PetroNor E&P ASA

Earnings Release • Feb 28, 2017

UNAUDITED FINANCIAL REPORT FOR THE QUARTER ENDED 31 DECEMBER 2016

UNAUDITED FINANCIAL REPORT FOR THE QUARTER ENDED 31 DECEMBER 2016

Please find enclosed African Petroleum Corporation Limited's

(the "Company" or "African Petroleum") unaudited financial

report for the quarter ended 31 December 2016.

HIGHLIGHTS

- During the quarter the Company continued working with Ophir

Energy and Petroci on planning for the first exploration well

(Ayame-1X) to be drilled on the CI-513 licence (Company 45%,

Ophir Energy (Operator) 45%, Petroci 10%) in Côte d'Ivoire in

Q2 2017.

- The Ayame-1X exploration well will be targeting the Ayame

West prospect with a gross mean prospective resource of 350

million barrels (ERC Equipoise CPR).

- Post period end, Ophir Energy (Operator) signed a drilling

rig contract for the Seadrill West Saturn sixth generation

drillship with drilling of the Ayame-1X exploration well

commencing in May 2017.

- The Company is continuing discussions with the Senegalese

and Gambian governments regarding possible licence extensions

and amendments to existing and future work obligations.

Concurrently, the Company remains in farm-out negotiations

with several potential farm-in partners for certain licences

across the portfolio, including Côte d'Ivoire, The Gambia and

Senegal.

- On 23 November 2016 the Company announced that Liberian

production sharing contracts LB-08 and LB-09 had expired and

will not be extended.

- On 23 November 2016 the Company reached agreement with the

Government of Sierra Leone to proceed into the First

Extension Period of the SL-4A-10 licence and to modify the

work programme, minimum expenditure requirements and social

obligations in favour of the Company during the First

Extension Period on the licence.

- Post period end, the Company appointed BDO Audit (WA) Pty

Ltd, a member firm of BDO International Ltd, to replace Ernst

& Young as auditor of the Company.

- Post period end, at the invitation of the incoming

government a delegation from the Company travelled to The

Gambia to attend the 52nd Independence Anniversary

Celebrations and Inauguration of His Excellency Mr Adama

Barrow, President of the Republic of The Gambia, and to hold

a private meeting with President Barrow.

- Approximately US$0.2 million cash at bank as at 31 December

2016, together with US$10.9 million restricted cash.

- Post period end, the Company completed a private placement

to raise NOK 26,675,000 (approximately US$3.1 million)

(before costs) through the issue of 10,670,000 new fully paid

ordinary shares at a price of NOK 2.50 per share.

- The Company has continued to operate with a reduced running

cost base (implemented in late 2015).

COMPANY BACKGROUND

African Petroleum, listed on the Oslo Axess (APCL) and the

Open Market of the Frankfurt Stock Exchange (A1C1G9), is an

independent oil and gas exploration company led by an

experienced Board and management team, with substantial

experience in oil and gas exploration, appraisal, development

and production. The Company is a significant net acreage

holder in West Africa with estimated net unrisked mean

prospective oil resources in excess of 7.4 billion barrels.

African Petroleum has equity interests in 8 licences across

four countries offshore West Africa (Côte d'Ivoire, Senegal,

The Gambia and Sierra Leone). The Company's assets are

located in proven hydrocarbon basins, where several

discoveries have been made in recent years, including

significant discoveries by Total and Anadarko in Côte

d'Ivoire, Cairn Energy in Senegal and by Kosmos Energy in

Senegal and Mauritania.

The Company has acquired more than 13,400km2 of 3D seismic

data on its existing licences and drilled three exploration

wells in West Africa.

