Interim Management Statement

Afren plc (AFR LN)

Interim Management Statement

London, 28 October 2010 - Afren plc ("Afren" or the "Company"), issues the following Interim Management Statement, in respect of the period 1 July 2010 to 28 October 2010, 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 Stable net production of 16,101 boepd to 30 September 2010

u Acquisition of a 45% interest in OML 26 from Shell Production Development Company of Nigeria Ltd., Total E&P Nigeria Ltd., and Nigeria Agip Oil Company, by First Hydrocarbon Nigeria

u Ebok development progressing, with first oil expected by year end

u Okwok appraisal ongoing - 35 ft of good quality pay encountered in the D2 reservoir; flowed 31° API crude oil at constrained rates intended to ensure integrity of the completion

u Acquisition of Black Marlin Energy completed - multi well exploration campaign defined through to end 2012

u Exploration drilling on OML 115 now scheduled for early 2011 (60 mmbbls Ufon prospect to be drilled)

u Infill drilling at the Okoro field by year end expected to add incremental gross rates of between 3,000 bopd to 5,000 bopd

Osman Shahenshah, Chief Executive of Afren Plc commented:

"2010 has, so far, been a year of unprecedented activity for Afren with portfolio growth across the full cycle E&P value chain. In Nigeria, Afren's support of First Hydrocarbon Nigeria's acquisition of a 45% stake in OML 26 from the operating subsidiaries of Shell, Total and ENI marks an important milestone in our long term commitment to the indigenous oil and gas sector. This acquisition is materially accretive to Afren's NAV, and is a strong endorsement to Afren's long term strategy. Our existing platform of producing assets continues to underpin the business, providing the strong foundations upon which we have been able to grow. The Ebok field development is progressing well with first oil expected by year end. Having also now completed the acquisition of Black Marlin, opening up a new core area for us in East Africa, we are preparing to enter an active exploration phase, with multiple wells scheduled in 2011."

Net production

Net production at the Company's assets to 30 September 2010 was:

*Cost recovery achieved by Afren at the Okoro field mid 2010

Gross production at the Okoro field in Nigeria averaged 17,300 bopd, in line with expectations, for the period to 30 September 2010. Process uptime of >99% has been maintained with the crude export process via the nearby Ima terminal continuing to run smoothly. The GSF High Island Vll jack up rig will mobilise to the Okoro field following the Okwok-9 appraisal well, where it will undertake infill drilling. Two infill wells will be placed up-dip from the Okoro-4 and Okoro-5 wells in the lower sand, and are expected to add incremental gross production of between 3,000 bopd to 5,000 bopd and increasing sweep efficiency in that part of the field. At mid year, Afren had achieved payback at Okoro for expenditures relating to the development of the field. Consequently, the Company's effective economic interest has moved to 50% post payback from 95% pre payback.

Gross production to 30 September 2010 at the CI-11 field offshore Côte d'Ivoire was in line with expectations at 27 mmcfd and 1,128 bopd. The results of a major mapping and reinterpretation exercise are under review and will assist in defining future plans to access and produce incremental oil and gas reserves.

Acquisition of OML 26

On 21 October 2010, First Hydrocarbon Nigeria ("FHN"), the indigenous Nigerian upstream oil and gas company in which Afren holds a 45% interest, announced the reaching of a Definitive Agreement with Shell Petroleum Development Company of Nigeria Ltd ("SPDC"), Total E&P Nigeria Ltd ("Total") and Nigeria Agip Oil Company ("NAOC") for the acquisition of their combined 45% interest in OML 26, Delta State onshore Nigeria.

FHN was established in June 2009 with the support of leading Nigerian financial institutions, and fulfils the Nigerian government's criteria for indigenous operators. The transaction represents Afren's 7th indigenous sector investment in Nigeria.

Production and development

The acquisition delivers both current production and substantial development upside to Afren and its indigenous partner FHN. At the time of announcement, the Ogini and Isoko fields were producing approximately 5,000 bopd gross from a limited number of currently active drainage points, with several wells currently shut in. This rate has subsequently increased to 6,500 bopd gross following the successful re-commissioning of a compressor unit at the Ogini field. Existing flow station capacity for the two fields is currently 30,000 bopd.

