PetroNor E&P ASA

Legal Proceedings Report • Oct 16, 2017

CORPORATE UPDATE

CORPORATE UPDATE

African Petroleum Corporation Limited ("African Petroleum" or the "Company"), an independent

oil and gas exploration company with licence interests in four countries offshore West Africa,

provides the following corporate update:

The Gambia (A1 & A4 Licences - 100% interest)

As announced on 4 September 2017, African Petroleum is in the process of commencing

arbitration proceedings in order to protect its 100% interest in the A1 and A4 licences in The

Gambia. Due to legal confidentiality considerations and commercial sensitivities associated with

the arbitration process, the Company intends to only provide material updates to shareholders as

and when appropriate.

The Company remains open to engaging in constructive dialogue with the Gambian authorities

with a view to establishing a satisfactory solution that is in the interests of all parties.

Senegal (SOSP & ROP PSCs - 90% interest)

SOSP: Further to ongoing discussions with the Senegalese authorities, the Company has recently

lodged an application to enter into the second renewal phase of the Senegal Offshore Sud

Profond ("SOSP") production sharing contract ("PSC"). Concurrently with the application, the

Company has requested to exchange the outstanding well commitment in the current phase for a

3D seismic acquisition programme, and to transfer this revised outstanding commitment to the

second renewal phase.

The term of the current first renewal phase of the SOSP PSC is due to end on 15 December 2017.

Should the Senegalese authorities agree to the Company's proposal then the second renewal

phase will be for a term of 2.5 years with a work programme commitment of acquiring, processing

and interpreting 3D seismic and the drilling of one exploration well.

Although the SOSP PSC continues to generate industry interest, the uncertainty around the status

of the PSC has proven to be an obstacle to securing a farm-in partner. It is for this reason that

the Company has decided to proceed with entry into the second renewal phase of the PSC prior

to re-engaging with interested parties.

ROP: African Petroleum continues to reserve its rights on the Rufisque Offshore Profond ("ROP")

PSC while it negotiates the SOSP renewal application and proposal with the Senegalese

authorities.

Côte d'Ivoire (CI-509 & CI-513 PSCs - 90% and 45% interest, respectively)

CI-513: The Ayamé-1X exploration well drilled on the CI-513 block in May 2017 had oil shows

recorded in the target reservoirs but no significant hydrocarbons were encountered, and the well

was plugged and abandoned as a dry hole. Ophir Energy (Operator) completed the well safely

and under budget with a final gross cost of approximately US$19 million.

Work is continuing with Ophir Energy to incorporate the Ayamé-1X exploration well results into the

joint venture's views of the prospect inventory in the area. The well encountered good reservoir

sands with oil shows, and so potential traps up-dip are being examined in detail. This includes a

recalibration of the 3D seismic using the petrophysical data acquired from the well.

CI-509: The current phase of the CI-509 PSC ended in March 2016; however, as previously

announced, the Ivorian authorities allowed the Company additional time to find a new partner to

join the PSC. Unfortunately, the Company has been unable to find a new partner and has now

commenced the process to withdraw from the CI-509 PSC.

Sierra Leone (SL-03 & SL-4A-10 licences - 100% interest)

The Company is in advanced negotiations with the Sierra Leone authorities to formalise

documentation in order to enter into the next phases of the SL-04 and SL-4A-10 licences and to

modify the work programmes for the phases. Further updates to shareholders will be provided as

appropriate.

In anticipation of entering into the next phases of the licences, the Company has been working

with ERC Equipoise to re-assess the prospective oil resources on the licences through the

inclusion of two new material prospects: Leo and Vega. It is expected that the revised

prospective resources for the SL-03 and SL-4A-10 licences will be published shortly after entry

into the next phases of the licences.

The ultra-deep water (3,000 - 3,600m) setting of these licences has been a deterrent to

attracting industry interest during the low oil price environment in the last few years. However,

the Company has recently experienced increased industry interest in this acreage due to

technology improvements and cost reductions in ultra-deep water drilling together with the

materiality of the prospects identified by the Company on the SL-03 and SL-4A-10 licences.

Corporate

African Petroleum is well funded with approximately US$14 million cash at bank, together with

US$1 million in restricted cash, as at 30 September 2017.

Jens Pace, African Petroleum's CEO, comments:

"We are in the process of formally commencing the arbitration process with the Gambian

government as a way to protect our interests and historic investment in those licences. Despite

the commencement of this process, we remain open to engaging in dialogue with the relevant

authorities with the hope of reaching an agreement that suits all parties. We ask shareholders to

remain patient as we start what will be a fluid process with unknown outcomes. We will

endeavour to provide material updates as and when appropriate; however, will be constrained by

what we are able to disclose throughout the process due to the legal and commercial sensitivities

associated with it.

We are encouraged by the ongoing dialogue that we are having with the Senegalese authorities

on SOSP and remain hopeful that we will reach an agreement prior to the expiration date.

Importantly, we are no longer reliant on bringing in a partner prior to receiving the extension,

giving us more flexibility and optionality to engage with known interested parties upon receipt of

the extension.

The rest of our portfolio continues to evolve in line with the industry backdrop. Whilst the

Ayamé-1X exploration well was commercially unsuccessful, we are exploring the potential

elsewhere in the block. We are in the process of withdrawing from our other asset in Côte

d'Ivoire, which whilst disappointing to do so, enables us to further rationalise our portfolio and

focus on the assets that are most likely to attract industry partners. Our assets in Sierra Leone

are increasingly exciting as a result of a significant resource potential and advancements in ultra-

deep-water drilling technology. We are close to obtaining agreement on progressing into the next

phases for our two licences in country.

In summary, we are at an important juncture across the majority of our licences and look forward

to updating the market as and when the outcomes of our ongoing discussions are finalised."

******

For further information, please contact:

Jens Pace, Chief Executive Officer

Stephen West, Chief Financial Officer

Tel: +44 20 3655 7810

Media Contacts:

Buchanan

Ben Romney/Chris Judd

Tel: +44 207 466 5000

About African Petroleum

African Petroleum is an independent oil and gas exploration company with an equity interest in

licences in four countries offshore West Africa (Senegal, The Gambia, Côte d'Ivoire and Sierra

Leone). The Company's assets are located in proven hydrocarbon basins in the West African

Transform Margin and the Atlantic Margin, where several discoveries have been made in recent

years.

For more information about African Petroleum, please see www.africanpetroleum.com.au