Trading statement and operations update

  Afren plc (AFR LN)

Trading statement and operations update

Initial phases of Ebok development successfully completed

Significant discovery offshore Nigeria

London, 23 January 2012 - Afren plc ("Afren" or the "Company") issues the following trading statement and operations update, in advance of the Company's 2011 full year results which are scheduled for release on 27 March 2012. Information contained within this release is un-audited and is subject to further review.

HIGHLIGHTS

Development and Operations

u Net group working interest production average of 19,200 boepd in 2011. Average production of 42,000 to 46,000 boepd expected in 2012

o Commissioning and ramp up of all 14 production wells associated with the initial phases of the Ebok field development successfully completed

o Approvals for the Barda Rash Field Development Plan received; First Oil expected in August 2012

Exploration and Appraisal activities

u Okoro East discovery starts 2012 exploration campaign (up to 15 wells) with significant discovery

o 549 ft net oil pay in excellent quality reservoir sands; well test programme underway

u Jebel Simrit-2 exploration well on Ain Sifni spudded end October 2011; drilling ahead on schedule

u Marianas semi-submersible drilling rig is due in Ghana imminently and will prepare to spud the Nunya-1x (formerly Cuda-2) exploration well

u Completed an Ocean Bottom Cable 3D seismic over the wider Ebok/Okwok/OML 115 area. Two exploration wells on Ebok North and OML 115 in 2012

u Surveys in Tanzania (Tanga) and Kenya (L17/L18) completed. Exploration drilling in 2012

Corporate Acquisitions and Group Financials

u Acquisition of 60 per cent. and 20 per cent. interest in the Barda Rash and Ain Sifni PSC's respectively, increases 2P and 2C resources from 136 mmboe to 1,026 mmboe (at a cost of US$0.66 per 2C bbl)

u Completion of FHN's acquisition of a 45 per cent. interest in OML26 onshore Nigeria

o Two producing fields (2P and 2C resources of 184 mmbbls), three undeveloped fields (2C resources of 144 mmboe) and significant exploration upside (615 mmboe)

u 2011 sales of US$600 million expected (circa 50% increase on 2010)

u 2011 full year capital expenditure on budget of US$550 million; 2012 budget of US$450 to US$500 million

u Net debt approximately US$548 million

Osman Shahenshah, Chief Executive of Afren, commented:

"In 2012 we successfully commissioned the initial phases of the Ebok development in Nigeria. We have increased our 2P and 2C resources base by 650 per cent. at a cost of US$0.66 per barrel to 1,026 mmboe, with the acquisition of Barda Rash and Ain Sifni in the Kurdistan region of Iraq and saw First Hydrocarbon Nigeria complete its acquisition of OML 26 in Nigeria.

We have started our 2012 exploration campaign with a significant discovery offshore Nigeria, through the Okoro East Exploration well. The multi well drilling campaign in Ghana, Nigeria, the Joint Development Zone of Nigeria São Tomé and Príncipe, Tanzania, Kenya and the Kurdistan region of Iraq, has the potential to materially transform and increase our discovered resource base."

Capital Markets' Morning

Afren will today be hosting a Capital Markets' Morning for analysts and institutional investors. The presentation materials are available on www.afren.com and the playback will be available from 14:00 GMT.

Notes to Editors

Afren Plc

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

TRADING STATEMENT

Net production

Net production at the Company's assets during the full year 2011 (subject to final reconciliation) was approximately 19,200 boepd. The annualised rate achieved is reflective of longer than anticipated period of facilities related downtime at the Ebok field, due in part to safety requirements as a result of managing simultaneous production and drilling operations and commissioning work associated with the production processing equipment and power generation facilities.

Production increased sharply during the fourth quarter of 2011 to an exit rate of 53,200 boepd, directly attributable to the Company. This increase in production follows the commissioning and ramp up of all production wells associated with the initial phases of the Ebok field development.

Realised commodity prices and revenue

During 2011 the Company realised an average oil price of US$109/bbl (representing a US$2.3 average discount to Brent), and an average gas price of US$8.4/mcf.

