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Proposed Fundraising

10th Nov 2009 07:00

RNS Number : 2367C

Afren PLC

10 November 2009

Afren plc (AFR LN)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, SOUTH AFRICA OR JAPAN

Proposed fundraising to raise approximately US$200 million through issue of new shares and exercise of existing warrants

Details of the Placing

A placing (the "Placing") of new Ordinary Shares, with both new and existing institutional shareholders (the "Placing Shares") is being conducted, subject to the satisfaction of certain conditions, through an accelerated book-building process to be carried out by Merrill Lynch International ("Merrill Lynch") and Morgan Stanley Securities Limited ("Morgan Stanley"), acting as joint bookrunners (the "Joint Bookrunners") and Jefferies International Limited ("Jefferies"), Nomura International Plc ("Nomura") and Evolution Securities Limited ("Evolution"), acting as co-lead managers, in relation to the Placing. Merrill Lynch is acting as sole global co-ordinator in relation to the Placing. The identity of Placees and the basis of the allocations are at the discretion of Afren and the Joint Bookrunners. The number of Placing Shares and the price at which the Placing Shares are to be placed (the "Placing Price") will be agreed by Afren with the Joint Bookrunners at the close of the book-building process. Details of the number of Placing Shares and the Placing Price will be announced as soon as practicable after the close of the book-building process.

The Placing Shares will be issued credited as fully paid and will rank pari passu with existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid on or in respect of such shares after the date of issue of the Placing Shares. The Placing will be made on a non-preemptive basis.

The Company will apply for admission of the Placing Shares to the Official List of the UK Listing Authority (the "Official List") and to trading on the London Stock Exchange's main market for listed securities ("Main Market"), together (the "Admission"). It is expected that Admission will take place and that trading will commence at the same time as cancellation of the Company's admission on AIM, to take place on or around 3 December 2009, as announced by the Company on 4 November 2009.

The Placing is conditional upon, inter alia, Admission becoming effective and upon the passing of the resolutions (without amendment) at the Company's general meeting scheduled for 30 November 2009. The Placing is also conditional on the Placing Agreement made between the Company, Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution not being terminated. It is anticipated that the settlement date will be on or around 3 December 2009.

Appendix I to this announcement (which forms part of this announcement) sets out the terms and conditions of the Placing.

Background to the Placing and Use of Proceeds

The Ebok appraisal drilling this year has significantly de-risked the project and identified further upside, as announced to the market at the Afren Capital Markets Day on 30 June 2009 and subsequently on 3 November 2009. In addition, in August 2009, Afren announced its entry into a farm-out agreement for the development of the Okwok field adjacent to its existing Ebok field. Together with the appraisal success on Ebok, this has increased the resource potential of the broader Ebok-Okwok complex and increased the scope of a potential joint development.

In addition, on the Okoro field, continuing sub-surface and reservoir management work has identified two attractive infill drilling locations that will add significant incremental reserves and production. On Block CI-11 in Côte d'Ivoire, subsurface evaluation work focused on applying the latest understanding of the Cretaceous depositional model has identified infill drilling opportunities targeting material upside potential.

The net proceeds of the Placing will be used to fund an accelerated appraisal and development of the broader Ebok-Okwok complex, further appraisal and infill drilling of Afren's Côte d'Ivoire assets and infill drilling on the Okoro project in Nigeria. In addition, Afren shall apply a proportion of the proceeds to potential future acquisitions and general corporate purposes.

Pending their use as described above, the Group intends to invest the net proceeds from the Placing in short term investments with internationally recognised financial institutions.

Exercise of Founder Warrants

Afren also announces the exercise, by certain shareholders including some of the Directors (the "Founder Shareholders"), of 40,000,000 warrants over Ordinary Shares (the "Founder Shares") issued pursuant to the Company's Founders' Investment and Warrant Scheme, which are due to expire on 11 December 2009, raising approximately £15 million (US$25 million) (before expenses) for the Company. The proceeds from the exercise of the warrants do not form part of the proceeds of the Placing but will be used in conjunction with the net proceeds of the Placing as described above.

In order to finance the exercise of these warrants and to pay tax obligations arising from the exercise, the Founder Shareholders have agreed to sell some of the Founder Shares in the Placing at the Placing Price (the exact number of which will be calculated following determination of the Placing Price).

Admission and CREST

Application has been made to the UK Listing Authority and to the London Stock Exchange respectively for admission of all of the Ordinary Shares to: (i) the Official List; and (ii) the London Stock Exchange's market for listed securities. No application has been made or is currently intended to be made for the Ordinary Shares to be admitted to listing or dealt with on any other exchange. It is expected that Admission will become effective and that dealings on the London Stock Exchange in the Ordinary Shares will commence on 3 December 2009 (International Security Identification Number: GB00B0672758, Stock Exchange Daily Official List (SEDOL) number B067275GB).

Application has been made to the London Stock Exchange to cancel admission of Afren's Ordinary Shares on AIM. It is expected that trading of Afren's Ordinary Shares on AIM will cease at the close of business on 2 December 2009.

CREST is a paperless settlement procedure enabling securities to be evidenced otherwise than by a certificate and transferred otherwise than by a written instrument. The Articles permit the holding of Ordinary Shares under the CREST system. The Ordinary Shares were admitted to CREST on 14 March 2005, the date that the Ordinary Shares were admitted to trading on AIM. Settlement of transactions in the Ordinary Shares following Admission may continue to take place within CREST if any shareholder so wishes. However, CREST is a voluntary system and the holders of Ordinary Shares who wish to receive and retain share certificates will be able to do so.

Dividend policy

The Group has made losses since the date of its incorporation and is accordingly currently unable to pay dividends. The Directors do not expect that Afren will pay any dividends in the foreseeable future, and in any event until such time as it is prudent to do so, having regard to the level of revenue generated by the Group's operations and the retained earnings to fund its operations and exploration and development programmes. For the foreseeable future, any earnings will be reinvested in developing the businesses of the Group.

Current trading and prospects

Afren has continued to make significant progress across all aspects of its core business, with both operational and strategic successes demonstrated. Afren continues to exceed prior production guidance on Okoro and the Lion and Panthère fields in Block CI-11 since acquisition, with a group working interest production for 2009 forecast to average 22,300 bopd. The Company has also delivered significant reserves growth, through the successful ongoing appraisal of the Ebok field in Nigeria. In addition, in August 2009 Afren announced the entry into a farm-out agreement for the development of the Okwok field adjacent to its existing Ebok field. Together with significant appraisal success on Ebok, this has significantly increased the resource potential of the broader Ebok-Okwok complex and increased the scope of potential joint development synergies. The Company will commence first phase drilling of the Ebok field post the current appraisal drilling and the Company is on track for first production from the Ebok field at the first half of 2010. Over the period to 2011, Afren intends to drill 10 appraisal and exploration wells, targeting over 600 net million barrels of oil equivalent (25 million recoverable barrels proved to date on the Ebok V well) in Nigeria, Congo, Côte d'Ivoire and Ghana.

Afren's management case reserves and resources

The table below sets outs Afren's management case of its reserves and resources at the date of its last interim results on 25 September 2009 and to date:

mmboe	Interim results (25 September 2009)	Current
Developed 2P reserves
Okoro	19	19
CI-11	9	9
	28	28
Undeveloped 2P reserves
CI-01	17	17
Ebok FB1 & FB2	0	34
Ebok West	0	13
Okwok Core	0	10
	17	73
Contingent 2C reserves
Ebok FB1 & FB2	34	0
Ebok West	0	0
Ebok Upside	50	37
Okwok Core	10	0
Okwok Upside	25	25
	119	62
Prospective mean resources
Keta	340	340
La Noumbi	40	40
CI-01	90	90
Iris Marin	10	10
Ibekelia Licence	10	10
JDZ Block 1	15	15
Okwok	40	40
OPL 907/OPL917	40	40
OPL 310	0	230
	585	815

2P Reserves and 2C Contingent Resources	163	163
Total	748	979

Production

Afren is currently producing oil from the Okoro field in Nigeria and oil and gas from the Lion and Panthère fields in Block CI 11 in Côte d'Ivoire, as well as processing gas at the Lion Gas Plant in Côte d'Ivoire. The Group achieved first oil in Okoro in June 2008 at a rate of approximately 3,000 bopd, rising to approximately 22,000 bopd by the end of 2008. The year to date production to 31 October 2009 at the Okoro field was 5,714,840 barrels of oil (gross), equivalent to an average daily production rate of 18,800 bopd. Oil production at Block CI-11 to 31 October 2009 was 389,542 barrels of oil (gross), equivalent to an average daily production rate of 1,281 bopd. Natural gas production at CI-11 was 9.9 bcf (gross), equivalent to an average daily production rate of 32.7 mmcfd. Also during the period to 31 October 2009, 362,543 barrels of oil equivalent of natural gas liquids were stripped from the inlet gas stream at the Lion Gas Plant, equivalent to 1,193 boepd.

Whilst on the Official List, the Group is targeting production of up to 100,000 bopd by the end of 2012 from Okoro, Ebok and Block CI-11 and other existing appraisal or development assets which can be converted into production assets, in addition to potential acquisitions in the longer term.

Contacts

Afren plc		+44 20 7451 9700
Osman Shahenshah	Chief Executive
Galib Virani	Head of Acquisitions and Investor Relations

BofA Merrill Lynch		+44 20 7996 1000
Andrew Osborne
Rupert Hume-Kendall

Morgan Stanley Securities Limited		+44 20 7425 8000
Edward Knight

Jefferies International Limited		+44 20 7029 8000
Jack Pryde

Nomura International Plc		+44 20 7102 1000
Jan Laubjerg

Evolution Securities Limited		+44 20 7071 4307
Tim Redfern

Pelham Public Relations		+44 20 7337 1500
James Henderson
Mark Antelme

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, SOUTH AFRICA OR JAPAN.

This announcement contains (or may contain) certain forward-looking statements with respect to certain of Afren's plans and its current goals and expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. Afren cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", or other words of similar meaning. Examples of forward-looking statements include statements regarding or which make assumptions in respect of the Company's production targets. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, economic and business conditions, the effects of continued volatility in credit markets, market-related risks such as changes in the price of oil or changes in interest rates and foreign exchange rates, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under International Financial Reporting Standards ("IFRS") applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigation or regulatory investigations, the success of future explorations, acquisitions and other strategic transactions and the impact of competition. A number of these factors are beyond Afren's control. As a result, Afren's actual future results may differ materially from the plans, goals, and expectations set forth in Afren's forward-looking statements. Any forward-looking statements made in this announcement by or on behalf of Afren speak only as of the date they are made. Except as required by the FSA, the London Stock Exchange or applicable law, Afren expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in Afren's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

This announcement is for information purposes only and shall not constitute an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This announcement has been issued by and is the sole responsibility of Afren.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution or by any of their respective affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement, including the Appendices, or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Merrill Lynch International, which is authorised and regulated in the United Kingdom by the FSA, is acting for Afren and for no-one else in connection with the Placing, and will not be responsible to anyone other than Afren for providing the protections afforded to customers of Merrill Lynch International nor for providing advice to any other person in relation to the Placing or any other matter referred to herein.

Morgan Stanley Securities Limited, which is authorised and regulated in the United Kingdom by the FSA, is acting for Afren and for no-one else in connection with the Placing, and will not be responsible to anyone other than Afren for providing the protections afforded to customers of Morgan Stanley nor for providing advice to any other person in relation to the Placing or any other matter referred to herein.

Jefferies International Limited, which is authorised and regulated in the United Kingdom by the FSA, is acting for Afren and for no-one else in connection with the Placing, and will not be responsible to anyone other than Afren for providing the protections afforded to customers of Jefferies nor for providing advice to any other person in relation to the Placing or any other matter referred to herein.

Nomura International Plc, which is authorised and regulated in the United Kingdom by the FSA, is acting for Afren and for no-one else in connection with the Placing, and will not be responsible to anyone other than Afren for providing the protections afforded to customers of Nomura nor for providing advice to any other person in relation to the Placing or any other matter referred to herein.

Evolution Securities Limited, which is authorised and regulated in the United Kingdom by the FSA, is acting for Afren and for no-one else in connection with the Placing, and will not be responsible to anyone other than Afren for providing the protections afforded to customers of Evolution nor for providing advice to any other person in relation to the Placing or any other matter referred to herein.

The distribution of this announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by Afren, Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution that would permit an offering of such shares or possession or distribution of this announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by Afren, Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution to inform themselves about, and to observe such restrictions.

The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS WHO ARE: (A) (I) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"), OR (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER, OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED; AND (B) (I) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS (AS DEFINED IN ARTICLE 2(1)(E) OF EU DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE")), AND/OR (II) PERSONS IN THE UNITED KINGDOM WHO ARE QUALIFIED INVESTORS (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN AFREN PLC.

Persons (including individuals, funds or otherwise) by whom or on whose behalf a commitment to acquire Placing Shares has been given ("Placees") will be deemed to have read and understood this announcement, including the Appendices, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in Appendix I. In particular, each such Placee represents, warrants and acknowledges that it is: (i) a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business; (ii) it is not within the United States; (iii) it is not within Australia, Canada, South Africa, Japan or any other jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares; (iv) it is not acquiring the Placing Shares for the account of any person who is located in the United States, unless the instruction to acquire was received from a person outside the United States and the person giving such instruction has confirmed that it has the authority to give such instruction, and that either (a) it has investment discretion over such account or (b) it is an investment manager or investment company and, in the case of each of (a) and (b), that it is acquiring the Placing Shares in an "offshore transaction" (within the meaning of Regulation S under the Securities Act; and (v) it is not acquiring the Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Placing Shares into the United States or any other jurisdiction referred to in (iii) above;

This announcement, including the Appendices, is not for distribution directly or indirectly in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia), Canada, Australia, South Africa or Japan or any jurisdiction into which the same would be unlawful. This announcement is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. No public offering of securities will be made in the United States by Afren in connection with the Placing.

This announcement does not constitute or form part of an offer or solicitation to purchase or subscribe for shares in the capital of Afren in Canada, Australia, South Africa or Japan or any jurisdiction in which such an offer or solicitation is unlawful. No public offering of securities of Afren will be made in connection with the Placing in the United Kingdom or elsewhere.

The relevant clearances have not been, and nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, and nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Canada, Australia, South Africa or Japan. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Australia, South Africa or Japan or any other jurisdiction outside the United Kingdom.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any State securities commission or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this announcement. Any representation to the contrary is unlawful.

This announcement relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority ("DFSA"). This announcement is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this announcement nor taken steps to verify the information set forth herein and has no responsibility for this announcement. The Placing Shares to which this announcement relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the Placing Shares offered should conduct their own due diligence on the Placing Shares. If you do not understand the contents of this announcement you should consult an authorised financial advisor.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of the Appendices or this announcement should seek appropriate advice before taking any action.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange. Neither the content of Afren's website nor any website accessible by hyperlinks on Afren's website is incorporated in, or forms part of, this announcement.

APPENDIX I

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING

Details of the Placing

Each of Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution has entered into an agreement with Afren (the "Placing Agreement") under which, subject to the conditions set out in that agreement, Merrill Lynch and Morgan Stanley (the "Joint Bookrunners"), Jefferies, Nomura and Evolution have agreed, as agents for and on behalf of Afren, to use reasonable endeavours to procure subscribers for Placing Shares at a price determined following completion of the bookbuilding process in respect of the Placing (the "Bookbuild"), described in this announcement and set out in the Placing Agreement.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of Afren including the right to receive all dividends and other distributions declared in respect of such ordinary shares after the date of issue of the Placing Shares.

As part of the Placing, Afren has agreed that it will not issue or sell any ordinary shares, and it has agreed to procure that certain of its shareholders will not sell any ordinary shares, in the capital of Afren for the Restricted Period, without the prior consent of the Joint Bookrunners. This agreement does not however prevent Afren from granting or satisfying exercises of options granted pursuant to existing employee share schemes of Afren as disclosed in publicly available information available as at today's date.

"Restricted Period" means from the date of this announcement until the date falling 180 days after Admission.

Application for Admission

The Company will apply for admission of the Placing Shares to the Official List of the UK Listing Authority and to trading on the main market for listed securities of the London Stock Exchange. Admission is conditional upon the approval of the Placing by shareholders of the Company at the general meeting convened for on or around 30 November 2009. It is expected that Admission will take place and that trading in the Placing Shares will commence on 3 December 2009.

Bookbuild

Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution will today commence the Bookbuild to determine demand for participation in the Placing by Placees. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

Merrill Lynch, Morgan Stanley and Afren shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, determine.

Participation in, and principal terms of, the Placing

1. Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution are arranging the Placing as agents for the Company.

2. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution. Merrill Lynch, Morgan Stanley, Jefferies, Nomura, Evolution and their respective affiliates are each entitled to enter bids in the Bookbuild as principal.

3. The Bookbuild will establish a single price payable by all Placees whose bids are successful (the "Placing Price"). The Placing Price and the number of Placing Shares to be issued will be agreed between the Joint Bookrunners and Afren following completion of the Bookbuild. The Placing Price and the number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Bookbuild.

4. To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution (as the case may be). Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at either the Placing Price, which is ultimately established by Afren and the Joint Bookrunners, or at prices up to a price limit specified in its bid. Bids may be scaled down by the Joint Bookrunners on the basis referred to in paragraph 9 below.

