of the blocks in order to identify areas for future seismic acquisition that could ultimately lead to future exploration drilling.

Ghana

Keta Block

On 25 April 2012, the Company announced that the Nunya-1x exploration well intersected 502 ft of very good quality sandstone reservoirs, however they were interpreted as water bearing. The well has provided important information with which to calibrate and further enhance the Company's understanding of this under-explored block in what still remains a high potential basin and the partners have since elected to progress into the next two year exploration phase.

South Africa

Block 2B

The partners' near-term work programme involves the acquisition of 600 km2 of 3D seismic data in the first quarter of 2013. Exploration drilling is expected in 2014.

East Africa exploration

Following the completion of the Black Marlin acquisition in October 2010, and the ongoing maturing of the portfolio via seismic acquisition in Kenya (Blocks L17/18, 1, 10A), Tanzania (Tanga), Seychelles (Areas A,B), Ethiopia (Blocks 7,8) and airborne gravity and magnetic surveys in Madagascar (Block 1101), mean net prospective resources have been upgraded for the East African portfolio from 2,113 mmboe to 5,838 mmboe. In addition, new plays have been identified offshore Kenya and Tanzania.

Kenya

Block 10A

Having satisfied all seismic work commitments with the acquisition of 750 km of 2D seismic over the block in 2011, the operator (Tullow Oil) will commence the drilling of one exploration well on the Paipai prospect. The well is expected to spud by end September 2012.

Block 1

Acquisition of the planned 1,800 km of 2D seismic data is well underway and the Company is making good progress towards completion during the fourth quarter of 2012. Post period end, the Company has increased its equity in the licence to 80% under the terms of the original farm-in agreement.

Blocks L17/L18

The Company completed the acquisition of 1,207 km of additional 2D seismic data targeting the deeper water portion of the block in January 2012. The preliminary interpretation of this data has identified four new highly encouraging prospects, in addition to the previously mapped prospects in the shallow water. These prospects represent a major new play with lower risk and greater materiality than the shallow water play, and together increase the mean prospective resources on the block from 94 mmboe to 1,088 mmboe, since the Black Marlin acquisition. As a result, Afren, together with consultation with the Ministry of Energy, has opted to acquire 1,000 km2 3D seismic in the second half of 2012 in lieu of the well commitment, in order to better understand the deep water prospectivity, ahead of exploration drilling in 2013. In addition, an onshore 2D seismic survey of 120 km has been contracted to start in September 2012 to simultaneously continue maturation of the shallow water/onshore play.

Tanzania

Tanga Block

During Q4 2011, the partners acquired over 900 km of 2D seismic data in deeper water areas of the licence. Interpretation of these data reinforces previous views of the prospectivity of these areas, in the same play that has also been identified in neighbouring Kenya blocks L17/18. The result is an increase in mean prospective resources on the block from 1,026 mmboe to 1,244 mmboe. A 3D seismic survey of approximately 550 km2 is planned for the second half of 2012, prior to exploration drilling.

Seychelles

Areas A,B,C

Seismic data previously acquired by the partners revealed the presence of several large scale structures in all three licence areas. A major new survey in Q4 2011 (3,733 km) included new basins that could also contain significant Jurassic and Cretaceous sedimentary sections, and is currently being processed. Afren has elected to relinquish Area C in order to focus on higher priority plays in Areas A and B.

Madagascar

Block 1101

An airborne gravity and magnetic survey was completed in January 2012. Geological fieldwork was conducted in June, and 230 km 2D seismic acquisition has been contracted to start in September 2012. An exploration well is expected in 2013.

Ethiopia

Blocks 7,8

Work is ongoing to further interpret the prospectivity of Blocks 7 and 8 ahead of expected drilling by the operator Africa Oil in 2013.

Finance Review

1. Result for the period

Revenues

Revenue for the period was US$771.7 million, an almost four-fold increase from the equivalent period in 2011, which arises from a full period of production from the Ebok field. Working interest production for the period increased to 41,251 boepd (including associated volumes from First Hydrocarbon Nigeria Limited) from 12,975 boepd in 1H 2011, again reflecting the full period of production from Ebok.

In 1H 2012, the Group realised an average oil price of US$107.9/bbl and an average gas price of US$6.0/mcf (1H 2011: US$110.4/bbl and US$8.0/mcf), against an average price for Brent in the period of US$112/bbl (1H 2011: US$111/bbl).

Gross profit

Gross profit for the period was US$396.1 million, driven by the increase in the Group's revenue and offset by related increases in operating costs including the DD&A charge for oil and gas assets and royalties relating to Ebok production. The DD&A charge for oil and gas assets in 1H 2012 was US$179.5 million, an increase of 237% on 1H 2011.

Profit for the period

Profit after tax on continuing activities for 1H 2012 was US$100.2 million (1H 2011: US$22.8 million), increasing in line with the impact of production growth, and reflective of a related increase in the Group's tax charge, increased finance costs, impairment costs, and a one-off gain on Afren's share of investments in associates which occurred in 2011.

