THIS DOCUMENT AND ANY ACCOMPANYING DOCUMENTS ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other appropriate independent financial adviser authorised under the Financial Services and Markets Act 2000, as amended ("FSMA") if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

This document comprises a circular prepared in accordance with the Listing Rules and a prospectus relating to the Ordinary Shares prepared in accordance with the Prospectus Rules of the Financial Conduct Authority (the "FCA") made under section 73A of the FSMA. This document has been approved by the FCA in accordance with section 85 of the FSMA and, together with the documents incorporated into it by reference (as set out in paragraph 24 "Information incorporated by reference" of Part IX (Additional Information)), will be made available to the public in accordance with Prospectus Rule 3.2 by the same being made available, free of charge, at www.Afren.com and at Kinnaird House, 1 Pall Mall East, London, SW1Y 5AU.

If you have sold or do sell or have otherwise transferred or do transfer all your Existing Shares held in certificated form prior to the date the shares are traded "ex" the entitlement to the Open Offer, please forward this document and, for Qualifying non-CREST Shareholders, the accompanying personalised Application Form and the enclosed Form of Proxy (and reply-paid envelope) at once to the purchaser or transferee, or the stockbroker, bank or other agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee. If you have sold or otherwise transferred any part of your registered holding of Existing Shares in Afren, please contact your bank, stockbroker or other agent through whom the sale or transfer was effected immediately and refer to the instructions regarding split applications set out in the Application Form, if relevant. However, no Application Form should be forwarded to or transmitted in or into the Excluded Territories where doing so may constitute a violation of local securities laws. See paragraph 6 "Overseas Shareholders" of Part VII (Terms and Conditions of the Open Offer) of this document if you propose to send this document and/or the Application Form outside the United Kingdom.

The distribution of this document and the accompanying documents, and/or the transfer of the Open Offer Entitlements and Excess Open Offer Entitlements through CREST into jurisdictions other than the United Kingdom, may be restricted by law. Therefore, persons into whose possession this document and any accompanying documents come should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws or regulations of any such jurisdiction. In particular, such documents should not be distributed, forwarded to, or transmitted in or into the United States or any Excluded Territory.

Afren plc

(incorporated under the Companies Act 1985 and registered in England and Wales, with registered number 05304498)

Proposed Capital Restructuring

Issue of Ordinary Shares in connection with the repayment of Existing Notes and Bridge Securities and the issue of New Senior Notes

Proposed Open Offer of up to 4,922,491,218 Ordinary Shares at 1 pence per Open Offer Share

Notice of General Meeting

Morgan Stanley

Sponsor and Financial Adviser

The whole of the text of this document should be read in its entirety, including the information incorporated by reference into this document, by any Shareholder and any other person contemplating a subscription of Ordinary Shares. In particular, your attention is drawn to the letter of recommendation from the chairman of Afren which is set out in Part I (Letter from the Chairman to Shareholders) of this document and you should read the section entitled "Risk Factors" of this document for a discussion of certain risks and other factors that should be considered when deciding on what action to take in relation to the Open Offer, and whether or not to subscribe for Ordinary Shares.

Subject to certain exceptions, neither this document nor the Application Form constitutes, or will constitute, or forms, or will form, part of, any offer or invitation to sell or issue, or any solicitation of any offer to purchase or acquire Ordinary Shares to any person with a registered address, or who is located, in the United States, or to any person with a registered address, or who is located, or resident in any of the Excluded Territories. Subject to certain exceptions, the Ordinary Shares are being offered outside the United States only in reliance on Regulation S. The Ordinary Shares have not been and will not be registered under the Securities Act or under securities laws of any state or other jurisdiction of the United States. The Ordinary Shares may not be offered, sold, taken up, resold, transferred or delivered, directly or indirectly, in or within the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirement of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. For a description of these and further restrictions, see paragraph 6 "Overseas Shareholders" of Part VII (Terms and Conditions of the Open Offer) of this document. Therefore, subject to certain exceptions, Application Forms will not be sent to, nor will any Open Offer Entitlements or Excess Open Offer Entitlements be credited to a stock account in CREST on behalf of, any Shareholder with a registered address in the United States. In addition, until 40 days after the commencement of the Open Offer, any offer, sale or transfer of Ordinary Shares in or into the United States by a dealer (whether or not participating in the Open Offer) may violate the registration requirements of the Securities Act.

The Existing Shares are listed on the premium segment of the Official List and traded on the London Stock Exchange's main market for listed securities. Applications will be made to (i) the UKLA for the Ordinary Shares to be admitted to the premium segment of the Official List, and (ii) the London Stock Exchange for the Ordinary Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. It is expected that Admission will become effective and that dealings in the Ordinary Shares issued in connection with the Debt for Equity Swap and the New Senior Notes Share Issue will commence (fully paid and for normal settlement) on 5 August 2015. It is expected that Admission will become effective and that dealings in the Ordinary Shares issued in connection with the Open Offer, the Early Subscriber Issue and the Bridge Securities Share Issue will commence (fully paid and for normal settlement) on 24 August 2015.

The Open Offer closes at 11.00 a.m. on 21 August 2015 and payment is required in full by this time. If you are a Qualifying non-CREST Shareholder and wish to apply or subscribe for Open Offer Shares under the Open Offer, you should complete the accompanying Application Form and return it with your remittance in accordance with the instructions set out in paragraph 4 "Procedure for Application and Payment" of Part VII (Terms and Conditions of the Open Offer) of this document and in the Application Form. If you are a Qualifying CREST Shareholder, the relevant CREST instructions must have settled, as explained in this document, by no later than 11.00 a.m. on 21 August 2015. The Application Form is personal to Qualifying non-CREST Shareholders and cannot be transferred, sold or assigned except to satisfy bona fide market claims. Applications under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.

Notice of the General Meeting of Afren, to be held at the offices of White & Case LLP, 5 Old Broad Street, London EC2N 1DW at 11.00 a.m. on 24 July 2015, is set out at the end of this document. You will find enclosed a Form of Proxy for use at the meeting. Whether or not you intend to attend the General Meeting, you are asked to complete and return the enclosed Form of Proxy in accordance with the instructions printed on it as soon as possible and, in any event, so as to be received by Afren's registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ ("Computershare") by no later than 11.00 a.m. on 22 July 2015 (or, in the case of an adjournment, no later than 48 hours before the time fixed for the holding of the adjourned meeting). You may also submit your proxy electronically at www.investorcentre.co.uk/eproxy using the Control Number, Shareholder Reference Number (SRN) and PIN on the Form of Proxy. If you are a member of CREST, you may be able to use the CREST electronic proxy appointment service. Proxies sent electronically must be sent as soon as possible and, in any event, so as to be received by no later than 11.00 a.m. on 22 July 2015 (or, in the case of an adjournment, no later than 48 hours before the time fixed for the holding of the adjourned meeting). Completion and return of a Form of Proxy will not preclude a Shareholder from attending and voting in person at the General Meeting should they so wish.

No action has been taken by Afren or any other person that would permit an offer of the Ordinary Shares or possession or distribution of this document or any other offering or publicity material in any jurisdiction where action for that purpose is required, other than in the United Kingdom.

The Ordinary Shares being offered and sold outside the United States are being offered and sold in offshore transactions in reliance on Regulation S in transactions not subject to the registration requirements of the Securities Act. Until 40 days after the commencement of the Open Offer, an offer, sale or transfer of Ordinary Shares within the United States by a dealer (whether or not participating in the Open Offer) may violate the registration requirements of the Securities Act.

All Overseas Shareholders, and any person (including, without limitation, a nominee, custodian or trustee) who has a contractual or other legal obligation to forward this document or any Application Form, if and when received, or other document to a jurisdiction outside the UK, should read paragraph 6 "Overseas Shareholders" of Part VII (Terms and Conditions of the Open Offer) of this document.

Certain information in relation to Afren has been incorporated by reference into this document. You should refer to paragraph 24 "Information incorporated by reference" of Part IX (Additional Information) for further details.

Morgan Stanley & Co. International plc ("Morgan Stanley"), which is authorised by the Prudential Regulation Authority (the "PRA") and regulated by the FCA and PRA in the United Kingdom, is acting exclusively for Afren in relation to the Placing and Open Offer and the Restructuring and nobody else, and will not be responsible to anyone other than Afren for providing the protections afforded to customers of Morgan Stanley nor for providing advice in relation to the Placing and Open Offer and the Restructuring, the contents of this document, or any other matter referred to in this document.

Apart from the responsibilities and liabilities, if any, which may be imposed upon Morgan Stanley by the FSMA or the regulatory regime established thereunder, Morgan Stanley accepts no responsibility whatsoever and makes no representation or warranty, express or implied, concerning the contents of this document, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by it, or on its behalf, in connection with Afren, the Ordinary Shares or the Open Offer, and nothing in this document is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. Morgan Stanley accordingly disclaims to the fullest extent permitted by law all and any responsibility and liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this document or any such statement.

Any reproduction or distribution of this document, in whole or in part, and any disclosure of its contents or use of any information contained in or incorporated by reference into this document for any purpose other than in considering an investment in the Ordinary Shares is prohibited. By accepting delivery of this document, each recipient agrees to the foregoing.

This document is dated 19 June 2015.

Summary 5
Risk Factors 25
Expected Timetable of Principal Events 61
Restructuring and Open Offer Statistics 62
Presentation of Information and Notices to Investors 63
Directors, Secretary and Advisers 71
Part I Letter from the Chairman to Shareholders 72
Part II Description of the Business 97
Part III Operating and Financial Review 130
Part IV Unaudited Interim Management Statement 159
Part V Directors, Senior Management and Corporate Governance 171
Part VI Questions and Answers about the Open Offer 192
Part VII Terms and Conditions of the Open Offer 199
Part VIII Taxation 224
Part IX Additional Information 227
Definitions and Interpretation 281
NOTICE OF GENERAL MEETING 298
EXPLANATORY NOTES ON THE RESOLUTION 303
EXPLANATORY NOTES TO THE NOTICE OF THE GENERAL MEETING: 306

SUMMARY

Summaries are made up of disclosure requirements known as "Elements". These Elements are numbered in Sections A-E (A.1—E.7).

This summary contains all the Elements required to be included in a summary for this type of securities and issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements.

Even though an Element may be required to be inserted in the summary because of the type of securities and issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of it being "not applicable".

	Section A – Introduction and Warnings
Element	Disclosure Requirement	Disclosure
A.1	Warning	This summary should be read as an introduction to this document. Any decision to invest in the Ordinary Shares should be based on consideration of this document as a whole by the investor. Where a claim relating to the information contained in this document is brought before a court, the plaintiff investor might, under the national legislation of the Member States of the European Economic Area, be required to bear the costs of translating this document before the legal proceedings are initiated. Civil liability attaches only to persons who have tabled this summary, including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of this document or it does not provide, when read together with the other parts of this document, key information in order to aid investors when considering whether to invest in the Ordinary Shares.
A.2	Any consents to and conditions regarding use of this document	No consent has been given by the Company or any person responsible for drawing up this document to use this document for subsequent sale or final placement of securities by financial intermediaries.

	Section B – Issuer
Element	Disclosure Requirement	Disclosure
B.1	Legal name	Afren plc (the "Company" and, together with its direct and indirect consolidated subsidiaries, the "Group").
	Commercial name	Afren
B.2	Domicile and legal form	The Company is a public limited company incorporated in England and Wales with its registered office situated at Kinnaird House, 1 Pall Mall East, London, SW1Y 5AU, United Kingdom. The Company is registered under company number 05304498. The Company is incorporated under the Companies Act 1985, and the principal laws and legislation, under which the Company operates and under which the Existing Shares were created, are laws of England and Wales (including the Companies Act).

