Interim Management Statement

Afren plc (AFR LN)

Interim Management Statement

London, 15th November 2011 - Afren plc ("Afren" or the "Company") issues the following Interim Management Statement, in respect of the period 1 July 2011 to 15 November 2011, 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

u Group net production currently circa 28,000boepd;expecting circa 50,000 boepd 2011 exit rate

u Strong financial position - US$223 million cash at bank; net debt US$519 million (gearing 45%)

u Acquisition of OML 26 (Nigeria) - following government and other customary approvals, formal completion expected shortly

u Ebok (Nigeria) - Phase 1 production currently at 15,800 bopd, steadily being increased towards upper end of targeted 17,000 bopd; four out of five wells available for production at Ebok Phase 2, with well test rates of 5,000 bopd, supporting developed capacity of 20,000 bopd; three additional D1 producers expected onstream by end 2011

u Okoro (Nigeria) - production stable at 18,000 bopd following debottlenecking work

u Barda Rash (Kurdistan) - Field Development Plan submission expected end 2011; phased development with production start-up mid 2012. Initial phases to target 506 mmbbls recoverable light oil

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

"We are pleased to report that production at Ebok Phase 1 is responding in line with prognosis to water injection and is being steadily increased to the expected 17,000 bopd level. Elsewhere at Ebok, we have a number of additional production wells that will be brought onstream by year end, which combined with existing production at Okoro and in Côte d'Ivoire keeps us on track to enter 2012 with net production of circa 50,000 boepd attributable to the Company. The Company remains in a strong position financially, with significant cash resources available and a profitable and growing production base underpinning an internally funded forward work programme."

Production and development operations update

* Pre/post cost recovery economic interest; ** Post achievement of cost recovery mid 2010 Afren's economic interest is 50% at the Okoro field, from 1 October 2011 Afren will benefit from an effective 75% economic interest in production from the Okoro-11 and Okoro-12 infill wells.

Current net daily production at the Company's operations in Nigeria and Côte d'Ivoire is approximately 28,000 boepd and the Company remains on track to exit the year with net production of approximately 50,000 boepd, following start up and commissioning of additional production wells at the Ebok field and ongoing production response to water injection.

Ebok

Production at Ebok Phase 1, targeting the Central Area of the field is currently at 15,800 bopd, and is steadily increasing towards the upper end of the targeted range at 17,000 bopd. Water injection was commissioned at the field during August and is running at a stabilised injection rate of approximately 18,000 bwpd from two wells, with capacity to increase to 22,000 bwpd. The production performance recorded at the field in response to water injection has been in line with prognosis.

A total of four out of the five planned development wells have been drilled and completed as part of Ebok development Phase 2, developing the West Fault Block area of the field. The Company expects to have completed drilling operations and have the fifth production well available shortly and for all five wells to have been commissioned and bought onstream during December. Production tests on available wells have yielded rates of up to 5,000 bopd and the Company expects fully developed production capacity of the five wells to be circa 20,000 bopd.

Having achieved a production test rate of up to 4,000 bopd from the D1 reservoir in the Central Area of the field during the first half of the year, ahead of expectations, the Company subsequently prioritised full development of the reservoir at this location and is in the process of batch drilling three additional production wells. It is expected that these wells will be commissioned and bought onstream by end 2011.

3D seismic work programme update

The Company completed an Ocean Bottom Cable 3D seismic survey over the whole Ebok/Okwok/OML 115 area on November 4th, 2011. Having commenced the survey on 24 June 2011, the Company acquired 348 km2 of high quality data that will assist the Company with future development and infill planning at the Ebok field, appraisal and development of the Okwok field and exploration of the highly prospective OML 115 acreage.

Okwok 

Having established the Okwok field as a future commercial development, with NSAI ascribing 52 mmbbls of gross recoverable resources following completion of the Okwok-9 appraisal well in November 2010, the Company is evaluating stand alone development options, the most likely of which will comprise the installation of a separate dedicated production processing unit with processed production stored at and exported from the existing Ebok field Floating Storage Offloading vessel ("FSO") located approximately 13 km to the west. The Company plans to drill one further appraisal well in H2 2012 to test additional upside that exists at the field, which will then be followed by formal submission of a Field Development Plan (FDP) to the Nigerian authorities.