5. The Bookbuild is expected to close no later than 4.30 p.m. (London time) on 10 November 2009 but may be closed earlier or later at the discretion of the Joint Bookrunners. The Joint Bookrunners may, in agreement with Afren, accept bids that are received after the Bookbuild has closed. Afren reserves the right (upon the agreement of the Joint Bookrunners) to reduce or seek to increase the amount to be raised pursuant to the Placing, in its absolute discretion.

6. Each prospective Placee's allocation will be agreed between the Joint Bookrunners and Afren and will be confirmed orally by Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution (as the case may be) as agents of Afren following the close of the Bookbuild. That oral confirmation will constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with Afren's articles of association.

7. Each prospective Placee's allocation and commitment will be evidenced by a contract note issued to such Placee by Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution (as the case may be). The terms of this Appendix will be deemed incorporated in that contract note.

8. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution (as the case may be)as agents of Afren, to pay in cleared funds, an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe and Afren has agreed to allot and issue to that Placee.

9. The Joint Bookrunners may choose to accept bids, either in whole or in part, on the basis of allocations determined in agreement with Afren and may scale down any bids for this purpose on such basis as they may determine. The Joint Bookrunners may also, notwithstanding paragraphs 4 and 5 above, subject to the prior consent of Afren (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (ii) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time.

10. A bid in the Bookbuild will be made on the terms and subject to the conditions in this announcement and will be legally binding on the Placee on behalf of which it is made and except with the consent of the Joint Bookrunners will not be capable of variation or revocation after the time at which it is submitted.

11. Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".

12. All obligations under the Bookbuild and Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing Agreement".

13. By participating in the Bookbuild, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

14. To the fullest extent permissible by law, none of Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution or any of their respective affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, none of Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution or any of their respective affiliates shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution's ' conduct of the Bookbuild or of such alternative method of effecting the Placing as the Joint Bookrunners and Afren may agree.

Conditions of the Placing

The obligations of Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution under the Placing Agreement are conditional on, amongst other things:

(a) agreement being reached between Afren, Merrill Lynch, and Morgan Stanley on the Placing Price and the number of Placing Shares;

(b) publication by Afren of an announcement of the Placing Price;

(c) the representations, warranties and agreements contained in the Placing Agreement being true and accurate and not misleading on the date of the Placing Agreement and on Admission;

(d) Afren complying with its obligations under the Placing Agreement to the extent the same fall to be performed or satisfied prior to Admission, including the delivery of a certificate from the Company to the Joint Bookrunners confirming that none of the warranties, representations or undertakings in the Placing Agreement have ceased to be true, accurate and not misleading;

(e) the passing of the resolutions relating to the Placing, without amendment, at the GM of the Company to be convened on or around 30 November 2009;

(f) in the opinion of the Joint Bookrunners, there having been, prior to Admission, no material adverse change in, or any development involving a prospective material adverse change in or affecting the condition, financial, operational, legal or otherwise, or in the earnings, management, business affairs, business prospects of Afren or any member of the Afren group of companies, whether or not arising in the ordinary course of business; and

(g) Admission taking place by 8.00 a.m. (London time) on 2 December 2009 (or such later date as the Joint Bookrunners may determine).

If any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by the Joint Bookrunners, by the respective time or date where specified (or such later time and/or date as Afren and the Joint Bookrunners may agree), the Placing will not proceed and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

The Joint Bookrunners may, at their discretion and upon such terms as they think fit, waive compliance by Afren with the whole or any part of any of Afren's obligations in relation to the conditions in the Placing Agreement save that any condition in the Placing Agreement relating to Admission or to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this announcement.

None of Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Afren or any other person shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Merrill Lynch and Morgan Stanley.

Termination of the Placing Agreement

The Joint Bookrunners are entitled, at any time before Admission, to terminate the Placing Agreement in relation to its obligations in respect of the Placing Shares by giving notice to Afren if, amongst other things:

(a) there has been a breach of any of the warranties and representations contained in the Placing Agreement or any failure to perform any of the undertakings or agreements in the Placing Agreement; or

(b) it shall come to the notice of the Joint Bookrunners that any statement contained in this announcement, or any other document or announcement issued or published by or on behalf of Afren in connection with the Placing (together the "Placing Documents"), is or has become untrue, incorrect or misleading in any respect, or any matter has arisen, which would, if the Placing were made at that time, constitute a material omission from the Placing Documents, or any of them, and which the Joint Bookrunners consider to be material in the context of the Placing or the underwriting of the Placing Shares, Admission or any of the transactions contemplated by the Placing Agreement; or

(c) in the opinion of the Joint Bookrunners, there having been, prior to Admission, no material adverse change in, or any development involving a prospective material adverse change in or affecting the condition, financial, operational, legal or otherwise, or in the earnings, management, business affairs, business prospects of Afren or any member of the Afren group of companies, whether or not arising in the ordinary course of business; or

(d) there has occurred (i) any material adverse change in the financial markets in the United States, the United Kingdom, member states of the European Union or in the international financial markets, (ii) any outbreak or escalation of hostilities, act of terrorism or war or other calamity or crisis or (iii) any change or development involving a prospective change in national or international political, financial or economic conditions, or exchange rates or exchange controls, in each case the effect of which is such as to make it, in the judgment of the Joint Bookrunners, impracticable or inadvisable to market the Placing Shares or to enforce contracts for the sale of the Placing Shares; or

(e) trading in any shares of the Company has been suspended or limited by the London Stock Exchange, on any exchange or over the counter market, or if trading generally on the American Stock Exchange, the New York Stock Exchange, the NASDAQ National Market, the London Stock Exchange or AIM has been suspended or limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of such exchanges or by such system or by order of the regulatory authorities of the United Kingdom, the United States, or any other governmental or self-regulatory authority, or a material disruption has occurred in commercial banking or shares settlement or clearance services in the United Kingdom, the United States or in Europe; or

(f) a banking moratorium has been declared by the authorities of any of the United Kingdom, the United States, the State of New York or any other member state of the EEA; or

(g) there is the occurrence of an adverse change (or a prospective adverse change) in UK taxation affecting Ordinary Shares or the transfer of such shares or exchange controls are imposed by the United Kingdom, the United States or any other member state of the EEA;

Upon such termination, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement subject to certain exceptions.

By participating in the Placing, Placees agree that the exercise by the Joint Bookrunners of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the Joint Bookrunners and that they need not make any reference to Placees and that they shall have no liability to Placees whatsoever in connection with any such exercise or failure so to exercise.

No prospectus

No prospectus is required to be or has been published in order to effect the sale of shares in the Placing. Notwithstanding that a prospectus is anticipated to be approved as soon as practicable following the GM by the FSA (in accordance with the UK Financial Services and Markets Act 2000) in relation to the Company's application for admission of its ordinary shares to the Official List and to trading on the Main Market (including in order to bring the Placing Shares to Admission), Placees' commitments will be made solely on the basis of the information contained in the announcements (including the Appendices and any Agreed Offering Documents as defined below) released by Afren today.

Each Placee, by accepting a participation in the Placing, agrees that the content of this announcement (including the Appendices) is exclusively the responsibility of Afren and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of Afren, Morgan Stanley,Merrill Lynch, Jefferies, Nomura or Evolution or any other person (save for any other offering document it may receive from Afren, which shall also be exclusively the responsibility of Afren ("Agreed Offering Documents")) and none of Merrill Lynch, Morgan Stanley, Jefferies, Nomura, Evolution or Afren, nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of Afren in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and settlement

Settlement of transactions in the Placing Shares following Admission will take place within CREST, subject to certain exceptions. Afren reserves the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if, in the opinion of the Joint Bookrunners, delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Following the close of the Bookbuild for the Placing, each Placee allocated Placing Shares in the Placing will be sent a contract note stating the number of Placing Shares to be allocated to it at the Placing Price and settlement instructions.

Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions that it has in place with Merrill Lynch, Morgan Stanley Jefferies, Nomura, Evolution (as the case may be).

Afren will deliver the Placing Shares to a CREST account operated by Merrill Lynch as agent for Afren and Merrill Lynch will enter its delivery (DEL) instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

It is expected that settlement will take place on or around 3 December 2009 on a delivery versus payment basis.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by Merrill Lynch.

Each Placee is deemed to agree that, if it does not comply with these obligations, Afren may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for Afren's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations and warranties

By participating in the Placing each Placee (and any person acting on such Placee's behalf) acknowledges, undertakes, represents, warrants and agrees (as the case may be) the following. It:

1. represents and warrants that it has read this announcement, including the Appendices and any Agreed Offering Documents, in its entirety;

2. acknowledges and agrees that no listing particulars or prospectus has been or will be prepared in connection with the Placing;

3. acknowledges that the ordinary shares in the capital of Afren are listed on the AIM market of the London Stock Exchange, and Afren is therefore required to publish certain business and financial information in accordance with the AIM Rules for Companies, and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;

4. acknowledges that none of Merrill Lynch, Morgan Stanley, Jefferies, Nomura, Evolution or Afren nor any of their respective affiliates or any person acting on behalf of any of them has provided, nor will they provide, it with any material regarding the Placing Shares or Afren or any other person other than this announcement and any Agreed Offering Document; nor has it requested any of Merrill Lynch, Morgan Stanley, Jefferies, Nomura, Evolution, Afren, or any of their respective affiliates or any person acting on behalf of any of them to provide it with any such information;

5. acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Australia, Canada, South Africa or Japan and, subject to certain exceptions, may not be offered, sold, transferred, delivered or distributed, directly or indirectly, in or into those jurisdictions;

6. represents and warrants that (i) it is not within the United States; (ii) it is not within Australia, Canada, South Africa, Japan or any other jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares; (iii) it is not acquiring the Placing Shares for the account of any person who is located in the United States, unless the instruction to acquire was received from a person outside the United States and the person giving such instruction has confirmed that it has the authority to give such instruction, and that either (a) it has investment discretion over such account or (b) it is an investment manager or investment company and, in the case of each of (a) and (b), that it is acquiring the Placing Shares in an "offshore transaction" (within the meaning of Regulation S under the Securities Act); and (iv) it is not acquiring the Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Placing Shares into the United States or any other jurisdiction referred to in (ii) above;

7. acknowledges that the content of this announcement is exclusively the responsibility of Afren and that none of Merrill Lynch, Morgan Stanley, Jefferies, Nomura, Evolution or any person acting on their behalf has or shall have any liability for any information, representation or statement contained in this announcement, any Agreed Offering Document or any information previously published by or on behalf of Afren and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this announcement, any Agreed Offering Document or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for the Placing Shares is contained in this announcement, any Agreed Offering Document and any information previously published by Afren by notification to a Regulatory Information Service, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by Merrill Lynch, Morgan Stanley, Jefferies, Nomura, Evolution or Afren and none of Merrill Lynch, Morgan Stanley, Jefferies, Nomura, Evolution or Afren will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of Afren in deciding to participate in the Placing;

8. acknowledges that none of Merrill Lynch, Morgan Stanley, Jefferies, Nomura, Evolution or any person acting on behalf of them or any of their respective affiliates has or shall have any liability for any publicly available or filed information, or any representation relating to Afren, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

9. represents and warrants that neither it, nor the person specified by it for registration as a holder of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services);

10. represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2007 (the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

11. if a financial intermediary, as that term is used in Article 3(2) of EU Directive 2003/71/EC (the "Prospectus Directive") (including any relevant implementing measure in any member state), represents and warrants that the Placing Shares purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the European Economic Area which has implemented the Prospectus Directive other than to qualified investors, or in circumstances in which the prior consent of Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution has been given to the proposed offer or resale;

12. represents and warrants that it has not offered or sold and, prior to the expiry of a period of six months from Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the Financial Services and Markets Act 2000 ("FSMA");

13. represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive (including any relevant implementing measure in any member state);

14. represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

15. represents and warrants that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

16. (A) represents and warrants that it is a person falling within Article 19(5) and / or Article 49(2)(a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or is a person to whom this announcement may otherwise be lawfully communicated; and

(B) acknowledges that any offer of Placing Shares may only be directed at persons to the extent in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive and represents and agrees that it is such a qualified investor;

17. represents and warrants that it is entitled to purchase the Placing Shares under the laws of all relevant jurisdictions which apply to it, and that its subscription/purchase of the Placing Shares will be in compliance with applicable laws and regulations in the jurisdiction of its residence, the residence of the Company, or otherwise;

18. undertakes that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as Merrill Lynch and Morgan Stanley may in their discretion determine and without liability to such Placee;

19. acknowledges that its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to subscribe for, and that Afren may call upon it to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;

20. acknowledges that none of Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution or any of their respective affiliates, or any person acting on their behalf, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution and that Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution do not have any duties or responsibilities to it for providing the protections afforded to Merrill clients or customers of Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

21. undertakes that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. None of Merrill Lynch, Morgan Stanley, Jefferies, Nomura, Evolution or Afren will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify Afren, Morgan Stanley, Merrill Lynch. Jefferies, Nomura and Evolution in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of Merrill Lynch who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

22. acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreements shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by Afren, Morgan Stanley, Merrill Lynch, Jefferies, Nomura or Evolution in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

23. acknowledges that Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution will rely upon the truth and accuracy of the representations, warranties and acknowledgements set forth herein and which are irrevocable and it irrevocably authorises Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution to produce this announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein;

24. agrees to indemnify and hold Afren, Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

25. represents and warrants that it will acquire any Placing Shares purchased by it for its account or for one or more accounts as to each of which it exercises sole investment discretion and it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;

26. acknowledges that its commitment to subscribe for Placing Shares on the terms set out herein and in the contract note will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to Afren's conduct of the Placing. The foregoing representations, warranties and confirmations are given for the benefit of Afren as well as Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution. The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to the subscription by it and/or such person direct from Afren for the Placing Shares in question. Such agreement assumes, and is based on a warranty from each Placee, that neither it, nor the person specified by it for registration as holder, of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services). If there are any such arrangements, or the settlement relates to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable. In that event the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax, and none of Afren, Morgan Stanley, Merrill Lynch, Jefferies, Nomura or Evolution shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify Merrill Lynch accordingly;

27. understands that no action has been or will be taken by any of the Company, Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution or any person acting on behalf of Afren, Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

28. in making any decision to subscribe for Placing Shares, confirms that it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for Placing Shares. It further confirms that it is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain a complete loss in connection with the Placing. It further confirms that it relied on its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved;

29. warrants and represents that it has (a) made its own assessment and satisfied itself concerning legal, regulatory, tax, business and financial considerations in connection herewith to the extent it deems necessary; (b) had access to review publicly available information concerning the Afren group that it considers necessary or appropriate and sufficient in making an investment decision; (c) reviewed such information as it believes is necessary or appropriate in connection with its subscription or purchase of the Placing Shares; and (d) made its investment decision based upon its own judgement, due diligence and analysis and not upon any view expressed or information provided by or on behalf of Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution;

30. understands and agrees that it may not rely on any investigation that Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution or any person acting on their behalf may or may not have conducted with respect to the Company, its group, or the Placing and Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution have not made any representation to it, express or implied, with respect to the merits of the Placing, the subscription or purchase of the Placing Shares, or as to the condition, financial or otherwise, of the Company, its group, or as to any other matter relating thereto, and nothing herein shall be construed as a recommendation to it to purchase the Placing Shares. It acknowledges and agrees that no information has been prepared by Merrill Lynch, Morgan Stanley, Jefferies, Nomura, Evolution, or the Company for the purposes of this Placing;

31. accordingly it acknowledges and agrees that it will not hold Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution or any of their respective associates or any person acting on their behalf responsible or liable for any misstatements in or omission from any publicly available information relating to the Company's group or information made available (whether in written or oral form) in presentations or as part of roadshow discussions with investors relating to the Company's group (the "Information") and that none of Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution or any person acting on their behalf, makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such Information or accepts any responsibility for any of such Information; and

32. acknowledges and agrees that in connection with the Placing, each of Merrill Lynch, Morgan Stanley, Nomura, Evolution, Jefferies and any of their respective affiliates acting as an investor for its own account may take up shares in the Company and in that capacity may retain, purchase or sell for its own account such shares in the Company and any securities of the Company or related investments and may offer or sell such securities or other investments otherwise than in connection with the Placing. Accordingly, references in this announcement or the Agreed Offering Documents to shares being issued, offered or placed should be read as including any issue, offering or placement of such shares in the Company to any of Merrill Lynch, Morgan Stanley, Nomura, Evolution and Jefferies and any relevant affiliate acting in such capacity. None of Merrill Lynch, Morgan Stanley, Nomura, Evolution and Jefferies intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

By participating in the Placing, each Placee (and any person acting on Placee's behalf) subscribing for Placing Shares acknowledges and agrees that: (i) the Placing Shares are being offered and sold only pursuant to Regulation S under the Securities Act in a transaction not involving a public offering of securities in the United States and the Placing Shares have not been and will not be registered under the Securities Act; (ii) it is not within the United States; (iii) it is not acquiring the Placing Shares for the account of any person who is located in the United States, unless the instruction to acquire was received from a person outside the United States and the person giving such instruction has confirmed that it has the authority to give such instruction, and that either (a) it has investment discretion over such account or (b) it is an investment manager or investment company and, in the case of each of (a) and (b), that it is acquiring the Placing Shares in an "offshore transaction" (within the meaning of Regulation S under the Securities Act); and (iv) it is not acquiring the Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Placing Shares into the United States.