Section B – Issuer
Element	Disclosure Requirement	Disclosure
B.3	Nature of the issuer's current operations and principal activities	Afren is an independent oil and gas exploration and production company focused on the exploration, development and production of oil and gas assets. The Company has a portfolio of producing assets, appraisal and development opportunities, and exploration prospects, with its core producing assets in Nigeria. Afren has further development or exploration interests in Kenya, Tanzania, Ethiopia, Seychelles, Madagascar, Côte d'Ivoire, Ghana, Congo Brazzaville and South Africa and the Kurdistan region of Iraq.
B.4a	Significant recent trends affecting Afren and the industries in which it operates	Average net production for year ended 31 December 2014 was 31,819 bopd (excluding Barda Rash), a year on year decrease of 32% from 47,112 bopd for the year ended 31 December 2013, due to achieving cost recovery on Ebok in the first quarter of 2014, and delays in achieving production ramp-up across Afren's producing asset base in Nigeria.
		The Company had a 42% decrease in revenues year on year from US\$1,644.3 million for the year ended 31 December 2013 to US\$945.8 million in the year ended 31 December 2014 reflecting lower production volumes, as well as the impact of lower realised oil prices during the second half of 2014.
		The Company recorded a US\$1,651.1 million loss in the year ended 31 December 2014, mainly due to a reduction in revenue and, given the fall in oil prices, a material impairment charge of US\$1,112 million in respect of the carrying value of the Company's production and development assets and the impact of the curtailment of future capital expenditure on our exploration.
		Events following the dismissal of the Group's former CEO and COO, including the Company's inability to continue the planned refinancing of debt obligations in 2014, as well as the sharp decline in oil prices, have placed significant pressure on the Group's liquidity position, resulting in the Group having net current liabilities of US\$459 million as at 31 December 2014.
		In January 2015, Afren outlined its intention to review its strategic options in respect of the Barda Rash field in the Kurdistan region of Iraq after disappointing operational results at the field and a significant reserves and resources downgrade, eliminating gross 2P reserves and revising gross 2C resources from 1,243 mmbbls to around 250 mmbbls. The movement in reserves at Barda Rash has led to a material impairment charge in the year ended 31 December 2014 of US\$932.6 million, which contributed to the loss recorded in 2014 as described above.
		Historically, crude oil prices have been highly volatile. For example, oil price volatility was particularly pronounced in 2014 as average prices for Brent crude oil decreased by 9.1% from US\$108.8/bbl for the year ended 31 December 2013 to US\$98.9/bbl for the year ended 31 December 2014. Since December 2014, Brent crude oil prices fell further to US\$45.2/bbl as at 13 January 2015 and were approximately US\$61.5/bbl as at 16 June 2015, being the latest practicable date prior to the publication of this Prospectus. Changes in crude oil

Section B – Issuer
Element	Disclosure Requirement	Disclosure
		prices will directly affect the Group's revenues, cash flows and profitability.
B.5	Group description	The Company acts as the holding company of the Group.
B.6	Major Shareholders	On 16 June 2015 (being the latest practicable date prior to the publication of this Prospectus), the following Shareholders have an interest of 3% or more in the Company's issued share capital:
			Number of shares	Percentage issued share capital
		South Atlantic Petroleum Limited Aedos Advisers	78,103,520 55,401,876	7.05% 5.00%

Element	Disclosure Requirement	Disclosure

B.7	Key financial information and		2012 (Restated)	Years ended 31 December 2013 (Restated)	2014
	narrative description of			(US\$ millions)
	significant	Revenue	1,571.4	1,644.3	945.8
	changes to	Cost of sales	(780.9)	(1,179.4)	(626.2)
	financial condition and	Gross profit Administrative expenses Other operating losses	790.5 (55.1)	464.9 (44.8)	319.6 (48.9)
	operating results	—derivative financial instruments —impairment of property, plant and	(60.2)	(46.6)	(8.9)
	of the Group during or	equipment —impairment of exploration and	—	—	(1,205.6)
	subsequent to the period covered by	evaluation assets —impairment of goodwill	(15.0) —	(60.5) —	(839.1) (115.2)
	the historical	Operating profit/(loss)	660.2	313.0	(1,898.1)
	financial information	Finance income Finance costs Other gains/(losses)	1.6 (90.8)	3.9 (157.3)	2.3 (66.9)
		—foreign currency gains —fair value gain/(loss) on financial	0.1	3.6	8.7
		liabilities and financial assets	(2.5)	3.5	0.7
		Share joint venture profit/(loss)	0.3	(26.6)	(1.7)
		Profit/(loss) before tax from continuing activities	568.9	140.1	(1,955.0)
		Income tax credit/(expense) Profit/(loss) from continuing activities after tax	(380.0) 188.9	334.7 474.8	303.9 (1,651.1)
		Profit/(loss) for the period from discontinued operations attributable to equity holders of Afren plc Profit/(loss) for the year	(2.1) 186.8	38.1 512.9	— (1,651.1)

				Year ended 31 December
			2012	2013
			(Restated)	(Restated) (US\$ millions)	2014
		Operating (loss)/profit for the year from continuing operations
			660.2	313.0
		Operating profit for the year from
		discontinuing operations Depreciation, depletion and amortisation	3.1 380.1	14.7 408.7	— 370.4
		Unrealised (gains)/losses on derivative financial instruments Impairment charge on property, plant and	20.0	4.2	(32.2)
		equipment Impairment charge on exploration and		—
		evaluation assets Impairment charge on goodwill	15.0	60.5 —	839.1 115.2
		Share-based payments (credit)/charge Operating cash flows before movements in	29.4	25.6	(2.3)
		working capital Decrease/(increase) in trade and other operating receivables	1,107.8 (251.9)	826.7 91.7	597.7 36.4
		(Decrease)/increase in trade and other operating payables Decrease/(increase) in inventory of crude	124.2	163.8	(1,898.1) 1,205.6 (84.4)

Disclosure	Disclosure
Requirement
	Sale of derivative financial instruments	—	—	79.9
	Net cash provided by operating
	activities Purchases of property, plant and	974.4	1,038.2	538.7
	equipment	(394.5)	(468.0)	(561.3)
	Exploration and evaluation expenditure	(138.0)	(307.1)	(89.3)
	Acquisition of additional licence rights
	and tax benefits Acquisition of participating interest in	—	(120.0)	—
	licences	(190.2)	—	—
	Cash received on disposal of discontinued
	operations Increase in inventories—drilling spare	1.3	17.5	—
	parts and materials	(18.7)	(5.5)	(61.4)
	Investment inflow	0.5	3.9	0.5
	Net cash used in investing activities	(739.6)	(879.2)	(712.1)
	Issue of ordinary share capital—share
	based plan exercises Purchase of own shares	2.2 —	6.7 —	2.6 (3.1)
	Issue of ordinary share capital—
	non-controlling interest	1.8	—	—
	Investment in subsidiary—additional shares purchased from third parties
	Proceeds from borrowings—net of issue	—	(109.3)	—
	costs	397.4	450.6	245.6
	Repayment of borrowings and finance
	leases Deferred consideration paid	(271.0) (9.7)	(541.3) —	(102.1) (22.0)
	Interest and financing fees paid	(111.0)	(174.7)	(101.0)
	Net cash (used in)/provided by financing
	activities	9.7	(368.0)	20.0
	Net (decrease)/increase in cash and cash equivalents	244.5	(209.0)	(153.4)
	Cash and cash equivalents at beginning of
	period	353.9	598.7	389.9
	Effect of foreign exchange rates Cash and cash equivalents at end of	0.4	0.2	—
	period	598.7	389.9	236.5

			As at 31 December
		2012 (Restated)	2013 (Restated)	2014
			(US\$ millions)
	Assets
	Non-current assets
	Intangible oil and gas assets Property, plant and equipment	851.3 1,853.0	1,090.2 2,052.2	219.6 1,379.9
	Goodwill	115.2	115.2	-
	Deferred tax assets	-	97.5	348.2
	Prepayments and advances to Partners Available for sale investments	88.4 0.9	- 1.3	- -
	Investment in joint ventures	7.8	1.7	-
		2,916.6	3,358.1	1,947.7

	Current assets Inventories	94.4	80.9	164.7
	Trade and other receivables	326.1	209.6	221.8
	Prepayments and advances to Partners	7.4	99.3	64.0
	Derivative financial instruments	-	0.1	-
	Cash and cash equivalents	598.7	389.9	236.5

Disclosure
	1,026.6	779.8	687.0
Total Assets	3,943.2	4,137.9	2,634.7
Liabilities
Current Liabilities
Trade and other payables	(485.4)	(717.2)	(735.3)
Provisions	-	-	(21.0)
Borrowings Current tax liabilities	(216.3) (156.4)	(77.3) (72.3)	(268.4) (15.7)
Deferred consideration on acquisitions	-	(22.0)	(21.0)
Obligations under finance lease	(19.3)	(22.1)	(21.8)
Derivative over own equity	-	-	(57.5)
Derivative financial instruments	(31.3) (908.7)	(28.2) (939.1)	(4.8) (1,145.5)
Net current (liabilities)/assets	117.9	(159.3)	(458.5)

Non-current liabilities
Deferred tax liabilities	(477.6)	(146.3)	(96.0)
Provision for decommissioning Borrowings	(39.4)	(30.1)	(44.0)
Obligations under finance leases	(943.6) (98.1)	(1,051.7) (77.7)	(1,035.6) (56.0)
Deferred consideration on acquisitions	-	(18.1)	-
Other payables	(43.5)	-	-
Derivative over own equity	-	(52.3)	-
Derivative financial instruments	(9.8)	(17.1)	(8.4)
Total liabilities	(1,612.0) (2,520.7)	(1,393.3) (2,332.4)	(1,240.0) (2,385.5)
Net assets	1,422.5	1,805.5	249.2

Equity
Share capital	18.9	19.1	19.2
Share premium Merger reserve	920.3 179.4	926.8 179.4	929.3 -
Other reserves	6.9	27.5	118.0
Retained earnings	265.4	-	-
Accumulated (loss)/profit	-	642.0	(800.1)
Total equity attributable to parent	1,390.9	1,794.8	266.4
company
Non-controlling interest	31.6	10.7	(17.2)
Total equity	1,422.5	1,805.5	249.2

Element	Disclosure Requirement	Disclosure
		Average net production for year ended 31 December 2014 • was 31,819 bopd (excluding Barda Rash), a year on year decrease of 32% from 46,728 bopd for the year ended 31 December 2013, due to achieving cost recovery on Ebok in the first quarter of 2014, and delays in achieving production ramp-up across Afren's producing asset base in Nigeria.
		• The 42% decrease in revenues year on year from US\$1,644.3 million for the year ended 31 December 2013 to US\$945.8 million in the year ended 31 December 2014 reflects lower production volumes principally attributable to a reduced share of production and liftings from the Ebok field following cost recovery and delays with the installation of the CFBx platform due to adverse weather conditions, as well as the impact of lower realised oil prices during the second half of 2014. This followed a 4.6% year on year revenue increase in revenues from the year ended 31 December 2012 and to the year ended 31 December 2013, which reflected Afren's main producing assets in Nigeria, the Ebok and Okoro fields, continuing to perform ahead of expectations.
		A US\$1,651.1 million loss recorded in the year ended • 31 December 2014, mainly due to a reduction in revenue described above and, given the fall in oil prices, a material impairment charge of US\$1,112.1 million in respect of the carrying value of the Company's production and development assets and the impact of the curtailment of future capital expenditure on the Company's exploration. Furthermore, an updated reserves report at the Barda Rash field in the Kurdistan region of Iraq, led to the write-off of the remaining 2P reserves at the field and an additional impairment charge recognised in 2014 of US\$932.6 million. The 2014 result followed an increase in net profit year on year from US\$186.8 million in the year ended 31 December 2012 to US\$512.9 million in the year ended 31 December 2013, principally attributable to the achievement of a tax holiday relating to the Ebok field.
		Events following the dismissal of the Group's former CEO • and COO, including the Company's inability to continue the planned refinancing of debt obligations in 2014, as well as the sharp decline in oil prices, have placed significant pressure on the Group's liquidity position, resulting in the Group having net current liabilities of US\$458.5 million as at 31 December 2014. The Board has therefore concluded that there was material uncertainty as to whether the Group can continue as a going concern.
		• In January 2015, Afren outlined its intention to review its strategic options in respect of the Barda Rash field in the

Element	Disclosure Requirement	Disclosure
		Kurdistan region of Iraq after disappointing operational results at the field and a significant reserves and resources downgrade, eliminating gross 2P reserves and revising gross 2C resources from 1,243 mmbbls to around 250 mmbbls. The movement in reserves at Barda Rash has led to a material impairment charge in the year ended 31 December 2014 of US\$932.6 million, which contributed to the loss recorded in 2014 as described above. • The Company acquired an additional 10.4% of the issued
		share capital of FHN in May 2013 and a further 23.3% in July 2013. Following these acquisitions, the Company holds, directly and indirectly, 78% of the issued share capital of FHN. The Company consolidated FHN into its 2012 results on early adoption of IFRS 10, which led to the restatement of the 2012 results. FHN has a 45% interest in the OML 26 portfolio of assets located in onshore Nigeria.
			As at 31
			March 2015
			Unaudited
			US\$m
		Assets
		Non-current assets Intangible oil and gas assets	221.0
		Property, plant and equipment	1,580.1
		Deferred tax assets	340.4
			2,141.5
		Current assets
		Inventories	125.3
		Trade and other receivables	195.6
		Prepayments and advances to Partners	64.0
		Cash and cash equivalents	100.5
			485.4
		Total assets	2,626.9
		Liabilities
		Current liabilities
		Trade and other payables	(837.0)
		Provisions	(13.6)
		Borrowings	(574.8)
		Current tax liabilities	(23.8)
		Deferred consideration on acquisitions	(21.5)
		Obligations under finance lease Derivatives over own equity	(23.8) (58.9)


		Derivative financial instruments	-
			(1,553.4)
		Net current liabilities Non-current liabilities	(1,068.0)

Element	Disclosure Requirement	Disclosure
		Provision for decommissioning	(37.9)
		Borrowings	(721.3)
		Obligations under finance leases	(50.3)
		Derivative financial instruments	(11.8)
			(906.4)
		Total liabilities	(2,459.8)
		Net assets	167.1
		Equity
		Share capital	19.2
		Share premium	929.3
		Other reserves	89.0
		Accumulated loss	(852.1)
		Total equity attributable to parent company	185.4

		Non-controlling interest	(18.3)
		Total equity	167.1
		The above information is derived from Afren's unaudited condensed consolidated financial statements for the three months ended 31 March 2015. The key points in the financial statements during the three months to 31 March 2015 are as follows: The Group's revenue of US\$130.3 million (Q1 2014: • US\$269.0 million) and movements in working capital of US\$59.1 million (Q1 2014: US\$169.1 million) were driven by average net production at 36,035 bopd in line with expectations to meet the Group's guidance range for 2015, averaging 23,000 – 32,000 bopd. The fall in revenue was due to lower realised oil prices and production liftings from Ebok utilised to settle a net profit interest ("NPI") liability. NPI represents a contractual profit share payable to previous owners of the Ebok field for which liftings made in settlement are offset against cost of sales	operating cash flows before
		(NPI liftings commenced in the last quarter of 2014). This fall in revenue, together with higher administrative costs • incurred in relation to the Group's recapitalisation and the write-off of Q1 2015 expenditure on certain exploration and evaluation assets, resulted in a loss before tax for the period of US\$48.1 million (Q1 2014: profit before tax of US\$55.8 million). Although the Group continues to reflect the benefit of a five-year tax holiday at the Ebok field, a tax charge of US\$5.0 million was recorded for Q1 2015 (Q1 2014: US\$16.7 million credit). principally relates to the current tax charge at Okoro. This resulted in a loss after tax of US\$53.1 million (Q1 2014: US\$72.5 million profit after tax).	The tax charge for Q1 2015