Okoro

Gross production at the Okoro field averaged 15,400 bopd during the period to 30 September 2011. De-bottlenecking work has increased production to 18,000 bopd during October 2011. The Okoro East prospect, an Okoro main field look-a-like structure identified earlier in 2011, has been incorporated into the Company's forward drilling programme with a well now expected to spud on the prospect by year end.

OML 26

Following the announcement of First Hydrocarbon Nigeria Limited's ("FHN") acquisition of a 45% interest in OML 26 from the Shell Petroleum Development Company of Nigeria Ltd, Total E&P Nigeria Ltd and Nigeria Agip Oil Company, FHN has received the necessary government and customary approvals and FHN and Afren anticipate formal completion of the transaction shortly.

Post completion of the acquisition, as previously disclosed, FHN will propose a three phase development plan for the Ogini and Isoko fields, with the goal of ultimately increasing gross production to a rate of 50,000 bopd.

Afren and FHN will continue to seek out further opportunities to expand the partnership through the acquisition of other substantial oil and gas assets in Nigeria including those that are currently held between the Nigerian government and major international oil companies, assets that could be diversified in connection with indigenous licensing rounds and assets of other Nigerian companies if appropriate.

CI-11 and Lion gas Plant

Average gross production during the period to 30 September 2011 at CI-11 was 3,100 boepd, with 600 boepd of NGL production at the Lion Gas Plant. Production levels have been below expectation year to date, due to the impact of political and social unrest delaying the import of necessary equipment and resources required to conduct routine maintenance of the compressor unit in the first half of the year.

Kurdistan region of Iraq

On 2nd November, the Company announced completion of the acquisition of a 60% operated interested interest in the Barda Rash PSC and 20% non-operated interest in the Ain Sifni PSC together with the completion of an up to US$200 million corporate credit facility in connection with the acquisition. The total acquisition cost is US$588.25 million (inclusive of approximately US$81 million back costs and US$14 million 2011 capex related to Ain Sifni), of which US$388.25 million has been paid and US$200 million is due six months from closing.

The acquisition represents a highly complementary extension of the Company's existing portfolio, and offers a combination of near term development upside and substantial low risk exploration potential. Independently certified net 2C resources at Barda Rash and Ain Sifni are 890 mmbbls with total net unrisked resources estimated to be 1,074 mmbbls.

Barda Rash PSC

The Company has prepared a first draft of the proposed Field Development Plan which it intends to submit to the authorities for review and approvals end 2011.  The Company plans to undertake a phased development of the field with production start-up from the three existing wells scheduled for H1 2012. Initial work will focus on developing 506 mmbbls recoverable light oil resource that is anticipated to deliver gross production of 125,000 bopd by 2017 (giving five year line of sight on 75,000 bopd net to Afren). Production will initially be trucked to nearby export pipeline entry points, and ultimately exported via the planned Taq Taq to Ceyhan pipeline. Ongoing development would then focus on the development and production of 964 mmbbls of recoverable heavier oil resource, offering further large scale production growth potential over the medium to longer term.

Ain Sifni PSC

The operator, Hunt Oil, spudded the Jebel Simrit-2 exploration well at the end of October. The well will seek to prove and test the western extent of the Jebel Simrit anticline structure. In 2010, the Jebel Simrit-1 discovery well was drilled on the crest of the structure and logged continuous oil pay from 1,110 m to 3,070 m in Cretaceous and Jurassic reservoirs. Triassic reservoir targets were not penetrated by the well and no oil water contact was established. Subsequent exploration wells are also planned on the low risk Maqlub, Betnaar and East Simrit structures.

Exploration and appraisal operations update

Ghana - Keta Block

On October 25th 2011, Afren formally completed the farm out of a 35% working interest and transfer of operatorship of the Keta block to Oil Major Eni. Under the terms of the farm out, Afren will receive a carry through the drilling of one exploration well, back costs and carry through future seismic acquisition and a milestone bonus payable upon the achievement of first oil on the block. The partners plan to drill an exploration well (Cuda-2) targeting the 325 mmbbls gross unrisked Cuda prospect. The well was provisionally scheduled, at the time of farm down, to spud during the third quarter with the Marianas semi-submersible drilling unit. However the rig was damaged whilst under mobilisation in July, which has delayed the expected spud date, presently anticipated to occur in Q1 2012. In its most recent independent assessment NSAI more than doubled its view of gross unrisked prospective resources on the block to 1,412 mmbbls.