Placees acknowledge that their acceptance is not by way of acceptance of any public offer but is by way of a collateral contract and as such section 87Q of the UK Financial Services and Markets Act 2000 does not entitle any Placee to withdraw in the event that the Company publishes a supplementary prospectus in connection with the Company's application for admission of its ordinary shares to the Official List and to trading on the Main Market. If, however, any Placee is entitled to withdraw, by accepting an obligation to subscribe for Placing Shares, such Placee agrees to confirm its acceptance of the offer on the terms contained in this announcement on the same terms immediately after such right of withdrawal arises.

In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares.

Each Placee and any person acting on behalf of each Placee acknowledges and agrees that Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution or any of their affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.

When a Placee or person acting on behalf of the Placee is dealing with Merrill Lynch, Morgan Stanley, Jefferies, Nomura, Evolution, any money held in an account with Merrill Lynch, Morgan Stanley, Jefferies, Nomura, Evolution on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FSA made under FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from Merrill Lynch's, Morgan Stanley's, Jefferies', Nomura's or Evolution's money in accordance with the client money rules and will be used by Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution in the course of its own business; and the Placee will rank only as a general creditor of Merrill Lynch, Morgan Stanley, Jefferies, Nomura or Evolution (as the case may be).

All times and dates in this announcement may be subject to amendment. Merrill Lynch and Morgan Stanley shall notify the Placees and any person acting on behalf of the Placees of any changes.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

APPENDIX II

FURTHER INFORMATION ON AFREN

Overview

Afren is an independent oil and gas exploration and production company that was founded in 2004 and admitted to AIM on 14 March 2005. With a focus purely on Africa, the founding vision to become the leading pure-play African independent exploration and production company was based on a clear and differentiated strategy of utilising relationships of the Board and management to partner with indigenous companies, national oil companies and host governments, in growing an upstream portfolio of significant scale.

Adhering to the founding strategy Afren has today assembled a diversified portfolio of 16 assets across six African countries: Nigeria, Côte d'Ivoire, Ghana, Congo Brazzaville, Gabon and offshore Nigeria and São Tomé & Príncipe JDZ. This includes a farm-out agreement entered into with Addax in relation to Okwok, which is subject to completion. Afren's portfolio today encompasses producing, development, appraisal and exploration opportunities that provide a balanced platform and opportunity set from which to deliver further significant organic growth into the foreseeable future.

Afren is currently producing oil from the Okoro field in Nigeria and oil and gas from the Lion and Panthère fields in Block CI-11 in Côte d'Ivoire, as well as processing gas at the Lion Gas Plant in Côte d'Ivoire. The Group's drilling programme will be targeting a gross un-risked resource base of 686 mmboe in 2011.

Summary of Strengths, Strategy and Prospects

Afren's vision is to strengthen its position as the leading African independent oil and gas exploration and production company. The Directors believe that Afren's key strengths and strategic advantages are:

An exclusive focus on Africa

Over the past two decades, Africa's proven oil reserves have grown by over 100 per cent. (Source: BP Statistical Review of World Energy (June 2009)). Sub-Saharan Africa has witnessed a 165 per cent. reserves growth over the same period (Source: BP Statistical Review of World Energy (June 2009)). No other region has matched this growth statistic, with many established producing regions showing a contraction in reserves base over the same period. According to the BP Statistical Review of World Energy (June 2009), in this region there is:

● an estimated 52 billion barrels of proved oil reserves, of which 70 per cent. is in Nigeria; and

● an estimated 227 tcf of gas reserves, of which 81 per cent. is in Nigeria.

Management considers that in this region there is:

● a fiscally stable environment and high margin barrels;

● an established oil exploration and production industry, at an earlier stage of maturity than other major hydrocarbon provinces;

● significant exploration prospectivity with positive early indications of a secondary market emerging in the Gulf of Guinea; and

● significant opportunities to commercialise gas.

Currently, approximately 15 per cent. of oil and gas supplied to the US originates from West Africa, and this is projected by industry sources to increase to 30 per cent. over the next decade highlighting the future dependence on the West African hydrocarbon resource base, a region in which Afren is competitively advantaged through its indigenous identity and strong access to opportunities through the Board and management (Source: US Department of Energy, Energy Information Administration).

Strong African representation on the Board and management

Afren benefits from an experienced Board and senior management with extensive African experience and relationships, including:

● Afren's Chairman Egbert Imomoh, a Nigerian national, who has over 30 years working experience including as deputy managing director of Shell Nigeria with responsibility for more than one million bopd of operated production. Mr. Imomoh has a long history of managing oil and gas operations in Africa, allowing him to develop strong relationships with partner companies, government and authorities, indigenous companies and community relations.

● The Group's Chief Executive, Osman Shahenshah, with more than 20 years experience in oil, gas and energy corporate finance. His track record in oil and gas financing, acquisitions and strategic advisory includes advising on the financing of Mobil's Oso asset (Nigeria), the Escravos gas flaring reduction project (Nigeria), a US$1.6 billion financing at N'Kossa (Congo Brazzaville) and the financing of Block CI-11 (while at IFC).

● Afren's Chief Operating Officer, Shahid Ullah, who has spent over 15 years working in Nigeria and other west African countries. Mr. Ullah was responsible for and co-ordinated the development of Etame (Gabon) and the Abana field (Moni Pulo, Nigeria).

● Constantine Ogunbiyi, a Nigerian national and an Executive Director, who has extensive experience of African acquisitions and structured and project financings, both with Afren and in his previous career as a lawyer with major international law firms.

The extensive experience and relationships of the Board are complemented by members of Afren's senior management team who are based in Nigeria and Côte d'Ivoire, including operational managers and financial controllers. Afren benefits from fully staffed offices in all operational locations, covering the Company's operational requirements. These offices are staffed primarily by locally-based employees, further evidencing Afren's commitment to Africa. This 'on the ground' presence provides the Group with direct insight into local issues, as well as allowing the Group to react to operational matters promptly.

An established operational track record

Afren is operator on all of its core development assets and of its producing assets in Côte d'Ivoire. Afren is also technical advisor to Amni International Petroleum Development Company Limited ("Amni") at the producing Okoro field and to Oriental at the Ebok field. During 2008, Afren successfully operated and drilled a total of nine wells in Nigeria and Ghana and maintained an excellent environmental health and safety record. In September 2009, Afren commenced a multi-well appraisal and development drilling campaign at the Ebok field in Nigeria.

The Okoro field in Nigeria marked Afren's maiden operated full field development, in a period of under two years from signing the agreement to first oil. The first half of 2009 saw production from the field ahead of pre drill expectations of 19,327 bopd and a process uptime in excess of 95 per cent.

Proved reserves and production growth

At the time of its initial public offering in March 2005, Afren's sole oil and gas interest was a 4.41 per cent. interest in the JDZ Block 1, with no reserves. Afren has since established a probable contingent reserves base of 42.5 mmboe and prospective resources base of 350 mmboe.

Afren is actively engaged in exploration activities in all six African countries in which it has a presence. Through a selective exploration strategy, Afren is exposed to the high impact Cretaceous fairway along the West African transform margin, where it has secured the Keta Block in Ghana and Block CI-01 in Côte d'Ivoire (attractive prospectivity has been identified in both the primary Cretaceous intervals and younger Tertiary intervals), and selected under-explored basins elsewhere in West Africa where working hydrocarbon systems have been established and the potential for material discoveries exists (for example, the Vandji play in Congo Brazzaville).

Over the period to 2011 Afren aims to drill up to eight appraisal and exploration wells across its portfolio, targeting gross volumes of 686 mmboe.

The Group is currently producing approximately 27,686 boe per day of oil, natural gas and natural gas liquids from the Okoro field in Nigeria, Block CI-11 and the Lion Gas Plant in Côte d'Ivoire respectively. At the Okoro field, the year to date production to 31 October 2009 was 5,714,840 barrels of oil (gross), equivalent to an average daily production rate of 18,800 bopd. The Ebok development is expected to deliver 15,000 bopd in the first half of 2010, increasing to 35,000 bopd at the end of first phase drilling.

The Group is targeting production of up to 100,000 bopd by the end of 2012 from Okoro, Ebok and Block CI-11 and other existing appraisal or development assets which can be converted into production assets and potential acquisitions.

Continued growth through partnerships and acquisitions

Afren's significant reserves growth to date has been achieved through a combination of accessing and developing discovered but undeveloped assets through partnerships with indigenous companies (in relation to Okoro and Ebok) across the Gulf of Guinea (Nigeria in particular) and selective acquisitions where Afren is strategically advantaged (for example, the acquisition of Devon Energy's assets in Côte d'Ivoire and Ghana).

The discovered but undeveloped oil and gas fields across Sub-Saharan Africa, more specifically in Nigeria, offer a rich opportunity set. With the vast majority of these fields residing as "fallow" assets in the major oil companies' portfolios, they typically fall below the materiality threshold of the major oil companies, given a growing focus on exploring the deeper water regions for very large discoveries.

There are encouraging signs that indicate a secondary asset market is emerging in the Gulf of Guinea, as certain governments' emphasis turns to realising the full benefit of the Gulf's natural resources and encouraging greater local and indigenous participation in order to achieve this. Attractive acreage is increasingly being awarded to indigenous companies who, in turn, are looking to partner with independent oil companies that can bring both technical expertise and financial resources. Afren intends to continue its partnership based approach in growing the reserves base.

In addition, to complement its fallow field strategy and in direct response to the Nigerian government's objective to increase the level of local participation in the oil and gas sector, Afren has established an indigenous company, First Hydrocarbon Nigeria Limited ("FHN") with the support of two leading Nigerian financial institutions First City Monument Bank ("FCMB") and Guaranty Trust Bank Plc. FHN will acquire substantial oil and gas assets in Nigeria from the major international oil companies' portfolios. Over time, FHN will be owned by a wider Nigerian stakeholder base, ensuring diversity of ownership and a reflection of Afren's Nigerian focus.

History of the Group

Afren was incorporated in December 2004 and its share capital was admitted to trading on AIM in March 2005. Afren has since developed a diversified portfolio of 16 assets comprising production, near term development and high impact exploration assets across Côte d'Ivoire, Nigeria, offshore Nigeria and São Tomé & Príncipe JDZ, Ghana, Congo and Gabon.

The Group's first asset, acquired on 8 March 2005, was an indirect 4.41 per cent. interest in JDZ Block 1 in offshore Nigeria and São Tomé & Príncipe JDZ through a 49 per cent. equity interest in Dangote Energy Equity Resources Ltd ("DEER"). This acquisition gave Afren its foothold in offshore Nigeria and São Tomé & Príncipe JDZ and its proven deep water reserves.

On 18 July 2005, Afren acquired from Ascent Resources plc a 12.86 per cent. interest in the Iris Marin licence in Gabon. This acquisition provided Afren with access to the Gamba sandstone reservoir which is productive in the nearby Etame field. In April 2007 Afren increased its equity interest in the Iris Marin licence area from 12.86 per cent. to 16.67 per cent. following the withdrawal of Petroleum Oil & Gas Corporation Pty Limited of South Africa.

On 24 March 2006, Afren, Afren Energy Resources Limited ("AERL") and Amni signed a production sharing and technical services agreement for the development of the Okoro and Setu fields in offshore Nigeria.

On 3 January 2007, Afren acquired a 20 per cent. interest in the Ibekelia TEA licence area. The Ibekelia licence is located adjacent to the Gamba, Ivinga and Olowi oilfields.

On 3 April 2007, AERL on behalf of itself and Amni signed a contract with Bumi Armada Berhad (which was later amended and novated) for the use of the Armada Perkasa FPSO for an initial five-year term with an option to extend. The Armada Perkasa FPSO has a storage capacity of 380,000 barrels and a processing capacity of 27,000 bopd.

On 12 November 2007, Afren entered into a share purchase agreement with Devon Energy to acquire Devon Energy Ghana Holdings Limited, which indirectly held (together with Encana International (Ghana) Limited) a 90 per cent. working interest and operatorship of the Keta Block, located offshore eastern Ghana in the Volta Basin.

On 20 February 2008, AGER through a joint venture agreement with GEC, signed production sharing contracts for OPL 907 and OPL 917 located in onshore Nigeria within the Anambra Basin. Under the terms of the production sharing contracts, AGER took a 41 per cent. interest in OPL 907 and a 42 per cent. interest in OPL 917, and AGER acts as operator of both assets. The joint venture agreement between Afren and GEC defines the commercial terms under which Afren participates with GEC in the exploration and development of the two licences. Afren's interests are held through AGER in which Afren holds an 80 per cent. economic interest.

On 5 March 2008, Devon Energy, Devon International Holdings Ltd, Afren C1 (II) Limited and Afren entered into a share purchase agreement pursuant to which on 24 September 2008, Afren CI (II) Limited acquired Devon Energy and Devon International Holdings Ltd's interests in Côte d'Ivoire comprising (i) a 47.9592 per cent. working interest and operatorship of the producing Block CI-11, (ii) a 65 per cent. direct interest and operatorship with rights over an additional 15 per cent. interest in the undeveloped Block CI-01, and (iii) a 100 per cent. interest in the onshore Lion Gas Plant. The consideration for the acquisition was US$184 million (after working capital adjustments). The transaction yielded immediate production, complementing production start-up at the Okoro field in Nigeria, increased probable reserves by 67 per cent. to 70 million boe and represented a strategic new entry into Côte d'Ivoire.

On 31 March 2008, Afren Resources signed a farm-in agreement with Oriental jointly to develop the Ebok field located offshore South-East Nigeria. Oriental had been awarded a 100 per cent. interest and operatorship of Ebok by the Mobil/NNPC Joint Venture in May 2007.

On 3 April 2008, Afren announced that it had raised £118.75 million pursuant to a placing with institutional investors of 95 million new ordinary shares of one penny each in the capital of the Company at 125 pence per share.

On 10 June 2008, Afren announced first oil from the Okoro field in Nigeria.

On 8 October 2008, Afren entered into a strategic alliance agreement with Sojitz Corporation ("Sojitz") jointly to pursue significant oil and gas acquisition opportunities in Africa. Under the terms of the agreement, the alliance will terminate on the earlier of 8 October 2011 or the date upon which Sojitz has invested a total of US$500 million in joint acquisitions. Sojitz is to provide financial support to the alliance for the purpose of funding material joint acquisitions, among other things, including by securing funding and credit support from the Japanese Government.

On 24 October 2008, Afren, through its subsidiary Afren Energy Ghana Limited, signed a farm-out agreement with Mitsui Ghana in respect of the Keta Block, pursuant to which on 28 November 2008 Mitsui Ghana acquired a 20 per cent. participating interest in the petroleum agreement governing the Keta Block together with a 22.2 per cent. interest in a joint operating agreement with Gulf in return for a significant contribution to the Cuda-1x exploration well.

On 26 March 2009, Afren announced the successful outcome of the Ebok field appraisal. An independent assessment of the in-place oil and recoverable oil reserves from the Ebok field preliminarily confirmed a P50 STOIIP of 148 mmbls oil for the FB-1 and FB-2 areas of the field. Recoverable reserves were calculated at 41.2 mmbls. The independent assessor further assigned a 14 mmbls oil of resources to the FB-1 and FB- field area. An additional 21 mmbls oil of contingent reserves and 33 mmbls prospective resources were assigned to other areas of the field including the Ebok West and Ebok North Fault Blocks.

On 15 April 2009, Afren announced that it had raised £84.8 million (US$126.3 million) pursuant to a placing with institutional investors of 265 million new ordinary shares of one penny each in the capital of the Company at 32 pence per share.

On 3 July 2009, Afren announced that it had established FHN with the support of two leading Nigerian financial institutions, FCMB and Guaranty Trust Bank Plc. FHN was established to fulfil the Nigerian Government's criteria for indigenous operators and is to be used as vehicle to acquire substantial oil and gas assets in Nigeria, including stakes in assets currently under negotiation, assets that may become available that are held by international independents and by the joint ventures between the Nigerian Government and international oil companies, and assets that may be divested in connection with indigenous licensing rounds.

On 25 August 2009, Afren announced that it had entered into a farm-out agreement with Addax for the development of the Okwok field, located in OML 67 offshore Nigeria, in consideration for Afren agreeing to drill one appraisal well in the farm-out area and paying all costs associated therewith. Under the terms of the farm-out agreement, Afren as technical adviser, will acquire a 28 per cent. legal interest and a 70 per cent. effective working interest (before cost recovery), reverting to 56 per cent. (after cost recovery) pre hurdle point and 35 per cent. (after cost recovery) post hurdle point, subject to gross volumes lifted. The hurdle point is the period following the cost recovery period when available petroleum lifted equals US$1.2 billion in value. The assignment of Addax's interests is not effective until Afren completes the drilling of the well. Afren is required to have completed the drilling of the well by 31 March 2011. Afren was also granted an option, exercisable within six months after the drilling of the appraisal well is complete (and, if Afren elects, the production testing of one or more of the crude oil bearing sections of that well), to purchase Addax's residual interest in the project.

On 3 November 2009, Afren announced a drilling update on the Ebok-5 appraisal well and approval by the Department of Petroleum Resources of Phase 1a of the field development plan for Ebok.

