Afren Closes $50 Million Unsecured Loan

The proceeds of the US$50 million unsecured loan will be used primarily to finance the Company's acquisition opportunities. The Company recently announced an agreement with Excel, an established indigenous company, for the development of the Eremor field in Nigeria, taking the portfolio to 11 assets in 5 countries. The Company is currently evaluating other near term development acquisition opportunities both in Nigeria and elsewhere in West Africa.

FCMB is a leading and well established Nigerian bank and the loan endorses both Afren's existing asset base and its future pipeline of opportunities. Afren was founded with the vision to become the premier pan-African independent exploration and production company through a strong African representation in its Board, Management, Partners and Shareholders. This latest initiative reinforces the recent steps to increase the African participation in Afren's capital structure.

The US$50 million loan is unsecured, has a five year term, with interest payable semi-annually at LIBOR plus 4.45 percent and principal repayments commencing only after 30 months. The loan is accompanied by 12 million detachable warrants over the Company's ordinary shares, with a term of five years. The warrants have been priced at 85 pence representing a premium of 42 percent to the current share price.

Osman Shahenshah, Chief Executive of Afren, commented:

"The US$50 million loan provides further flexibility in the continued build-out of Afren's West African portfolio. This follows the recent syndication of Afren's US$200 million Development Facility and its successful US$65 million equity placement, both of which were over-subscribed. FCMB's strong local backing of Afren is a testament to the Company's existing portfolio and potential pipeline of acquisition opportunities. The continued support by Nigerian financial institutions, including Guarantee Trust Bank plc's participation in the US$200 million Development Facility, is both a strong endorsement to Afren's established credibility in its principal operating region and to the maturity and funding capacity of the regional financial sector, as a supplement to Afren's traditional support base in North American and European capital markets. Such local participation from the growing African Capital Markets base, complements Afren's focus on partnering with indigenous companies in developing a pan-African portfolio of oil & gas upstream assets."

Ladi Balogun, Chief Executive Officer of FCMB, commented:

"We are proud to be associated with Afren, a well run company in an exciting space. We expect that Afren will be able to increasingly tap into the local capital markets to comfortably fund their expansion plans in the region. With greater choice of funding options, Afren will benefit from a lower cost of capital to accelerate its growth options. We look forward to working with Afren on subsequent transactions, as we see this company continuing to hold significant promise in the future."