AFR.L Regulatory News (AFR)

Afren plc (AFR LN)

Annual General Meeting - Chairman's Statement

London, 7 June 2010 - At today's AGM the Chairman, Egbert Imomoh, opened the meeting with the following statement:

The year 2009 and the first half of 2010 has been a period of continued growth and delivery for Afren. Operationally, net production for the Company averaged 22,100 boepd in 2009. In Nigeria, gross production at the Okoro field averaged 18,800 bopd, exceeding pre start-up expectations with stable production maintained in Côte d'Ivoire. We expect significant production growth with the start up of the Ebok field in October at an initial expected rate of 15,000 bopd, increasing to 35,000 bopd by year end. We also have two infill wells planned at the Okoro field that are expected to increase gross production at the field by 3,000 bopd to 5,000 bopd over the second half of the year.

In terms of drilling activity, we successfully completed three appraisal wells over the course of 2009 at the Ebok field and the independent competent person, Netherland Sewell, upgraded reserves on Ebok from 19.1 million barrels to 107.5 million barrels as at 31 December 2009. Netherland Sewell also upgraded its estimate of remaining Okoro gross 2P reserves by 9.4 mmbbls, to 24.8 mmbbls as at 31 December 2009. On a total net basis, Netherland Sewell has currently certified net 2P reserves and contingent resources for the Company of 113 mmboe, with 1,054 net mmboe of prospective upside potential across the Company's assets in Nigeria, Côte d'Ivoire, Ghana, Congo and the JDZ.

Development of the Ebok field commenced in December 2009 and is on schedule. In January, production, processing and storage facilities for the Ebok development were contracted, having opted for a Mobile Offshore Production Unit (MOPU) and Floating Storage Offloading (FSO) vessel configuration. All facilities work remains on schedule for October production start up. The wellhead support structure was installed at the field in March 2010, and the first phase of development drilling is underway and expected to complete mid year. The subsequent second development phase of Ebok, targeting the West Fault Block area will commence in the second half of the year, incorporating the installation of an additional dedicated wellhead platform and six development wells tied back to the central Ebok MOPU and FSO facilities.

When we established Afren in 2005, we had the vision to create a Pan African portfolio. Significant recent progress has been made in this regard. We further consolidated our position in Nigeria with the addition of the Okwok field and OML 115, adjacent to and surrounding the Ebok field, and OPL 310 offshore south west Nigeria. I am also delighted that we have made our first strategic entry into East Africa with the announced acquisition of Black Marlin Energy. This acquisition is subject to certain conditions, including approval of Afren shareholders in a general meeting to be convened in this regard.

The acquisition will complement our existing portfolio, doubling our net prospective resources to approximately 2.3 billion boe and adding several high impact exploration wells currently intended to be drilled through 2012 in Ethiopia, Kenya, Madagascar and the Seychelles. Post transaction, Afren will hold 27 assets across nine countries. Combined with our existing portfolio we now have nine exploration wells scheduled through to 2012, the majority of which will be drilled along the West African Transform margin and East African rift basins, two of Africa's most prolific and high profile regions in terms of recent exploration success.

Financially, we are in a strong position having generated US$278 million of net cash from operations and raised US$313 million in equity funds in 2009. We ended the year in a net cash position of US$54 million, and made US$148 million in debt repayments and invested US$209 million in our projects during the period. In a move that has provided the Company with additional financial flexibility, we signed a facility agreement for an up to US$450 million reserves based lending facility in March this year. Secured against the Ebok field reserves, the facility will be used to fund future development activities across the broader Ebok/Okwok/OML 115 area.

I am delighted to say that on 3 December 2009, Afren's shares moved from the Alternative Investment Market to the London Stock Exchange's main market, and that we were also included in the FTSE 250 index in March this year. This move puts us on a platform more appropriate for our size, and will continue to further raise the profile of Afren as a leading, dynamic and growth focused African independent E&P.

Finally, I would like to welcome Group Finance Director Darra Comyn to the Board of Afren, and as non executive Directors Ennio Sganzerla and Toby Hayward. Darra brings with him over 24 years as a senior finance practitioner, and holds responsibility for maintenance of robust internal financial controls and processes, cost control, taxation and strict compliance to all corporate governance requirements. Enio and Toby bring a wealth of technical industry and financial experience respectively, that will assist the Board and management team to continue delivering progressive and sustainable growth.

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