On 4 November 2009, Afren announced an operational update and confirmed its intention to move to the Official List.

Summary of Reserves and Resources

NSAI has produced a report, dated as of 3 November 2009, on Afren's reserves and resources. NSAI has prepared its assessment of Afren's asset base as at 30 June 2009 (and 15 October 2009 in respect of the Ebok Field), and has reviewed and incorporated only field studies and data that were available up to that date. Afren has provided updated data, including updated performance data for the Okoro and Setu fields, the Lion and Panthère fields in Block CI-11, the Kudu, Eland and Ibex fields in CI-01, JDZ Block 1, certain reservoirs in the Ebok field, the La Noumbi permit, the Iris Marin and Ibekelia licences, the Keta Block and OPL 310, made available after 30 June 2009 but not in time to incorporate into NSAI's 15 October 2009 estimates. NSAI has reviewed this data and has confirmed its estimate of reserves and resources for all of the fields as at 15 October 2009 has not changed materially from 30 June 2009 and are therefore still valid as at 15 October 2009. In its internal reserve and resource estimates, Afren management includes the most current and comprehensive suite of available data, work and studies.

Reserves

NSAI has estimated the proved, probable and possible reserves to the Afren interest in the Okoro field located in OML 112, offshore Nigeria, and in the Lion and Panthère fields located in Block CI-11, offshore Côte d'Ivoire as of 30 June 2009 and to the Afren interest in the Ebok field located in OML 67, offshore Nigeria and as of 15 October 2009.

The table below sets out NSAI's estimated net oil and gas reserves to Afren's interest in the following assets as of 30 June 2009 (and 15 October 2009 in respect of the Ebok field). This information has been extracted without material adjustment from the NSAI Report.

	Afren Effective Working Interest Reserves After Royalty		Net Entitlement Reserves(1)
Country / Category	Oil (mmbbl)	Gas (bcf)	Oil (mmbbl)	Gas (bcf)
Offshore Nigeria(4)
Okoro Field(2)
Proved (1P)	8.4	-(3)	8.4	-(3)
Proved + Probable (2P)	10.4	-(3)	10.4	-(3)
Proved + Probable + Possible (3P)	13.5	-(3)	13.5	-(3)
Ebok Field(2)
Proved (1P)	13.1	-(3)	9.7	-(3)
Proved + Probable (2P)	19.1	-(3)	13.0	-(3)
Proved + Probable + Possible (3P)	26.2	-(3)	15.9	-(3)
Offshore Côte d'Ivoire(5)
Lion and Panthère Fields(2)
Proved (1P)	0.7	16.2	0.4	8.9
Proved + Probable (2P)	0.9	22.0	0.5	12.3
Proved + Probable + Possible (3P)	1.3	31.0	0.7	18.0

____________

(1) Net reserves are after deductions for royalty burdens

(2) Estimates for Okoro, Lion and Panthère Fields are as of 30 June 2009. Estimates for Ebok Field are as of 15 October 2009 and reflect the Nigerian Government approval of the Ebok Phase 1 development plan which was received on 2 October 2009

(3) Gas reserves are not included because there is currently no viable market for produced gas

(4) Oil reserves for offshore Nigeria include crude oil only

(5) Oil reserves for offshore Côte d'Ivoire include crude oil and condensate

Contingent Resources

NSAI has estimated the contingent resources for the Kudu, Eland and Ibex fields in Block CI-01, offshore Côte d'Ivoire, JDZ Block 1, offshore Nigeria and São Tomé & Príncipe JDZ, three reservoirs in the Ebok field located in OML 67, offshore Nigeria and the Setu field located in OML 112, offshore Nigeria as of 30 June 2009.

The development plan approved on 2 October 2009 for the Ebok field does not address all of the discovered hydrocarbons, therefore, oil volumes in those discovered reservoirs at the Ebok field not covered by the development plan are considered contingent resources.

Oil

The table below sets out NSAI's estimated gross OOIP and contingent oil resources for the following assets as of 30 June 2009. This information has been extracted without material adjustment from the NSAI Report.

	Gross (100%) Oil Volumes (mmbl)
	OOIP			Contingent Oil Resources
Area	Low Estimate (1C)	Best Estimate (2C)	High Estimate (3C)	Low Estimate (1C)	Best Estimate (2C)	High Estimate (3C)
Offshore Côte d'Ivoire	59.2	81.1	104.8	13.5	19.8	27.9
JDZ Block 1	80.8	123.4	173.8	24.4	42.5	67.0
Offshore Nigeria	82.5	129.6	171.7	18.1	31.8	45.9

Gas

The table below sets out NSAI's estimated gross OGIP and contingent gas resources for the following assets as of 30 June 2009. This information has been extracted without material adjustment from the NSAI Report.

	Gross (100%) Gas Volumes (bcf)
	OGIP			Contingent Gas Resources
Area	Low Estimate (1C)	Best Estimate (2C)	High Estimate (3C)	Low Estimate (1C)	Best Estimate (2C)	High Estimate (3C)
Offshore Côte d'Ivoire	105.7	160.1	237.0	66.2	101.5	152.4
JDZ Block 1(1)	-	-	-	-	-	-
Offshore Nigeria(1)	-	-	-	-	-	-

____________

(1) Gas resources are not included because there is currently no viable market for produced gas

Prospective Resources

NSAI has estimated the prospective resources for the La Noumbi permit, onshore Congo, the Kudu and Ibex Fields in Block CI-01, offshore Côte d'Ivoire, the Iris Marin and Ibekelia licences, offshore Gabon, the Keta Block, offshore Ghana, JDZ Block 1, offshore Nigeria and São Tomé & Príncipe JDZ, seven reservoirs in the Ebok field, offshore Nigeria and OPL 310, offshore Nigeria as of 30 June 2009.

Oil

The table below sets out NSAI's estimated gross OOIP and unrisked prospective oil resources for the following assets as of 30 June 2009. This information has been extracted without material adjustment from the NSAI Report.

	Gross (100%) Oil Volumes (mmbl)
	OOIP			Unrisked Prospective Oil Resources
Area	Low Estimate	Best Estimate	High Estimate	Low Estimate	Best Estimate	High Estimate
Onshore Congo	662.3	1,282.6	2,153.3	145.0	315.0	595.5
Offshore Côte d'Ivoire	17.4	48.6	93.3	4.2	12.0	24.2
Offshore Gabon	282.0	390.3	513.2	52.5	97.3	159.4
Offshore Ghana	722.4	2,416.7	8,061.2	153.9	604.2	2,299.5
JDZ Block 1	734.1	1,003.0	1,348.5	229.4	350.1	518.4
Offshore Nigeria	169.5	411.3	712.8	90.9(1)	186.9(1)	327.9(1)

____________

(1) These prospective volumes include condensate associated with the OPL 310 prospective gas resources

Gas

The table below sets out NSAI's estimated gross OGIP and unrisked prospective gas resources for the following assets as of 30 June 2009. This information has been extracted without material adjustment from the NSAI Report.

	Gross (100%) Gas Volumes (bcf)
	OGIP			Unrisked Prospective Gas Resources
Area	Low Estimate	Best Estimate	High Estimate	Low Estimate	Best Estimate	High Estimate
Offshore Côte d'Ivoire	197.4	544.9	949.6	157.5	436.1	736.6
Offshore Nigeria	1,169.5	1,625.1	2,265.6	833.5	1,201.9	1,711.4

Summary of future net revenue

NSAI has estimated the future net revenue to the Afren interest in the Okoro field located in OML 112, offshore Nigeria and in the Lion and Panthère fields located in Block CI-11, offshore Côte d'Ivoire, as of 30 June 2009 and to the Afren interest in the Ebok field located in OML 67, offshore Nigeria as of 15 October 2009.

The table below sets out NSAI's estimated future net revenue to the Afren interest in the following assets as of 30 June 2009 (and 15 October 2009 in respect of the Ebok field), under the assumptions set out in the NSAI Report. This information has been extracted without material adjustment from the NSAI Report.

	Future Net Revenue(2) (US$mm)
Country / Category	Total	Present Worth at 10%
Offshore Nigeria
Okoro Field(1)
Proved (1P)	305.2	281.0
Proved + Probable (2P)	390.6	349.3
Proved + Probable + Possible (3P)	481.2	418.8
Ebok Field(1)
Proved (1P)	68.0	42.6
Proved + Probable (2P)	118.2	81.5
Proved + Probable + Possible (3P)	172.1	122.0
Offshore Côte d'Ivoire
Lion and Panthère fields(1)
Proved (1P)	31.9	30.9
Proved + Probable (2P)	44.2	40.0
Proved + Probable + Possible (3P)	62.5	53.1

____________

(1) Estimates for Okoro, Lion and Panthère Fields are as of 30 June 2009. Estimates for Ebok Field are as of 15 October 2009 and reflect the Nigerian Government approval of the Ebok Phase 1 development plan which was received on 2 October 2009

(2) Future net revenue is the revenue attributable to the interests of Afren after deducting from the future gross revenue direct operating expenses, taxes and all interests, including royalties, attributable to others.

Overview of Assets

Afren currently has the following assets in its portfolio:

	Legal Interest	Effective Working Interest		Fiscal system	Expiry
		Pre-Cost Recovery	Post Cost Recovery
Nigeria
Okoro (OML 112)	0%	95%	50%	Royalty Tax Concession	12 February 2018
Setu (OML 112)	0%	95%	50%	Royalty Tax Concession	12 February 2018
Ebok (OML 67)	40%	100%	50%	Royalty Tax Concession	Initial term - May 2011
OPL 310	40%	91%	321%/70%	Royalty Tax Concession	10 February 2019
OPL 9077	241%	251.25%	241%	PSC	20 February 2018
OPL 9177	242%	270%	242%	PSC	20 February 2018
Ofa (OML 30)7	32.5%	See Table 1		Royalty Tax Concession	Initial term - November 2009 (subject to regulatory review, renewal may be granted for a further period of 20 years)
Offshore Nigeria and São Tomé & Príncipe
JDZ Block 1	64.41%	64.41%	64.41%	PSC	28 April 2014
Côte d'Ivoire
Block CI-11 (Lion and Panthère fields)	47.9592%	47.9592%	47.9592%	PSC	Typically 25 years from development approval
Block CI-01 (Kudu, Eland and Ibex) fields	465%	465%	465%	PSC	Typically 25 years from development approval
Lion Gas Plant	100%	100%	100%	N/A	N/A
Ghana
Keta Block	68%	568%	68%	Royalty Tax Concession	31 December 2009 (extension subject to the ratification of a new petroleum agreement before Ghanaian Parliament)
Gabon
Iris Marin Licence	16.67%	16.67%	16.67%	PSC	11 May 2010
Ibekelia Licence	20%	20%	20%	TEA	Until conclusion of PSC negotiations
Congo (Brazzaville)
La Noumbi Permit	14%	14%	14%	PSC	18 June 2010

___________

(1) Afren's interest is 56% pre-hurdle point and post hurdle point Afren's interest is 35%. The hurdle point is the point following the Cost Recovery Period when available petroleum lifted equals US$1.2 billion in value.

(2) Afren's interests are held through AGER in which Afren holds an 80% economic interest in relation to current assets.

(3) Afren's interest is 21% during short period of Optimum (local partner) cost recovery period.

(4) 65% direct interest and 15% additional rights

(5) 75.55% if GNPC is carried

(6) Indirect interest via 49% ownership of DEER

(7) The NSAI Report does not include an analysis of Afren's Nigerian appraisal assets in the Anambra Basin (OPL 907 and 917) or Ofa (OML 30)

Table 1 - for Ofa, Afren's effective working interest depends upon its cumulative production as follows:

Cumulative Production (mmbbls)	Effective Working Interest
0	50%
5	32.50%
10	26.50%
15	22.50%
20	20%
30	15%

In addition, in August 2009, Afren announced its entry into a farm-out agreement for the development of the Okwok field adjacent to its existing Ebok field. Under the terms of the farm-out agreement, Afren as technical adviser, will acquire a 28 per cent. legal interest and a 70 per cent. effective working interest (before cost recovery), reverting to 56 per cent. (after cost recovery) pre hurdle point and 35 per cent. (after cost recovery) post hurdle point, subject to gross volumes lifted. The hurdle point is the period following the cost recovery period when available petroleum lifted equals US$1.2 billion in value. The assignment of Addax's interests is not effective until Afren completes the drilling of the first approved well. Afren is required to have completed the drilling of the well by 31 March 2011.

Production

Afren is currently producing oil from the Okoro field located in OML 112, offshore Nigeria and oil and gas from the Lion and Panthère fields in Block CI-11, offshore Côte d'Ivoire, as well as processing gas at the Lion Gas Plant in Côte d'Ivoire.

Oil Production

The Group achieved first oil in the Okoro field in June 2008 at a rate of 3,000 bopd, rising to approximately 22,000 bopd by the end of 2008. At the Okoro field, the year to date production to 31 October 2009 was 5,714,840 barrels of oil (gross), equivalent to an average daily production rate of 18,800 bopd. Oil production at Block CI-11 to 31 October 2009 was 389,542 barrels of oil (gross), equivalent to an average daily production rate of 1,281 bopd.

The following table sets out the number of production wells drilled since 2008, together with the average crude oil production and total production management anticipates will be achieved through 2010:

Year ended	2008	2009(1)	2010(1)
Production wells	16	16	16
Average crude oil production (bopd)	4350	20,600	16,960
Total production (mmboe) (crude oil/ condensate, gas, LPG)	3.42	9.4	8.28

____________ (1) Estimated

The following table sets out the actual number of wells drilled since 2007, together with the number of wells management anticipates will be drilled through 2010:

	2007	2008	2009(1)	2010(1)
Number of exploration wells drilled	2	2	4	0
Number of production wells drilled	0	7	0	6
Total wells	2	9	4	6

____________ (1) Estimated

Gas Production

Natural gas production at the Lion and Panthère fields in Block CI-11 was 9.9 bcf (gross), equivalent to an average daily production rate of 32.7 mmcfd.

The Lion Gas Plant in Côte d'Ivoire was built to improve margins by extracting and selling high value natural gas liquids from gas produced at Block CI-11. Gas production from adjacent Blocks CI-26 and CI-40, operated by Canadian Natural Resources Limited, was added to the process stream, providing third party tariff revenue from the use of the Block CI-11 pipeline infrastructure, and additional gasoline and butane sales revenue at the Lion Gas Plant.

During the period to 31 October 2009, 362,543 barrels of oil equivalent of NGL were stripped from the inlet gas stream at the Lion Gas Plant, equivalent to 1,193 boepd from a process stream of rich gas produced at Blocks CI-11, CI-26 and CI-40. With a total inlet capacity of 75 mmcfd, the produced butane is sold into the local market at a price of US$21.09/boe with the gasoline spiked into the Block CI-11 crude stream and sold onto the open market.

APPENDIX III

OPERATING AND FINANCIAL REVIEW OF THE AFREN GROUP

Contractual obligations and contingent liabilities

At 30 June 2009, 31 December 2008, 2007 and 2006, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

	At 30 June	At 31 December
	2009	2008	2007		2006
	US$000's	US$000's	US$000's	US$000's
Within one year	44,535	40,998	26,520	684
In the second to fifth years	133,541	103,109	125,339	1,124
	178,076	144,107	151,859	1,808

Operating lease commitments included rentals of US$27.7 million at 30 June 2009, US$28.6 million at 31 December 2008 and US$25.2 million at 31 December 2007 within one year and US$85.8 million at 30 June 2009, US$100.0 million at 31 December 2008 and US$120.8 million at 31 December 2007 between two and five years for the FPSO that is used on the Okoro field. Other operating lease commitments represents rentals payable by the Group for certain of its office properties and long term logistics contracts. Property leases are negotiated for an average term of three years and rentals are fixed for an average term of three years.

At 30 June 2009, 31 December 2008, 31 December 2007 and 31 December 2006, the Group had future capital commitments for oil and gas asset development and oil and gas asset exploration and evaluation as follows:

	At 30 June	At 31 December
	2009	2008	2007	2006
	US$000's	US$000's	US$000's	US$000's
Capital commitments
Oil and gas assets - Development	-	-	183,278	56,618
Oil and gas assets - Exploration & Evaluation	6,406	11,154	3,951	5,100
	6,406	11,154	187,229	61,718

The significant decrease in development commitments from US$183.3 million at 31 December 2007 to nil at 31 December 2008 relates to the Group's satisfaction of commitments in relation to the Okoro field.

As at 31 December 2008, the Group had a US$6.0 million stand-by letter of credit issued by a bank in respect of contractual arrangements of the FPSO. There were no such stand-by letters of credit as at 31 December 2007 or 2006.

As at 31 December 2007, the Group had a US$17.6 million outstanding letter of credit issued by a bank relating to a drilling contract on the Okoro development. There were no such letters of credit outstanding as at 31 December 2008 or 2006.

As part of the contractual arrangements on the Ofa field in Nigeria, Afren may be liable to contribute up to a maximum of US$0.5 million in respect of the abandonment should certain events specified in the contract occur.

Capitalisation and capital resources

The capitalisation and indebtedness of the Group is set out below. The Group does not have any contingent or indirect indebtedness.

The following table sets out the Group's capitalisation and indebtedness as at 30 September 2009 and 30 June 2009.

