PetroNor E&P ASA

Quarterly Report • Aug 31, 2016

UNAUDITED FINANCIAL REPORT FOR THE QUARTER ENDED 30 JUNE 2016

UNAUDITED FINANCIAL REPORT FOR THE QUARTER ENDED 30 JUNE 2016

Please find enclosed African Petroleum Corporation

Limited's (the "Company" or "African Petroleum")

unaudited financial report for the quarter ended 30

June 2016.

HIGHLIGHTS

- Further to the completion of the transaction with

Ophir Energy on the CI-513 licence in Côte d'Ivoire in

March 2016, the Company (45% interest) has been

working with Ophir Energy on preliminary planning for

an exploration well to be drilled in 2017.

- The Company is actively engaged in discussions with

a number of 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 The Gambia and Senegal.

- Post period end, the Company announced that it has

signed a Letter of Intent with an undisclosed

International E&P company with respect to Licences A1

and A4, offshore The Gambia.

- Mr Charles Matthews, Non-Executive Chairman, retired

as Chairman and Non-Executive Director in order to

pursue other business interests. Dr David King assumed

the position of Non-Executive Chairman.

- Post completion of the CI-513 transaction, payments

were made during the second quarter in respect of

outstanding training and resource fees on the licence

(US$7.5m), signature bonus (US$0.9m) and bank

guarantee (US$4.4m) to maintain the CI-513 licence in

good standing.

- Approximately US$1.6 million cash at bank as at 30

June 2016, together with US$10.9 million restricted

cash.

- 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 11.6 billion

barrels.

African Petroleum has equity interests in 10 licences

across five countries offshore West Africa (Côte

d'Ivoire, Liberia, 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 in Côte d'Ivoire, Cairn Energy in

Senegal and by Kosmos Energy in Senegal and Mauritania.

The Company has acquired more than 18,500km2 of 3D

seismic data and drilled three exploration wells, one

of which was an oil discovery at Narina-1 in Liberia.

CEO STATEMENT

"The successful completion of the transaction with

Ophir Energy in Côte d'Ivoire marks a positive start

to the year for African Petroleum. The deal supports

our view that an industry appetite still exists for

high quality exploration opportunities despite the

challenging market conditions. Indeed the associated

reduction in costs across the sector in this market

supports the case for exploration while work

programmes can be conducted with much greater

efficiency than in the recent past. Furthermore, the

award of this new PSC at the end of the first period

of our previous PSC demonstrates that agreements can

be reached with governments on licence extensions and

amendments in order to support continued activity and

long-term investment.

Encouraged by this result, the Company's focus is on

replicating this outcome across the rest of our

portfolio. We are engaged in discussions with

potential partners, and with the governments of

Senegal and The Gambia, to align our ambitions and to

support exploration in our licenced acreage position

in this prospective region. Based on a shared

objective of moving forward to drill the high quality

prospects the Company has identified through

substantial technical work and historic investment, we

are confident of concluding additional transactions in

the near future."

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, Liberia, 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 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

On 16 March 2016, the Company announced that the new a

new Production Sharing Contract ("PSC") with Ophir

Energy plc covering the Company's CI-513 licence area

in Côte d'Ivoire became effective.

In accordance with the terms of the new PSC, Ophir

Energy holds a 45% interest and is Operator, African

Petroleum holds a 45% interest and Petroci (the

National Oil Company of Côte d'Ivoire) holds a 10%

carried interest. The new PSC incorporates adjustments

to fiscal terms and holding costs agreed with the

Government of Côte d'Ivoire that reflect the current

commodity price environment and outlook for

development of the deepwater prospects identified

through interpretation of the Company's 3D seismic.

The agreement has resulted in an extension to the

previous minimum work commitments on the block and now

requires that an exploration well be drilled within

two years of the signing of the new PSC.

African Petroleum and Ophir Energy are now working

towards the drilling of an exploration well on CI-513

in 2017. Ophir Energy will contribute an additional

10% (over and above their participating interest

share) towards the drilling of the first exploration

well to be drilled on the block.

The Gambia & Senegal

The Company is continuing advanced farm-out

discussions with several interested parties across the

Company's Gambia and Senegal assets. These farm-out

discussions are being conducted in conjunction with

meetings and discussions with the Governments of The

Gambia and Senegal with a view of aligning the

requirements of the potential incoming partners with

the respective licence terms and obligations.

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 the year, including

significant gas discoveries at Tortue, Geumbeul-1 and

Ternanga-1, and the successful appraisal well at

Ahmeyim-2.

Although African Petroleum was unable to deliver on a

farm-out transaction in The Gambia or Senegal in H1

2016 due to 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.