Administrative expenses decreased by US$5.8 million in 1H 2012 compared to 1H 2011 reflecting an increase in the allocation of costs to assets and operations.

The impairment charge on oil and gas assets of US$12.2 million (1H 2011: US$0.2 million) relates to the write-off of costs of the Nunya well on the Keta block offshore Ghana.

During the period the Group recognised a loss from derivative financial instruments of US$9.1 million (1H 2011: US$12.0 million) relating to crude oil hedging contracts, as the oil price realised averaged consistently above the hedged price during the period. Hedges covering approximately 1.8 million barrels are in place for the period 1 July 2012 to 31 December 2012, providing minimum floor prices on these volumes of between approximately US$80-US$90/bbl.

The policy of the Company is to protect its minimum cash flow requirement in the context of a sustained downturn in oil prices. As such the maximum amount of our working interest we would seek to protect with these arrangements is between 20-30% of estimated production for a rolling period of 24 months forward.

Finance costs for 1H 2012 were US$67.1 million, of which US$18.0 million were capitalised as part of the cost of asset development (1H 2011: costs of US$47.1 million; US$24.5 million capitalised). The increase in finance costs relates to the interest costs on the Group's Bond issues in January 2011 and March 2012, as well as additional interest arising on the Ebok reserve-based lending facility and Ebok production facilities finance lease.

The income tax charge for the period was US$215.9 million, of which US$164.3 million related to deferred tax (1H 2011: net income tax charge of US$21.0 million, including a deferred tax credit of US$3.7 million). Available tax losses were largely utilised in 2011, which, together with a period of full production at Ebok has led to an increased effective tax rate in 1H 2012.

Afren's share of FHN's result for the period was a gain US$0.2 million (1H 2011: US$1.3 million loss), the gain largely representing the recognition of deferred tax assets in FHN.

Normalised profit after tax, which excludes the effect of unrealised hedge movements and share related charges, was US$103.1 million (1H 2011: US$44.4 million)1

2. Financing the Group's activities

Cash generated from operating activities before movements in working capital in 1H 2012 was US$558.3 million (1H 2011: US$117.0 million), of which US$500.9 million has been used to fund the Group's investments in development, appraisal and exploration activities.

In March 2012, the Group completed a second Bond issue, proceeds of which were US$300 million before issue costs. The coupon on the bonds is 10.25% and they are listed on the Luxembourg Stock Exchange. The proceeds from the issue of the new Bond have been used to repay and cancel the US$200 million VTB/BNPP facility and for general corporate purposes.

Including the March 2012 Bond issue, as well the January 2011 Bond, the Ebok reserve-based lending facility, and other corporate facilities, gross debt at 30 June 2012 was US$1,026.2 million, excluding finance leases (1H 2011: US$663.9 million).

Loan repayments in the period, excluding payments in respect of finance leases, were US$214.0 million reflecting early settlement of the US$200 million VTB/BNPP facility using the proceeds of the Bond issue in March 2012 and periodic payments due under the Ebok facility. Cash at bank at 30 June 2012 was US$443.7 million, resulting in net debt, excluding finance leases, of US$582.5 million (1H 2011: US$343.0 million).

Cash at bank as at 20 August 2012 was US$395 million. The movement since 30 June 2012 reflects net revenue received, movements on the Group's loan facilities, payments for capital expenditure and advances and payments to partners.

3. Development, appraisal and exploration activities

The Company's investment in appraisal and exploration activities has continued during 2012, with expenditure of approximately US$97 million, the main areas of expenditure being further exploration at Okoro East (US$16 million), Ebok (US$18 million), Keta (US$16 million), Ain Sifni (US$11 million) and Kenya Blocks 1, 10A and L17/L18 (US$16 million).

Expenditure on oil and gas assets was US$136 million, comprising continuing development of the Ebok and Okoro fields and US$23 million on Barda Rash.

4. Related party transactions

Related party transactions are disclosed in note 10 to the condensed set of financial statements. There have been no material changes in the level or nature of related party transactions since the last annual report.

5. Principal risks to 2012 performance

The Directors do not consider that the principal risks and uncertainties of the Group have changed since the publication of Annual Report and Accounts for the year ended 31 December 2011. The principal risks faced by Afren relate to: operational risks involving field delivery risks, exploration failure, environmental and safety incidents, unfulfilled work and / or PSC obligations and detrimental changes to the conditions of our licences; external risks including geo-political risks, security incidents, host community action and oil price volatility; strategic risks including exposure to bribery and corruption, managing growth and the loss of key employees; and financial risk including changes to tax regimes and other legislation, and treasury management. A detailed explanation of these risks can be found on pages 22 to 25 of the 2011 Annual Report and Accounts which is available at www.afren.com.

6. Going concern

As stated in note 1 to the condensed financial statements, the Directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, being a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed financial statements.