	As at 30 September 2009	As at 30 June 2009
	US$000s	US$000's
Total current debt	(159,771)	(148,771)
Guaranteed	-	-
Secured	(143,105)	(140,438)
Unguaranteed / unsecured	(16,667)	(8,333)
Total non-current debt (excluding current portion of long-term debt)	(203,796)	(218,797)
Guaranteed	-	-
Secured	(125,463)	(132,130)
Unguaranteed / unsecured	(78,333)	(86,667)
Shareholders' equity
Share capital	(12,830)	(12,785)
Share premium	(563,365)	(561,182)
Other reserves	118,199	136,619
Total	(821,564)	(804,916)

The following table sets out the Group's net indebtedness in the short and medium-long term as at 30 September 2009 and 30 June 2009:

	As at 30 September 2009	As at 30 June 2009
	US$000's	US$000's

Cash	201,642	153,276
Cash equivalent	-	-
Trading securities	-	-
Liquidity	201,642	153,276
Current financial receivable	-	-
Current bank debt	(159,771)	(148,771)
Current portion of non current debt	-	-
Other current financial debt	-	-
Current financial indebtedness	(159,771)	(148,771)
Non current bank loans	(158,796)	(173,797)
Bonds issued	-	-
Other non current loans	(45,000)	(45,000)
Non-current financial indebtedness	(203,796)	(218,797)
Net financial indebtedness	(161,926)	(214,292)

Liquidity

The Group's liquidity requirements arise principally from its capital expenditure and working capital requirements. For the periods presented, the Group met its working capital requirements primarily from the proceeds of equity and debt financings.

The Group held cash and cash equivalents of US$153.3 million at 30 June 2009, US$117.7 million at 31 December 2008, US$91.8 million at 31 December 2007 and US$35.7 million at 31 December 2006.

The Group cash and cash equivalents balance at 30 June 2009 included US$28.7 million to which the Group had restricted access as a result of short-term restrictions on project cash, pending completion of certain milestones on the Okoro field operations. In addition certain cash was held on behalf of the joint venture for the Ghana Keta block. This compares with US$58.9 million and US$25.0 million to which the Group had restricted access at 31 December 2008 and 31 December 2007 respectively.

Following confirmation of project completion, the majority of the cash relating to the Okoro project is no longer restricted as at 30 September 2009.

Financing

Equity financing

In April 2009, Afren raised approximately US$126.3 million (before expenses) via a placement of 265 million shares with institutional investors.

In July 2008, an agreement was reached for early conversion of the £41.25 million senior unsecured convertible bonds originally issued in July 2006. Afren issued 71.1 million shares upon conversion of the bonds.

In April 2008 Afren raised approximately US$235.0 million (before expenses) via a placement of 95 million shares with institutional investors.

In June 2007, Afren raised approximately US$65.0 million (before expenses) via a private placement of 55.3 million shares.

In April 2007, US$15.0 million of equity funds were raised via a private placement with Standard Bank (US$10.0 million) and BNP Paribas.

Debt financing

Total debt at the end of 2008 amounted to US$405.2 million and this had fallen to US$348.2 million by 30 June 2009.

The following table presents information on the Group's borrowings as at 30 June 2009 and 31 December 2008, 2007 and 2006:

	As at 30 June				As at 31 December
	2009		2008 unaudited		2008		2007		2006

	Current	Non-current	Current	Non-current	Current	Non-current	Current	Non-current	Current	Non-current
	$000's	$000's	$000's	$000's	$000's	$000's	$000's	$000's	$000's	$000's

Convertible bond	-	-	-	70,906	-	-	-	69,206	-	64,540
Loan notes	-	35,191	-	-	-	33,205	-	-	-	-
Bank borrowings	148,771	164,166	29,165	181,099	111,218	260,741	-	77,485	-	-
	148,771	199,357	29,165	252,005	111,218	293,946	-	146,691	-	64,540

Bank borrowings relating to the US$230 million Okoro Development facility from BNP Paribas, were US$191.6 million at 31 December 2008, US$32.4 million at 31 December 2007 and nil at 31 December 2006. Interest on the loan is based on LIBOR plus a margin of between 4.5 per cent. and 5.75 per cent. as at 31 December 2008. The facility is repayable in semi-annual instalments of approximately US$30.0 million ending in 2011. The loan is secured by the assets of the Okoro field. The repayment profile is impacted by borrowing base calculations linked to the certified reserves of the Okoro field.

The acquisition of operations in Côte d'Ivoire was financed by a financing package arranged through BNP Paribas. The outstanding balance on the financing package was US$132.6 million as at 30 June 2009 and US$139.6 million at 31 December 2008 (US$128.1 million and US$133.9 million at 30 June 2009 and 31 December 2008 respectively net of financing arrangement costs). Repayment instalments for US$72.9 million (senior debt) of the facility amount are determined by borrowing base calculations linked to the certified reserves of the Côte d'Ivoire operations whilst US$66.7 million (subordinate debt) of the facility is repayable in semi-annual instalments of US$6.7 million commencing January 2010. Interest on the senior debt is based on LIBOR plus a margin of between 3.25 per cent. and 3.5 per cent. as at 31 December 2008. Interest on the subordinate debt is based on LIBOR plus a margin of 4.25 per cent. The senior debt includes certain financial covenants which are assessed on a quarterly basis.

Borrowings also include a balance of US$46.5 million at 31 December 2008, US$45.1 million at 31 December 2007 and US$nil at 31 December 2006, relating to an unsecured loan facility from First City Monument Bank plc. Interest on the loan is based on LIBOR plus a margin of 4.45 per cent. The loan is repayable in six equal semi-annual instalments commencing 2010 and ending in 2012.

In October 2008 Afren entered into a strategic alliance with Sojitz, a Japanese investment and industrial conglomerate, to jointly pursue acquisition opportunities of scale in Africa. Sojitz invested US$45.0 million in the form of loan notes in Afren which become convertible bonds at the time of entering into or announcing joint acquisitions. The net proceeds from the issue of the loan notes were split between a liability component and an equity component at the date of issue. The liability component of the loan notes was US$32.6 million as at 31 December 2008 and US$33.2 million at 30 June 2009.

The July 2008 conversion of the £41.25 million senior unsecured convertible bonds reduced the Group's debt by approximately US$70.9 million.

The following table presents information on the Group's debt maturity profile as at 30 June 2009 and 31 December 2008, 2007 and 2006:

	As at 30 June		As at 31 December
	2009	2008 unaudited	2008	2007	2006
	US$000's	US$000's	US$000's	US$000's	US$000's

Due within one year	148,771	29,165	111,218	11,030	7,317
Due within two to five years	218,797	272,157	318,421	157,410	73,755
Due after five years	-	-	-	-	-
	367,568	301,322	429,639	168,440	81,072

During the remainder of 2009 and the first half of 2010 the Group estimates that it will be required to repay US$148.8 million of debt principal repayments. The Group intends that it will be able to repay its borrowings through cash flow from operations.

The Group has also recently commenced the appraisal and development of the Ebok field in Nigeria. The anticipated capital expenditure has subsequently increased as a result of two factors: i) during 2009 the base case reserves and upside resources of Ebok have increased and ii) as a result of the Company's development obligations in respect of Okwok, the potential appraisal and development costs in relation to the broader Ebok - Okwok complex. The Company has recently received an indicative signed term sheet for a loan facility of up to US$300 million, which is subject to confirmation of reserves, for purposes of a reserves based facility to assist in the funding of the broader Ebok-Okwok complex. Although the Group's current committed facilities are sufficient to meet its current committed expenditures, this facility will provide the Group with additional financial flexibility with respect to the broader Ebok-Okwok complex development programme.

Recent developments

In July 2009 Afren announced it had allotted conditional to admission 2,701,138 ordinary shares of 1p each with a market value approximately £1.35 million to Energy Investment Holdings Limited, representing a milestone payment in relation to the Ebok project.

In August 2009 Afren announced that it had signed a drilling contract for the development of Ebok field, offshore Nigeria. In September 2009, Afren announced that the initial development phase of the Ebok field, offshore south east Nigeria had commenced and that the Ebok-5 well was spudded.

In August 2009 Afren announced that it had signed a farm-out agreement with Addax Petroleum for the acquisition of a 28 per cent. legal interest in the Okwok field, offshore Nigeria.

The Okwok field was discovered by the Mobil/NNPC Joint Venture in 1967 (Okwok 1), and two subsequent appraisal wells were drilled in 1968 (Okwok 2 and Okwok 3) but were not production tested. The wells encountered oil in the LD1 and D2 series of reservoirs with over 100 ft of oil pay logged in the Okwok 2 well at the D2 level plus multiple 50 ft oil bearing sections in the LD1 in Okwok 1 and Okwok 2.

Oriental and Addax drilled a further three wells in 2006 which found over 100 ft of oil pay in the D2 of Okwok 4st and an approximate equivalent amount of pay in the LD1 series in Okwok 8. The Okwok 4ST1 well sampled 32° API quality crude, while Okwok 8 tested 27° API quality crude oil at a rate of 1,200 bopd per day from the LD1 reservoir interval.

Through Afren's technical understanding of the area based on detailed work and appraisal drilling at Ebok, Afren estimates that:

• the Okwok field has STOIIP of 225 mmbbls in the D2 and LD1c, LD1d and LD1e reservoirs;

• assuming a 32 per cent. recovery factor, 70 mmbbls of oil in place could potentially be produced; and

• upside exploration potential at the deeper Qua Iboe level could add significantly to the reserves base. Two prospects have been identified and are estimated to each contain circa 200 mmbbls STOIIP.

In October 2009 the Group finalised an insurance claim in respect of partial redrill cost and equipment lost down hole in 2008 and 2009. The amount of the claim for the joint venture was US$12.8 million net of deductibles. This is expected to impact the Group's financial results for the second half of 2009.

On 3 November 2009, Afren announced that:

• The Ebok-5 appraisal well had encountered 182ft of gross oil pay in the D1 reservoir and 84 ft of gross oil pay in the LD-1E reservoir;

• Extensive log and pressure data had been acquired over these intervals, which were being analysed;

• Results confirm pre drill estimates of Ebok West Fault Block volumetrics with de-risks of 92 mmbbls STOIIP and 25 mmbbls 2P recoverable;

• The Ebok-5 appraisal well was currently drilling below 3,350 ft and would continue to test deeper objectives in the D2 and Qua Iboe sands;

• The results increased the total Ebok project to 78 mmbbls 2P recoverable reserves, with upside resources potential of 74 mmbbls

Following completion of the initial Ebok development phases, management plans that the second phase development will be launched, incorporating the full development of the D1 reservoir (Fault Block 1 & 2 areas) and the now de-risked Fault Block West, whilst appraising the potential within the West Flank Qua Iboe structure (150 mmbbls STOIIP, estimated 45 mmbbls recoverable resources) and Fault Block North (30 mmbbls STOIIP, estimated 9 mmbbls recoverable resources).

Afren currently plans to drill one appraisal well at Okwok in mid 2010, and is engaged in studies to determine the optimal well location and development concept, maximising on development synergies with Ebok.

A full summary of the Ebok - Okwok complex 18 month planned drilling schedule and associated volumes as estimated by management are shown below:

Target	Well type	Gross Best Estimate Resources - Appraisal Upside MMbbl	Indicative Timing / Result

Ebok West Fault Block	Appraisal	25	Oil
Ebok D2 Southern Lobe	Appraisal	8	Q4 09
D2 base case	Production	n/a	Q1 10
D2 base case	Production	n/a	Q1 10
D2 base case	Production	n/a	Q1 10
D2 base case	Production	n/a	Q1 10
D2 base case	Production	n/a	Q2 10
D1 base case	Production	n/a	Q2 10
Ebok D2 Upside Extension	Appraisal	12	Q2 10
Ebok West Flank Qua Iboe	Exploration	45	Q2 10
Okwok	Appraisal	70	Q3 10
Ebok North Fault Block	Appraisal	9	Q1 11

Total	12	169

On 4 November 2009, the Company announced an operational update and confirmed its intention to move up to the Official List.

APPENDIX IV

ADDITIONAL INFORMATION

Risk Factors

Investors and prospective investors should consider carefully whether an investment in Afren is suitable for them in light of the information set out in this announcement.

The risks and uncertainties summarised below may not be the only ones facing the Group. Additional risks and uncertainties not currently known to the Company or that the Company deems immaterial may also impair the Company's business operations. The Group's business, prospects, financial condition and results of operations could be materially and adversely affected by any of these risks.

Risk factors relating to the countries in which Afren operates

● Risks associated with emerging and developing markets generally

● The countries in which the Group operates face political, economic, fiscal, legal, regulatory and social uncertainties which could have a material adverse effect on Afren's business, financial condition and results of operations

● The countries in which the Group operates suffer from crime and governmental or business corruption which could have an adverse effect on Afren's business, financial condition and results of operations

● The countries in which the Group operates suffer from terrorism and militant activity which could have a material adverse effect on Afren's business, financial condition and results of operations

● Underdeveloped infrastructure in the countries in which the Group operates could have an adverse effect on Afren's business, financial condition and results of operations

● Uncertainties in the interpretation and application of laws and regulations in the jurisdictions in which Afren operates may affect the Group's ability to comply with such laws and regulations which may increase the risks with respect to the Group's operations

● Licensing and other regulatory requirements in the countries in which the Group operates may be subject to amendment or reform which could make compliance more challenging

● The Group is exposed to the risk of adverse sovereign action by governments in the countries in which it operates

Risk factors relating to the Oil and Gas Industry

● Any volatility and future decreases in crude oil prices could materially and adversely affect the Group's business, prospects, financial condition and results of operations

● The level of the Group's crude oil and gas reserves, their quality and production volumes may be lower than estimated or expected

● The Group faces drilling, exploration and production risks and hazards that may affect the Group's ability to produce crude oil and natural gas at expected levels, quality and costs

● Afren faces significant uncertainties in connection with its appraisal, exploration and development activities

● The Group operates in a highly competitive industry

Risk factors relating to Afren's Business

● The Group's exploration and production operations are dependent on the Group's compliance with the obligations under its licences, contracts and field development plans

● There are risks inherent in Afren's strategy of geographic diversification and acquisition of new exploration and development properties

● The Group faces costs and risks in developing its near term development plans

● The Group's business strategy of significantly increasing reserves and production may require additional funding in the longer term

● Typical risks associated with debt financing may, in the longer term, affect the Group's business, prospects, financial position and operating results

● The Group depends on key members of management and service providers and on its ability to retain and hire new qualified personnel and consultants

● If the Group fails to consummate or integrate acquisitions successfully, the Group's financial condition and future performance could be adversely affected

● Failure to manage Afren's future growth and performance may adversely affect its operations

● The Group is obliged to comply with health and safety and environmental regulations and cannot guarantee that it will be able to comply with these regulations

● Afren operates a number of joint ventures which may result in delays or additional costs if the joint venture parties disagree

● Afren's operations are subject to the risk of litigation

● The Group does not insure against certain risks and its insurance coverage may not be adequate for covering losses arising from potential operational hazards and unforeseen interruptions

● Failure to obtain necessary equipment and transportation systems could materially and adversely affect production

● The Group may face unanticipated increased or incremental costs

● The Group is subject to foreign exchange and inflation risks, which might adversely affect its financial condition and results of operations

● Members of the Group may engage in hedging activities from time to time that would expose the Group to losses should markets move against the Group's hedged position

● The Group may be exposed to certain tax risks in Nigeria which might adversely affect its financial condition and results of operations

Risk factors relating to an investment in Afren's Ordinary Shares

● The price of the Ordinary Shares may fluctuate

● Further share issues could have an adverse effect on the market price of the Ordinary Shares as a whole or a dilutive effect on shareholders

● Ordinary Shares may be unsuitable as an investment

● Pre-emptive rights may not be available to US holders of the Company's Ordinary Shares

Material contracts

The following contracts are all the material contracts (not being contracts entered into in the ordinary course of business) which have been entered into within the two years prior to the date of this document by members of the Group and the contracts (not being contracts entered into in the ordinary course of business) entered into at any time by members of the Group which contain provisions under which any member of the Group has an obligation or entitlement which is or may be material to the Group as at the date of this document:

A placing agreement was entered into between Afren, Merrill Lynch International and Jefferies International Limited on 3 April 2008 relating to the placing of 95 million new Ordinary Shares at 125 pence per Ordinary Share to institutional investors. Afren paid commission of 1.75 per cent. of the aggregate value at the placing price of the placing shares to Merrill Lynch International and Jefferies International Limited. Afren gave representations and warranties customary for an agreement of this nature in favour of Merrill Lynch International and Jefferies International Limited, unlimited in time and amount.