Section B – Issuer
Element	Disclosure Requirement	Disclosure
		the three months to 31 March 2015 was US\$59.1 million (Q1 2014: US\$169.1 million). This decrease was primarily attributable to lower revenue. Net cash generated by operating activities was US\$84.0 million (Q1 2014: US\$114.2 million). The narrowing of the decrease compared to operating cash flow before movements in working capital reflects a reduction in the inventory of crude oil compared to the respective year-ends.
		The Group spent US\$212.0 million developing its assets • (US\$209.7 million investment in producing and development assets and US\$2.3 million on exploration and evaluation projects). The investment in producing and development assets included US\$128.9 million in respect of various drilling and enhancement activities at Ebok.
		Gross debt at 31 March 2015 was US\$1,296.1 million, • excluding finance leases. Cash at bank at 31 March 2015 was US\$100.5 million, resulting in net debt (excluding finance leases) of US\$1,195.6 million (31 December 2014: gross debt of US\$1,304.0 million; cash of US\$236.5 million; and net debt of US\$1,068 million).
		• There are no material changes to either the contingent liabilities or post balance sheet events, from those previously disclosed within the 2014 annual report and accounts.
		There has been no significant change to the financial condition and operating results of the Group since 31 March 2015, the date to which the latest financial information of the Group was published.
B.8	Key pro forma financial information	None
B.9	Profit forecast or estimate	Not applicable. No profit forecast or estimate made.
B.10	Description of the nature of any qualifications in the audit report on the historical financial information	Not applicable. There has been no qualification of the audit reports incorporated into this document by reference for the years ended 31 December 2014, 2013 and 2012. Whilst not qualified, the audit report for the year ended December 2014 included an emphasis of matter regarding a material uncertainty in respect of going concern.
B.11	Working capital	The Company is of the opinion that, taking into account the proceeds of the Restructuring, as at the date of this document the Group does not have sufficient working capital for its present requirements, that is, for at least the 12 months following the date of this document.
		Alongside the announced Restructuring on 13 March 2015, the

Element	Disclosure Requirement	Disclosure
		Company announced a revised business plan (the "2015 Business Plan") that reflected the Directors' intention to maintain an operating business focused on its core producing assets. The Company has reviewed its working capital requirements under (a) the Restructuring being approved by shareholders, (b) the Restructuring not being approved by shareholders (the Alternative Restructuring) and (c) the Restructuring and Alternative Restructuring not completing. The Company has reviewed its working capital requirements under the RWC Scenario with a number of risks assumed to adversely impact on the working capital of the Group.
		a. Restructuring being approved by shareholders
		If the Restructuring is implemented, under the RWC Scenario there is a forecast maximum cash deficit of US\$301.7 million in the next 12 months (occurring in May 2016), taking into account the proceeds of the Restructuring and the mitigating actions under the Company's control, with the initial headroom breach of approximately US\$18.8 million forecast to occur in August 2015.
		b. Restructuring not being approved by shareholders (Alternative Restructuring)
		If the Alternative Restructuring is implemented, under the RWC Scenario there is a forecast maximum cash deficit of US\$302.2 million in the next 12 months (occurring in May 2016), taking into account the proceeds of the Alternative Restructuring and the mitigating actions under the Company's control, with the initial headroom breach of approximately US\$18.8 million forecast to occur in August 2015.
		c. Restructuring and Alternative Restructuring not completing
		If the Restructuring and the Alternative Restructuring do not complete, the Directors believe that the Group would face an immediate risk of being unable to meet its contractual obligations when they fall due and in such circumstances shareholders would be very unlikely to receive any return of their current investment as explained below:
		• Afren Resources will be in breach of its obligations under the Ebok Facility and will be required to pay the two amortisation payments of US\$50 million under the Ebok Facility which were due on 31 January 2015 and 30 April 2015 and which were deferred as part of the negotiation of the terms of the Restructuring;
		• the Company shall be liable to pay US\$15 million of accrued and unpaid interest under the 2016 Notes which was due on 1 February 2015 and which was deferred as part of the negotiation of the terms of the Restructuring;
		• the Company shall be liable to pay US\$12.8 million of accrued and unpaid interest under the 2019 Notes which was due on 8

Element	Disclosure Requirement	Disclosure

		April 2015 and which was deferred as part of the negotiation of the terms of the Restructuring;
		the Company shall be liable to pay US\$11.9 million of accrued • and unpaid interest under the 2020 Notes which was due on 9 June 2015 and which is unlikely to be paid following the expiry of the 30 day grace period;
		• the Company will be required to pay further amortisation payments of US\$50 million each under the Ebok Facility which are due on 31 July and 31 October 2015 and 31 January 2016;
		• the Okwok/OML 113 Facility will be due and payable in full (in the amount of US\$50 million plus accrued interest) on 30 September 2015;
		• the 2016 Notes will be due and payable in full (in the amount of US\$253 million plus accrued interest) on 1 February 2016;
		the Bridge Securities will be due and payable in full (in the • amount of US\$211.6 million plus accrued interest) on 25 April 2016 (save that the non-approval of the Restructuring or the Alternative Restructuring shall be an event of default); and
		the New Senior Notes, which would have provided a further • net US\$148 million in cash to the Group, will not be issued.
		The Group will also be in default under the 2016 Notes and 2019 Notes (and the 2020 Notes upon the expiry of the grace period noted above) for non-payment of interest when previously due.
		If the Restructuring and the Alternative Restructuring do not proceed, the Directors are of the opinion that, given the defaults under the Group's existing borrowings, the Group will be unable to meet its debts as they fall due. In such circumstances:
		• the Company would cease trading and the subsidiaries of the Company would become subject to applicable insolvency processes; and/or
		the Ebok Lenders would be able to enforce their security over • the shares in Afren Resources and thereby acquire the Group's interest in OML 67; and/or
		the OML 26 Lender would be able to enforce its security over • the shares in FHN and thereby acquire the Group's interest in OML 26; and/or
		the Okwok/OML 113 Lender would be able to enforce its • security and thereby acquire the Group's interest in Okwok; and
		• Shareholders would be very unlikely to receive any proceeds from the sale of the Group's assets or other return of income or

Element	Disclosure Requirement	Disclosure
		capital by the Company.
		Additional Actions To Improve The Company's Working Capital
		In addition to the mitigating actions under its control, the Group has certain additional actions available to pursue to improve its working capital position:
		the Group could conserve cash through stricter working capital • management (which may deliver limited benefits by further stretching payment terms with creditors and suppliers but which is not expected to be a long-term solution);
		• the Group could further reduce planned capital expenditure, including drilling wells and placing operating assets on care and maintenance (which may be achievable, subject to existing contractual obligations and commitments under the relevant licences, but would adversely affect the Group's ability to maintain production and therefore revenue);
		• the Group could further reduce its cost base (which may be achievable through additional headcount reduction but which could require additional up-front costs and could, adversely affect the Group's operational capabilities);
		• the RWC Scenario assumes higher royalties based on an adverse interpretation of the marginal field tax regime. The Company would intend to continue to pay at the previously agreed and accepted rates whilst disputing any proposed increase through negotiations and thereby deferring payment;
		the Group would also look at disposals of certain non-core • assets, farming out additional acreage and subleasing the rig, thus significantly reducing the capital exposure (although there is no certainty that such sales or farm-outs could be realised in the available timeframe on acceptable terms or at all). Any such disposals will also be subject to the Listing Rules on substantial transactions and the agreement of certain partners and suppliers; and
		the Group would seek to renegotiate or defer existing • contractual obligations in respect of amounts due to creditors including suppliers, bank facilities and noteholders (although there is no certainty that such agreements could be obtained or obtained on terms acceptable to the Group).
		Under the Restructuring, the Group would benefit from 50% of any proceeds raised via the Open Offer of up to US\$75 million, the other 50% of the proceeds is required to repay debt. The Open Offer is not included in the RWC Scenario as the Open Offer is not underwritten.
		In addition, certain market and operational factors could benefit the forecast working capital shortfall including, but not limited to:

Section B – Issuer
Element	Disclosure Requirement	Disclosure
		an improvement in global oil prices; •
		ongoing production achieving rates at or exceeding those • planned during the period;
		• lower costs being incurred for future expenditure through improved terms in the light of longer term low oil prices;
		improved differentials for crude sold being achieved; •
		cash receipts for the settlement for underlifted crude oil on • OML 26 in line with the Company's position; or
		improved cash flow agreement with ExxonMobil/NNPC • regarding NPI share on Ebok.

Section C – Securities
Element	Disclosure Requirement	Disclosure
C.1	Type and class of securities	The Open Offer Shares are ordinary shares in the capital of the Company.
		Pursuant to the Open Offer, the Company is proposing to offer up to 4,922,491,218 new Ordinary Shares to all Qualifying Shareholders at 1 pence per Ordinary Share.
		The Excess Shares being offered are new Ordinary Shares.
		When admitted to trading, the new Ordinary Shares will be registered with ISIN number GB00B0672758 and SEDOL number B067275.
C.2	Currency of the securities issue	Pounds Sterling.
C.3	Issued share capital	On the Record Date the Company had 1,107,560,524 Shares and the nominal share capital of the Company amounted to £11,075,605.24.

	Section C – Securities
Element	Disclosure Disclosure Requirement
C.4	Description of the rights attaching to the securities	The Ordinary Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Shares, including the right to all future dividends and other distributions declared, made or paid.
		Qualifying Shareholders may apply for any whole number of Ordinary Shares up to and including their maximum entitlement. The Excess Application Facility enables Qualifying non-CREST Shareholders to apply for Excess Shares in excess of their Open Offer Entitlement up to a maximum aggregate number of Excess Shares not exceeding (a) 4,922,491,218 Open Offer Shares in aggregate for all Qualifying Shareholders and (b) 984,498,244 Open Offer Shares in aggregate for all Qualifying Shareholders who are Existing Shareholders. If there is an over-subscription resulting from excess applications, allocations in respect of such excess applications will be scaled down at the discretion of the Company, with the intention that the Company will prioritise applications from Existing Shareholders.
C.5	Restrictions on the free transferability of the securities	Not applicable. There are no restrictions on the free transferability of the Shares.
C.6	Admission to trading	The Existing Shares are listed on the premium segment of the Official List and are traded on the London Stock Exchange's main market for listed securities.
		Application will be made to the UKLA and to the London Stock Exchange for the Restructuring Shares to be admitted to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities. It is expected that Admission will become effective, and that dealings in Ordinary Shares issued in connection with the Debt for Equity Swap and the New Senior Notes Share Issue will commence on 5 August 2015 at 8.00 a.m. (London time). It is expected that Admission will become effective, and that dealings in Ordinary Shares issued in connection with the Open Offer, the Early Subscriber Issue and the Bridge Securities Share Issue will commence on 24 August 2015 at 8.00 a.m. (London time). The Ordinary Shares will not be listed on any other regulated market.
C.7	Dividends and dividend policy	No dividends were declared or paid during 2014 to holders of Existing Shares.
		If oil prices remain at their current levels, it is highly likely that no dividends would be declared, made or paid and that Afren would be unable otherwise to return any value to its Shareholders.
		The Company may by ordinary resolution declare dividends and fix the time for payment thereof, but no dividend shall be payable except out of profits of the Company available for distribution in accordance with the Companies Act or in excess of the amount, or at any earlier date than, recommended by the Directors.

