Afren Raising Funds from Share Placement for Nigerian Development

Afren reports that its brokers, Bridgewell Securities Limited and Jefferies International Limited, have placed 24,444,441 new ordinary shares with a range of institutional investors. The new shares ("the Placing Shares") were placed at a price of 45p per share, raising £11.0 million (before expenses) for the Company ("the Placing"). Application has been made to AIM for the Placing Shares to be admitted to trading, which is expected to commence on December 22, 2005.

The Placing follows the securing by Afren of two new offshore development opportunities in Nigeria. The first, the Ogedeh field, was announced in August 2005. The Ogedeh field was discovered by Chevron in 1993. Although never commercially developed, the analysis so far conducted suggests that the field holds between 10 and 25 million barrels of oil, with gas reserves in the order of 25BCF.

The second development opportunity is the Akepo field, offshore Nigeria and adjacent to the Ogedeh field, which was announced by Afren on 8 December 2005. The Akepo field was also discovered by Chevron in 1993 and has also not yet been commercially developed. It is expected to contain approximately 10 – 20 million barrels of prospective recoverable oil resources.

The proceeds of the Placing will secure a Letter of Intent for a jack-up rig contract for the purpose of drilling two appraisal wells on the Ogedeh and Akepo discoveries. The Company is currently in advanced stages of negotiations to secure a rig for these wells. It is expected that drilling will commence in Q2 2006 and that both wells will be suspended after drilling and will be re-entered for tie-back as producing wells in 2007. The locations of both fields, in shallow water offshore Niger Delta, mean that the costs of development are likely to be comparatively low. Analysis already conducted on both fields indicates that they could together produce 10,000 barrels per day, on full field development.

Commenting on the placement of shares, Brian O'Cathain, Chief Executive of Afren said, "We are pleased with the positive response to the placement and the continuing support of our shareholders. The proceeds will ensure that these wells can be drilled in the first half of 2006 and that the fields can move towards first oil in early 2007."