Combined STOIIP is 777 mmbbls and cumulative gross production to date from Ogini and Isoko is 73.9 mmbbls (46.8 mmbbls and 27.1 mmbbls respectively). Gross remaining reserves and contingent resources for the two fields have been independently estimated at 184 mmbbls.

A three phase field re-development has been defined for the Ogini and Isoko fields, and is aligned with the government's objective of increasing production from under-exploited fields in Nigeria. Production is expected to increase to 40,000 bopd, following the first two phases over a period of four years. This will include the drilling of 21 production wells, with existing well locations being expanded to accommodate multi-well clusters. Work-overs and side-tracking of existing production wells will also be undertaken along with de-bottlenecking of existing production handling and export facilities. Initial net investment attributable to FHN's interest, including both the acquisition cost and FHN's equity share of Phase 1 development capex, is US$187.5 million. Capex for phases two and three will be supported entirely by existing field cash flows.

Upside potential

Incremental to the production and development opportunity presented at the Ogini and Isoko fields, OML 26 hosts three further discovered but undeveloped fields and also holds substantial exploration potential. The Aboh, Ozoro and Ovo fields are estimated to hold an estimated gross recoverable resource of 144 mmboe, of which 38 mmbbls is estimated to be liquids and the remainder natural gas. Ongoing work at OML 26 will include feasibility studies and an appraisal strategy to evaluate these three fields, with a view to defining a development concept for the liquids and a gas utilisation strategy. Options for the gas may include power supply to industrial users and the local community, in addition to gas re-injection.

OML 26 also holds an estimated 615 mmboe of gross prospective resources, offering multiple low risk/high reward exploration possibilities. The close proximity to existing production infrastructure on the block will enable the rapid tie back and monetisation of any future discoveries. FHN and Afren intend to review the blocks exploration prospectivity with the intention of high grading potential drilling targets that could be integrated into the broader drilling programme planned on the block.

Commercial terms and operational framework

Afren will provide technical and operational management services to FHN under an agreed set of terms. Transition planning is underway between the SPDC team and FHN and its Technical Services Provider Afren, who will together ensure the smooth transfer of operational control.

The commercial arrangements in place between FHN and Afren also provide for Afren to recover, with interest, acquisition and capital costs paid on behalf of or loaned to FHN. Afren has agreed terms with BNP Paribas for a US$130 million six year credit facility, which will part finance the acquisition. In proportion to its shareholding in FHN, Afren will also receive 45% of future free net cash flows generated that are attributable to FHN's interest in the block. The acquisition is subject to regulatory and customary approvals.

Ebok development

Phase 1

The Ebok development continues to progress, with first oil expected by year end. Refurbishment and fabrication work on the production, processing and storage facilities have been successfully completed and development drilling is on schedule.

The Naming and Sail Away Ceremony for the Floating Storage Offloading vessel ("FSO") was held at the Yulian shipyard in China on 5 August 2010. The vessel, a 267 metre and 174,917 ton unit, will store and offload for export stabilised crude oil that will be produced and processed at a dedicated Mobile Offshore Production Unit (MOPU) at the field location. The FSO has a storage capacity of 1.2 million barrels and will accommodate regular crude oil offtake by tankers up to VLCC size.

Work has also been completed on the MOPU. The facility is a former jack-up drilling rig that has been converted to a MOPU by removing the drilling package and replacing it with a newly fabricated processing module. It has been prepared with an initial oil production capacity of 50,000 bopd, and has been designed to allow for on site expansion and upgrade to also accommodate production from any future additional development phases at the field. Both the MOPU and FSO will shortly mobilise to the field location.

Phase 1 development drilling activities are at an advanced stage, with the Transocean Adriatic lX jack up rig on location, drilling and completing the lateral production sections of each of the six horizontal production wells. Of particular note during the Phase 1 drilling campaign, the Ebok-8 water injection well was drilled in August and encountered an additional 100 ft of oil pay in the LD1E sand which was full to base and not predicted pre-drill.

Phase 2

Work on development Phase 2, targeting the West Fault Block area of the field, commenced with an initial batch of pilot drilling that was completed in August. Four pilot holes were drilled, providing important information for future development work of the known oil bearing intervals, while also encountering additional oil pay in the LD1F reservoir.