Nigeria - OPL 310

OPL 310 extends from the shallow water continental shelf to deep water offshore south west Nigeria, and represents a high potential exploration opportunity in an under explored basin with a proven working hydrocarbon system. Afren has identified several prospects that lie in the same Cenonian, Turonian and Albian sandstone intervals that have yielded significant discoveries along with West African Transform Margin in Ghana and Côte d'Ivoire. The Company is engaged with interested parties to farm out a portion of the block. Plans are also in place to acquire additional seismic on the block.

Nigeria - Ebok and OML 115

The partners plan to commence drilling of exploration well in Q3 2012 targeting Ebok North,an untested fault block in the northern area of the field where the Company believe the same reservoirs that have been proved to be oil bearing elsewhere at the field are also present. Gross unrisked prospective resources are estimated at 35 mmbbls.

Following the completion of the Ocean Bottom Cable 3D seismic over the whole Ebok/Okwok/OML 115 area on 4th November 2011, an exploration well is now planned on OML 115 with expected spudding in mid 2012. The Ufon prospect is a 60 mmbbls target that is interpreted to have oil prospectivity in the same D Series reservoirs that have been proven to be oil bearing at the nearby Ebok and Okwok fields.

Nigeria - São Tomé & Príncipe JDZ Block1

The new operator on Block 1, Total, is seeking to reprocess existing seismic data and has proposed the drilling of one appraisal well on the Obo discovery and one exploration well in 2012. Afren has a 4.41% interest. The first well is expected to spud in H1 2012 with the Pacific Scirocco drilling rig.

Kenya - Block 1

The partners on Block 1 have commenced the acquisition of 1,200 km of 2D seismic data over the block. Airborne gravity and magnetic data was acquired in the first half of 2011, the results of which are very encouraging and have been used to target the planned 1,200 km seismic. Several major structures have already been mapped on the block that currently has 850 km of 2D seismic coverage.

Kenya - Block 10A

The Tullow Oil operated joint venture acquired 750 km of 2D seismic over the block during the first quarter of 2011 to supplement the existing 2D coverage of 2,631 km. Integration of the new data and interpretation is underway. This work satisfies all seismic obligations for the current exploration period. The operator will commence the drilling of one exploration well on the Paipai prospect during the first quarter of 2012.

Kenya - Block L17/18

Following completion of a 400 km 2D seismic acquisition programme in 2010, a number of newly defined prospects and leads have been identified on the acreage. The Company will start the acquisition of additional 2D seismic data in the deepwater region this month ahead of planned exploration drilling on the coastal play in 2012.

Tanzania - Tanga Block

During the first half of the year Afren undertook and completed a 751 km shallow water 2D seismic programme over the block. The results of this survey have been encouraging, and provide excellent definition of several large scale prospects and leads that have been identified to date, together with new zones of additional potential. The Company plans to drill the Orpheus prospect in 2012 from an offshore location and is in the process of acquiring additional deep water 2D seismic data.

Ethiopia - Blocks 7 and 8

The partners have opted to focus future exploration efforts on Blocks 7 and 8 that hold the El-Kuran oil discovery, and have recommended to relinquish Blocks 2 and 6. Work is ongoing to further interpret the prospectivity of Blocks 7 and 8 ahead of expected drilling in 2012 or 2013.

Madagascar - Block 1101

In July the Company announced that Government approvals had been received for Afren to assume operatorship and increase its interest in Block 1101 to 90% and that a revised work programme had also been agreed with OMNIS, the state oil and gas agency. Under the agreed terms of reassignment, Afren has increased its overall participation in Block 1101 to a 90% operated interest through the reassignment of a 50% interest previously held by Candax Energy, who remain partners on the block with a 10% interest. The expanded work programme combines the first two exploration phases on the block and requires the drilling of one exploration well to a minimum depth of 1,600 metres. The partners have also agreed to acquire an additional 150 km of new 2D seismic and airborne gravity and magnetics. The airborne gravity and magnetic acquisition is expected to commence in November. Under the revised ownership structure and work programme, it is expected that drilling will now commence in late 2012.

Seychelles - Blocks A,B,C

Seismic data acquired to date by the partners has revealed the presence of several large scale structures in all three license areas, in addition to new basins that could also contain significant Jurassic and Cretaceous sedimentary sections. The partners will shortly commence the acquisition of additional seismic data over Blocks A,B and C, ahead of expected exploration drilling.

South Africa - Block 2B

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 2012 or 2013.

