Interim Management Statement

Afren plc (AFR LN)

Interim Management Statement

London, 15 May 2012 - Afren plc ("Afren" or the "Company"), announces its Interim Management Statement and financial results for the three months ended 31 March 2012 and an update on its operations to 15 May 2012, in accordance with the reporting requirements of the EU Transparency Directive. Information contained within this release is un-audited and is subject to further review.

Highlights

·; 2012 exploration campaign yielding significant success

- High value discoveries offshore south east Nigeria at Okoro East and Ebok North Fault Block

- Transformational Simrit-2 discovery in Kurdistan region of Iraq; exploration well being deepened ahead of extensive testing programme

- Ongoing prospect maturation in East Africa with significant data acquisition; 1,570 km total 2D seismic, 9,000 km gravity and magnetic data

- 2012 exploration targeting mean resources of 630 mmboe (net to Afren)

·; Q1 net production of 41,308 boepd in line with expectations for the period (+327% year-on-year)

- Early production wells on Okoro East to be drilled shortly

- Further development of Ebok field ongoing (four production wells)

- On track for full year net production guidance (42,000 boepd to 46,000 boepd)

·; Development work underway at Barda Rash field

- On track for first oil in August 2012

·; Significantly cash generative portfolio

- Turnover US$386.7 million (Q1 2011: US$73.4 million); profit after tax US$53.2 million(Q1 2011: US$11.1 million loss)

- Net operating cash flow generated of US$300.2 million (Q1 2011: US$12.8 million net operating cash flow used); US$153.1 million net cash flow generated post capex (Q1 2011: US$147.2 million net cash flow used post capex)

- Cash at bank US$399.0 million (Q1 2011: US$333.0 million)

·; Diversified sources of funding; maturing capital structure

- Successfully completed US$300 million bond issue; majority of debt long dated (2016-2019)

- Net debt US$639.4 million (Q1 2011: US$291.6 million)

Commenting on today's IMS, Osman Shahenshah, Chief Executive of Afren plc, said:

"We have made an excellent start to our 2012 exploration campaign with significant discoveries at Okoro East, Ebok North fault Block and Ain Sifni. Group production during the first quarter was in line with our expectations, generating US$300.2 million of net operating cash flow. We look forward to continuing our exploration programme, with wells in Nigeria, the Nigeria-São Tomé & Príncipe JDZ , Congo, the Kurdistan region of Iraq and East Africa, targeting in excess of 630 million barrels of oil equivalent net to Afren."

Operations update

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

Net working interest production during the first quarter was in line with expectations and reflects the management of ongoing development work, simultaneous operations and associated downtime at the Ebok field during exploration and development drilling. The Company remains firmly on track to achieve full year net production guidance.

Nigeria

Okoro and Okoro East

On 17 January 2012, Afren and its partner Amni International Petroleum Development Company Ltd. ("Amni") announced that the Okoro East exploration well had successfully made a new oil discovery. Located approximately 2 km east of the Okoro main field, the well was targeting equivalent reservoirs to the main field in a fault sealed three-way dip closed structure in addition to further prospectivity in a deeper horst block structure - a play concept that had not previously been explored on the block.

The well encountered net pay of 549 ft across both the upper and deeper targets, and test data confirmed the oil to be light and of good quality (38° to 40° API) in excellent reservoir sands with multi-Darcy permeabilities and average porosity of between 30% to 35%. The pressure data also obtained has helped with the Company's structural understanding of the field and supports the Company's pre drill volumetric estimates (Pmean STOIIP of 157 mmbbls).

The year ahead will see ongoing management of existing production at the Okoro field with the objective of optimising the oil recovery factor from the already developed reservoir zones. Afren and its partner Amni will shortly commence the drilling of two new production wells at Okoro East, whilst also defining the most appropriate long-term development solution for the entire field.

Ebok and Ebok North Fault Block

Having commissioned all production wells associated with the initial phases of the Ebok field development in 2011, the Company and its partner Oriental Energy Resources ("Oriental") are in the process of drilling and completing a further four horizontal production wells at the field. The wells are being drilled from the West Fault Block wellhead platform and are targeting proved oil bearing reservoir zones that were not captured by the initial phases of development work.

On 14 May 2012 the Company announced that the Ebok North Fault Block ("Ebok NFB") exploration well has successfully made an oil discovery. The well was spudded on 12 April2012 by Afren and Oriental, and reached a total depth of 4,320 ft, with the Transocean Adriatic IX jack-up drilling rig. The well was targeting a separate fault block structure located to the north of the main Ebok field, and has successfully encountered 370 ft net pay (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 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 Ebok West Fault Block, followed by a full field development of Ebok NFB. The Transocean Adriatic IX rig will shortly commence the drilling of early production wells at the recent Okoro East discovery.

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 are being integrated into the existing data set. The new data will assist in the optimal placement of one appraisal well at Okwok during the second half of the year to test upside potential, and 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 second half of 2012, most likely targeting the Ufon prospect. The Ufon prospect is a three-way dip closed structure that is interpreted to have oil prospectivity in the same reservoirs that have proven to be oil bearing at the nearby Ebok and Okwok fields.