CEO STATEMENT

"The Company has entered 2017 with a strong momentum driven

by some important corporate and operational milestones

achieved last year. We have successfully rationalised our

portfolio through the relinquishment of our licences in

Liberia as we focus our efforts and resources on the licences

where we see the most potential for value creation. In this

regard, we have made considerable progress in our

negotiations with the governments of Senegal and The Gambia

to reach an accord on the terms and subsequent extension of

our highly prospective licences in these countries. Our

negotiations in The Gambia were somewhat delayed in the run-

up to the country's election however we have made

considerable progress in building a relationship with the new

administration and are encouraged by the initial dialogue

that we have had to date.

We remain in positive and progressive negotiations with

several potential farm-in partners for certain licences

across the portfolio, including Côte d'Ivoire, The Gambia and

Senegal. Whilst we have an existing LOI in place with a

highly credible industry player for our licences in The

Gambia, we continue to entertain discussions with all

potential partners across our entire portfolio to ensure we

obtain the best possible deals on behalf of our shareholders.

The general sector sentiment towards exploration activity in

our region of focus improved markedly in the second half of

2016 as the oil price stabilised and we have subsequently

reinitiated dialogue with a number of industry players who

are once again showing strong interest in our acreage.

In May of this year, we will return to exploration drilling

as we drill the first exploration well on CI-513 alongside

our partner Ophir. This highly prospective well has generated

a lot of industry interest and we continue to evaluate our

options with regards to a potential farm-out of our equity in

the licence in return for funding our share of the well. In

any event, we will retain a material interest in a well that

has the potential to be truly transformational for African

Petroleum in the success case.

In conclusion, we are excited by the near term catalyst of

the exploration well and are also highly encouraged by the

continued dialogue that we are having with our host

governments and potential industry partners, all against an

improving sector backdrop. Whilst the pace in getting to

this point has been frustratingly slow as a result of the

challenges faced by the wider industry in the last couple of

years, we have made significant progress in laying the

foundation for growth and believe that we are well placed to

achieve numerous operational and corporate objectives in the

coming year."

OPERATIONAL & CORPORATE UPDATE

FARM OUT PROCESS

African Petroleum seeks to build on the success of attracting

Ophir Energy plc as a partner on the CI-513 Licence in Côte

d'Ivoire by forming other strategic partnerships to explore

the Company's blocks in Côte d'Ivoire, Senegal, The Gambia,

and Sierra Leone. The strategy, supported by detailed

technical work and prospect definition, is to use the

significant equity held in this prospective portfolio to fund

a high impact exploration drilling campaign. The industry

interest in Côte d'Ivoire, The Gambia and Senegal licences in

particular, due to the regional context of hydrocarbon

discoveries being made in adjacent blocks in this part of the

Atlantic Margin, provides management with confidence that

agreements will be concluded in due course.

Côte d'Ivoire

Further to the announcement on 16 March 2016 that the new

Production Sharing Contract ("PSC") with Ophir Energy plc

covering the Company's CI-513 licence area in Côte d'Ivoire

became effective, the Company and Ophir Energy have been

working on planning for the first exploration well to be

drilled in Q2 2017. The CI-513 exploration well (Ayame-1X)

will be targeting the Ayame West prospect with a gross mean

prospective resource of 350 million barrels. Due to the

proximity of recent discoveries made by Total and Anadarko,

the short time frame to drilling and the material prospect

size, the Company is in discussions with several companies

who have expressed interest in farming in to the CI-513

licence.

The Gambia & Senegal

The Company is continuing meetings and discussions with the

Governments of The Gambia and Senegal with a view of aligning

the requirements of potential incoming partners with the

respective licence terms and obligations.

Post period end, in February 2017, a delegation from the

Company travelled to The Gambia to attend the 52nd

Independence Anniversary Celebrations and Inauguration of His

Excellency Mr Adama Barrow, President of the Republic of The

Gambia, and to hold a private meeting with President Barrow.