Section D – Risks
Element	Disclosure Requirement	Disclosure
D.1	Key information on the risks specific to the issuer	Shareholders should carefully consider the following risks: If Shareholders do not approve the Resolution at the General • Meeting and the Alternative Restructuring is implemented it is highly likely that there would be no value returned to Shareholders under the terms of the Alternative Restructuring. The amended economic terms of the New Senior Notes, the obligation to pay US\$934 million in principal and accrued interest under the New 2019 Notes, the New 2020 Notes and the New 2021 Notes, together with the requirement to initiate a sale of the Group's business, will mean that Shareholders would be unlikely to see any proceeds from the sale of the Group's assets or other return of value by the Company.
		The Restructuring is subject to conditions other than to vote in • favour of the Resolution; failure of fulfilling any one of these conditions will result in the Restructuring not proceeding. If the Restructuring (or the Alternative Restructuring) does not proceed, the Directors are of the opinion that the Group will be unable to meet its debts as they fall due in which circumstances the Company would cease trading and the subsidiaries of the Company would become subject to applicable insolvency processes.
		Even if the Restructuring does proceed, the ability of the Group • to be in a position to return value to Shareholders for their investment is highly dependent, among other factors, on oil and gas prices, the level of production of oil by the Group, the ability for the Group to reduce its costs and operational cost base, the development of existing appraisal assets, and the ability of the Group to continue to make oil and gas discoveries and monetise such discoveries.
		The Group's future revenues, profitability, cash flows, • borrowing capacity and rate of growth depend substantially on prevailing prices for crude oil and so the Group may be adversely affected by a substantial or extended decline in prices for crude oil.
		The majority of Afren's current production is obtained from • two fields located offshore Nigeria – Ebok and Okoro – which represent approximately 95% of Afren's production for the year ended 31 December 2014. If production at such assets is delayed or interrupted, Afren's ability to generate revenue would be harmed, which would have a material adverse effect on its business, financial condition and results of operations.
		At 31 December 2014, Afren had approximately US\$1,304 • million in total indebtedness outstanding and if the Restructuring completes, Afren will have approximately US\$1,534 million in total indebtedness outstanding immediately after the completion of the Restructuring. Afren is subject to the risk that over the longer term it will be unable to

	generate sufficient cash flow, or be able to obtain sufficient funding, to satisfy its obligations to service and/or refinance its indebtedness. This could limit Afren's financial and operational flexibility, and as a result could have a material adverse effect on Afren's business, financial condition and results of operations.
•	The Group's debt service obligations and requirements to comply with related covenants may adversely affect its business, financial condition and results of operations.
•	Afren conducts the majority of its operations through partnerships with indigenous companies and in some cases is restricted in its ability to control the operation or future development of such assets, which may increase the risk of delays, additional costs or the suspension or termination of the licences or the agreements pursuant to which it operates.
•	The Group must continue to make significant capital expenditures in order to maintain its production levels and improve overall efficiency. The inability to finance these and other expenditures could have a material adverse effect on the Group's business, financial condition or results of operations.
•	Afren has experienced significant management changes in 2014. If the Group's new CEO is unable to implement the Company's strategy or if the Group is unable to strengthen its Board its business could be harmed.
•	Afren depends on key members of management and technical, financial and operations personnel and on its ability to retain and hire new qualified personnel and consultants to effectively manage its business and to implement its 2015 Business Plan.
•	Violation or circumvention of Afren's corporate governance policies and code of conduct, or the Company's internal controls and procedures, could have a material adverse effect on Afren's business, financial condition and results of operations.
•	There have been two instances of the Group failing to comply with its reporting obligations under the Listing Rules, in that such transactions were considered to be outside of the ordinary course of business. Afren cannot guarantee such breaches will not result in regulatory action, which could have an adverse effect on the business and financial condition of the Group.
•	Afren's operations are subject to the risk of claims or litigation, which has the potential to materially adversely impact Afren's business, results of operations or financial condition.
•	The Nigerian Government and third parties may cease treating Afren's subsidiary and commercial partners as indigenous companies.
•	Oil and natural gas development and exploration activities are dependent upon the availability of drilling and related equipment in the particular areas where such activities will be conducted. Failure to obtain necessary equipment, third party services and transportation systems could materially and

		adversely affect Afren's business, financial condition, and results of operations.
		The countries in which the Group operates face political, • economic, fiscal, legal, regulatory and social uncertainties while uncertainties in the interpretation and application of laws and regulations in the jurisdictions in which Afren operates may affect the Group's ability to comply with such laws and regulations which may increase the risks with respect to the Group's operations.
D.3	Key information	Shareholders should carefully consider the following risks:
	on the risks specific to the securities	• Shareholders and prospective investors should be aware that the value of an investment in Ordinary Shares may go down as well as up. The market price of Ordinary Shares may be subject to fluctuations due to a change in sentiment in the market regarding Ordinary Shares and may not always reflect the underlying asset value.
		• The Shares are, and any dividends to be paid in respect of them will be, denominated in pounds sterling. An investment in Ordinary Shares by an investor whose principal currency is not pounds sterling exposes the investor to foreign currency risk.
		Application for Admission of the Ordinary Shares offered in the • Open Offer and the new Shares in the Restructuring is subject to the approval of the UK Listing Authority and Admission will become effective as soon as a dealing notice has been issued by the UK Listing Authority and the London Stock Exchange has acknowledged that Ordinary Shares (nil and fully paid) will be admitted to trading. As such, admission of the new Ordinary Shares may not occur when expected.
		• Subject to certain exceptions, the exercise of rights under the Open Offer will not be available to any Shareholders with a registered address in the United States, and such Shareholders may as a result experience dilution of ownership in Afren.
		Shareholders who do not acquire Ordinary Shares in the Open • Offer will experience a dilution in their ownership of Afren.

Section E – Offer
Element	Disclosure Requirement	Disclosure
E.1	Total net proceeds and estimate of total expenses of the offer, including estimated expenses charged to investors	Assuming the Open Offer is subscribed in full, the Open Offer proceeds will be approximately £49.2 million (before expenses). However, as the Open Offer is not underwritten, there is no assurance that the Company will receive any proceeds under the Open Offer. The fees and expenses relating to the Restructuring (including the Open Offer and the issue of the Restructuring Shares), including professional fees and expenses and the costs of printing documents, are estimated to amount to approximately US\$63 million and are

Section E – Offer
Element	Disclosure Requirement	Disclosure
		payable by the Company.
		No expenses will be charged to Shareholders who take up their Open Offer Entitlements.
E.2a	Reasons for the offer, use of proceeds, and estimated net amount of	In light of the significant volatility in the industry and related financing markets resulting from the rapid decline in oil prices, as announced in January 2015, the Board initiated a process to review its capital structure, liquidity requirements and funding sources.
	expenses	Assuming the Open Offer is subscribed in full, the Open Offer proceeds of £49.2 million (before expenses), will be applied by Afren as follows:
		50% of the gross proceeds will be used to make payments for a • pro rata reduction in the principal amount outstanding under the Ebok Facility and Okwok/OML 113 Facility; and
		the balance of £24.6 million (before expenses), for general • working capital purposes.
		The Company estimates expenses of the Restructuring will be approximately US\$63 million, which it intends to pay with any proceeds of the Open Offer, as well as the net proceeds of the issue of the New Senior Notes and existing cash balances.
E.3	Terms and Conditions of the offer	The Company proposes to raise up to £49.2 million (approximately US\$75 million) by way of Open Offer subject to, inter alia, the passing by Shareholders of the Resolution at the General Meeting, by the issue of up to 4,922,491,218 new Ordinary Shares. The Offer Price of 1 pence per Ordinary Share, which is payable in full on acceptance by not later than 11:00 a.m. on 21 August 2015, represents a 46.5% discount to the closing middle market price of an Existing Share on 18 June 2015 (being the last business day before the announcement by Afren of the Open Offer) and a 28.3% discount to the theoretical ex-right price of an Existing Share based on that closing price.
		The Open Offer is open to all Shareholders, including those Existing Noteholders who acquire Ordinary Shares pursuant to the Debt for Equity Swap and the New Senior Notes Share Issue.
		Under the Open Offer, Qualifying Shareholders may apply for Open Offer Shares at the Offer Price, payable in full on application, free of all expenses, up to a maximum of their pro rata entitlement, which shall be calculated on the basis of:
		4 Open Offer Shares for every 9 Existing Shares
		held by them and registered in their names at 5.00 p.m. on the Record Date and so in proportion for any other number of Existing Shares then held and otherwise on the terms and conditions set out in this document and, in the case of Qualifying non-CREST Shareholders, the Application Form.

Element	Disclosure Requirement	Disclosure
E.4	Material interests	There is no interest, including any conflict of interest that is material to the Company or the offer of Ordinary Shares.
E.5	Name of person selling securities	Not applicable. The Open Offer Shares comprise an offer of up to 4,922,491,218 new Ordinary Shares issued by the Company.
E.6	Dilution resulting from the Restructuring	The Restructuring will result in substantial dilution for Existing Shareholders in their interests in the Company. Following the implementation of the Restructuring (and assuming that the Open Offer is subscribed in full by all Qualifying Shareholders), the Existing Shareholders, in aggregate, will own up to approximately 9% of the share capital in the Company, and the Existing Noteholders, in aggregate, will own approximately 91% of the share capital in the Company. The following table shows the dilution to the issued share capital for
		each stage of the Restructuring and the cumulative dilution effect for Existing Shareholders.
		Step	Dilution to issued share capital	Cumulative Interests of Existing Shareholders
		Current position	-	100%
		Debt for Equity Swap	80%	20%
		New Senior Notes Share Issue	50%	10%
		Open Offer	-	17%(*)
		Bridge Securities Share Issue	5%	16% (*)
		Early Subscriber Issue	10%	15% ()(*)
		Completion of Restructuring	-	15% ()(*)
		() Assumes that Existing Shareholders subscribe for their Open Offer Entitlements in full. (*) Assumes that the New Senior Notes are issued on or before 7 August 2015 so that the Additional Commitment Issue does not become payable.
		The total number of Ordinary Shares in issue immediately prior to the Restructuring will represent between approximately 6% and 9% of the total number of Ordinary Shares in issue immediately following completion of the Restructuring (depending upon the level of take up in the Open Offer). The new Open Offer Shares will represent between approximately nil and 26% of the total number of Ordinary Shares in issue immediately following completion of the Restructuring.
E.7	Estimated expenses charged to investor by the Company	Nil

RISK FACTORS

Prior to investing in Ordinary Shares, Shareholders and prospective investors should consider carefully the following risks, together with all other information included or incorporated by reference into this document. The following factors do not purport to be a complete list or explanation of all the risks involved in investing in Ordinary Shares. They are based on information known as at the date of this document which the Directors consider to be material, and additional risks and uncertainties not presently known or currently deemed immaterial may also have a material adverse effect on the Group's business, results of operations, financial condition and prospects and the market price of Ordinary Shares. If any of these risks materialise, the market price of Ordinary Shares may decline and Shareholders may lose all or part of their investment. Shareholders and prospective investors should consider carefully whether an investment (or further investment) in the Group is suitable for them in light of the information set out in this document and the documents incorporated by reference into this document and their personal circumstances. If Shareholders or prospective investors are in any doubt about any action they should take, they should consult a competent professional adviser who specialises in advising on the acquisition of listed securities.

1. Risks Relating to the Restructuring

If the Resolution is not passed and the Alternative Restructuring is implemented it is highly likely that there would be no value returned to Shareholders under the terms of the Alternative Restructuring.

In order for the Restructuring to proceed, among other conditions, (i) Shareholders must approve the Resolution and admission of New Shares to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities, and (ii) all conditions precedent in relation to the issue of the New Senior Notes, the Debt for Equity Swap, the New Senior Notes Share Issue and the Early Subscriber Issue and the implementation of the Amended Ebok Facility must be fulfilled. If the Resolution is not approved by Shareholders, the Restructuring will not occur but the Alternative Restructuring may be implemented (subject to the satisfaction of the conditions precedent to the implementation of the Alternative Restructuring).

If Shareholders do not vote in favour of the Resolution, the restructuring of the Group will proceed on the terms of the Alternative Restructuring.

The Alternative Restructuring will result in significantly more indebtedness and a higher cost for such indebtedness.

Under the Alternative Restructuring, the economic terms of the New Senior Notes will be adjusted to significantly increase the principal amount and interest due under such notes, resulting in substantially more expensive debt for the Group. Total debt of US\$1,789 million immediately following the completion of the Alternative Restructuring will rank ahead of Shareholders in right of payment. As compared to the terms of the Restructuring, the amount owing to holders of the New Senior Notes will increase by US\$265 million immediately and by a further US\$372 million over the next two years due to higher interest payable on such notes.

The amended economic terms of the Alternative Restructuring are as follows:

US\$5 million of the Bridge Securities will not be repaid via the issue of New Shares under the Bridge Securities Share Issue and the Bridge Securities will be reinstated and become repayable in full pursuant to the issue of the New Senior Notes;
the Debt for Equity Swap will not be implemented. Instead, approximately US\$234 million of Existing Notes which would have been repaid under the Debt for Equity Swap will become due in December 2021 (with interest at 20.2% per annum payable in kind) (the "New 2021 Notes");
the terms of the New Senior Notes will be amended (the "Alternative New Senior Notes") such that:
o the principal amount of the New Senior Notes will be increased to approximately US\$401 million (from US\$369 million) due to (i) an increased discount of 5% to the issue price of the New Senior Notes, (ii) the early subscription fee being payable by the issue of additional New Senior Notes (rather than in Ordinary Shares pursuant to the Early Subscriber Issue) and (iii) US\$5 million of the Bridge Securities being payable by the issue of additional New Senior Notes; and

o the interest rate on the New Senior Notes will be adjusted, with (i) interest of 7.1% per annum payable in cash on the principal amount of the New Senior Notes, (ii) interest of 2.5% per annum on the principal amount of the New Senior Notes being payable in kind and capitalised quarterly in arrears by the issuance of new payment in kind notes (due in August 2017) with the same terms as the New Senior Notes (the "New Senior PIK Notes") and (iii) interest of 26.9% per annum on the principal amount of the New Senior Notes being payable in kind and capitalised quarterly in arrears by the issuance of new payment in kind notes (due no earlier than six months after the maturity date of the Amended Ebok Facility) which will accrue PIK interest only and rank junior to the New 2019 Notes and the New 2020 Notes (the "New Junior PIK Notes").

Additionally, no new Shares will be issued, either under the terms of the Bridge Securities, the New Senior Notes or pursuant to any equity offering to Existing Shareholders, as a result of which the Company will not receive any proceeds from the Open Offer.