On 8 October 2008, Sojitz, Afren Energy International plc and Afren entered into a bond subscription agreement under which Sojitz agreed to make a direct investment into Afren in the form of floating rate guaranteed bonds issued by Afren Energy International plc, with a nominal value of US$45million; with Afren guaranteeing Afren Energy International plc's payment obligations. The terms and conditions of the bonds are set out in an individual bond certificate issued by Afren Energy International plc on 29 October 2008. No convertible bonds have been issued to date. The bonds are exchangeable for convertible bonds at the time of entering into, or announcing, a joint acquisition between Afren and Sojitz, and the convertible bonds are convertible into fully-paid ordinary shares in Afren. Afren Energy International plc is to pay to Sojitz an annual fee of 0.5 per cent. of the available bond commitment less the drawdown amount. Bonds are exchangeable for convertible bonds for each joint acquisition in a proportion pro rata to the aggregate joint acquisition investment by Sojitz available to Afren, assuming a notional US$500million of available aggregate joint acquisition investment, including funds committed and/or advanced directly or indirectly by or on behalf of Sojitz in respect of joint acquisitions. If US$300million or more is committed, all of the bonds will be exchanged for convertible bonds. Interest on the bonds and the convertible bonds is six month US$ LIBOR plus two per cent. per annum. The bonds and convertible bonds are redeemable at the option of Afren Energy International plc from six months following the first utilisation date, upon payment of a 2.5 per cent. early redemption fee, and mature on 8 October 2011. If Afren declares a cash dividend, each bondholder is entitled to receive an amount per bond to be calculated with reference to several factors, including the cash dividend amount, the 30-day volume weighted average price of an ordinary share in Afren and the principal amount of the bonds. The conversion price of the bonds is calculated by reference to the 30-day volume weighted average price of Afren ordinary shares ending on the earlier of the time of entering into, or announcing, a joint acquisition. The bonds and convertible bonds are redeemable in whole (but not in part only) at the option of Sojitz upon notification within the first 20 days following each of the first and second anniversaries of the agreement if, during the 365 days prior to the anniversary, the parties have not entered into a joint acquisition and, in addition, Afren has not submitted to Sojitz at least five proposals for joint acquisitions (excluding exploration opportunities).

A strategic alliance agreement was entered into between Afren and Sojitz on 8 October 2008 under which the parties agreed to act jointly with the aim of acquiring rights or property interests in Africa relating to the exploration or extraction of oil or gas and/or the production of oil and gas related or derived products, including assets already in development and/or production. Under the terms of the agreement, the alliance will terminate on the earlier of 8 October 2011 or the date upon which Sojitz has invested a total of US$500 million in joint acquisitions. Sojitz is to provide financial support to the alliance for the purpose of funding material joint acquisitions, among other things, including by securing funding and credit support from the Japanese Government. Afren is to be appointed as operator in respect of any joint acquisitions. Afren is required to attempt to locate assets which are materially and strategically appropriate for a direct or indirect joint acquisition and provide information in relation to such assets to Sojitz. Subject to such assets fulfilling certain criteria, Afren is required to submit a proposal to Sojitz offering participation in acquisitions of such new assets. Afren and its affiliated companies cannot transfer or sell any interest in any asset of the type referred to above already held by Afren without offering Sojitz the opportunity to purchase the interest on the same terms that Afren has offered such interest to a third party.

A placing agreement was entered into between Afren and Merrill Lynch International, Jefferies International Limited and Morgan Stanley Securities Limited on 15 April 2009 relating to the cash placing of 265 million new Ordinary Shares at 32 pence per Ordinary Share to institutional investors. Afren paid commission of two per cent. of the aggregate value at the placing price of the placing shares to Merrill Lynch International, Jefferies International Limited and Morgan Stanley Securities Limited. Afren gave representations and warranties customary for an agreement of this nature in favour of Merrill Lynch International, Jefferies International Limited and Morgan Stanley Securities Limited, unlimited in time and amount.

The Company and the Directors entered into the Placing and Sponsor's Agreement on 10 November 2009 with Merrill Lynch International, Morgan Stanley, Evolution, Nomura and Jefferies relating to the issue of approximately US$175 million of new Ordinary Shares (the "New Shares") and the sale of Ordinary Shares by certain shareholders, including certain Directors in connection with the exercise of 40,000,000 warrants over Ordinary Shares (the "Founder Shares" and together with the New Shares, the "Placing Shares") and the admission of the Ordinary Shares (issued and to be issued) to the Official List and to trading on the London Stock Exchange. The Company appointed Merrill Lynch International as sponsor, global coordinator and joint bookrunner, Morgan Stanley as joint bookrunner and Evolution, Nomura and Jefferies as co-managers in respect of Admission and the Placing. Merrill Lynch International, Morgan Stanley, Jefferies, Nomura and Evolution have agreed to procure subscribers for the Placing Shares and the Underwriters have agreed to underwrite settlement of the Placing Shares at the Placing Price. In consideration of the services being provided under the Placing and Sponsor's Agreement the Company agreed to pay to Merrill Lynch International a fee of US$750,000 in connection with its role as sponsor and the Underwriters a commission at a rate of 1.25 per cent. of the amount equal to the product of the Placing Price and the aggregate number of Placing Shares. An additional commission of up to one per cent. of the amount equal to the product of the Placing Price and the aggregate number of Placing Shares is payable to the Underwriters at the absolute discretion of the Company. The Company also agreed to pay all reasonable costs and expenses of, or in connection with, the Placing, Admission, the Placing and Sponsor's Agreement and the allotment and issue of the New Shares (including, without limitation, any stamp duty or stamp duty reserve tax) and all stock exchange listing fees, admission fees, registrar's fees, legal fees and expenses of the Company and the Underwriters, the Company's accountancy fees and expenses, costs of printing, advertising and circulating documentation and the out-of-pocket expenses of the Underwriters. The Company and the Directors gave certain customary representations, warranties and indemnities to the Underwriters under the Placing and Sponsor's Agreement. The liabilities of the Company are unlimited as to time and amount. Prior to Admission, the Placing and Sponsor's Agreement may be terminated by Merrill Lynch International and Morgan Stanley upon the occurrence of certain specified events, including, but not limited to, material adverse change and force majeure. Neither Merrill Lynch International nor Morgan Stanley is entitled to terminate the Placing and Sponsor's Agreement after Admission.

Financing arrangements

Afren has entered into financing arrangements which are summarised below.

US$200,000,000 Facility Agreement (as amended and restated from time to time)

On 20 March 2007, Afren Okoro as borrower entered into a US$200,000,000 revolving loan facility arranged by BNP. Afren and AERL act as guarantors under the terms of the agreement (as amended and restated on 14 May 2007, and as further amended on 11 August 2008 and 8 October 2009) (the "Okoro Facility"). The aggregate commitments as at 30 December 2008 consisted of US$127,500,000 "Tranche A" commitments and US$22,500,000 "Tranche B" commitments.

Afren Okoro is permitted to draw the funds available under the Okoro Facility only for the purposes of (i) funding budgeted capital and operating expenditure relating to the Okoro field; (ii) funding fees, expenses and interest accruing under the Okoro Facility; (iii) funding up to 50 per cent. of cost overruns in relation to the development of the Okoro field or any other borrowing base asset to the extent taken into account in a projection; and (iv) on and from completion of the Okoro project, for the lawful general corporate purposes of Afren Okoro. Notwithstanding this, no amounts borrowed by Afren Okoro under the Okoro Facility shall be used for anything other than to finance or refinance (or to provide credit support in respect of the financing or refinancing of) the ownership, acquisition, construction, development and/or operation of an asset or portfolio of assets.

The total aggregate commitments under the Okoro Facility reduce at a rate of US$ 30,000,000 per six month period from US$ 200,000,000 on 30 December 2008 to the higher of (i) the borrowing base amount (which is readjusted every six months) and (ii) US$ 20,000,000 on 30 December 2011, with the total commitment falling to zero on the final maturity date, being the earlier of five years from the closing date (as defined in the agreement) and the projected date on which the specified assets subject to the agreement fall below 25 per cent. of their initial reserves. The rate of interest payable is calculated on the basis of a formula which incorporates the aggregate of the applicable margin, LIBOR, and the mandatory cost specified.

The Okoro Facility includes representations, covenants and events of default which are standard for facilities of this nature. The events of default comprise a cross-default in an aggregate amount of more than US$ 1,000,000, an adverse change in the political situation in Nigeria, and a change of control in any Obligor other than Afren.

Fixed and floating security over all of the shares and assets of Afren Okoro and AERL has been granted in relation to the Okoro Facility. Charges over the shares of Afren Okoro and Afren Block One Limited, and pledges over the bank accounts of, Afren Okoro, AERL and the AERL-Amni joint bank account and of Afren Block One Limited, have also been granted in relation to the Okoro Facility.

US$150,000,000 Senior Secured Revolving Reducing Facility Agreement (as amended and restated from time to time)

On 5 March 2008, Afren CI (UK) Limited ("ACL (I)") as borrower, Afren and Afren CI (II) Limited ("ACL (II)") as guarantors and BNP (in various capacities including "Facility Agent", "Original Lenders" and "Security Agent") entered into the US$150,000,000 Senior Secured Revolving Reducing Facility Agreement (the "CI Facility") to provide financing for, amongst others things, the acquisition of Devon CI One Corporation, Devon Côte d'Ivoire Limited and Lion G.P.L. S.A. The CI Facility was amended and restated on 23 September 2008 and Afren CI One Corporation and Afren Cote d'Ivoire acceded as guarantors on 20 October 2008.

Under the CI Facility, the lenders make available to ACL (I) a revolving credit facility comprising of a "Facility A Commitment" (in two tranches) totalling US$120,000,000, and a "Facility B Commitment" (in two tranches) totalling US$30,000,000.

ACL (I) is permitted to draw the funds available under Facility A for the purposes of (i) on-lending to ACL (II) to fund the remainder of the acquisition costs relating to the acquisition of Devon Côte d'Ivoire Limited and Devon CI One Corporation and the related fees and expenses; (ii) to pay fees and expenses related to any of the finance documents relating to the CI Facility; and (iii) for lawful general corporate purposes.

ACL (I) is permitted to draw the funds available under Facility B for the purposes of (i) on-lending to ACL (II) to fund the remainder of the acquisition costs relating to the acquisition of Lion G.P.L. S.A., and to pay the related fees and expenses; and (ii) for lawful general corporate purposes.

The total aggregate commitments under Facility A of the CI Facility reduce at a rate of US$ 11,200,000 (rounded to three significant figures) per six month period from US$ 112,430,000 on 30 June 2008 to US$11,240,000 on 31 December 2012. The total aggregate commitments under Facility B of the CI Facility reduce at a rate of US$3,760,000 (rounded to three significant figures) per six month period from US$37,570,000 on 30 June 2008 to US$ 3,760,000 on 31 December 2012. Each of the total commitments of Facility A and Facility B fall to zero on the final maturity date, being the earlier of 30 June 2013 and the projected date on which the specified assets subject to the agreement fall below 25 per cent. of their initial reserves. The rate of interest payable is calculated on the basis of a formula which incorporates the aggregate of the applicable margin, LIBOR, and the mandatory cost specified.

The CI Facility includes representations, covenants and events of default which are standard for facilities of this nature. There are a number of negative pledges and restrictions set out in the CI Facility which protect the interests of the lenders, such as restrictions on transfers of assets, restrictions on granting security over assets, among others.

Fixed and floating security over all of the shares and assets of Afren CI One Corporation, Afren Cote d'Ivoire, ACL (II) and ACL (I) has been granted in relation to the CI Facility. In addition, charges over the shares of Afren CI One Corporation, Afren Cote d'Ivoire and ACL (I), and pledges over the bank accounts of ACL (I), Afren Cote d'Ivoire, Afren CI One Corporation and Lion G.P.L. S.A., have also been granted in relation to the CI Facility.

US$66,666,636 Subordinated Facility Agreement

On 5 March 2008, ACL (I) as borrower, Afren and ACL (II) as guarantors, BNP ("as Arranger") and FCMB ("as Subordinated Agent") entered into a "Facility A" term loan and "Facility B" term loan, for the total aggregate amount of US$66,666,636. ACL (I) shall apply the Facility A loan towards (i) on-lending to ACL (II) to fund (i) acquisition costs relating to the acquisition of Devon Côte d'Ivoire Limited and Devon CI One Corporation and related fees and expenses, (ii) paying fees and expense in relation to any finance documents; and (iii) for general corporate purposes. ACL (I) shall apply the Facility B loan towards (i) on-lending to ACL (II) to fund the remainder of the acquisition costs relating to the acquisition of Lion G.P.L. S.A and related fees and expenses; and (ii) for general corporate purposes. The facility agreement includes representations, covenants and events of default which are standard for facilities of this nature. The events of default comprise a cross-default in an aggregate amount of more than US$1,000,000, and a change of control provision triggered in the event that Afren ceases to wholly own any obligor or the target companies, or any persons acting in concert gain control of Afren.

With the exception of the French law bank account pledge over the proceeds of a treasury account, the security package provided in respect of the CI Facility is also for the benefit of the Subordinated Lenders.

US$50,000,000 Facility Agreement

On 17 August 2007, Afren Nigeria and Afren entered into a US$50,000,000 Facility Agreement with FCMB, under which FCMB granted Afren Nigeria an amortising facility over five years with an interest rate of LIBOR plus 4.45 per cent. per annum solely for the use by Afren Nigeria for its general corporate purposes and those of Afren and their subsidiaries. The loan principal (together with interest and fees) is repayable in six equal semi-annual instalments commencing 30 months from the drawdown date. Payment of interest and fees is also payable during the initial 30 month period. In return for the grant of the facility, Afren (as guarantor of Afren Nigeria's obligations) issued a detachable warrant to FCMB to subscribe for 12,000,000 ordinary shares. The agreement includes representations, covenants and events of default which are standard for facilities of this nature. There are a number of negative pledges and restrictions set out in the agreement which protect the interests of FCMB, such as restrictions on transfers of assets, restrictions on granting security over assets, including an undertaking from each of Afren Nigeria and Afren not to dispose of, and that no substantial subsidiary will dispose of, a substantial part of its assets.

ISDA Documentation

On 8 May 2007, Afren Okoro and BNP entered into an International Swaps and Derivatives Association ("ISDA") master agreement. On 1 June 2007 and 11 July 2007, respectively, Afren Okoro and BNP entered into a swap and a cap transaction pursuant to such agreement. The purpose of these transactions is to protect Afren Okoro from volatility in the price of dated Brent oil. Each transaction is effective on 1 May 2008 and is in respect of the price of a total notional quantity of 1,571,982 barrels of dated Brent oil, with 32 monthly determination periods terminating on 31 December 2010.

On 8 May 2007, Afren Okoro and BNP entered into an International Swaps and Derivatives Association ("ISDA") master agreement. On 23 June 2009, Afren Okoro and BNP entered into a swap and a cap transaction pursuant to the agreement. The purpose of these transactions is to protect Afren Okoro from volatility in the price of dated Brent oil. The transaction is effective on 1 July 2009 and is in respect of the price of a total notional quantity of 1,004,646 barrels of dated Brent oil, with 32 monthly determination periods terminating on 31 December 2011.

On 12 May 2008, Afren CI (UK) Limited and BNP entered into an ISDA master agreement in respect of the hedging policy set out in the US$150,000,000 Senior Secured Revolving Reducing Facility Agreement and the US$66,670,000 Subordinated Facility Agreement, each dated 5 March 2008. A transaction was entered into pursuant to such agreement on 29 September 2008, effective 1 October 2008, under the terms of which Afren CI (UK) Ltd and BNP entered into a synthetic put option in respect of the price of a total notional quantity of 1,576,611 barrels of dated Brent oil. The aim of this transaction is to hedge against volatility in the movement in the price of oil by guaranteeing that Afren CI (UK) Ltd will always receive at least a minimum price in the case of a reduction in the market price of crude oil. The arrangement has 15 quarterly determination periods and terminates on 30 June 2012.

On 23 September 2008, Afren CI (UK) Limited and, one of its indirect subsidiaries, Afren Cote d'Ivoire, entered into an ISDA master agreement which follows from the agreement between Afren CI (UK) Limited and BNP referred to above. A transaction was entered into pursuant to a confirmation dated 23 September 2008, effective 1 October 2008, whereby Afren Cote d'Ivoire and Afren CI (UK) Limited entered into a synthetic put option in respect of the price of a total notional quantity of 1,576,611 barrels of dated Brent oil. The aim of the transaction is to hedge against volatility in the movement in the price of oil by guaranteeing that Afren Cote d'Ivoire will always receive at least a minimum price in the event of a reduction in the market price of crude oil. The arrangement has 15 quarterly determination periods and terminates on 30 June 2012.

Agreements relating to Afren's assets

Afren has entered into agreements relating to its assets which are summarised below.

Okoro and Setu Fields

Production Sharing and Technical Services Agreement

A Production Sharing and Technical Services Agreement was entered into between Amni, Afren and AERL on 24 March 2006 (as amended) with respect to the Okoro and Setu fields. Afren's rights and obligations were novated to Afren Okoro pursuant to a novation deed dated 1 March 2007. Under the agreement, AERL is appointed as the contractor and technical operator. Afren Okoro is obligated to lend to AERL and Amni the initial field development costs. Afren Okoro is entitled to recover such costs (plus interest of eight per cent. per annum) from 90 per cent. of the sales proceeds of crude oil (net of royalties and taxes). Thereafter, proceeds are to be shared equally between Amni and AERL (unless a separate OML has been issued in respect of the Okoro and Setu fields). Until such amount is repaid, Amni and AERL have granted a bank account charge, an asset charge and a share option agreement (in respect of shares in Amni) as security for the repayment of the amounts loaned by Afren Okoro. To the extent the development does not result in sales proceeds being generated, Afren Okoro is not entitled to recoup any amounts from Amni or AERL. The agreement remains in effect until terminated in accordance with its terms.