Total revenue for 2011 is expected to be circa US$600 million, compared with US$319 million in 2010. The increase in revenue is due to increased production year-on-year as a result of production start up at the Ebok field and commissioning of two infill wells at the Okoro field, combined with the impact of higher realised commodity prices during the period.

Oil inventory

Oil inventory at 31 December 2011 was approximately US$37 million (31 December 2010: US$14.2 million), representing approximately 800,000 barrels net to Afren.

Hedging

Hedges covering approximately 4.0 million barrels providing average minimum floor prices of approximately US$87/bbl are in place for the period to 31 December 2012.

Capital expenditure

Capital expenditure for 2011 amounted to approximately US$550 million, in line with guidance. Of this amount, circa US$440 million was allocated to production and development activities and circa US$110 million to exploration and appraisal. Based on current plans, capital expenditure for 2012 is forecast to be circa US$450 to US$500 million.

Financing and net debt

Net debt at 31 December 2011 was US$548 million (31 December 2010: US$127.5 million) with cash at bank of US$292 million (31 December 2010: US$140.2 million).

OPERATIONS UPDATE

Production and development operations update

* Post achievement of cost recovery mid 2010 Afren's economic interest is 50% at the Okoro field, from 1 October 2011 Afren benefited from an additional economic interest in production related to the recovery of financing costs for the Okoro-11 and Okoro-12 infill wells. Full recovery is expected by end January 2012.

Nigeria

Ebok

The initial phases of the Ebok development have been completed, following the commissioning and ramp up of all 14 production wells. Reservoir performance and well deliverability recorded at the field to date are in line with prognosis, with production processing and regular crude oil offtake operations running smoothly.

Having completed the initial phases of rig-based drilling and development work in the Central Fault Block area of the field, the Transocean Adriatic lX jack-up drilling rig was mobilised to the Okoro field in mid-December 2011, where it was used to drill the successful Okoro East exploration well. The Transocean High Island Vll jack-up drilling rig remains on location at the West Fault Block area of the field. The Company and its partner at the field, Oriental Energy Resources ("Oriental"), plan to drill up to four further horizontal production wells from the West Fault Block location, targeting oil bearing reservoir zones that were not drilled during the initial phases of field development work. The field partners also plan to drill an exploration well on the Ebok North Fault Block during the first half of the year.

Okoro

Production at the Okoro field averaged 15,800 bopd on a gross basis (9,000 bopd net) during the period. Two infill wells were brought onstream during the first quarter of 2011 and de-bottlenecking work also undertaken in order to increase the production handling capacity of the Okoro Floating Production Storage and Offloading vessel ("FPSO").

Following the successful Okoro East exploration well, the Company expects to drill one development well from the existing unmanned Well Head Platform at the Okoro field.

Okwok

The Company completed an Ocean Bottom Cable 3D seismic survey over the whole Ebok/Okwok/OML 115 area on 4 November 2011. Having commenced the survey on 24 June 2011, the Company acquired 348 km2 of high quality data. Processing of the new data is underway and expected to be complete by the second quarter. One of the primary purposes of the new data is to assist in development planning for the 51.8 mmbbls Okwok field and also optimal placement of one further appraisal well that Afren and its partner Oriental plan to drill during the second half of the year, ahead of formal submission of a Field development Plan ("FDP") to the Nigerian authorities. The most likely development scenario for Okwok comprises the installation of a separate dedicated production processing platform tied back to and sharing the existing 1.2 mmbbls capacity Ebok Floating Storage Offloading vessel ("FSO") located approximately 13 km to the west.