Forward exploration and appraisal drilling schedule

* Working interest pre/post cost recovery

** Commitment well required to be drilled in 2011/2012; Afren is carried through the drilling of an exploration well at the Keta Block (Ghana)

Financial position

Revenue in the period was US$312.2 million (9 months ended 30 September 2010: US$265.7 million), reflecting higher price realisations from the Okoro field and increased liftings in the third quarter of the year.

Oil and gas inventory at 30 September 2011 was US$49.2 million (31 December 2010: US$14.2 million), representing approximately 600,000 barrels at Ebok and 300,000 barrels at Okoro net to Afren.

In the last quarter of 2011, the Company has fixed the price on the sale of approximately 1.2 million barrels at an average price of US$111/bbl. Hedges covering approximately 3 million barrels providing minimum floor prices between approximately US$80-$US90/bbl are in place for the period to 31 December 2012.

Profit from continuing activities before tax in the period was US$113.0 million (2010: US$75.3 million). This reflects an increase in gross profit of US$39.3 million compared to the prior period, but also includes the effect of gains on derivative financial instruments of US$5.2 million (2010: loss of US$3.6 million); finance costs of US$36.8 million (2010: US$8.7 million); and a share of gain of an associate of US$17.4 million (2010: share of loss of US$0.6 million).

Normalised profit in the period was US$49.1 million (2010: US$58.8 million). Normalised profit excludes the effect of unrealised hedge movements, share related costs, the cost of early debt repayment and the share of gain on an associate.

As at 30 September 2011, the Group has net current liabilities of US$140.3 million (31 December 2010: US$86.8 million) largely reflecting the liability for deferred consideration of US$200 million (discounted to US$190.3 million) due on the acquisition of the 60% participating interest in the Barda Rash PSC, offset by an increase in the Group's working capital of US$150 million since 31 December 2010.

Capital expenditure on appraisal and exploration in the period was US$286.0 million (2010: US$31.4 million), which includes amounts relating to the Group's acquired interest in the Barda Rash PSC. Development expenditure was US$318.2 million (2010: US$187.4 million), comprising US$257 million on the Ebok field and $60m on the Okoro infill programme.

Net debt as at 30 September 2011 was US$518.8 million (31 December 2010: US$127.5 million) with cash at bank of US$222.6 million (31 December 2010: US$140.2 million).

Outlook

Afren expects net production to increase from present levels of approximately 28,000 boepd, to a 2011 exit rate of approximately 50,000 boepd, following start-up of additional production wells at the Ebok field development Phase 2, together with the ongoing positive response to water injection at Phase 1. In Kurdistan, the Barda Rash Field Development Plan is expected to be submitted end 2011, with a phased development, and production start-up expected in mid 2012. The initial phases will target 506 mmbbls recoverable light oil.

With US$223 million cash at bank and a profitable and growing platform of production, the Company is set to deliver its forward work programme and realise the vast resource potential of its portfolio, from existing resources and internally generated cash flows.

Ends.

Notes to Editors

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 31 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 for each period was equivalent to profit 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 (''the Group'') have been prepared in accordance with International Accounting Standard (''IAS'') 34, ''Interim Financial Reporting'', as issued 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 as issued by the IASB, have been omitted or condensed. The condensed Group interim financial statements for the nine months ended 30 September 2011 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 2010 were published and copies of which were 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.

Accounting policies

With the exception of the additional policy in relation to finance leases below, the same accounting policies, presentation and methods of computation have been followed in the condensed set of financial statements as applied in the preparation of the Group's latest audited financial statements.

Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets of the Group at their fair value or, if lower, at the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Group's general policy on borrowing costs. Contingent rentals are recognised as expenses in the period in which they are incurred.

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease except where another more systematic basis, such as a unit of production method, is more representative of the time pattern in which economic benefits from the lease asset are consumed. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred. In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed

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.

Afren expects net production to increase from present levels of approximately 28,000 boepd, to a 2011 exit rate of approximately 50,000 boepd, following start-up of additional production wells at the Ebok field development Phase 2, together with the ongoing positive response to water injection at Phase 1. In Kurdistan, the Barda Rash Field Development Plan is expected to be submitted end 2011, with a phased development, and production start-up expected in mid 2012. The initial phases will target 506 mmbbls recoverable light oil.