The Company has signed a non-exclusive Letter of Intent

("LOI") with an undisclosed International E&P company with

respect to Licences A1 and A4, offshore The Gambia (announced

31 August 2016). The LOI represents a non-binding commercial

proposal regarding the possible acquisition of interests in

Licences A1 and A4 where African Petroleum holds 100%

operated working interest in both blocks. The proposal set

forth within the LOI is subject to ongoing due diligence and

commercial negotiations. In the meantime, the Company is in

active discussions with other interested companies.

This part of the Atlantic Margin has become highly active

with the recent exploration success of third party operators,

namely Cairn Energy in Senegal and Kosmos Energy in Senegal

and Mauritania. A significant level of activity in the

region is ongoing as Cairn Energy and its partners commenced

a multi-well exploration and appraisal drilling programme

across their Senegal acreage in December 2015, with the first

three appraisal wells SNE-2, SNE-3 and SNE-4 being announced

as successful in January 2016, March 2016 and May 2016

respectively. In addition, Kosmos Energy extended their

Mauritania drilling campaign further south and commenced

drilling in Senegal in December 2015. This has led to a

string of very successful drilling programmes by Kosmos

Energy through the first half of 2016, including significant

gas discoveries at Tortue, Geumbeul-1 and Ternanga-1, and the

successful appraisal well at Ahmeyim-2. In December 2016

Kosmos announced a farm-out to BP for $916 million in fixed

consideration and up to $2 billion in variable consideration.

Despite the challenging market conditions for exploration

activity and the prolonged nature of discussions with

potential partners and governments, the Company remains

confident that current advanced discussions can yield farm-

outs in due course. Further announcements will be made when

appropriate.

LICENCE PHASES

African Petroleum is actively engaged in discussions with a

number of governments regarding possible licence extensions

and amendments to existing and future work obligations. The

Company maintains strong relationships with host governments

founded upon recognition of the Company's efforts to progress

the exploration of these licences. Based on the dialogue

experienced to date with the governments of Senegal, The

Gambia, Côte d'Ivoire and Sierra Leone, we are confident that

we will achieve outcomes that are mutually beneficial for our

host countries, potential industry partners and African

Petroleum.

On 23 November 2016 the Company announced that Liberian

production sharing contracts LB-08 and LB-09 ("PSCs") had

expired and will not be extended. The Company had been in

discussions with the relevant Liberian authorities regarding

the possible amendment of terms and extension of these PSCs

to enable the Company additional time to attract an industry

partner whilst not enduring costly work commitments; however,

agreement could not be reached.

Please refer to the next section "Licence Information" for

further information on specific licences.

PRIVATE PLACEMENT

Post period end, on 23 January 2017 the Company completed a

private placement to certain existing and new investors to

raise NOK 26,675,000 (approximately US$3.1 million) (before

costs) through the issue of 10,670,000 new fully paid

ordinary shares at a price of NOK 2.50 per share. Proceeds

from the private placement will be used to strengthen the

Company's balance sheet and liquidity position, to fund the

Company's ongoing working capital and for general corporate

purposes.

CHANGE IN AUDITOR

Post period end, on 19 January 2017 the Company appointed BDO

Audit (WA) Pty Ltd ("BDO"), a member firm of BDO

International Ltd, as auditor of the Company. BDO were

selected to replace Ernst & Young as the Company's auditors

for the financial year ending 31 December 2016 and subsequent

financial years on the basis that BDO are more aligned to the

Company's current operations and to the Company's continued

strategy to reduce corporate costs.

LICENCE INFORMATION

Côte d'Ivoire: Blocks CI-509 & CI-513

In Côte d'Ivoire, African Petroleum holds:

i) 90% working interest in offshore licence CI-509, with

the remaining 10% held by Petroci, the National Oil Company

of Côte d'Ivoire. The Company was awarded CI-509 in March

2012; and

ii) 45% non-operated interest in offshore licence CI-513,

with a 45% operated interest held by Ophir Energy plc and the

remaining 10% held by Petroci. A new PSC for CI-513 was

signed in December 2015 and became effective in March 2016.