OML 26

On 1 December 2011, FHN announced that it had completed the acquisition of a 45 per cent. interest in the OML 26 licence, onshore Nigeria, from the Shell Petroleum Development Company of Nigeria Ltd ("SPDC"), Total E&P Nigeria Ltd ("Total") and Nigeria Agip Oil Company ("Agip"), together the "SPDC Joint Venture". FHN also announced that it had reached completion on financing facilities totalling US$280 million enabling it to fully fund the acquisition cost and its share of future capital requirements associated with the initial development of the block. FHN is partnered with Nigerian Petroleum Development Company ("NPDC"), the oil and gas exploration and production subsidiary of Nigerian National Petroleum Company ("NNPC"), in the re-development of the block. At end 2011 the partners had increased gross production from the Ogini and Isoko fields to approximately 10,500 bopd (from 6,000 bopd at the time of completion) following increased compressor uptime and the opening of an additional two production strings. The proposed forward work programme (including facilities upgrade) is expected to increase production to more than 40,000 bopd through a phased development process over the next four years, and ultimately take production to 50,000 bopd. Afren and FHN will continue to seek out further opportunities to expand the partnership through the acquisition of other oil and gas assets in Nigeria.

Côte d'Ivoire

CI-11 and Lion gas Plant

Production at Block CI-11 averaged 3,200 boepd, with 600 boepd of NGL production at the Lion Gas Plant. Production levels were below expectations during the year, due to the impact of political and social unrest delaying the import of necessary equipment and resources required to conduct routine maintenance of the compressor unit in the first half of the year.

Kurdistan region of Iraq

Barda Rash PSC

Following the announcement in July 2011 that it had acquired a 60 per cent. operated interest in the Barda Rash PSC and 20 per cent. non-operated interest in the Ain Sifni PSC, in December 2011, the Company received all necessary approvals of the FDP for the Barda Rash discovery. Work is now focused on the development of 506 mmbbls of recoverable light oil, the first stage of which comprises re-entering the three existing wells that have been drilled at the field to date, completing them as production wells and commissioning a modular early production system. Production will be trucked to nearby pipeline export points and ultimately exported via the planned Taq Taq to Ceyhan export pipeline once constructed and commissioned. The Company will then commence the drilling and completion of multiple new development wells with the intention of increasing production to a planned trucking capacity of 35,000 bopd and ultimately to a targeted 125,000 bopd by 2017. Ongoing development beyond the light oil phases will then focus on the development and production of 964 mmbbls of recoverable heavier oil resource, offering further large scale production growth potential over the medium to longer term.

Exploration and appraisal operations update

Offshore south east Nigeria

Okoro East

The Okoro East exploration well was spudded on 18 December 2011 by Afren and its partner Amni International Petroleum Development Company Ltd. ("Amni") with the Transocean Adriatic lX jack-up drilling rig. The objective of the well was to explore a separate previously un-drilled structure located approximately 2 km east of the Okoro main field. Okoro East is in a similar structural setting with a fault sealed 3-way dip closure in Tertiary reservoir sands at equivalent intervals to the main Okoro Field. In addition, the Okoro East exploration well was targeting a deeper horst block structure, a play concept that had not been previously explored on the block. The prospect was mapped on good quality 3D seismic data. The well was drilled to a total measured depth of 8,751 ft (8,016 ft true vertical depth) and successfully encountered oil in both the Tertiary reservoir sands equivalent to those that have been developed and are in production at the Okoro main field and the deeper previously unexplored reservoirs. The well encountered 549 ft true vertical thickness of net oil pay (580 ft gross) and 41 ft of net gas pay. The discovery of pay in the deeper zones has opened up further prospectivity at similar levels on the main Okoro field and elsewhere on the block. The partners have completed logging operations and testing operations are in progress that will help determine the optimal development solution for the discovery.

Nigeria - Ebok and OML 115

Afren and its partner Oriental completed an Ocean Bottom Cable 3D seismic over the whole Ebok/Okwok/OML 115 area on 4th November 2011. The partners plan to drill an exploration well in H1 2012 targeting Ebok North, an untested fault block in the northern area of the field where the Company believe the same reservoirs that have been proved to be oil bearing elsewhere at the field are also present. Gross unrisked prospective resources are estimated at 35 mmbbls. An exploration well is also planned on OML 115 with an expected spud during the second half of the year. The Ufon prospect is a 60 mmbbls target that is interpreted to have oil prospectivity in the same D Series reservoirs that have been proven to be oil bearing at the nearby Ebok and Okwok fields.