Marketing Services and Sale and Purchase Agreement for Crude Oil

A Marketing Services and Sale and Purchase Agreement for Crude Oil was entered into between BP Oil International Limited ("BP") and AERL (acting on its own behalf and on behalf of its partner, Amni) on 13 May 2009 with an effective date of 1 March 2009. This contract supersedes and replaces the Marketing Services and Sale and Purchase Agreement for Crude Oil between BP and AERL made on 27 June 2008. Under the terms of this agreement, BP will provide certain services to AERL which will include the purchase by BP of the Okoro crude oil from AERL and the on-sale of such oil by BP to a third party buyer. The agreement commences on the effective date and continues for a minimum of 12 months and then until such time as terminated by either party. During the term of the agreement, AERL agrees not to sell any of the Okoro crude oil except through BP's services and BP will be the only face to market in respect of the services. The total quantity of Okoro crude oil to be sold under this agreement is the total production from the Okoro field during the term of the agreement. The price of the crude oil is set by the calculation of a formula. In addition, a formula to calculate profit sharing is provided with reference to certain differences between the price paid by BP to AERL for the crude oil and the price paid to BP by the third party buyer from BP's onward sale of the crude oil.

Contract for the Provision of Floating Production Storage and Offloading Unit

A Contract for the Provision of Floating Production Storage and Offloading Unit was entered into between AERL (on behalf of itself and its co-venturers) and Bumi Armada Berhad on 3 April 2007. This contract was then novated and split pursuant to a novation agreement dated 8 February 2008 between AERL, Bumi Armada Berhad (as guarantor of the contractor), Armada Floating Solutions Limited (as contractor) and Bumi Armada (Singapore) PTE. Limited into (i) the Bareboat Charter Contract (entered into between AERL and Armada Floating Solutions Limited); and (ii) the Operation and Maintenance Contract (entered into between AERL and Bumi Armada (Singapore PTE. Limited). Bumi Armada (Singapore) PTE. Limited is responsible for the operation and maintenance of the FPSO and Armada Floating Solutions Limited is to provide the FPSO. The term for both contracts is five years from the issuance of the provisional acceptance certificate on the first flow of oil into the FPSO with an option for AERL to extend the term for at least one year to a maximum of five years. The provisional acceptance certificate was issued on 1 July 2009. Rates are applied daily for the FPSO hire at US$42,426 per day and the operation and maintenance services at US$26,000 per day, subject to review. The technical fee in the Operation and Maintenance Contract is US$1.88 million per annum. Under the Bareboat Contract, AERL has an exclusive option to purchase the FPSO at its sole discretion. AERL may terminate the Bareboat Contract and the Operation and Maintenance Contract on 180 days' notice provided that if termination occurs before the end of the primary term of the contracts, an early termination payment is payable by AERL. An early termination payment is not incurred in the case of termination as a result of certain conditions including force majeure events or the actual or constructive loss of the FPSO. The contracts also provide each party with the right to terminate upon a default by the other party. Events of default are linked between the two contracts. Parent company guarantees are to be provided by Armada Floating Solutions Limited and Bumi Armada (Singapore) PTE. Limited from Bumi Armada Berhad and by AERL from Afren and are to be valid until the expiry of 180 days after the demobilisation of the FPSO, or in the case of a total loss of requisition of the FPSO, the date of termination of the contracts. In addition, AERL is obliged to provide Armada Floating Solutions Limited and Bumi Armada (Singapore) PTE. Limited with a bank guarantee or letter of credit for a sum not exceeding US$6 million.

Ebok

Farm-Out Agreement

The Mobil/NNPC Joint Venture holds participating interests in several oil mining licences, including OML 67, in which the Ebok field is situated. The Mobil/NNPC Joint Venture entered into a Farm-Out Agreement with Oriental on 25 May 2007 under which Oriental was granted a 100 per cent. working interest in an area within OML 67 for the purpose of conducting petroleum operations for a period of 60 months in consideration for Oriental making monthly payments to the Mobil/NNPC Joint Venture of 30 per cent. of the profit oil and profit gas arising from the farm-out area and certain other payments and complying with a number of obligations in relation to OML 67. Subject to obtaining approval from the Department of Petroleum Resources of Nigeria and to Oriental complying with its obligations under the Farm-Out Agreement, the Farm-Out Agreement continues for so long as the Mobil/NNPC Joint Venture continue to have the right to conduct petroleum operations within the relevant area of OML 67.

Farm-In Agreement

Oriental entered into a Farm-In Agreement with Afren Resources on 31 March 2008. This agreement sets out the terms upon which Afren Resources accepts the assignment and transfer of a 40 per cent. participatory interest in the rights and obligations of Oriental in respect of the Farm-Out Agreement (including those referred to above), the farm-out area and the Joint Operating Agreement. In consideration for such participating interest Afren Resources was to pay US$11.5 million to Oriental and US$1 million to Sovereign Oil & Gas Company II, LLC following satisfaction of certain conditions precedent, and US$11.5 million to Oriental and US$1 million to Sovereign Oil & Gas Company II, LLC following any development plan submitted to the Government of the Federal Republic of Nigeria being approved. Oriental has the right to require such payment to be satisfied in whole or in part by the issue of shares in Afren at a number of shares to be agreed between the parties. The conditions precedent were satisfied in respect of the agreement on 22 August 2008 and Afren Resources paid the initial payments referred to above within 15 business days of that date. The field development program was approved by the Department of Petroleum Resources on 5 October 2009 and payment was made within 15 business days. Under the agreement, Afren Resources also agreed to bear and pay all capital costs and all operating costs (until Afren Resources has recovered all capital costs) as well as 40 per cent. of the payment obligations of Oriental and the provision of abandonment security under the Farm-Out Agreement referred to above, Afren has provided a parent company guarantee in favour of Oriental and the Mobil/NNPC to guarantee Afren Resources' obligations in respect of the farm-in.

Joint Operating Agreement

Oriental and Afren Resources entered into a Joint Operating Agreement on 31 March 2008 to set out the parties' obligations with respect to the conduct of petroleum operations in the farm-out area, with Oriental as operator and Afren Resources as technical adviser. Afren Resources is liable to fund all costs to drill of one exploration well and (unless Afren decides to relinquish its rights in the interest at that time) one exploration, appraisal or development well and other work program costs. Available crude oil from the farm-out area (after deducting royalty amounts due to the Federal Government of Nigeria, overriding royalty amounts due to the Mobil/NNPC Joint Venture and Sovereign Oil and Gas Company II, LLC and amounts due for taxes) will be allocated 100 per cent. to Afren Resources until Afren Resources has recovered its capital and operating costs. Thereafter, available crude oil will be shared between Afren Resources and Oriental equally. The Joint Operating Agreement is effective for so long as both the parties retain an interest in the Farm-out Agreement referred to above and farm-out area.

Contract C-1527 (Rig Contract)

Afren Resources (on behalf of itself and its co-venturers) entered into Contract Number C-1527 for the provision of jack-up drilling unit "GSF Adriatic IX" and drilling rig services with GlobalSantaFe International Drilling Corporation in association with Global Offshore Drilling Limited (collectively with GlobalSantaFe International Drilling Corporation, the contractor) on 7 August 2009. The contractor is to provide the drilling unit together with certain other equipment, material, supplies, services and personnel necessary to carry out drilling operations. Afren Resources is to pay the contractor varying defined rates during the different operating terms of drilling operations which range from US$85,000 per day to US$97,000 per day. Certain other rates are also applicable for various situations such as force majeure, repair and re-drilling with such rates calculated as a percentage (either 80 per cent. or 100 per cent.) of the applicable term rate. In addition, the contractor is entitled to certain lump sums in relation to mobilisation and other fees and is entitled to mark up reimbursable items on a sliding scale linked to cost, ranging from 10 per cent. to five per cent. The contract continues in force until the date that drilling operations are deemed to be complete under the contract, initially for a period of 250 days beginning on the date of acceptance of the drilling unit by Afren Resources or unless earlier terminated. Afren Resources may extend the term for another 175, 250 or 425 days. Afren Resources may terminate at any time without reason on 10 days' notice in which case liquidated damages for early termination will apply.

Okwok

Addax Farm-Out Agreement

On 7 July 2009, Afren Exploration and Addax entered into a farm out agreement whereby Addax agreed to assign 70 per cent. of the rights, entitlements and obligations of Addax a joint venture agreement dated 14 September 2005 between Oriental and Addax, a technical services agreement dated 16 September 2006 between Oriental and Addax, a joint operating agreement dated 9 May 2006 between Oriental and Addax, a deed of assignment dated 6 June 2006, a crude oil sales and agency agreement dated 16 November 2005 and a conveyance of overriding royalty interest dated 14 September 2005 between Oriental, Addax and Sovereign, in consideration for Afren Exploration agreeing to drill one appraisal well in the farm-out area and paying all costs associated therewith. Afren Exploration was also granted an option, exercisable within six months after the drilling of the well is complete (and, if Afren Exploration elects, the production testing of one or more of the crude oil bearing sections of that well), to purchase Addax's residual interest in the project. In consideration for such option, Afren Exploration is to pay US$55 million together with an amount equal to the sum of all expenditure and liabilities incurred by Addax in respect of its residual interest on or after such completion of the drilling of the first well (and production testing if applicable). The agreement is conditional on a number of matters, including consent to the assignment from Oriental, NNPC, Mobil and the Minister, which Afren is still awaiting to receive. The assignment under the agreement of Addax's interests is not effective until Afren Exploration completes the drilling of the well. Afren Exploration is required to have completed the drilling of the well by 31 March 2011 (subject only to delays caused by force majeure).

Joint Operating Agreement

On 19 August 2009, Oriental, Addax and Afren Exploration entered into a joint operating agreement to determine how the Okwok oil field is to be managed. Under the agreement, Oriental is appointed as operator and Afren Exploration is appointed as its technical adviser. The parties can elect to take part in proposed site projects. Oriental may propose and conduct site projects where neither of the other parties is willing to approve a work programme containing a firm well, or a development plan within a fixed period of time. If parties elect not to participate in such a project, they have an option to reinstate such rights and participate within a specified timeframe and subject to certain conditions and payments. No exclusive operations shall conflict with projects in which all three parties have agreed to participate. Each party shall have the right to own, take in kind and separately dispose of its share of total production in such quantities and in accordance with such procedures as set out in an offtake agreement.

OPL 310

Participation Agreement and Production and Revenue Sharing Agreement

A participation agreement was entered into by Optimum and Afren Investments on 8 September 2008 and was amended by a Production and Revenue Sharing Agreement on 19 December 2008. Optimum, as holder of 100 per cent. of the participating interest in OPL 310, agreed to assign 40 per cent. of such interest to Afren Investments. Under the agreement, Afren Investments agreed to pay US$10 million to the Government of Nigeria as initial payment for revalidation of the OPL 310 licence being allocated to Optimum and to take on certain liabilities and obligations in relation to operations pursuant to the OPL 310 licence. These included the obligation to make a payment to Optimum of (i) US$3 million following governmental approval being given to Optimum's proposed assignment to Afren Investments, (ii) US$10 million after the issue of the oil mining lease with respect to the area the subject of the OPL 310 licence in the joint names of Optimum and Afren Investments, (iii) US$4 million after the date on which production of petroleum commences pursuant to the first development plan with respect to the area the subject of the OPL 310 licence which receives all necessary governmental consents ("Production Date"), and (iv) subject to an independent third party having certified there is at least 100 mmboe of recoverable reserves in the area of the subject of the OPL 310 licence, US$8 million after the date on which the cumulative production of petroleum from such area reaches 50 mmboe. If the first well drilled after 8 September 2008 results in the discovery of petroleum and an independent third party certifies that the discovery will produce at least 10,000 boe per day, then Afren Investments is to pay Optimum US$5 million, with the amount to be paid pursuant to (ii) above reduced to US$9 million and the amount to be paid pursuant to (iii) above reduced to zero. Afren Investments must also pay the Government of Nigeria US$10 million after the issue of the oil mining lease in the joint names of Optimum and Afren Investments and the same amount again once the Production Date is achieved. Afren Investments is required to pay all capital and operating expenditures from 8 September 2008 until the Production Date. After the Production Date and until Afren Investments recovers certain costs incurred as a result of carrying Optimum's capital and operating expenditure obligations until the Production Date, Afren Investments will bear all capital expenditures. After Afren Investments has recovered its costs, Optimum and Afren Investments will bear 70 per cent. and 30 per cent. of capital expenditure respectively. After the Production Date, operating expenditures will be apportioned between the parties in proportion to each party's share of net available production. Optimum is to pay the royalty and concession rental on behalf of the parties and liability for such payments will be shared in proportion to each party's share of net available production. Until Afren Investments recovers certain costs, it is entitled to 91 per cent. of net available production. Optimum then has an entitlement to 79 per cent. of net available production until it recovers certain costs, then the parties are to share in net available production with Optimum being entitled to 30 per cent. and Afren Investments being entitled to 70 per cent. The agreement is effective from 8 September 2008 and continues for a term of the OPL 310 licence or such replacement licence, including any extension thereof, unless otherwise terminated. The Department of Petroleum Resources transmitted the ministerial approval for the assignment of 40 per cent. equity to Afren on 26 May 2009.

Anambra Basin - OPL 907 and OPL 917

Master Loan and Production Sharing Agreement

AGER, Afren, GEC and AERL entered into a Master Loan and Production Sharing agreement on 22 December 2005 to set out the basis on which Afren, GEC and AERL are to lend monies to AGER. The agreement provides that for each of OPL 907 and OPL 917, the lending parties are to enter into a loan memorandum with AGER in respect of the purpose of the loan, the interest rate, the default interest rate and repayment obligations. AGER, Afren, GEC and AERL entered into a loan memorandum for each of OPL 907 and OPL 917 on 1 February 2006. Under the loan memorandum in respect of OPL 907, Afren agreed to loan to AGER amounts not exceeding 47.3 per cent. of the work commitment for OPL 907 (or such further amounts as Afren may in its absolute discretion make available to AGER) at an interest rate of 10 per cent. accruing daily. Afren is entitled to 60 per cent. of allocated profit oil and AGER is entitled to 40 per cent. of allocated profit oil. Under the loan memorandum in respect of OPL 917, Afren agrees to loan to AGER an amount equal to 70 per cent. of the US$13 million work commitment for OPL 917 at an interest rate of 10 per cent. accruing daily. Afren is entitled to 60 per cent. of allocated profit oil and AGER is entitled to 40 per cent. of allocated profit oil.

Production Sharing Contract

AGER entered into a production sharing contract on 20 February 2008 with a term of 30 years in relation to OPL 907 with NNPC, Buston Energy Resources Limited, Allenne Exploration and Production Limited, Kaztec Engineering Limited, VP Energy Limited, De Atai Oil Services International Limited and Bepta Oil and Gas Limited. The current parties to the agreement and their respective participating interests are: AGER (41 per cent.), Buston Energy Resources Limited (25 per cent.), Allenne Exploration and Production Limited (14 per cent.), Kaztek Engineering Limited (5 per cent.), Bepta Oil and Gas Limited (10 per cent.) VP Energy Limited (3 per cent.) and De Atai Oil Services International Limited (2 per cent.).

AGER entered into a production sharing contract on 20 February 2008 with a term of 25 years in relation to OPL 917 with NNPC, VP Energy Limited, Petrolog Oil and Gas Limited, De Atai Oil Services International Limited, and Goland Petroleum Development Company Limited. The current parties to the agreement and their respective participating interests are: AGER (42 per cent.), Petrolog Oil and Gas Limited (18 per cent.), VP Energy Limited (17 per cent.), De Atai Oil Services International Limited (10 per cent.) and Goland Petroleum Development Company Limited (13 per cent.).

Under the production sharing contracts the parties other than NNPC were appointed as contractor for OPL 907 and OPL 917 respectively and such parties are required to ensure minimum work programmes (including minimum financial commitments) are complied with and pay NNPC a production bonus once certain levels of production have been attained. Subject to the contractor fulfilling its obligations, each of the production sharing contracts are for a term of 30 years, being a 10 year exploration period and a 20 year oil mining licence period. Upon the discovery of a commercial quantity of hydrocarbons NNPC may apply for a conversion of the oil prospecting licence into an oil mining licence and on expiry of the 20 year mining period, NNPC is to seek the maximum allowed renewal period of the oil mining licence.