With US$223 million cash at bank and a profitable and growing platform of production, the Company is set to deliver its forward work programme and realise the vast resource potential of its portfolio, from existing resources and internally generated cash flows.

2. Profit per share

The profit and weighted average number of ordinary shares used in the calculation of the profit per share are as follows:

The weighted average number of ordinary shares for the purposes of diluted profit per share reconciles to the weighted average number of ordinary shares used in the calculation of basic profit per share as follows:

In 2010, 12 million potential ordinary shares were anti-dilutive and therefore excluded from the weighted average number of ordinary shares for the purposes of diluted earnings per share. There were no excluded potential ordinary shares as at 30 September 2011.

3. Reconciliation of profit after tax to the normalised profit after tax

*Excludes realised (gains)/losses on derivative financial instruments.

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.

4. Obligations under finance lease

The Group has a seven year lease of a Mobile Offshore Production Unit (MOPU) and a Floating Storage Offloading Vessel (FSO) from Mercator Offshore (Nigeria) Limited. The capex day rate payable is accounted for as a finance lease and consequently, the present value of the lease as at 30 September 2011 of US$122.0 million and US$17.9 million has been reported in the balance sheet in non-current and current liabilities respectively. Interest on the finance lease included in the income statement during the period was US$4.0 million.

5. Operating Segments

For management purposes, the Group currently operates in five geographical markets: Nigeria, Côte d'Ivoire, Other West Africa, Eastern Africa, and Middle East & North Africa. Unallocated operating expenses, assets and liabilities relate to the general management, financing and administration of the Group.

5. Operating Segments continued

5. Operating Segments continued

6. Deferred consideration

US$190.3 million(US$200 million, undiscounted) relating to the acquisition of the 60% participating interest in the Barda Rash PSC, Kurdistan is due in February 2012 and therefore reported as deferred consideration in the balance sheet.

7. Assets held for sale

A loss of US$2,924,000 (2010: nil) has been disclosed in the period as arising from discontinued operations. This loss relates to the seismic business of Black Marlin Energy Holdings Limited (Black Marlin) which was acquired by Afren as part of its acquisition of the issued share capital of Black Marlin in 2010. The trade and assets of this business were identified as held for sale on acquisition as an active programme was in place at 31 December 2010 for the sale of the business.

However, during the period under review it was decided by management that the business would no longer be sold but it that would be abandoned, with the assets of the business (largely marine and land seismic vehicles and equipment) either put into use by Afren in other parts of the Group or sold on a piecemeal basis.

These assets have therefore been reclassified in the period out of assets held for sale and into property, plant and equipment.

8. Merger Reserve

The provisions of the Companies Act 2006 relating to merger relief (s612 and s613) have been applied to the equity raising through a cash box structure, resulting in the creation of a merger reserve.

9. Subsequent events

On 2 November 2011 Afren announced the completion of Kurdistan acquisition and execution of a corporate credit facility for up to US$200 million in connection with the acquisition. Following the completion, US$57.9 million included in prepayments as at 30 September 2011, in respect of Ain Sifni PSC, has subsequently been reclassified to intangible oil and gas assets.

10. Contingent liabilities

There has been no change to the contingencies reported in the annual report for the year ended 31 December 2010.

11. Related parties

The following table provides the total amount of transactions which have been entered into with related parties during the three months ended 30 September 2011 and 2010:

Trading transactions

St. John Advisors Ltd is the contractor company for the consulting services of John St. John, a Non-executive Director. St. John Advisors also receive a monthly retainer of £15,000 for consulting advice. This contract is for 12 months from 27 June 2008 and automatically continues thereafter unless terminated by either party. A separate contract was engaged in 2010 with STJ Advisors LLP for consulting services in relation to the Senior Note which completed on 27 January 2011.

Tzell Travel Group operates as a franchise. The franchisee utilised by Afren for some of its travel needs is a close family member of the Chief Executive Officer and Tzell Travel Group is therefore considered a related party. Afren uses several travel agents as there is a significant travel element to its operations and Tzell competes on an even basis with these. Tzell provided approximately 8% (2010: 9%) of the travel arrangements by value.

First Hydrocarbon Nigeria Limited (FHN) is an associate company of Afren plc. During the period the group provided professional services to FHN and the fees receivable relating to these services amounted to US$5 million. The amounts outstanding are unsecured and are expected to be settled in cash. No guarantees have been given or received. No provisions have been made for doubtful debts on the amounts owed by related parties.