Fabrication of the dedicated Phase 2 wellhead platform ("WHP") has been completed and the WHP is currently in transit, for planned installation at the field location in November. A total of six development wells on the Ebok West Fault Block will be drilled and bought onstream shortly after Phase 1 start up.

Establishing a production hub

Phase 1 is expected onstream at a rate of 15,000 bopd and Phase 2 at a rate of 20,000 bopd. It is planned that the Ebok development will become a central facility for the broader Ebok/Okwok/OML115 area, allowing for the economical and rapid tie back of production from any future developments in the surrounding area.

Exploration and appraisal

Okwok

The Okwok-9 well was spudded on 25 August 2010, and reached a total measured depth of 8,083 ft. Testing operations are currently being completed, after which the GSF High Island Vll rig will relocate to the Okoro field to undertake infill drilling. The well was completed over a 35 ft interval of good quality D2 reservoir (average porosity 30%) and flowed 31° API crude oil at constrained rates intended to ensure integrity of the completion. The well was flowed for 48 hours and shut in for a 54 hour build-up. The final build-up pressure was equal to the initial reservoir pressure, indicating no depletion. The 48 hour flow test was designed to establish a connected reservoir volume with previously drilled wells, and also to quantify reservoir permeability and heterogeneity. Analysis of this newly acquired data is ongoing to define expected horizontal well performance under a production scenario and to establish the connected oil volumes.

OML 115

OML 115 surrounds both the Ebok and Okwok fields, where a number of attractive prospects and leads have been identified. The Ufon prospect has been selected for drilling, with nearby well control indicating that the same "D" series reservoirs that have been proved to be oil bearing at Ebok and Okwok may be oil bearing at the target location. Afren and its partner Oriental intend to now spud an exploration well on the 60 mmbbls Ufon prospect in early 2011.

Keta Block and OPL 310

In August the Company launched a competitive process in order to attract an industry partner to participate in the 70% Afren owned and operated Keta block offshore Ghana. A data room was opened on 23 August 2010 and the Company expects to conclude this process by the end of the year, ahead of exploration drilling in 2011.

In early November, the Company also intends to launch a competitive process to attract an industry partner to participate in OPL 310, located offshore south west Nigeria, in which Afren also holds a 70% operated interest and expects to drill in 2011.

Completion of Black Marlin acquisition

On 8 October 2010, Afren announced the admission to trading of 76,776,096 ordinary shares in Afren in connection with the acquisition of Black Marlin Energy Holdings Limited ("Black Marlin"). In line with the its pan African strategy, the acquisition has established Afren with a multi country platform in East Africa, comprising twelve assets across Kenya, Madagascar, the Seychelles and Ethiopia. This is a complementary extension to Afren's existing West African business and expanding production base, enhancing the Company's exposure to the full cycle E&P value chain.

Encouragingly all of Afren's licenses are located in basins with proved working hydrocarbon systems, and importantly offer the potential for large scale oil discoveries. Net prospective resources attributable to Afren's interest are estimated to be 1.2 billion barrels.

Afren is well positioned to leverage its West African cash generative production base to test this potential with the drill bit. A multi-well exploration campaign has been defined through to end 2012 across all four countries, and ongoing studies are expected to significantly unlock further prospectivity. To aid this process, following the Acquisition Afren now benefits from ownership of one of the largest East African seismic databases.

Financial position

The Company's overall financial position remains strong. Net debt at 30 September 2010 was US$64.2 million with cash at bank of US$166.2 million.

Ends.

Notes to Editors

Afren is an African focused independent 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 27 assets across nine countries across the full cycle E&P value chain. Afren is currently producing from its assets offshore Nigeria and Côte d'Ivoire, with the significant Ebok appraisal and development project due onstream in 2010 from Nigeria. Afren has exploration interests in Ghana, Nigeria, Côte d'Ivoire, Congo Brazzaville, the Joint Development Zone of Nigeria - São Tomé & Príncipe, Kenya, Ethiopia, Madagascar and Seychelles. For further information please refer to www.afren.com.

For further information please refer to www.afren.com.