Block CI-11

Share Purchase Agreement

Petroleum Production Sharing Contract

A Petroleum Production Sharing Contract was entered into by The Republic of Côte d'Ivoire, UMIC Côte d'Ivoire Corporation and Petroci on 27 June 1992 (the "Petroleum Production Sharing Contract"). Under the contract, Petroci and UMIC Côte d'Ivoire Corporation were appointed as contractor in respect of carrying out crude oil and natural gas operations in Block CI-11. The term of the contract is expressed to be until the expiry, surrender or withdrawal of the last existing exclusive exploitation licence granted to the contractor. The contractor was granted an exclusive exploration authorisation for an initial period of 18 months from 4 January 1993. Such right is extendable at the contractor's request provided it fulfils its exploration work commitments under the contract for renewals of further exploration periods to an aggregate further term of 5.5-6.5 years. The contract requires the contractor to surrender parts of the initial area of Block CI-11 in stages except to the extent any appraisal or exploitation perimeters have been granted. If the contractor conducts an appraisal and considers the field to be commercial it may apply to the Government for an exclusive exploitation authorisation, which shall be for a period of 25 years from the date of issue and may be extended for a further 10 years. The grant of an exclusive exploitation authorisation obligates the contractor to undertake all petroleum operations necessary for the exploitation at its sole costs and risk. Exploration decrees for the Lion and Panthère fields were granted for 25 years on 12 September 1994. The contractor is entitled to no greater than 63 per cent. of production of crude oil and natural gas, or such lesser percentage which would be sufficient to recover costs. Any other crude oil or natural gas produced is to be shared between The Republic of Côte d'Ivoire and the contractor on a tiered basis linked to daily total production of crude oil or natural gas (as applicable). The contractor is also required to pay bonuses to the Directorate General of Taxes of Côte d'Ivoire linked to production rates of crude oil. Petroci retained a greater participating interest in respect of two wells drilled in Block CI-11 which were developed prior to the effective date. Except for such area, Petroci's initial participating interest in Block CI-11 is 10 per cent. with an option to increase up to a maximum of 20 per cent. for a particular exploitation area provided Petroci notifies the other contractor parties within four months of a grant of an exclusive exploitation authorisation for such area. Any additional participation is assigned from each of the other contractor parties in proportion to their participating interests. There have been three subsequent amendments to the contract and the current parties to the contract are The Republic of Côte d'Ivoire, Afren Cote d'Ivoire, Petroci, the IFC and SK Energy. UMIC Côte d'Ivoire Corporation changed its name to Ocean International Limited and then to Devon Côte d'Ivoire, Ltd., and the shares in Devon Côte d'Ivoire, Ltd. were subsequently acquired by Afren CI (II) Limited on 24 September 2008 pursuant to a share purchase agreement dated 5 March 2008. The IFC are currently in the process of selling their participating interest in CI-11. This is subject to the government's approval, which, if not obtained after a certain period of time, is deemed to have been given.

Joint Operating Agreement

A Joint Operating Agreement was entered into by UMIC Côte d'Ivoire Corporation and Petroci on 27 June 1993, with an effective date of 4 January 1993. There have been eight amendments to the agreement. The current parties to the agreement are Afren Cote d'Ivoire, Petroci, IFC and SK Energy. Under the Production Sharing Agreement, Petroci retained a greater interest in a special area of Block CI-11 encompassing two previously drilled wells. The parties now hold the following percentage participating interests in Block CI-11: Afren Cote d'Ivoire (47.9592 per cent.), Petroci (20.1360per cent), IFC (18.9456per cent) and SK Corporation (12.9592per cent). The parties can elect whether or not to take part in proposed projects which are in addition to the minimum exploration work commitments set out in the Petroleum Production Sharing Contract. Parties have the right, but not the obligation, to assume any non-consenting parties' participating interest in such case. If parties elect not to participate in such a project, they have an option to reinstate such rights and participate within a specified timeframe and subject to certain conditions and payments. The agreement continues until only one party holds 100 per cent. of the interest in Block CI-11 or when the Petroleum Production Sharing Contract terminates, whichever is the earlier.

Unitization Agreement

Petroci, UMIC Côte d'Ivoire Corporation, IFC, Pluspetrol Côte d'Ivoire CI-11 Corporation (which later transferred its interest to Yukong Limited) and GNR (Côte d'Ivoire) Limited entered into a Unitization Agreement on 1 July 1996. The Petroleum Production Sharing Contract covers two areas (being Block CI-11 and the special areas inside Block CI-11 in which Petroci is entitled to enhanced participating interest) and both the Lion field and the Panthère field are covered by the contract and are each partly located within and without the special areas. As the participating interests of the parties in the special area differ from that of the parties in Block CI-11 excluding the special area, the parties agreed to unitise the Lion field and the Panthère field to obtain an equitable allocation of production and cost for the two areas. The Unitization Agreement provides for the formation of a unit area for the purposes of unitising the reserves in the two areas, the ownership of all joint property used for petrol operations and reserves in any future exploitation perimeter within the two areas. For that purpose, unit interests over the area are determined and calculated by a selected engineering firm first on 1 July 1996, and subsequently recalculated on a yearly basis on 1 July; the amount of reserves determined, however, takes into account reserves that were produced and sold between the Petroleum Production Sharing Contract effective date (4 January 1993) and the date of the Unitisation Agreement.

Gas Sale and Purchase Agreements

(a) An agreement for the Sale and Purchase of Natural Gas in Block CI-11 was entered into between Société Ivoirienne de Raffinage (as buyer), UMIC Côte d'Ivoire Corporation, IFC, G.N.R. (Cote d'Ivoire) Ltd, Pluspetrol S.A., Petroci and The Republic of Côte d'Ivoire (collectively as sellers) on 28 February 1996 (as amended on 1 January 1998). Under the agreement, the sellers are required to deliver a daily quantity of up to 24 million cubic feet of natural gas, and a minimum annual quantity of 4.7 billion cubic feet of natural gas on a take or pay basis, with pricing determined pursuant to specified formulae. The agreement is due to expire on the 31 December 2009 and the parties are currently negotiating the terms of a new gas sale and purchase agreement.

(b) An agreement for the Sale and Purchase of Natural Gas in Block CI-11 was entered into between La Caisse Autonome d'Amortissement (as buyer) (now SOGEPE), UMIC Côte d'Ivoire Corporation, IFC, G.N.R. (Côte d'Ivoire) Ltd, Pluspetrol S.A. (collectively as sellers) and Petroci and The Republic of Côte d'Ivoire (collectively as delivering parties) on 30 September 1994 (as amended on 1 August 2003). The seller's obligation to deliver a set annual quantity and buyer's obligation to take or pay have expired in accordance with the terms of the agreement. Afren Cote d'Ivoire terminated the purchase price provisions of the amendment (setting natural gas price of US$2.35 per million btu for all natural gas received up to an annual base quantity, and thereafter of US$2.15 per million btu) in accordance with the terms of the amendment. The parties are currently negotiating a new gas price; in the interim, it has been agreed to use a provisional price of U$4 per million btu. The agreement expires (if not earlier terminated) on the expiry of the last exclusive exploration authorisation issued by The Republic of Côte d'Ivoire to the contractor under the Petroleum Production Sharing Contract.

(c) On 17 April 1998, Lion GPL, S.A. ("Lion") and SIR entered into an LPG Sales Contract whereby Lion agrees to sell, and SIR agrees to purchase, commercial butane received in SIR's storage facility. The quantities which SIR agrees to purchase are determined by a formula set out in the agreement. Lion has the exclusive right to supply to SIR any shortage of commercial butane which SIR needs to supply the Ivorian market. The price for the commercial butane is determined by governmental decree. Such price was determined by decree of The Republic of Côte D'Ivoire on 7 July 1997, which specified that the sale price would be US$244 per metric ton from the date that the volume of sales by Lion reaches 5000 tons or following the expiry of the period of the first 18 months of production. The agreement is renewable annually. Lion has the right to close down the LPG plant if it is no longer economically viable (thereby terminating the agreement).

Gas Transportation Agreement

On 25 October 2005, a Block CI-26 and Block CI-40 Gas Transportation Agreement was entered into between CNR International (Côte d'Ivoire) SARL, Svenska Petroleum CI AB, Petroci Holding, Petroci Overseas Limited and The Republic of Côte d'Ivoire (collectively, as charterer for CI-40), CNR International (Côte d'Ivoire) SARL, Tullow Côte d'Ivoire Limited, Petroci Holding, and The Republic of Côte d'Ivoire (collectively, as charterer for CI-26), Ocean Energy Côte d'Ivoire Corporation, IFC, SK Corporation and Petroci Holding (collectively, as transporter). Under the agreement, the transporter is required, subject to minimum and maximum specified quantity requirements, to receive, transport and deliver natural gas (and certain other associated liquids and gases) on behalf of the charterers at a price of US$0.13 per thousand cubic feet for actual volumes of gas delivered by the charterer to the transporter less any unaccounted for line losses. The transporter is required to maintain the CI-11 pipeline and the Azito pipeline as part of its obligations under the agreement. The agreement expires (unless earlier terminated) on the date of expiration of any exclusive exploitation authorisation to be issued by The Republic of Côte d'Ivoire to the contractor under the production sharing contract (such contract is not defined but it may be referring to the Petroleum Production Sharing Contract).

Block CI-01

Production Sharing Contract

A production sharing contract was entered into by The Republic of Côte d'Ivoire, UMIC Côte d'Ivoire Corporation and Petroci on 5 December 1994 (as amended), with UMIC Côte d'Ivoire Corporation and Petroci as contractor and UMIC Côte d'Ivoire Corporation appointed as operator. The contract provides that the duration of any exclusive exploration authorisation together with an approved appraisal work programme is for a total of eight years and nine months and the duration of any exclusive exploitation authorisation is 25 years from the date of issue, which may be extended for a further period of 10 years. A commercial petroleum discovery entitles the parties to an exploitation authorisation and several such discoveries in respect of the relevant area. Afren is currently in the process of obtaining an exclusive exploitation authorisation. The contractor is entitled to take no more than 60 per cent. of total production of crude oil (or 40 per cent. in the case of natural gas) or such lesser percentage as would be sufficient for it to recover its costs. Any other crude oil or natural gas produced is to be shared between The Republic of Côte d'Ivoire and the contractor on a tiered basis linked to daily total production. The contractor is also required to pay bonuses to the Directorate General of Taxes of Côte d'Ivoire linked to production rates of crude oil. Under the agreement, Petroci had an initial participating interest of 10 per cent. Petroci elected to take a 40 per cent. participating interest on 14 February 1996, but reduced such interest effective on 31 December 1997 so that it holds a 20 per cent. carried interest in exploration and appraisal. Petroci has an option to convert the 20 per cent. carried interest into a total exploitation participation of 20 per cent. or less in respect of each area where exploitation is being conducted. UMIC Côte d'Ivoire Corporation assigned its interest under the contract to UMIC (CI-01) Corporation which assigned a portion of its interest to Yukong Limited on 19 January 2006. UMIC (CI-01) Corporation changed its name to Ocean (CI-01) Corporation and then to Devon CI One Corporation, and the shares in Devon CI One Corporation were subsequently acquired by Afren C1 (II) Limited pursuant to a share purchase agreement dated 5 March 2008. Currently the parties have the following participating interests: Devon CI One Corporation (65 per cent.); Petroci (20 per cent.) and SK Corporation (which acquired Yukong Limited's interest) (15 per cent.).

Keta Block

Petroleum Agreement

Under a Petroleum Agreement between the Republic of Ghana, GNPC, Devon Energy Ghana Limited and EnCana International (Ghana) Limited dated 29 July 2002 (as amended), Afren Energy Ghana Limited ("Afren Ghana") (formerly Devon Energy Ghana Limited) is designated as the contractor in respect of the Keta Block. Under the agreement, Afren Ghana and GNPC have 90 per cent. and 10 per cent. initial participating interests respectively, with the option for GNPC to acquire an additional 15 per cent. participating interest subject to GNPC contributing a proportionate share of development and production costs within designated commercial discovery areas. The agreement was to expire on 31 January 2008 but would be extended for two additional periods up to 31 December 2009 for each well drilled beyond the minimum work requirements. On 29 July 2009 the Ministry of Energy of Ghana confirmed such extension to 31 December 2009. Afren Ghana also has the option under the agreement to require the Ministry of Energy and GNPC to enter into a new petroleum agreement, covering 4,400 km2 of the contract area as selected by Afren Ghana. The new petroleum agreement is to contain the same terms and conditions as the Petroleum Agreement except that the term shall be six years divided into three periods of two years each with one exploration well work obligation and a minimum expenditure of US$25 million for each period. Afren Ghana assigned a two per cent. participating interest to Gulf and entered into a joint operating agreement with Gulf on 18 June 2008.

Farm-Out Agreement

On 24 October 2008 Afren Ghana and Mitsui Ghana entered into a Farm-out Agreement and this agreement completed on 20 November 2008. Under the agreement, Mitsui Ghana acquired a 20 per cent. participating interest in the Petroleum Agreement together with a 22.2 per cent. interest in a joint operating agreement with Gulf. Mitsui Ghana agreed to pay 50 per cent. of all costs and claims incurred in the drilling programme in respect of the exploration well (subject to a cap), certain well costs incurred prior to the date of the agreement, and to fund 20 per cent. of cash calls in funding any costs relating to the exploration well exceeding the approved budget.

La Noumbi Permit

Production Sharing Agreement

A Production Sharing Agreement was entered into between the Republic of Congo (the "Government"), Les Établissements Maurel & Prom, Tacoma Resources Ltd and Heritage Congo Ltd (in which Afren acquired the entire issued share capital of in November 2006) (together the contractor) with an effective date of 9 February 2004. The agreement terminates on expiry or termination of the research permit or exploration permit. The research permit, granted by the Presidential Decree to Zetah Maurel & Prom Congo dated 10 February 2003 enters into force on the date that the Production Sharing Agreement is approved by law and is granted for a period of four years. Such permit can be renewed twice for a three year period each. The contractor is represented by the company Zetah Maurel & Prom Congo. Les Établissements Maurel & Prom was appointed operator. Oil costs may be recovered in the following priority; exploration costs, development costs, research costs and last, the deposit agreed for the purpose of the rehabilitation works. Such oil costs may be recovered up to a limit of 60 per cent. of the net oil production and certain other limits determined by a sliding scale formula relating to the oil price. If the determined price (the parties are to meet every quarter to agree the price applicable for each month of the quarter) of oil is less than US$22 then the contractor is entitled to 45 per cent. of the oil produced and the Government is entitled to 55 per cent. If the determined price is more than US$22 then 25 per cent. of the oil production will be shared as if the determined price was less than US$22 and the contractor will be entitled to 40 per cent. and the Government will be entitled to 60 per cent. of the remainder. Excess oil will be shared between the contractor and the Government in shares of 40 per cent. and 60 per cent. respectively. The Government may request the contractor sell up to 30 per cent. of its oil entitlement to Congolese industries.

DEFINITIONS

In this announcement:

"Admission" means the admission of the issued Ordinary Shares of Afren to listing on the Official List becoming effective in accordance with the Listing Rules and admission to trading having been granted and becoming effective on the London Stock Exchange's market for listed securities;

"AIM" means the alternative investment market of the London Stock Exchange;

"Afren" or the "Company" means Afren plc;

"announcement" means this announcement (including the appendices to this announcement);

"CREST" means the relevant system, as defined in the Uncertificated Securities Regulations 2001 (SI 2001/3755) (in respect of which Euroclear UK & Ireland Limited is the operator);

"Directors" means the directors of Afren;

"Evolution" means Evolution Securities Limited, which is authorised and regulated in the United Kingdom by the FSA and is a member of the London Stock Exchange;

"FSA" means the Financial Services Authority;

"FSMA" means the Financial Services and Markets Act 2000, as amended;

"GM" means the general meeting of the Company to be held at the offices of White & Case LLP, 5 Old Broad Street, London EC2N 1DW at 11 a.m. on 30 November 2009;

"Group" means Afren and its subsidiary undertakings from time to time;

"JDZ" Joint Development Zone;

"Jefferies" means Jefferies International Limited, which is authorised and regulated in the United Kingdom by the FSA and is a member of the London Stock Exchange;

"Joint Bookrunners" means Merrill Lynch and Morgan Stanley;

"London Stock Exchange" means the London Stock Exchange plc;

"Listing Rules" means the rules and regulations made by the UK Listing Authority pursuant to Part VI FSMA, as amended from time to time;

"Merrill Lynch" or "Merrill Lynch International" means Merrill Lynch International, which is authorised and regulated in the United Kingdom by the FSA and is a member of the London Stock Exchange;

"Morgan Stanley" means Morgan Stanley Securities Limited which is authorised and regulated in the United Kingdom by the FSA and is a member of the London Stock Exchange;

"Nomura" means Nomura International Plc, which is authorised and regulated in the United Kingdom by the FSA and is a member of the London Stock Exchange;

"NSAI" means Netherland, Sewell & Associates, Inc.;

"NSAI Report" means the competent person's report by NSAI;

"Ordinary Share" means an ordinary share of 1 penny each in the capital of the Company;

"Placee" means any person (including individuals, funds or otherwise) by whom or on whose behalf a commitment to acquire Placing Shares has been given;

"Placing" means the placing of the Placing Shares by Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution on behalf of the Company, with both new and existing institutional investors;

"Placing Agreement" means the placing agreement dated 10 November 2009 among the Company, the directors of the Company, Merrill Lynch, Morgan Stanley, Jefferies, Nomura and Evolution in respect of the Placing;

"Placing Price" means the price per Ordinary Share at which the Placing Shares are placed;

"Placing Shares" means the new Ordinary Shares to be issued pursuant to the Placing;

"Prospectus Directive" means the Directive of the European Parliament and of the Council of the European Union 2003/71/EC;

"Securities Act" means the US Securities Act of 1933, as amended;

"UK Listing Authority" means the FSA acting in its capacity as the competent authority for the purposes of Part VI of FSMA;

"Underwriters" means Merrill Lynch International, Morgan Stanley, Evolution, Nomura and Jefferies;

"United Kingdom" or "UK" means the United Kingdom of Great Britain and Northern Ireland; and

"United States" or "US" means the United States of America, its territories and possessions, any state of the United States and the District of Columbia.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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