The two licence interests have a combined net acreage of

1,633km2.

The current phase of licence CI-509 ended in March 2016;

however, the Company has not received a formal notice of

termination and the Company remains in positive dialogue

regarding the proposed suspension of the licence to enable

sufficient time for a regional technical study and the

introduction of a new partner by the Company, at which point

it is anticipated the licence will be renewed.

On 14 July 2014 the Company signed an agreement to farm-out

10% of CI-509 to Buried Hill Africa Limited, subject to

certain conditions precedent. As at the date of this report

the conditions precedent had not been satisfied.

Independent petroleum consultant ERC Equipoise prepared an

assessment of prospective oil resources attributable to the

Company's Côte d'Ivoire licences and estimates the net

unrisked mean prospective oil resources at 1,273MMStb

(adjusted for Ophir Energy's 45% interest in CI-513).

Senegal: Rufisque Offshore Profond & Senegal Offshore Sud

Profond

In Senegal, African Petroleum Senegal Limited holds a 90%

operated working interest in exploration blocks Rufisque

Offshore Profond ("ROP") and Senegal Offshore Sud Profond

("SOSP"). The National Oil Company Petrosen, holds the

remaining 10% equity. The Company's Senegal licences are

located offshore southern and central Senegal, with a net

acreage of 14,216km2.

The current phase of the ROP licence ended in October 2015;

however, the Company has lodged a request for an extension

with the Government of Senegal and remains in positive

dialogue regarding this extension request.

The Company was required to elect whether to continue with

the current phase of the SOSP licence in June 2016 by

committing to the drilling of an exploration well; however,

the Company has not elected to commit to the drilling of the

exploration well and has entered into dialogue regarding the

possible amendment of this licence commitment.

Independent petroleum consultant ERC Equipoise prepared an

assessment of prospective oil resources attributable to the

Company's Senegal Licences and estimates the net unrisked

mean prospective oil resources at 1,779MMStb.

The Gambia: Blocks A1 & A4

African Petroleum holds a 100% operated working interest in

offshore licences A1 and A4, with a combined net acreage of

2,672km2. The Company has completed a 3D seismic survey with

data covering 2,500km2 and has found a number of analogous

leads and prospects in its acreage to that of the recent

SNE-1 and FAN-1 discoveries and the SNE-2, SNE-3 and SNE-4

successful appraisal wells drilled by Cairn Energy in Senegal.

The current phase of the A1 and A4 licences required the

Company to drill an exploration well on either of the

licences no later than 1 September 2016. The Company was

unable to meet this drilling commitment and is in positive

dialogue with the Government of The Gambia regarding the

transfer of the outstanding drilling commitment into the next

phase and entry into the next phase of the licences.

Independent petroleum consultant ERC Equipoise prepared an

assessment of prospective oil resources attributable to the

Company's Gambian Licences and estimates the net unrisked

mean prospective oil resources at 3,079MMStb.

Sierra Leone: Blocks SL-03 & SL-4A-10

In Sierra Leone, the Company holds a 100% operated working

interest in offshore licences SL-03 and SL-4A-10. African

Petroleum was awarded a 100% interest in SL-03 in April 2010,

while licence SL-4A-10 was awarded as part of Sierra Leone's

third offshore licencing round in 2012. The Company's Sierra

Leone licences cover a combined net acreage of 3,925km2 and

are located to the south of Freetown, offshore Sierra Leone.

On 4 August 2016 the Company received formal ratification

from the authorities in Sierra Leone for the entry into the

First Extension Period on the SL-03 licence. As previously

announced in December 2015, the Petroleum Directorate agreed

to modify the work programme, minimum expenditure

requirements and social obligations in favour of the Company

during the First Extension Period on the licence.