West Africa Transform Margin

Ghana Keta Block

On 25 October 2011, Afren formally completed the farm out of a 35 per cent. working interest and transfer of operatorship at the Keta block to Oil Major Eni. Under the terms of the farm out, Afren will receive a carry through the drilling of one exploration well, back costs and carry through future seismic acquisition and a milestone bonus payable upon the achievement of first oil on the block. The Marianas semi-submersible drilling rig is due in country imminently and will prepare to spud the Nunya-1x (formerly Cuda-2) exploration well. Gross unrisked resources for the Nunya (Cuda) prospect are estimated at 325 mmbbls.

Nigeria - OPL 310

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

Kurdistan region of Iraq

Ain Sifni PSC

The operator, Hunt Oil, spudded the Jebel Simrit-2 exploration well at the end of October 2011. The well is seeking to prove and test Cretaceous, Jurassic and Triassic reservoirs at the western extent of the Jebel Simrit anticline structure and is drilling ahead in accordance with the planned schedule. In 2010, the Jebel Simrit-1 discovery well was drilled on the crest of the structure and logged continuous oil pay from 1,110m to 3,070m in Cretaceous and Jurassic reservoirs. Triassic reservoir targets were not penetrated by the well and no oil water contact was established. Subsequent exploration wells are also planned on the low risk East Simrit and Maqlub structures.

East Africa

Tanzania - Tanga Block

Having completed a 751 km shallow water 2D seismic programme over the block in 2011, the results of this survey have been encouraging and provided excellent definition of several large scale prospects and leads that have been identified to date, together with new zones of additional potential. The Company plans to drill the Orpheus prospect in 2012 from an offshore location and is in the process of securing a jack up drilling rig capable of undertaking this work. During Q4 2011 over 900 km of deepwater 2D seismic was acquired, this is currently being processed and final results are expected at the end of the Q1 2012.

Kenya - Block L17/18

Following completion of a 400 km 2D seismic acquisition programme in 2010, a number of newly defined prospects and leads have been identified on the acreage. The Company has also commenced the acquisition of additional 2D seismic data in the deepwater region of the block and plans to drill one exploration well targeting the coastal play in the second half of the year contingent on rig availability.

Kenya - Block 10A

Having satisfied all seismic work commitments with the acquisition of 750 km of 2D seismic over the block in 2011, the operator will commence the drilling of one exploration well on the Paipai prospect. The drilling rig is now scheduled to arrive at the field location later than planned which means that the well is now expected to spud in June.

Kenya - Block 1

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

Ethiopia - Blocks 7 and 8

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

Madagascar - Block 1101

Having increased its working interest to 90% through the reassignment of a 50% from partner Candax Energy, the Company has agreed with state oil and gas agency OMNIS an expanded work programme that combines the first two exploration phases on the block and requires the drilling of one exploration well to a minimum depth of 1,600 metres. The partners have also agreed to acquire an additional 150 km of new 2D seismic and airborne gravity and magnetics. The airborne gravity and magnetic acquisition has been undertaken and it is expected that drilling will now commence H1 2013.

Seychelles - Blocks A,B,C

Seismic data acquired to date by the partners has revealed the presence of several large scale structures in all three license areas, in addition to new basins that could also contain significant Jurassic and Cretaceous sedimentary sections. Acquisition of over 3,500 line km 2D has just been completed and final data is expected at end of Q1 2012.

Other West Africa

South Africa - Block 2B

The partners near term work programme involves the acquisition of 600 km2 of new 3D seismic data, with reprocessing of existing 2D seismic and on-going seismic inversion and regional biostratigraphy studies ahead of expected exploration drilling in 2013 or 2014.

Nigeria - São Tomé & Príncipe JDZ Block1

The new operator on Block 1, Total, is seeking to reprocess existing seismic data and has proposed the drilling of one appraisal well on the Obo discovery and one exploration well in 2012. Afren has a 4.41% interest. The first well is expected to spud in Q1 2012.

Forward exploration and appraisal drilling schedule

* Working interest pre/post cost recovery

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