OML 26

During the first quarter, output at OML 26 was restricted to 3,250 bopd owing to gaslift compressor outage and maintenance work that was undertaken on the SPDC operated Trans Forcados Trunkline which necessitated a 24 day period of downtime at the Ogini flowstation. Following a review of gaslift compression strategy at the field, the partners will in the near term seek to optimise production with the existing compression facilities and ultimately procure and install new compressor units in the third quarter. At the same time, the partners are evaluating 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

Having received all necessary approvals of the Field Development Plan (FDP) for Barda Rash during November 2011, the Company has commenced the development programme that will initially target approximately 500 million barrels of light recoverable oil out of the independently assessed 1.43 billion barrels total recoverable volume.

Phase I development work is focused on the existing BR-1, BR-2 and BR-3 wells that have been drilled at the field to date. The three wells will be sequentially re-entered, worked over, tested, completed and bought onstream. The wells will be tied back to a modular Early Production Facility that is being installed at the central BR-1 well location. Assembly of the Romfor 23 rig has been completed at the BR-1 well location, and final preparations are being made to re-enter the well. The Company is on track to commence production at Barda Rash by August, and expects all three wells to be onstream and producing at a rate of between 10,000 bopd to 15,000 bopd by year end. Acquisition of a comprehensive block wide 3D seismic survey has also commenced and is progressing well. The objective of the survey is to provide additional data that will assist in future development planning and well placement combined with enhancement of the Company's understanding of fracture zone distribution.

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 discovered a significant oil accumulation based on the results of drilling, wireline logs and sidewall core sampling. 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) and 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. No oil water contact has been established in the target reservoirs.

As there were continuing strong hydrocarbon shows to the planned depth of 12,139 ft, Afren and operator Hunt Oil Middle East ran casing at that depth and continued drilling to a new total depth of circa 12,467 ft to test additional zones of prospectivity. Drilling operations are expected to be completed by the end of May, after which a comprehensive well testing programme will be undertaken across multiple reservoir intervals. Testing operations are expected to take up to two months to complete. Following this, the drilling rig will be mobilised to the East Simrit prospect to drill the Simrit-3 exploration well. Given the scale of the oil column that has been intersected with the Simrit-2 well, the initial volumetric estimates for the Ain Sifni PSC are being updated to incorporate the new data.

Côte d'Ivoire

CI-11 and Lion gas Plant

Production operations continued uninterrupted at the Company's assets in Côte d'Ivoire during the period 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

Keta Block (Ghana)

The objective of the Nunya-1x exploration well was to explore a large four-way dip closed Upper Cretaceous prospect in the Keta block, located offshore Ghana. On 25 April 2012, the Company announced that the well had intersected 502 ft of very good quality sandstone reservoirs, however they were interpreted as water bearing. The well was drilled with the Marianas semi-submersible drilling rig to a total depth of 14,928 ft in a water depth of 5,535 ft. Afren has a 35 per cent. carried interest in the block. 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.

OPL 310 (Nigeria)

Afren has identified several prospects that lie in the same Senonian, Turonian and Albian sandstone intervals that have yielded significant discoveries along with the West African Transform Margin in Ghana and Côte d'Ivoire. The Company intends to drill an exploration well in 2012 and has plans in place to acquire additional seismic data.

Block 1 (Nigeria São Tomé & Príncipe JDZ)

The operator on Block 1, Total, has commenced a two well drilling campaign on the block with the West Polaris drill ship.

La Noumbi (Congo Brazzaville)

Following interpretation of depth processed 2D data on the block, two prospects have been identified and the operator has proposed drilling these in 2012.

Block 2B (South Africa)

The partners near-term work programme involves the acquisition of 600 km2 of new 3D seismic data, with reprocessing of existing 2D seismic and ongoing seismic inversion and regional biostratigraphy studies ahead of expected exploration drilling in 2014.

OPL 907/917 (Nigeria)

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.

East Africa exploration

Block 1 (Kenya)

Acquisition of the planned 1,800 km of 2D seismic data is well underway, and the Partners are targeting completion during 2012.

Block 10A (Kenya)

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 in H2 2012.

Blocks L17/L18 (Kenya)

The Company has completed the acquisition of 1,207 km of additional 2D seismic data targeting the deepwater portion of the block. The preliminary interpretation of the deep water 2D seismic identifies four new highly encouraging prospects, in addition to the previously mapped prospects in the shallow water. Importantly, the leads mapped on the new seismic represent a major new play with lower risk and greater materiality than the shallow water play. Afren proposes to acquire 1,000 km2 3D seismic in H2 2012, in order to better understand the deep water prospectivity and identify a well location. The primary objectives of the 3D deep water seismic survey is to optimally image the deep water structures, define the reservoir distribution, potentially define fluid - or lithology - related amplitude anomalies and reduce risk.