If Shareholders do not approve the Resolution at the General Meeting, including granting authority for the issue of New Shares in connection with the Restructuring, the amended economic terms of the Alternative Restructuring (including the obligation to pay US\$934 million in principal and accrued interest under the New 2019 Notes, the New 2020 Notes and the New 2021 Notes), together with the requirement to initiate a sale of the Group's business by no later than 31 December 2015 (see "The Alternative New Senior Notes will have security over the assets of the Group and the Company will be required to enter into an agreement by no later than 31 December 2016 to dispose of all of its assets" below), will mean that the Shareholders would be unlikely to receive any proceeds from the sale of the Group or the disposal of the Group's assets or other return of income or capital by the Company, and therefore the Shareholders would be unlikely to see any return of their current investment. While Existing Shareholders will therefore continue to own 100% of the issued share capital of the Company, Shareholders would be unlikely to see any return of their current investment under the Alternative Restructuring.

If the Alternative Restructuring is implemented, the Amended Ebok Facility will still become effective in accordance with its terms.

The Alternative New Senior Notes will have security over the assets of the Group and the Company will be required to enter into an agreement by no later than 31 December 2016 to dispose of all of its assets.

Prior to completion of the Scheme, the Group will undertake an internal reorganisation and the issuer of the New Senior Notes and the Reinstated Notes (Afren Finance plc, being the "Notes Issuer", which is a direct subsidiary of the Company) will become the intermediate holding company of the Group. The Notes Issuer (together with Afren International Limited, another direct subsidiary of the Company) will subsequently hold all of the Company's investments in its operating subsidiaries and will also acquire all (or substantially all) of the Company's assets, though the contractual liabilities of the Company (including any guarantees of indebtedness) will remain with the Company (the "Security Reorganisation"). After the completion of the Security Reorganisation, the Company would be dependent on cash from its operating subsidiaries for any of its funding requirements or to satisfy any of its payment obligations. If the Company's operating subsidiaries do not provide funding to the Company in order for it to meet its obligations when they fall due (for example, following any default under the New Senior Notes), the Company may be subject to insolvency proceedings if it cannot raise alternative financing.

The Company has also agreed to grant security over its interests in the Notes Issuer's shares in favour of the New Senior Notes Trustee (for the benefit of the holders of the New Senior Notes (or as applicable the Alternative New Senior Notes)). This security was granted as a condition of the new funding; without this, the Company would not have received the proceeds of the Bridge Securities or the additional funding under the New Senior Notes and it would have been very unlikely to have avoided insolvency proceedings.

The Security Reorganisation and security structure is intended to facilitate the exercise and enforcement of security by the holders of the New Senior Notes (or as applicable the Alternative New Senior Notes) upon any default under such notes. The Security Reorganisation will also provide the necessary flexibility for the Company to dispose of its assets (subject to shareholder approval as required by the Listing Rules) either as a single disposal of shares in the Notes Issuer or the sale of separate operating assets as required by the terms of the Alternative New Senior Notes. The Security Reorganisation will also mean that after any sale of all or substantially all of the Group's business there will be few if any assets left in the Company to meet the claims of Shareholders on any liquidation of the Company.

It will be an event of default under the Alternative New Senior Notes if:

the Company does not take certain steps to initiate a sale of all or substantially all of the Group's business by the end of 2015; and/or
the Company has not entered into an agreement or agreements (each a "sale agreement") for the sale of all or substantially all of the Group's business by the end of 2016; and/or
Shareholders do not approve the terms of any sale agreement when put to them for approval; and/or
any binding sale agreement is terminated as a result of a failure to satisfy conditions of such agreement (other than shareholder approval), provided that such termination shall not in any event be an event of default before 31 March 2017.

The holders of the Alternative New Senior Notes will also have the right to appoint a majority of the Company's Board and the board of Directors of the Notes Issuer and Afren International Limited (each such member, a "Director Nominee"), with control over the process for the sale of the Group's business, under the terms of an investor rights agreement (the "Investor Rights Agreement"). It will be an event of default under the Alternative New Senior Notes if the Company, the Notes Issuer and/or Afren International Limited fail to appoint any Director Nominee or breach the terms of the Investor Rights Agreement. Therefore, the holders of the New Senior Notes will have effective control of the sale process as their nominees will represent a majority of the board of directors that determine to whom and on what terms such assets may be sold.

The Company may dispose of its assets in one or more transactions and to any potential purchaser, including the holders of the New Senior Notes and/or the Reinstated Notes. It would be possible for the Company to sell some or all of its assets to the providers of the Group's debt finance in order to reduce its debt obligations and for the consideration for such sale to be the release of its indebtedness. Accordingly, it is possible that the Group will not actually receive any cash proceeds if its assets are sold to its debt providers in order to discharge its debt obligations.

There will therefore be a limited time for Shareholders to recover value. Shareholders will only receive value if any sales proceeds of the Group's assets are in excess of the amount of the debt.

Under the Listing Rules, the Company will need to obtain one or more prior shareholder approvals for the sale of such assets. If Shareholders fail to approve the sale of such assets (by way of a simple majority of Shareholders attending and voting in general meeting), holders of the Alternative New Senior Notes will be able to accelerate repayment of such notes upon such event of default and enforce their security under the Alternative New Senior Notes (as noted above) without further recourse to shareholder approval. Additionally, there would be cross-defaults to the Group's other facilities which would allow the relevant holders and/or lenders to accelerate the repayment of such facilities at such time.

Accordingly, any failure by Shareholders to approve the terms of the disposal of all or substantially all of the Group's assets would allow holders of the Alternative New Senior Notes, as well as the Group's other secured lenders, to enforce their security and Shareholders would be unlikely to receive any return of income or capital by the Company following such enforcement.

The Restructuring is subject to conditions other than to vote in favour of the Resolution; failure to fulfil any one of these conditions will result in neither the Restructuring nor the Alternative Restructuring proceeding.

The Restructuring comprises a number of inter-conditional steps and transactions. Even if the Resolution is passed, in order for the Restructuring to be implemented there are other conditions that need to be fulfilled, including:

satisfying all relevant conditions precedent under the Amended Ebok Facility and the Amended Okwok/OML 113 Facility;
the approval of the Scheme by the necessary majority of noteholders at the Scheme Meeting (being not less than 75% by value and a majority by number of those attending and voting at the Scheme Meeting);
the implementation of the Security Reorganisation;
the sanction of the Scheme by the Court; and
the sanction of the US Court of the Chapter 15 application.

These same conditions (other than the passing of the Resolution) would also be required to implement the Alternative Restructuring. If any of these inter-conditional requirements are not satisfied (or where possible waived), neither the Restructuring nor the Alternative Restructuring will be implemented. In such circumstances:

Afren Resources will be in breach of its obligations under the Ebok Facility and Afren Resources will be required to pay the two amortisation payments of US\$50 million under the Ebok Facility which were due on 31 January 2015 and 30 April 2015 and which were deferred as part of the negotiation of the terms of the Restructuring;
the Company shall be liable to pay US\$15 million of accrued and unpaid interest under the 2016 Notes which was due on 1 February 2015 and which was deferred as part of the negotiation of the terms of the Restructuring;
the Company shall be liable to pay US\$12.8 million of accrued and unpaid interest under the 2019 Notes which was due on 8 April 2015 and which was deferred as part of the negotiation of the terms of the Restructuring;
the Company shall be liable to pay US\$11.9 million of accrued and unpaid interest under the 2020 Notes which was due on 9 June 2015 and which is unlikely to be paid following the expiry of the 30 day grace period;
the Company will be required to pay further amortisation payments of US\$50 million each under the Ebok Facility which are due on 31 July and 31 October 2015 and 31 January 2016;
the Okwok/OML 113 Facility will be due and payable in full (in the amount of US\$50 million plus accrued interest) on 30 September 2015;
the 2016 Notes will be due and payable in full (in the amount of US\$253 million plus accrued interest) on 1 February 2016;
the Bridge Securities will be due and payable in full (in the amount of US\$211.6 million plus accrued interest) on 25 April 2016 (save that the non-approval of the Restructuring or the Alternative Restructuring shall be an event of default); and
the New Senior Notes, which would have provided a further net US\$148 million in cash to the Group, will not be issued.

The Group will also be in default under the 2016 Notes and 2019 Notes (and the 2020 Notes upon the expiry of the grace period noted above) for non-payment of interest when previously due.

If neither the Restructuring nor the Alternative Restructuring proceeds, the Directors are of the opinion that, given the defaults under the Group's existing borrowings, the Group will be unable to meet its debts as they fall. This is because the Directors believe that the Group's lenders would be highly likely to accelerate the Group's borrowings given the existing events of default under the Group's facilities and other borrowings and the failure of the Group to complete a consensual restructuring. In such circumstances:

the Company would cease trading and the subsidiaries of the Company would become subject to applicable insolvency processes; and/or
the Ebok Lenders would be able to enforce their security over the shares in Afren Resources and thereby acquire the Group's interest in OML 67; and/or
the OML 26 Lender would be able to enforce its security over the shares in FHN and thereby acquire the Group's interest in OML 26; and/or
the Okwok/OML 113 Lender would be able to enforce its security and thereby acquire the Group's interest in Okwok; and
Shareholders would be very unlikely to receive any proceeds from the sale of the Group's assets or other return of income or capital by the Company.

The Company will have insufficient working capital for its present purposes under a reasonable worst case scenario

The Company has reviewed its working capital requirements to deal with the implementation of the Restructuring. The Company has considered a reasonable worst case scenario to its working capital requirements (the "RWC Scenario") with a number of risks assumed to adversely impact on the working capital of the Group.

If the Restructuring is implemented, under the RWC Scenario there is a forecast maximum cash deficit of US\$301.7 million in the next 12 months (occurring in May 2016), taking into account the proceeds of the Restructuring and the mitigating actions under the Company's control, with the initial headroom breach of approximately US\$18.8 million forecast to occur in August 2015.

If the Alternative Restructuring is implemented, under the RWC Scenario there is a forecast maximum cash deficit of US\$302.2 million in the next 12 months (occurring in May 2016), taking into account the proceeds of the Alternative Restructuring and the mitigating actions under the Company's control, with the initial headroom breach of approximately US\$18.8 million forecast to occur in August 2015. However, the implementation of the Alternative Restructuring should allow the Company to continue operations on a funded basis while it negotiates the sale of its business.

In such circumstances, and in the event either the Restructuring or the Alternative Restructuring is implemented, the Group has several actions available to pursue:

the Group could further reduce planned capital expenditure, including drilling wells and placing operating assets on care and maintenance (which may be achievable, subject to existing contractual obligations and commitments under the relevant licences and the agreement of certain partners and suppliers, but would adversely affect the Group's ability to maintain production and therefore revenue);
the Group could further reduce its cost base (which may be achievable through additional headcount reduction but which could require additional up-front costs and could, adversely affect the Group's operational capabilities);
the Group could conserve cash through stricter working capital management (which may deliver limited benefits by further stretching payment terms with creditors and suppliers (which in some cases would need the agreement of such third parties) but which is not expected to be a long-term solution);
the RWC Scenario assumes higher royalties based on a revised interpretation of the marginal field tax regime. The Company would continue to pay at the previously agreed and accepted rates whilst disputing the proposed increase through protracted negotiations. It is unlikely that the higher royalties would be paid in the period under review; and
the Group would also look at disposals of certain non-core assets (e.g. interests in East Africa), farming out additional acreage and subleasing the rig, thus significantly reducing the capital exposure (although there is no certainty that such sales or farm-outs could be negotiated with third parties or realised in the available timeframe on acceptable terms or at all, and such actions may require initial payment of significant contractual break clauses, which would impact short term liquidity). Any such disposals will also be subject to the Listing Rules on substantial transactions and the agreement of certain partners and suppliers.

The RWC Scenario does not include any proceeds from the Open Offer, which may provide up to a further US\$75 million in cash proceeds. If any proceeds are received under the Open Offer, while 50% of such proceeds are required to be applied to partially repay debt under certain of the Group's existing secured facilities, the remainder would be available for general corporate purposes and will thereby improve the Group's overall cash position.

Even if the Restructuring does proceed the Company may be unable to return any value to Shareholders.

Even if the Restructuring does proceed, such that the terms of the Existing Notes are amended, the New Senior Notes are issued, the Amended Ebok Facility becomes effective and the Group receives the injection of capital pursuant to the issue of the New Senior Notes and the implementation of the Open Offer, the ability of the Group to be in a position to return value to Shareholders (either through an increased share price or payment of dividends or a return of capital in the longer term) for their investment is highly dependent, among other factors, on oil and gas prices, the level of production of oil by the Group, the ability for the Group to reduce its costs and operational cost base, the development of existing appraisal assets, and the ability of the Group to continue to make oil and gas discoveries and monetise such discoveries.

The Group has no ability to control the prevailing level of oil prices that it receives and will be dependent on the prevailing market oil price, even though cost reductions and operational improvements should allow the business to be more sustainable in a lower oil price environment compared to the last quarter of 2014. Please refer to the section entitled "Risks Relating to the Oil and Gas Industry—The Group may be adversely affected by a substantial or extended decline in prices for crude oil" in this section of the document for further details. The Group's aim is to ensure that its business is in a strong position to sustain operations at current oil price levels, although it will take time to implement the operational restructuring and see the benefits of such changes. Additionally, while the Group's 2015 Business Plan focuses on capital investment in producing assets, all discretionary spending on exploration projects has been put on hold beyond 2015. See "Risks Relating to the Afren's Business—The Group must continue to make significant capital expenditures in order to maintain its production levels and improve overall efficiency. The inability to finance these and other expenditures could have a material adverse effect on the Group's business, prospects, financial condition and results of operations".