The current phase of the SL-4A-10 licence ended in September

2015, having fulfilled the commitment to acquire 3D seismic

over the licence. On 23 November 2016 the Company reached

agreement with the Government of Sierra Leone to proceed into

the First Extension Period of the SL-4A-10 licence and to

modify the work programme, minimum expenditure requirements

and social obligations in favour of the Company during the

First Extension Period on the licence.

Independent petroleum consultant ERC Equipoise prepared an

assessment of prospective oil resources attributable to the

Company's Sierra Leone licences and estimates the net

unrisked mean prospective oil resources at 1,354MMStb.

Liberia: Blocks LB-08 & LB-09

African Petroleum, through its wholly owned subsidiary

European Hydrocarbons Limited, held a 100% working interest

in production sharing contracts LB-08 and LB-09 ("PSCs").

On 23 November 2016 the Company announced that the PSCs had

expired and will not be extended. The Company had been in

discussions with the relevant Liberian authorities regarding

the possible amendment of terms and extension of these PSCs

to enable the Company additional time to attract an industry

partner whilst not enduring costly work commitments; however,

agreement could not be reached.

HEALTH, SAFETY, ENVIRONMENT AND SECURITY

As an operator of offshore concessions, it is the duty of

African Petroleum to provide a safe working environment and

minimize any adverse impact on the environment. Health,

safety, environment and security policies are embedded

throughout all of the Company's core operations. In this

regard, we strive for continuous improvement as lessons

learnt from past operations are incorporated into business

practices going forward.

PRINCIPAL RISKS AND UNCERTAINTIES

As an exploration company in the oil and gas industry, the

Company operates in an inherently risky sector. Oil and gas

prices are subject to volatile price changes from a variety

of factors, including international economic and political

trends, expectation of inflation, global and regional demand,

currency exchange fluctuations, interest rates and global or

regional consumption patterns. These factors are beyond

control of the Company and may affect the marketability of

oil and gas discovered. In addition, the Company is subject

to a number of risk factors inherent in the oil and gas

upstream industry, including operational and technical risks,

reserve and resource estimates, risks of operating in a

foreign country (including economic, political, social and

environmental risks) and available resources. We recognise

these risks and manage our operations in order to minimise

our exposure.

OUTLOOK

African Petroleum is entering an exciting period as we count

down to the drilling of our exploration well on licence CI-

513 in Côte d'Ivoire in May. This highly prospective well,

which lies in close proximity to large commercial

discoveries, continues to attract industry interest and as a

result the Company is considering a number of options with

regards to potentially farming down further equity in the

licence in return for funding our share of the well. In the

event of a further farm-out, we will retain an appropriate

level of exposure to ensure a transformational impact in the

success case.

The general sector outlook has improved dramatically since

the oil price rebounded from a low of US$27 per barrel in

early 2016 and stabilised at a level where the industry is

becoming more active in exploration. Based on the dialogue

that we are having with industry players, many of whom have

recently reinitiated dialogue as a result of the improving

climate, we are witnessing an increased appetite for

exploration activity in our region of focus. As such, we are

optimistic that our discussions with host governments and

potential industry partners will culminate in a positive

outcome for the Company in the near future.

STATEMENT OF RESPONSIBILITY

We confirm that, to the best of our knowledge, the condensed

set of financial statements for the fourth quarter of 2016,

which has been prepared in accordance with IAS34 Interim

Financial Statements, provides a true and fair view of the

Company's consolidated assets, liabilities, financial

position and results of operations, and that the management

report includes a fair review of the information required

under the Norwegian Securities Trading Act section 5-6 fourth

paragraph.

For further information, please contact:

Jens Pace, Chief Executive Officer

Stephen West, Chief Financial Officer

Tel: +44 20 3655 7810

Angeline Hicks, Company Secretary

Tel: + 61 401 489 883

Media Contacts:

Buchanan

Ben Romney/Chris Judd

Tel: +44 207 466 5000

This information is subject to disclosure requirements

pursuant to section 5-12 of the Norwegian Securities Trading

Act.