Post period end, the Company announced that that it

had signed a Letter of Intent ("LOI") with an

undisclosed International E&P company with respect to

Licences A1 and A4, offshore The Gambia. 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 conditional upon African

Petroleum confirming the extension of the exploration

periods of both licences by at least 12 months by the

Government of The Gambia, and is subject to ongoing

due diligence and commercial negotiations.

BOARD RE-STRUCTURE

On 23 May 2016 it was announced that Mr Charles

Matthews, Non-Executive Chairman, had retired as

Chairman and Non-Executive Director in order to pursue

other business interests. Dr David King, who was

serving as a Non-Executive Director of the Company

since July 2013, assumed the position of Non-Executive

Chairman, effective from the retirement of Mr Matthews.

Dr King is a professional geoscientist and has over 35

years of experience in oil and gas and other natural

resources industries. He holds an MSc in Geophysics

from Imperial College, London, and a PhD in Seismology

from the Australian National University, Canberra.

After starting a career in academia, including 2 years

as Research Fellow at the Norwegian Seismic Array

facility at Kjeller, Dr King worked in oil and gas

exploration across a broad range of geographies. He

co-founded, as well as held executive and non-

executive board positions with, a number of successful

ASX listed oil and gas exploration companies,

including Eastern Star Gas Limited, Gas2Grid Limited

and Sapex Limited. He has also served as Managing

Director of ASX listed gold producer North Flinders

Mines, CEO of oil & gas producers Beach Petroleum and

Claremont Petroleum, and Chairman of Robust Resources

Ltd. Dr King is currently Non-Executive Chairman of

two ASX listed companies: oil and gas exploration

company Galilee Energy Limited, and biotechnology

research and development company, Cellmid Limited.

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, Liberia 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.

Please refer to the next section "Licence Information"

for further information on specific licences.

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.

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 A1 and A4 licences currently require the Company

to drill an exploration well on either of the licences

no later than 1 September 2016. The Company is unable

to meet this drilling commitment and is in positive

dialogue with the Government of The Gambia regarding

an extension of this licence commitment.

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.

Liberia: Blocks LB-08 & LB-09

African Petroleum, through its wholly owned subsidiary

European Hydrocarbons Limited, is both operator and

holder of a 100% working interest in production

sharing contracts LB-08 and LB-09, which have a

combined net acreage of 5,350km2. The Company has

completed an extensive work programme on its Liberian

licences with 5,100km2 of 3D seismic acquired, three

wells successfully drilled, including the discovery at

Narina-1, and identified key prospects.

The current phase of licences LB-08 and LB-09 ended in

June 2016; however, the Company has not received

formal notice of termination and the Company remains

in dialogue with the Government of Liberia regarding a

proposal involving the extension of these licences.

Independent petroleum consultant ERC Equipoise

prepared an assessment of prospective oil resources

attributable to the Company's Liberian licences and

estimates the net unrisked mean prospective oil

resources at 4,192MMStb.

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.

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

September 2015; however, the Company is continuing

discussions with the Government of Sierra Leone to

proceed into the First Extension Period of the SL-4A-

10 licence, having fulfilled the commitment to acquire

3D seismic over the licence.

Post period end, in 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.

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.

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

Whilst the Company acknowledges that the term of

certain assets in our portfolio has technically

expired, we reiterate that we have not received formal

termination of any of our licences and therefore

retain an equity interest in ten licences in five

countries offshore West Africa, including the CI-513

licence in Côte d'Ivoire with our new partner Ophir

Energy. Furthermore, we are maintaining regular

dialogue with the relevant authorities in each of our

countries of operation who acknowledge African

Petroleum's efforts to progress the licences through

significant technical work and substantial historic

investment, against the backdrop of challenging market

conditions that have impacted the Company's ability to

farm-out the licences and complete the required work

commitments in the associated timeframes.

The ongoing dialogue we are having with governments

and potential partners across our asset base gives us

confidence that mutually beneficial farm-out

agreements will be made in the near term, thereby

allowing us to recommence and progress our activity

across the portfolio. Separately, we are excited by

the technical work that we are doing with our partners

Ophir Energy on CI-513 and look forward to the firm

catalyst of exploration drilling in 2017.

STATEMENT OF RESPONSIBILITY

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

condensed set of financial statements for the first

half 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:

For UK and International media - Buchanan

Ben Romney/Chris Judd

Tel: +44 207 466 5000

For Norwegian media - First House

Geir Arne Drangeid

Tel: +47 913 10 458

This information is subject to disclosure requirements

pursuant to section 5-12 of the Norwegian Securities

Trading Act.