7. Financial strategy and outlook

Our financial strategy continues to be to maintain the flexibility required to support the significant appraisal and development activities in Nigeria and the Kurdistan region of Iraq, and the exploration activities across the portfolio. In addition to the significantly cash generative nature of our growing production base, we have maintained our relationships with the lending banks through our Reserve Based Lending facility on Ebok, while diversifying our sources of capital through access to the Bond market.

The Okoro East and Ebok North Fault Block discoveries in Nigeria and Simrit-2 discovery in the Kurdistan region of Iraq will add significantly to the already material 2P reserves base and further extends our range of development opportunities and will in time add to the growing production base. With a number of high impact exploration wells to be drilled in both West and East Africa and the Kurdistan region of Iraq, and the growing production base, Afren is well placed for continued success.

Responsibility Statement

The Directors confirm that to the best of their knowledge:

a) the condensed set of financial statements has been prepared in accordance with lAS 34 'Interim Financial Reporting';

b) the Half-yearly management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

c) the Half-yearly management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

Disclaimer

This statement contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this report but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information. This interim management report has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The report should not be relied on by any other party or for any other purpose.

Independent review report to Afren plc

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2012 which comprises the income statement, the balance sheet, the statement of changes in equity, the cash flow statement and related notes 1 to 10. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financialstatements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2012 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Deloitte LLP

Chartered Accountants and Statutory Auditor

London, United Kingdom

21 August 2012

Comprehensive income for each period was equivalent to profit after tax for each period presented.

Notes to the half-yearly financial statements

Six months ended 30 June 2012

1. Basis of accounting and presentation of financial information

The condensed Group interim financial statements, comprised of Afren plc (''Afren'') and its subsidiaries (together, ''the Group''), have been prepared in accordance with International Accounting Standard (''IAS'') 34, ''Interim Financial Reporting'', as adopted by the International Accounting Standards Board ("IASB"). Accordingly, certain information and footnote disclosure normally included in annual financial statements prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the IASB, have been omitted or condensed as is normal practice. The condensed Group interim financial statements for the six months ended 30 June 2012 have been prepared solely for the purposes of compliance with the terms of issue of the senior secured loan notes. The condensed Group interim financial statements are unaudited, and do not constitute statutory accounts as defined in sections 435(1) and (2) of the Companies Act 2006. Statutory accounts for the year ended 31 December 2011 were published and copies of which have been delivered to the Companies House. The report of the auditors on those accounts was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report, and did not contain any statement under sections 498(2) or (3) of the Companies Act 2006.

Changes in accounting policy

The same accounting policies, presentation and methods of computation have been followed in these condensed Group interim financial statements as were applied in the preparation of the Group's financial statements for the year ended 31 December 2011. These interim financial statements should be read in conjunction with the Group's consolidated financial statements for the year ended 31 December 2011.

Going concern

The directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed Group interim financial statements.

2. Finance costs

3. Earnings per share

4. Reconciliation of profit after tax to normalised profit after tax

* Excludes realised losses on derivative financial instruments of US$12.4 million (30 June 2011: US$3.4 million).

Normalised profit after tax is a non-IFRS measure of financial performance of the Group, which in management's view more accurately reflects the Group's underlying financial performance. This may not be comparable to similarly titled measures reported by other companies.

5. Taxation

The rise in the effective tax rate reflects having largely utilised the available tax losses and the commencing of production at the Ebok field during 2011 and throughout the 6 months ended 30 June 2012.

6. Operating segments

For management purposes, the Group currently operates in five geographical markets which form the basis of the information evaluated by the Group's chief operating decision maker: Nigeria, Cote d'Ivoire, Other West Africa, Eastern Africa and Middle East and North Africa. Unallocated operating expenses, assets and liabilities relate to the general management, financing and administration of the Group.

6. Operating segments continued

* During the year ended 31 December 2011, exploration and evaluation additions of US$415.4 million in respect of the Barda Rash licence were transferred to oil and gas assets in the Middle East and North Africa segment.

6. Operating segments continued

7. Senior secured loan notes

8. Impairment charge on exploration and evaluation assets

The charge during the period relates to Nunya-1x well costs, in Keta block offshore Ghana, written off during the period as the well was plugged and abandoned.

9. Contingent liabilities

There has been no material change to the contingencies reported in the annual report for the year ended 31 December 2011.

10. Related parties

The following table provides the total amount of transactions which have been entered into with related parties during the six months ended 30 June 2012 and 2011:

Trading transactions

St John Advisors Ltd and STJ Advisors LLP are the contractor companies for the consulting services of John St. John, a Non-Executive Director of Afren, for which they receive fees, including contingent completion and success fees, from the Company. Both St John Advisors and STJ Advisors LLP also receive monthly retainers of £18,000 and £36,000 under contracts which started from 27 June 2008 and 15 December 2011 respectively. The contracts have a twelve month period which automatically continues unless terminated by either party.

In addition, a separate contract was entered into with STJ Advisors LLP in 2010 for consulting services provided in relation to the issue of the senior secured loan notes which completed on 27 January 2011.

First Hydrocarbon Nigeria Limited (FHN) is an associate of Afren plc.

Advisors and Company Secretary