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2009 Highlights

Egbert Imomoh
Chairman

Osman Shahenshah
Chief Executive

100% appraisal drilling success
Significant production growth in 2010

Results reflect first full year contribution of production operations

In 2009, the Company’s financial results were up compared with 2008 as a result of the first full year of production contribution from operations in Nigeria and Côte d’Ivoire. Good progress was also made on cost reduction initiatives which were implemented earlier in the year, enhancing the normalised profitability of the business. With first oil expected from Ebok in October 2010 and an aggressive drilling campaign scheduled for the year ahead, Afren is positioned to deliver large scale production growth that will be fully realised in 2011 and beyond.

Solid platform of producing assets

In Nigeria, an average gross production rate of 18,800 bopd was achieved at the Okoro field with uptime of 99.6%, exceeding pre start-up expectations due to better than forecast reservoir performance and good aquifer support. Two infill drilling opportunities have been identified that are expected to deliver incremental production in 2010. NSAI has increased its 2P reserves estimate for Okoro to 24.8 mmbbls from 15.5 mmbbls. In Côte d’Ivoire, average gross production for the year from upstream operations at CI-11 was 30 mmcfd and 1,230 bopd, whilst midstream NGL output at the Lion Gas Plant was 1,140 boepd.

100% Ebok appraisal drilling success rate

We successfully completed three appraisal wells in 2009. The Ebok-4 well encountered oil within the ‘D’ series reservoirs, delineating a reserves base well in excess of minimum economic requirements, confirming a commercial development project. The Ebok-5 and Ebok-6 appraisal wells both encountered oil in their target objectives as planned, and in particular established three new oil bearing reservoirs. NSAI has independently confirmed a gross 2P reserves base of 107.5 mmbbls.

Ebok development underway

The first phase development commenced in December 2009 and is expected to deliver production of 15,000 bopd in October 2010. The necessary production and storage infrastructure has been contracted with the selected configuration, comprising a Mobile Offshore Processing Unit (MOPU) and Floating Storage Offloading vessel (FSO), providing an estimated cost saving of US$51 million compared with an alternative Floating Production Storage Offloading vessel (FPSO) development solution.

Acceleration of Ebok West Fault Block

The West Fault Block development has been accelerated in response to the Ebok-5 well proving a materially greater than expected reserves base of good quality 30° API oil, and will incorporate a separate dedicated wellhead platform (WHP) tied back to the central MOPU and FSO. Phase 2 is expected to deliver a further 20,000 bopd by end 2010. The development philosophy at Ebok is one of ongoing development and appraisal, with continued phasing in of additional volumes from other parts of the field in 2011 and beyond, offering progressive and sustainable growth to Afren.

Update of Independent assessment of reserves

NSAI has updated an independent assessment of Afren’s reserves and resources, which supports management estimates:

• Ebok gross 2P reserves of 107.5 mmbbls certified (vs Management 116 mmbbls)
• Okoro gross 2P reserves of 24.8 mmbbls certified (vs Management
  20.8 mmbbls)

Strengthened balance sheet

The Company strengthened its balance sheet in 2009, ending the year with a net cash position of US$54.2 million. The net cash from operations of US$278 million was supplemented by US$313 million raised in equity funds. Net investment of US$209 million – mostly comprising capital expenditure on Ebok – was accompanied by debt repayments of US$148 million. In March 2010 (post period end), the Company signed a facility agreement for an up to US$450 million reserves based lending facility, secured against the Ebok project reserves. The facility provides added financial flexibility and will be used to fund development activities across the broader Ebok/Okwok/OML 115 area.

Outlook

Under difficult circumstances at the start of the year, the team has delivered excellent operational results and operating cash flow, profitability ahead of company expectations and strengthened the balance sheet. Looking ahead, the Company is in a position of strength with the necessary resources in place to deliver the planned 2010 work programme. With the move to the Official List and FTSE 250 inclusion effected, Afren intends to further establish itself as a leading main board listed African independent E&P company and leverage its differentiated strategy to deliver progressive and sustainable growth.