Afren

London, July 04, 2006 - Afren plc ("Afren" or the "Company") announces the closing of the private placement of US$50 million equivalent in British Pounds of Convertible Senior Unsecured Bonds due 2011 (the "Bonds").

Background

The proceeds from the issuance of the Bonds will fund Afren's ongoing investment in its diversified portfolio of assets. The closing of the financing follows the significant portfolio upgrade announced on 1 June, to develop the Okoro and Setu fields offshore Nigeria, with estimated recoverable reserves of 35 to 60 million barrels of oil. According to the Production Sharing and Technical Services Agreement, Afren will be entitled to 90 percent of the production to recover appraisal and development costs of the Okoro and Setu fields. Afren also receives 50 per cent of profit oil pre- and post- recovery of its appraisal and development costs.

Afren has contracted the Seadrill-7 Jack-up drilling unit for two wells offshore Nigeria. The Seadrill-7 is currently on location in Nigeria with another operator. Appraisal and development drilling on the Company's offshore Nigeria fields is expected to commence in Q4 this year, and the Company is targeting production of 15,000 to 20,000 barrels of oil per day by 2008 from its existing portfolio.

As a result of recently announced transactions, Afren is well positioned with a diversified portfolio of 10 assets across Nigeria, Nigeria São Tomé and Príncipe, Gabon and Congo comprising production, near-term development and exploration assets.

Summary of the Bonds

The Bonds, privately placed with institutional investors, were issued at 100 percent of the principal amount and denominated in British Pounds. The Bonds bear a coupon of 9 percent per annum (payable semi-annually), mature in 2011 and are convertible into ordinary shares of the Company. The conversion price of 60 pence per ordinary share, was set at a 25 percent premium to the price determined in the pricing period leading up to closing. The Bonds also contain other terms, including anti-dilution provisions effective in the event of certain future issuances, a bondholder put option, payable in cash or shares (at a discount to the share price during the period prior to the payment) at the Company's option, a Company call option, and the ability to make coupon payments in cash or shares (at a discount to the share price during the period prior to the payment) at the Company's option. Jefferies International Ltd. acted as Sole Placement Agent for the Bonds.

Brian O'Cathain, Chief Executive, commented:

"Afren has made significant progress in 2006. The agreement with Amni to develop the Okoro and Setu fields offshore Nigeria underpins our target production of 15,000 to 20,000 barrels of oil per day in 2008. We will commence appraisal and development drilling in Q4 this year. Following this financing we are in an even stronger position to continue to create significant shareholder value."

Enquiries:

Afren plc
+44 (0) 20 7182 1800
Brian O'Cathain   
Osman Shahenshah   

Pelham Public Relations
+44 (0) 20 7743 6673
James Henderson   
Alisdair Haythornthwaite   

Background information

Afren

Afren (www.afren.com) was founded in December 2004 by a management team including Dr Rilwanu Lukman with the vision to become the leading pan African independent Exploration and Production company. Since its listing on the AIM market of the London Stock Exchange, Afren has rapidly expanded its portfolio and the management team has delivered ten assets in the Joint Development Zone of Nigeria Sao Tome and Principe, Nigeria, Gabon and Congo.

Afren will continue to add to its diversified portfolio of production, near term development and high impact exploration with the overall objective of creating substantial shareholder value.