The Company has approached the Ad Hoc Committee with a view to increasing the amount borrowed under the Bridge Securities by an additional US\$30 million in net cash proceeds to provide additional working capital. Any additional borrowing under the Bridge Securities will be repaid out of the proceeds of the New Senior Notes. The Ad Hoc Committee is currently considering such request and there can be no assurance that such funding will be made available. If the Restructuring is implemented, under the RWC Scenario there is a forecast maximum cash deficit of US\$301.7 million in forecast to occur in May 2016, taking into account the proceeds of the Restructuring and the mitigating actions under the Company's, with the initial headroom breach forecast to occur in August 2015 of approximately US\$18.8 million. See "—The Company will have insufficient working capital for its present purposes under a reasonable worst case scenario". Although the Board expects the Company to continue operations on a funded basis following the implementation of the Restructuring, it is possible that the Directors may still seek the protection of a moratorium from creditor claims through instituting insolvency proceedings if the RWC Scenario were to occur and the Company was unable to take mitigating actions (such as those outlined in "—The Company will have insufficient working capital for its present purposes under a reasonable worst case scenario"). This may lead to enforcement sales, administration sales or analogous events without the need for Shareholder consent and which will likely provide no return to Shareholders on their current investment.

The Group may not be able to achieve its planned costs savings, included those planned under the costs savings initiatives under the 2015 Business Plan. In addition, to achieve savings targets, business continuity may be adversely impacted. Where the management intends to implement creditor management programs, these may not be as effective as expected, in particular as a result of supplier fatigue, and suppliers may cease to supply the business adversely impacting operations.

If the crude oil price remains at or near its current level, production remains static or decreases, cost reductions and operational improvements are not successfully implemented and if no new discoveries are made and monetised, it is likely that no dividends would be declared, made or paid and the Group may be unable to invest in its development and appraisal assets, thereby restricting the future growth of the Group outside of its current core producing assets in Nigeria. In such circumstances, it is likely that Afren would be unable to return any value to its Shareholders, or invest in the ongoing monetisation of reserves, as a result of which the market value of the Ordinary Shares may deteriorate.

2. Risks Relating to Afren's Business

The Group may be adversely affected by a substantial or extended decline in prices for crude oil.

The Group's future revenues, profitability, cash flows, borrowing capacity and rate of growth depend substantially on prevailing prices for crude oil. Oil prices also affect the carrying value of Afren's oil and gas properties and the amount and value of Afren's oil and gas reserves. Historically, crude oil prices have been highly volatile. For example, oil price volatility was particularly pronounced in 2014 as average prices for Brent crude oil decreased by 9.1% from US\$108.8/bbl for the year ended 31 December 2013 to US\$98.9/bbl for the year ended 31 December 2014. The price for benchmark Brent crude oil averaged US\$109/bbl for the first half of 2014, essentially on a par with the average price for 2013. As oil demand weakened in the midst of robust supply during the second half of 2014, Brent prices declined significantly to average US\$75/bbl in the fourth quarter and ultimately exit 2014 at US\$55.8/bbl. Since December 2014, Brent crude oil prices fell further to US\$45.2/bbl as at 13 January 2015 and were approximately US\$61.5/bbl as at 16 June 2015, being the being the latest practicable date prior to the publication of this Prospectus. Changes in crude oil prices will directly affect the Group's revenues, cash flows and profitability.

Prices for crude oil are subject to fluctuations in response to a variety of factors beyond the Group's control, including, but not limited to:

the condition of the world economy and geopolitical events, including the impact of recessionary economic conditions on the Group's customers and on consumption levels of crude oil;
changes in the global and regional supply and demand for crude oil and expectations regarding future supply and demand, even relatively minor changes;
the worldwide political and economic environment and uncertainty or instability resulting from an outbreak or escalation of armed hostilities or acts of terrorism, including in the Middle East, North Africa, West Africa, Russia, the Ukraine, the United States or other crude oil-producing regions;
the cost of exploring for, developing, producing and refining crude oil and marketing oil products;
access to pipeline, storage platforms, shipping vessels and other means of transporting and storing crude oil;
prices of, demand for and availability of alternative fuels and new technologies;
the ability of the Organisation of Petroleum Exporting Countries and other crude oil producing nations, through the co-ordination of oil production and supply or otherwise, to influence global production levels and prices;
Nigerian and foreign governmental regulations and actions, including export restrictions and taxes, impacting the crude oil and other industries; and
weather conditions and natural disasters.

The Group does not currently have any contractual hedging protection against fluctuations in crude oil prices. Accordingly, the Group will only receive the market price in its oil sales and is therefore exposed to any future fall in the oil prices. The decrease in crude oil prices in the second half of 2014 has impacted the Group's revenue, has and may continue to reduce the amount of cash flow available to fund the Group's operations and certain capital expenditure projects, which in turn would reduce production volume and exacerbate the decrease in revenue. If prices for the Group's crude oil fall further or remain at lower levels, this would materially adversely affect the Group's business, results of operations, financial condition and prospects, and the trading price of the Ordinary Shares.

Afren's current production is concentrated in two assets and if production at such assets is delayed or interrupted, Afren's ability to generate revenue would be harmed, which would have a material adverse effect on its business, financial condition and results of operations.

The majority of Afren's current production is obtained from two fields located offshore Nigeria – Ebok and Okoro – which represent approximately 95% of Afren's production for the year ended 31 December 2014. As a result of these concentrations, Afren is disproportionately exposed to the effect of disruptions with joint venture partners, loss of licences or interests at these fields, regional supply and demand factors, delays or interruptions of production from wells in this area caused by governmental regulation, processing or transportation capacity constraints, availability of equipment, equipment failure, facilities, personnel or services market limitations, weather events, or interruption of the processing or transportation of oil. Additionally, Afren may be exposed to additional risks, such as changes in field-wide rules and regulations that could cause the Group to permanently or temporarily shut-in all of its wells within the Ebok and Okoro fields. If delays or interruptions in production at these assets occur due to such risks and circumstances, or if Afren's interests in such assets were to be terminated or reduced, or if Afren is in dispute with its joint venture partners, Afren's ability to generate revenue would be harmed, which would have a material adverse impact on its business, financial condition and results of operations. See "—Afren conducts the majority of its operations through partnerships with indigenous companies and in some cases has limited ability to influence or control the operation or future development of such assets, which may increase the risk of delays, additional costs or the suspension or termination of the licences or the agreements pursuant to which it operates".

Afren has a significant amount of indebtedness which limits its financial and operational flexibility.

At 31 December 2014, Afren had approximately US\$1,304 million in total indebtedness outstanding and if the Restructuring completes, Afren will have approximately US\$1,534 million in total indebtedness outstanding immediately after the completion of the Restructuring. Afren is subject to the risk that over the longer term it will be unable to generate sufficient cash flow, or be able to obtain sufficient funding, to satisfy its obligations to service and/or refinance its indebtedness.

Afren's substantial level of indebtedness has important consequences over the longer term, including:

requiring Afren to use a significant portion of cash flow to service its debt obligations, thereby reducing financial flexibility and cash available to finance its operations;
the potential changes in the credit ratings of Afren's debt to affect negatively the cost, terms, conditions and availability of financing, such as the downgrades by Standard & Poor's Financial Services LLC and Fitch Ratings, Inc. in February and March 2015, respectively;
potentially limiting Afren's ability to borrow additional amounts for working capital in the longer term, capital expenditure or debt service requirements, or Afren's ability to refinance existing indebtedness;
increasing Afren's vulnerability to general adverse economic and industry conditions including increases in interest rates and credit spreads; and
restricting Afren's ability to pay dividends or other distributions from retained earnings.

The above factors could limit Afren's financial and operational flexibility, and as a result could have a material adverse effect on Afren's business, prospects, financial condition and results of operations.

The Group's debt service obligations and requirements to comply with related covenants may adversely affect its business, prospects, financial condition and results of operations.

The Ebok Facility contains customary operating and financial covenants restricting the ability of each borrower and each guarantor to, among other things

create security;
make material acquisitions or disposals, sell, lease, transfer or dispose of assets; and
incur indebtedness or issue guarantees (does not apply to Afren).

The Ebok Facility also requires each borrower and each guarantor to observe certain affirmative covenants, including, but not limited to, covenants relating to:

maintenance of relevant authorisations;
compliance with laws; and
payment of taxes.

The indenture governing the New Senior Notes will contain restrictions that substantially limit the financial and operational flexibility of Notes Issuer and the guarantors of the New Senior Notes (including the Company and its operating subsidiaries). In particular, these agreements place limits on their ability to incur additional debt, grant security interests to third persons, dispose of material assets, undertake organisational measures such as mergers, changes of corporate form, joint ventures or similar transactions and enter into transactions with related parties. Other limitations in the terms of the New Senior Notes restrict the Group's ability to pay dividends. The Group's ability to comply with these provisions may be affected by changes in economic or business conditions or other events beyond its control. Further, the Directors may wish to implement the Company's business plan in a way that is not permitted by such restrictive covenants so as to add value to the business as a whole and/or increases the ability of the Group to generate cash in the long term. The Company will not be able to implement such changes to its business plan unless it first obtains consent of the holders of the New Senior Notes, which may not be forthcoming. There can be no assurance that the operating and financial restrictions and covenants in the indenture governing the New Senior Notes will not adversely affect the Group's ability to finance its future operations or capital needs, or engage in other business activities that may be in its best interest.

Further, if the Group does not comply with the covenants and restrictions in the indenture governing the New Senior Notes, it could also be in default under such indenture. Any such default could lead to an acceleration of debt under other debt instruments it is permitted to incur that contain cross acceleration or cross default provisions. If the Group's obligations under the indenture governing the New Senior Notes were to be accelerated, it is possible that the Group's collateral under such indenture would not be sufficient to repay such debt in full.

Additionally, it will be an event of default under the Alternative New Senior Notes if:

the Company does not take certain steps to initiate a sale of all or substantially all of the Group's business by the end of 2015; and/or
the Company has not entered into an agreement or agreements (each a "sale agreement") for the sale of all or substantially all of the Group's business by the end of 2016; and/or
Shareholders do not approve the terms of any sale agreement when put to them for approval; and/or
any binding sale agreement is terminated as a result of a failure to satisfy conditions of such agreement (other than shareholder approval), provided that such termination shall not in any event be an event of default before 31 March 2017; and/or
the Company, the Notes Investor or Afren International Limited breaches the terms of the Investor Rights Agreement.

The holders of the Alternative New Senior Notes will have the right to appoint a majority of the Company's Board and the board of directors of the Notes Issuer, with control over the process for the sale of the Group's business.

The Group's debt service obligations and requirements to comply with related covenants could have negative consequences for the Group in the longer term, including the following:

limiting the Group's ability to obtain additional financing in the future, including its ability to refinance its debt;
because certain of the Group's borrowings are subject to variable interest rates, the Group is exposed to increases in interest rates, thereby reducing the Group's ability to use its cashflow to fund working capital, capital expenditures and general corporate requirements, which could affect the Group's ability to expand its business further in the future;
limiting the Group's flexibility in planning for, or responding to, changes in its business and industry;
limiting the Group's ability to pay dividends; and
placing the Group at a competitive disadvantage to other, less leveraged competitors or those who are not reliant on external funding,

each of which, alone or in combination, could have a material adverse effect on the Group's business, financial condition and results of operations.

Afren conducts the majority of its operations through partnerships with indigenous companies and in some cases is restricted in its ability to control the operation or future development of its assets, which may increase the risk of delays, additional costs or the suspension or termination of the licences or the agreements pursuant to which it operates.

Afren has entered into commercial partnerships with indigenous companies in respect of a majority of its assets. Pursuant to government initiatives to develop the local oil and gas industry in the regions in which Afren operates, licences or agreements to exploit oil and gas are usually initially awarded to indigenous companies who then seek to partner with larger companies with advanced technical competencies and financial resources. For example, Afren holds a 50% working interest in each of the Ebok and Okoro fields with Oriental Energy Resources Ltd ("Oriental") and Amni International Petroleum Development Company Limited ("Amni"), respectively, while Afren holds a 45% interest in OML 26 with the Nigerian National Petroleum Corporation ("NNPC"). As a result, Afren's assets are often subject to joint operating obligations.

In some cases, Afren's ability to control the operation or future development of its assets may be constricted by the contractual terms of such licences and joint operating obligations, including compliance with environmental, safety and other regulations, or the amount of capital expenditures that Afren will be required to contribute based on approved work programmes with respect to such assets, which could cause Afren to incur unexpected future costs or losses. It is also possible that Afren's interests, on the one hand, and those of its indigenous partners or commercial partners, as applicable, on the other, will not always be aligned, resulting in possible project delays, additional costs or disagreements. For example, in April 2015 Afren entered into a settlement agreement with Oriental in respect of certain claims related to the accounting treatment of contributions to the Ebok field. As part of these arrangements, Afren has agreed to transfer to Oriental amounts recovered (excluding those which compensate for legal fees Afren has incurred) from former Directors and officers of the Company in relation to the unauthorised payments issue. A liability for these amounts has been recorded or disclosed in the audited accounts for the year ended 31 December 2014. Afren has also agreed with Oriental that Oriental will fund their share of capex in Ebok. Going forward this will result in a lower share of production following the end of all cost recovery.

Afren may also be subject to claims by its indigenous partners or commercial partners regarding potential non-compliance with Afren's obligations. For example, in March 2015 Afren received a notice from Amni purporting to terminate the production sharing and technical services agreement in respect of Okoro (the "PSTSA") for non-compliance with its terms. Afren believes that (based on legal advice received) Amni had no reasonable basis for purporting to terminate the PSTSA and has rejected such claim and Amni's ability to seek such termination. At present, both Afren and Amni continue to operate under the PSTSA in accordance with its terms and in line with previous practice and Amni has not taken any further steps in connection with the purported termination of the PSTSA. The Company is continuing to monitor this dispute. See "—Afren's operations are subject to the risk of claims or litigation, which has the potential to materially adversely impact Afren's business, results of operations or financial condition".