Tanga Block (Tanzania)

During Q4 2011, the partners acquired over 900 km of deepwater 2D seismic, the results of which have now been interpreted and integrated with existing data. In 2012, the partners intend to acquire 3D seismic data over the deepwater areas of the block ahead of exploration drilling on the Orpheus prospect from a shallow water location. The Company is in the process of securing a suitable jack up rig.

Areas A,B,C (Seychelles)

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.

Block 1101 (Madagascar)

The expanded work programme on Block 1101 consists of the drilling of one exploration well to a minimum depth of 5,249 ft and the acquisition of additional 150 km of new 2D seismic and airborne gravity and magnetics. The gravity and magnetic acquisition was completed in January 2012, seismic acquisition is planned for H2 2012 and drilling is expected in 2013.

Blocks 7,8 (Ethiopia)

Work is ongoing to further interpret the prospectivity of Blocks 7 and 8 ahead of expected drilling in H2 2012.

Forward 2012 exploration and appraisal drilling schedule

* Working interest pre/post cost recovery;

** Well operating; Simrit-2 (Kurdistan region of Iraq) discovery announced 17 April 2012, Ebok NFB (offshore Nigeria) discovery announced 14 May 2012

Financial position

Revenue in the period was US$386.7 million (Q1 2011: US$73.4 million), reflecting increased production from the Ebok field. The company realised an average oil price of US$115.5/bbl (Q1 2011: US$104.1/bbl) and an average gas price of US$6.0/mcf (Q1 2011: US$7.6/mcf).

Oil and gas inventory at Q1 2012 was US$36.3 million (Q1 2011: US$13.4 million), representing approximately 460,000 barrels at Ebok and 270,000 barrels at Okoro net to Afren.

Hedges covering approximately 2.7 million barrels are in place for the period 1 April 2012 to 31 December 2012, following the purchase of additional deferred put options and spreads post year end, providing minimum floor prices on these volumes of between approximately US$79-US$90/bbl.

Profit from continuing activities before tax was US$143.2 million (Q1 2011: US$2.0 million). This reflects an increase in gross profit of US$171.6 million compared with the prior period, but also includes the effect of losses on derivative financial instruments of US$30.2 million on the valuation of mark to market oil price hedges (Q1 2011: US$9.6 million loss), finance costs of US$23.6 million largely arising from interest charges on the Company's banking facilities and secured loan notes, and a share of FHN's unrealised losses on oil price hedges (US$9.3 million net to Afren) arising from Afren's shareholding in FHN offset by gains on the recognition of deferred tax assets relating to FHN's historical losses.

Normalised profit in the period was US$78.3 million (Q1 2011: US$9.9 million). Normalised profit excludes the effect of unrealised hedge movements on Afren and on its share of the derivative financial instrument losses in FHN, share related costs, and the cost of early debt repayment.

On 8 March 2012, the Company completed a second bond issue raising approximately 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 in part to repay and cancel the up to US$200 million VTB/BNPP facility and for general corporate purposes.

Capital expenditure on appraisal and exploration in the period was US$41.3 million (Q1 2011: US$27.4 million), which included US$15.7 million in respect of the successful Okoro East exploration well. Development expenditure was US$105.2 million (Q1 2011: US$105.0 million). Deferred consideration of US$200 million in respect of the acquisition of Afren's interests in the Barda Rash PSC was paid in the period.

Net debt, excluding finance leases, as at Q1 2012 was US$639.4 million (31 December 2011: US$548.3 million) with cash at bank of US$399.0 million (Q1 2011: US$333.0 million).

Ends.

Notes to Editors

Afren Plc

Afren is an independent upstream oil and gas exploration and production company listed on the main market of the London Stock Exchange and constituent of the Financial Times Stock Exchange Index of the leading 250 UK listed companies. Afren has a portfolio of 29 assets across 12 countries spanning the full cycle E&P value chain. Afren is currently producing from its assets offshore Nigeria and Côte d'Ivoire and holds further interests in the Kurdistan region of Iraq, Ghana, Nigeria, Côte d'Ivoire, Congo Brazzaville, the Joint Development Zone of Nigeria - São Tomé & Príncipe, Kenya, Ethiopia, Madagascar, Seychelles, Tanzania and South Africa. For more information please refer to www.afren.com.

Comprehensive income/(loss) for each period was equivalent to profit/(loss) after tax for each period presented.

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 three months ended 31 March 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/(loss) after tax to normalised profit after tax

* Excludes realised losses on derivative financial instruments of US$ 16.0 million (31 March 2011: US$ 1.2 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 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 3 months ended 31 March 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. Contingent liabilities

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

9. Subsequent events

On 25 April 2012, Afren announced that the Nunya-1x exploration well in the Keta block offshore Ghana has encountered thick and high quality water bearing reservoirs. An assessment will be carried out to determine whether this will lead to an impairment of the well costs incurred.

10. Related parties

The following table provides the total amount of transactions which have been entered into with related parties during the three months ended 31 March 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 £15,000 and £30,000 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.