Afren to Participate in Eremore Field Development

Afren has entered into a Financing and Technical Services Agreement with Excel Exploration & Production Limited for the development of the Eremor Field in Nigeria. The field is located in OML 46 in located in shallow waters offshore Nigeria.

Excel was awarded a 100 percent interest and operatorship of Eremor under the Federal Government of Nigeria's Marginal Field Program.

3D seismic data is available for the field. The data shows the field is estimated to contain in place volumes of up to 30 million barrels in the D3.0 reservoir, with a similar potential upside in the shallower D1.0 reservoir. Recoverable reserves are estimated at up to 10 million barrels from the D3.0 reservoir. Eremor is located close to existing infrastructure and within 12 kilometers of a number of Shell producing fields.

The field was initially discovered by Shell in 1978 (Eremor-1), and encountered five hydrocarbon bearing zones. Three additional wells were drilled to appraise the areal extent of the accumulation between 1984 and 1990. The Eremor-1 well was re-entered in 2005 and a short production well test performed on the D3.0 interval. Good oil samples were recovered of a low Gas to Oil Ratio, 22 degree API crude. Analysis of the test data indicates that flow rates of up to 2,000 bopd are achievable from the vertical well. Eremor-1 is currently suspended and suitable for re-completion.

Phase-1 of the Field Development Plan includes completion of the existing well and construction of a 7-kilometer oil evacuation line to the nearest flow station. The Field Development Plan and Environmental Impact Assessment have been approved and development work will commence in the near term.

The agreement signed between Afren and Excel defines the commercial terms under which Afren will participate with Excel in the development of Eremor. Under the agreement, Afren will be responsible for financing Phase-1 of the Field Development Plan, and will initially recover the investment from 90 percent of net field revenues. Following cost recovery, Afren and Excel will equally share production revenue and costs.

Osman Shahenshah, Chief Executive of Afren, commented:

"I am delighted to announce Afren's fourth partnership with a well established indigenous company in Nigeria, which underpins Afren's commitment and strong competitive position to develop relatively low risk fields with significant near term upside that provide early cash flow and add to our growing reserve base. This follows the recent announcement of a Farm-In Agreement with Independent Energy for participation in the Ofa Field and takes Afren's portfolio to 11 assets in 5 Countries, achieved in just over 2 years, offering a combination of both on-shore and off-shore near-term development and high impact exploration opportunities, with 15,000 to 20,000 barrels of oil per day from the existing portfolio by mid-2008. "