Similarly, failure by Afren's indigenous partners or commercial partners, as applicable, to comply with the obligations under the relevant licences or the agreements pursuant to which Afren operates may lead to fines, penalties, restrictions, withdrawal of licences and termination of the agreements under which it operates and the obligation for it to meet its partners' obligations under the relevant licence or agreement. Afren has previously had disagreements with its partners as to compliance with the terms of their contractual arrangements. Further, in the event that any of Afren's indigenous partners or commercial partners becomes insolvent or otherwise unable to pay its debts as they come due, licences or agreements awarded to them may revert back to the relevant government authority who will then reallocate the licence. Although Afren anticipates that the relevant government authority may permit it to continue operations at a field during a reallocation process, there can be no assurances that it will be able to continue operations pursuant to these reclaimed licences or that any transition related to the reallocation of a licence would not materially disrupt Afren's operations or development and production schedule. Any reallocation of licences, or any fines, penalties, restrictions, or withdrawal or termination, due to Afren's indigenous partners or commercial partners' failure to meet obligations under a licence or agreement, may delay or disrupt production or development of the related asset and have a material adverse effect on Afren's business, prospects, financial condition and results of operations.

The Group must continue to make significant capital expenditures in order to maintain its production levels and improve overall efficiency. The inability to finance these and other expenditures could have a material adverse effect on the Group's business, prospects, financial condition and results of operations.

The Group's 2015 Business Plan focuses near term future capital expenditures on targeted improvements to further develop and upgrade its core producing assets in Nigeria with the goal of optimising production and maximising oil recovery. For example, the Company plans topside and facilities expenditures to de-bottleneck production facilities, upgrade power and complete the Central Fault Block extension ("CFBx") installation at Ebok in 2015. Similarly, Afren intends to re-engineer the forward work programme at Okoro to develop the Okoro Further Field Development ("Okoro FFD") over two phases from the Okoro main well head platform ("WHP"), which should enable production decline from the main field to be offset with new wells coming on stream from the Okoro FFD. The 2015 programme for OML 26 includes completion of the current five well drilling programme (three wells completed to-date) and five workovers in the second half of 2015. These programmes will require substantial capital expenditure, and the Group's current business plan budgets 2015 capital expenditures at approximately US\$500 million (net of inventory and prepaid costs), of which approximately US\$280 million relates to Ebok. Such spending may be constrained if the Group's revenues continue to decline, the Alternative Restructuring is implemented and/or if new restrictions are placed on the Group's capital expenditures.

In April 2015, Afren agreed with Oriental that in order to retain its participation in the Okwok licence, it will decide by the end of June 2015 on the further development plan and commit to the funding of the field, following completion of the recent development well and a review of the optimum development plan. If it is decided by the end of June 2015 that Afren will not commit to the funding of the field and on further development, it has agreed to transfer its interest in the Okwok field to Oriental. Similarly, the Group has agreed that in order to retain its participation in OML 115 licence, it will decide by the end of 2015 to commit to a development plan, failing which it shall transfer such interest to Oriental. Afren's willingness to commit to such development plans will depend, in part, on the availability of funding to meet such capex obligations. The Company currently anticipates it will proceed with the Okwok further field development, but is in the process of finalising the costs and timing of the related funding commitments for field development. Any loss of such Licences could impact future revenues of the Group. In addition, if the Group's interest in the Okwok licence is transferred to Oriental, this would be an event of default under the Okwok/OML 113 Facility, which may give Access Bank as the Okwok/OML 113 Lender the right to accelerate repayment of the Okwok/OML 113 Facility. This potential event of default may also give rise to a cross-default under the Ebok Facility, the New Senior Notes, the Note Purchase Agreement, the 2016 Notes, the 2019 Notes, the 2020 Notes, entitling the respective lenders and noteholders to require immediate repayment under such agreements. Accordingly, any loss of the Group's interest in the Okwok licence could have a material adverse effect on Afren's business, prospects, financial condition and results of operations.

In the longer term, the Group's ability to secure future debt or equity financing in amounts sufficient to meet its financial needs and capital expenditure could be adversely affected by many factors. If Afren's revenues or reserves decline, it may not be able to raise additional funds (or any external debt or equity financing may not be on acceptable terms) or have the capital necessary (either from internal sources or through external debt or equity financing) to undertake or complete future drilling programmes. Furthermore, any additional debt financing may involve refinancing costs or penalties or restrictive covenants, which may limit or affect Afren's operating flexibility. There can be no assurance that the Group will be successful in obtaining such required financing or that the cost of such financing or the other applicable terms of such financing will not make such financing more onerous than under the facilities available to the Group at present.

If the Group is unable to raise the necessary financing in the longer term, then it will have to revise its planned capital expenditures. Such possible reduction could adversely affect the Group's ability to expand its business and meet its anticipated production levels and, if the reductions are severe enough, they could adversely affect the Group's ability to maintain its production at planned levels.

If the Group's new CEO is unable to implement the Company's strategy, or if the Group is unable to strengthen its Board, its business could be harmed.

Afren has experienced significant management changes in 2014. On 13 October 2014, Afren terminated the employment and directorships of its then-CEO, Osman Shahenshah, and then-COO, Shahid Ullah for gross misconduct in connection with their receipt of unauthorised payments from third parties. Additionally, the Company terminated the employment of its former Associate Directors, Iain Wright and Galib Virani, and took disciplinary action with regard to certain other employees, for receipt of payments in breach of the Company's approved remuneration policy. As a result of such dismissals, the Group lost most of its core senior executive management.

The current management team is actively managing the business in accordance with the 2015 Business Plan approved by the Directors. On 30 April 2015, Afren appointed Alan Linn as the Company's new CEO and on 8 June 2015, Afren appointed David Thomas as COO. On 12 June 2015, the Company announced the resignation of Darra Comyn as a Director, to take effect from the close of the Company's 2015 annual general meeting. The Company is seeking a replacement of Mr. Comyn as Group Finance Director, but he will remain with the Company in that position until the completion of the Restructuring. Additionally, in response to the events covered by the WFG Review (see "—Violation or circumvention of Afren's corporate governance policies and code of conduct, or the Company's internal controls and procedures, could have a material adverse effect on Afren's business, prospects, financial condition and results of operations") and as required by the Bridge Noteholders as a condition to providing the Interim Funding, the Directors are seeking to strengthen the Board and improve the Board's internal management and reporting controls. If the Company is unable to recruit a replacement Group Finance Director or additional or alternative non-executive directors with appropriate experience, it may lack the necessary skills and expertise to provide the necessary oversight of the Group's activities.

The execution of the Group's 2015 Business Plan and its financial performance will continue to depend in significant part on Afren's executive management team and other key management personnel and the smooth transition to new senior leadership, including Alan Linn, the Company's new CEO and any new or additional board members and senior executives. Afren's success will be dependent upon the ability of these individuals to gain proficiency with regard to the Group's business sector and the jurisdictions in which it operates, to implement or adapt the Group's corporate strategies and initiatives, and develop key professional relationships, including relationships with employees, business partners, suppliers and customers. It may take time for Afren's new CEO and new COO (and once appointed, new Group Finance Director) to become sufficiently familiar with Afren's business and other key personnel in the business and the Group's partners to effectively develop and implement the Group's strategy.

In addition, the new CEO and COO could make organisational changes, including changes to the Group's management team, structure and operations, which could prove initially disruptive to the Group's business. If Afren is unable to effect an efficient transition with the CEO and COO (and once appointed, new Group Finance Director), or if the new CEO or COO or any new or additional board members or senior executives should unexpectedly prove to be unsuitable or unable to integrate and implement the Group's 2015 Business Plan, such failure and disruption could adversely impact the Group's ability to compete effectively and materially adversely affect its business, prospects, financial condition and results of operations.

Afren depends on key members of management and technical, financial and operations personnel and on its ability to retain and hire new qualified personnel and consultants to effectively manage its business and to implement its 2015 Business Plan.

Afren's future operating results depend in significant part upon the continued contribution of key management, technical, financial and operations personnel. As described above, in October 2014, Afren terminated the employment and directorships of its CEO, COO and two of its Associate Directors, in connection with their receipt of unauthorised payments from third parties or receipt of payments in breach of the Company's approved remuneration policy. Such former employees had long standing relationships with Afren's commercial partners and other stakeholders that Afren has been required to reassure as to the ongoing management strength of the Group. Afren's management of its business will depend, among other things, on the Group's ability to attract and retain sufficient numbers of qualified personnel (including to fill certain of the vacancies noted above), the continued training of such personnel, the presence of adequate supervision and continued consistency in the quality of the Group's services. Afren does not currently maintain "key person" insurance.

Attracting and retaining additional skilled personnel will be fundamental to the continued growth of Afren's business. Afren requires skilled personnel in the areas of exploration and development, operations, engineering, business development, oil and gas marketing, finance and accounting relating to its projects. Personnel costs, including salaries, have increased as the standard of living rises in the countries in which Afren has assets and as industry-wide demand for suitably qualified personnel increases. No assurance can be given that Afren will successfully attract new personnel or retain existing personnel required to continue to expand its business and to successfully execute and implement its business strategy. In addition, Afren faces competition for trained personnel from international and indigenous oil and gas companies, some of which may be larger or more diversified than Afren and may have greater financial and technical resources.

Violation or circumvention of Afren's corporate governance policies and code of conduct, or the Company's internal controls and procedures, could have a material adverse effect on Afren's business, prospects, financial condition and results of operations.

The Company has been significantly impacted by recent violations of its corporate governance policies and code of conduct by certain of its directors and employees. In 2014, as a result of an independent review of certain transactions undertaken by the Group with Oriental in 2012 and 2013 and with Amni in 2013 (the "WFG Review") (See "—Afren has previously breached its obligations under the Listing Rules and Afren cannot guarantee such breaches will not result in regulatory action, which could have an adverse effect on the business and financial condition of the Group"), outside counsel appointed by the Directors determined that unauthorised payments had been received by the then-CEO Osman Shahenshah and the then-COO Shahid Ullah from a third party. Additionally, two Associate Directors, Iain Wright (Afren's former technical director) and Galib Virani (Afren's former head of M&A), and a further seven current and former employees, had received payments in breach of the Company's approved remuneration policy. In response to the findings in the WFG Review, Afren provided full copies of the WFG Review reports on the unauthorised payments and the breach of the Listing Rules to the FCA and the UK Serious Fraud Office.

On 13 October 2014, the Company terminated the employment and directorships of Mr. Shahenshah and Mr. Ullah for gross misconduct and instructed counsel to commence legal proceedings to recover sums in respect of such unauthorised payments. Afren also terminated the employment of the Company's two Associate Directors with immediate effect, sought to recover the sums in respect of their non-approved payments and commenced disciplinary actions against the additional employees involved in the receipt of unauthorised or non-approved payments.

Afren has subsequently settled its claims against the former CEO and former COO and secured a cash payment from them of US\$17.1 million in relation to the payments made to them that were not authorised by the Board of Directors and a further US\$3 million in respect of the costs to Afren of the independent review conducted by WFG and KPMG and certain legal costs. Afren has agreed that all amounts received by the executives and repaid to the Company will be paid to Oriental, but only following actual receipt by the Company.

On 20 March 2015, the Company also notified the Serious Fraud Office regarding the hire of certain individuals within its operations, in respect of which the Company has preliminary concerns about one hire, and about the payment of certain travel and accommodation expenses connected to Afren's activities, which arose in the course of the WFG Review. The Company is also in communication with the U.S. Attorney's Office for the Southern District of New York and intends to brief the agency on these issues.

There has been no indication from these regulatory authorities as to whether or not regulatory action will be taken. Afren cannot guarantee that relevant government regulators will not pursue an investigation or take other regulatory action against the Company for any breach of applicable law or regulation related to such payments or the circumstances reported on 20 March 2015.

Afren is committed to the highest standards of corporate governance and business ethics. In 2014 (and prior to the results of the WFG Review) Afren had reviewed and updated its corporate governance policies and business code of conduct. In connection with the findings of, and as recommended by, the WFG Review, Afren has committed to implementing Group-wide training on these policies and has taken additional action to enhance the effectiveness of the Company's internal reporting and controls. Despite enhancing internal reporting, policies and controls, there can be no assurance that Afren's policies, procedures and internal controls will be followed at all times or effectively detect or prevent violations of these policies or applicable laws by one or more of Afren's Directors, employees, consultants, agents or partners. Furthermore, the Company's corporate governance policies and procedures and its internal controls may not protect against fraudulent activity. As a result, if Afren fails to prevent any such violations, the Company could be subject to investigation by regulators and, penalties, and such violations may have a material adverse effect on its business, prospects, financial condition and results of operations.

Violations of Afren's corporate governance policies may also damage the Group's reputation. Afren's reputation is important to its business for reasons including, but not limited to, finding commercial partners for business ventures, securing licences with governments, procuring offtake contracts, attracting contractors and employees and negotiating favourable terms with suppliers. Negative publicity, whether arising from the events described above or from any potential litigation, regulatory, supervisory or enforcement actions, could have a material adverse effect on the Group's business, prospects, financial condition and results of operations.

The Ebok Farm-Out Agreement, the Ebok JOA and farm-out agreement in relation to Okwok contain warranties in relation to compliance with anti-corruption laws. A material breach of these warranties could result in early termination if the breach is not cured within a 90 day period. However, it should be noted that the interests in these agreements are with relevant Group member rather than the Company and therefore it is arguable that the interest of each such Group member is not affected by conduct by the Company or other Group member that is not a party to such agreement in breach of these provisions. In addition, the Okwok JOA contains a similar warranty in relation to compliance with anti-corruption laws and no improper payments, although any breach of such warranties would only result in a claim for damages for any loss rather than early termination.

Afren has previously breached its obligations under the Listing Rules and Afren cannot guarantee such breaches will not result in regulatory action or shareholder claims, which could have an adverse effect on the business and financial condition of the Group.

Following receipt of an allegation in the first half of 2014, the Directors instructed WFG to undertake a review of certain transactions undertaken by the Group with Oriental in 2012 and 2013 and with Amni in 2013. The WFG Review concluded that there were two instances of the Group failing to comply with its reporting obligations under the Listing Rules in respect of notifying the market regarding transactions undertaken with Oriental in 2012 and 2013, in that such transactions were considered to be outside of the ordinary course of business. As a result, such transactions should have been announced as class 2 transactions in accordance with the requirements of the Listing Rules in July 2012 and August 2013.

The WFG Review noted that on the instructions of Mr. Osman Shahenshah (the Group's former CEO), the focus of the commercial discussions was on ensuring that the transactions with Oriental were deemed to be in the ordinary course of business, so that the underlying transaction would not be announceable. As the Company's commercial team had made a determination that the transactions were in the ordinary course of business, the Company considered that no announcement was required. Accordingly, the Company did not consult with its sponsor prior to entry into such agreements, although the Directors believed that their advice had been taken.

The WFG Review also noted that these two transactions, together with the further transaction entered into with Amni in 2013 that was subject to the investigation but which was not required to be disclosed in accordance with the Listing Rules, were connected to the issues raised in the WFG Review relating to unauthorised payments.

In response to the findings in the WFG Review, Afren notified the FCA regarding such breaches and made the full WFG Review report available to it. Afren cannot guarantee that the FCA will not pursue an investigation or take other regulatory action against the Company for any breaches of the Listing Rules identified in the WFG Review report. Such sanctions could include a public censure and/or a civil fine. In addition, persons who have suffered loss may be able to bring claims against the Company for any misleading statements in certain information required to be published by the Company, or any dishonest omissions of any matter required to be included in such published information, where such person has actively relied on such information and suffered a loss as a result. Any such claims could have an adverse effect on the business and financial condition of the Group.

While the Company has (and at the time had) in place appropriate controls and procedures to ensure compliance with the Listing Rules, certain former members of senior executive management elected to not comply with them or ensure that the Company consulted with its advisers as appropriate as to the application of the Listing Rules. The WFG Review report made certain recommendations as to improvements that could be made in the Company's internal controls and procedures and the Board has implemented, or is in the process of implementing, the recommendations. The Board is continuing to review its internal policies against such recommendations and best practice. Despite enhancing its internal reporting, policies and controls, there can be no assurance that Afren's policies, procedures and internal controls will be followed at all times or effectively detect or prevent violations of these policies or applicable laws by one or more of Afren's Directors, employees, consultants, agents or partners. Any failure to comply with such policies could result in regulatory action which could have an adverse effect on the business and financial condition of the Group.

Afren's operations are subject to the risk of claims or litigation, which has the potential to materially adversely impact Afren's business, prospects, financial condition and results of operations.

Afren may be subject to claims or litigation arising out of its operations.

For example, since the announcement of the review of the Group's capital structure and funding requirements in January 2015, Afren has received a number of claims for breaches of contract for non-payment of amounts due for services provided and/or the termination of services contracts. These claims have arisen in part due to the liquidity constraints facing the Group, as well as actions taken to reduce costs in line with the revised focus on the Group's core producing assets. Such claims include:

notices of claim by West African Ventures in excess of US\$104 million in termination and cancellation fees, costs, losses and expenses under oil services contracts relating to Okwok and Okoro;
a notice of purported termination from Amni of the PSTSA between AERL and Amni for noncompliance with its terms, arising as a result of AERL's termination of the oil services contract between Amni and AERL relating to Okoro (including a claim that all costs and expenses of AERL's termination of the Okoro field contract are entirely for the account of AERL and that Amni has no obligation to make any contribution in respect of the costs expenses arising from the termination of the Okoro field contract); and
arbitration proceedings by Lion Petroleum for US\$10 million in damages in respect of certain breaches of the JOA signed between East African Exploration (Kenya) Limited and Lion Petroleum in respect of Block 1, Kenya.

Afren disputes and/or has rejected such claims and is in discussions with the relevant claimants regarding potential settlements and/or withdrawal of such claims.

While the magnitude particularly of the Amni claim cannot be quantified at this stage, damages claimed under any litigation may be material or may be indeterminate, and the outcome of such litigation may materially adversely impact Afren's business, prospects, financial condition and results of operations. While Afren assesses the merits of each lawsuit and defends itself accordingly, it may be required to incur significant expenses or devote significant resources to defending itself against such litigation. In addition, the adverse publicity surrounding such claims may have a material adverse effect on Afren's business.

The Nigerian Government and third parties may cease treating Afren's subsidiary and commercial partners as indigenous companies.

Although Afren believes that its subsidiary, First Hydrocarbon Nigeria Limited ("FHN"), as well as certain of its commercial partners are currently indigenous companies under Nigerian law, there can be no assurance that the legal arrangements put in place with respect to its subsidiary, FHN, or the arrangements used by certain of its commercial partners to achieve indigenous status will be interpreted in the manner anticipated, or that Afren will have the power or ability to maintain such status.

While the Nigerian Content Act includes a definition of "Nigerian Company", the definition of an "indigenous company" in Nigeria and the benefits afforded to such a company will remain unclear until the Petroleum Industry Bill ("PIB") is passed. The draft PIB suggests that an "indigenous petroleum company" will be defined as (i) a company engaged in the exploration for and production of petroleum (crude oil and/or gas) and which has its board and management controlled, directly or indirectly, by Nigerian citizens or associations of Nigerian citizens; (ii) a company which meets the requirements of any guidelines or regulations that may be issued by the new industry regulators which will be established under the PIB; or (iii) any company that is listed on any stock exchange in Nigeria with a majority of its directors being Nigerians.

Afren jointly established FHN with two leading Nigerian financial institutions to increase its exposure in Nigeria. Afren currently holds (directly and indirectly) 78.0% of the issued share capital of FHN. Afren has also agreed to purchase the remaining 22% of FHN that it does not acquire by no later than September 2019. Afren's ownership in FHN is structured in order to meet the criteria generally understood under Nigerian oil and gas industry policies for FHN to be classified as an indigenous Nigerian company, with the majority of its equity interest held by Nigerian owners. Afren has split its legal and beneficial holdings in FHN such that it is the legal owner of 43.1% of the issued ordinary shares and does not have control of a majority of the votes conferred by the ordinary shares in FHN, as any change of control of FHN, including a change of voting control, could require prior consent of the Nigerian Minister of Petroleum Resources. The remaining portion of Afren's legal interest in FHN is held in trust for the benefit of the Group and the Group's Nigerian employees by Adcax Investments Limited, a Nigerian-formed trust company.

There can be no assurance that relevant authorities will treat FHN as an indigenous company, or that applicable laws, regulations or policies concerning indigenous preferences will not be changed in the future. For example, it is expected that the PIB will entitle indigenous petroleum companies to certain benefits such as priority in respect of bidding for new oil mining/prospecting licences, however, if FHN or Afren's other relevant commercial partners do not in the future each qualify as an "indigenous petroleum company" then there is a risk that Afren would not benefit from priority in bidding for new oil mining/prospecting licences. In addition, until such time as the PIB is passed, there remains a risk that the provisions dealing with the definition of "indigenous petroleum companies" and any benefits attributed to such companies will be amended in a manner that is adverse to the interests of the Company, which could result in Afren's loss of its interests in certain assets or the application of less advantageous fiscal terms that could have a material adverse effect on its business, prospects, financial condition and results of operation.

There are risks inherent in Afren's geographically diverse portfolio of assets and any strategic geographic consolidation or divestitures or farm-outs of existing operations may prove to be unsuccessful or costly.

Afren has previously undertaken a number of acquisitions of assets across a broad geographic area, including West, East and South Africa and the Kurdistan region of Iraq. To date, Afren's assets are based in Nigeria, the Kurdistan region of Iraq, Kenya, Tanzania, Congo-Brazzaville, Ghana, Ethiopia, Madagascar, Seychelles, Côte d'Ivoire and South Africa. The Group also has operating offices in Lagos, Nigeria, Erbil, the Kurdistan region of Iraq and Nairobi, Kenya, as well as its technical office in Houston, USA and its corporate office in London, England. Managing the Group's business across these regions, time zones and cultures requires significant time and adaptability on the part of senior executives and other personnel and may lead to organisational inefficiencies.

In 2013, Afren successfully completed the disposition of its producing assets in Côte d'Ivoire. In connection with its 2015 Business Plan, the Company is currently actively working on a strategic review of a number of its non-core assets, including in the Kurdistan region of Iraq and Côte d'Ivoire. The Company has currently suspended operations in Barda Rash and is analysing exit strategies in the Kurdistan region of Iraq, including relinquishment of its interests in that region. The Company is considering a range of options, including farm-out agreements and/or disposal of interests, with the purpose of either sharing costs for development of certain assets or reducing the size of its portfolio to provide potential revenue to the business and enable the Company to focus on its core producing assets. To the extent that Afren determines to pursue further divestitures or farmouts or consolidate its business focus geographically, it may not be successful in completing such divestitures or may have to expend substantial amounts of cash, incur debt and continue to absorb loss-making or under-performing divisions. Any divestitures or farm-outs that Afren is unable to complete may involve a number of risks, including diversion of management's attention, a negative impact on its relationships with its partners, costs associated with retaining the targeting divestiture, closing and disposing of the impacted business or transferring business to other facilities, all of which may negatively affect the Group's business, prospects, financial condition and results of operations.

The Group does not insure against certain risks and its insurance coverage may not be adequate for covering losses arising from potential operational hazards and unforeseen interruptions.

Afren considers that the extent of its insurance cover is reasonable based on the costs of cover, the risks associated with its business and industry practice. Afren's insurance currently includes cover for damage to or loss of certain production assets and its crude oil in storage, insurance for out-of-control wells (including coverage for re-drill of and environmental damage caused thereby), third party liability coverage (including employer's liability insurance), directors and officers liability insurance, construction all risks insurance for certain projects, employers liability in the United Kingdom and workers compensation insurance in Nigeria, plus travel, offices and art policies, in each case subject to excesses, exclusions and limitations. There can be no assurance that such insurance will be adequate to cover any losses or exposure for liability or that Afren will continue to be able to obtain insurance to cover such risks. For example, Afren does not have business interruption insurance in place and, therefore, it will suffer losses as a result of shut in or cessation in production.

Afren is unable to give any guarantee that expenses relating to losses or liabilities will be fully covered by the proceeds of applicable insurance. Consequently, Afren may suffer material losses from uninsurable or uninsured risks or insufficient insurance coverage. Afren is also subject to the future risk of unavailability of insurance, increased premiums or excesses, and expanded exclusions. See "—Uncertainties in the interpretation and application of laws and regulations in the jurisdictions in which Afren operates may affect the Group's ability to comply with such laws and regulations which may increase the risks with respect to the Group's operations".

Members of the Group may engage in hedging activities from time to time that would expose the Group to losses should markets move against the Group's hedged position.

The nature of Afren's operations results in exposure to fluctuations in commodity prices. While the Group does not currently have any contractual hedging protection, Afren has historically used financial instruments and physical delivery contracts to hedge its exposure to these risks and may do so in future. If Afren engages in hedging it will be exposed to credit related losses in the event of non-performance by counterparties to the associated financial instruments. Additionally, if product prices increase above those levels specified in any future hedging agreements, Afren could lose the cost of floors or ceilings or a fixed price could limit Afren from receiving the full benefit of commodity price increases. If Afren enters into hedging arrangements, it may suffer financial loss or be required to pay a premium if it is unable to commence operations on schedule or is unable to produce sufficient quantities of oil to fulfil its obligations. In addition, Afren may not be able to find pricing for hedging on suitable terms.

Failure to obtain necessary equipment, third party services and transportation systems could materially and adversely affect Afren's business, prospects, financial condition and results of operations.

Oil and natural gas development and exploration activities are dependent upon the availability of drilling and related equipment in the particular areas where such activities will be conducted. Demand for specialised equipment such as drilling rigs or access restrictions may affect the availability of such equipment to Afren and may delay Afren's development and exploration activities. While low oil prices have currently led to greater availability of certain equipment, in certain areas in which Afren operates there remains a significant demand for drilling rigs and other related equipment. The Group also contracts or leases services and capital equipment from third party providers. Costs of third party services and equipment have increased significantly over recent years. Unavailability or high costs of such services and equipment could result in a delay or restriction in Afren's projects and adversely affect the feasibility and profitability of such projects, and therefore have an adverse effect on Afren's business, financial condition, and results of operations.

Afren's difficult liquidity position has caused the Group to reduce or delay the payment of certain suppliers and, in some cases, suppliers have refused to continue to provide materials, equipment or services to the Group. In some cases Afren has received informal agreements from suppliers to continue to supply the Company on alternative or reduce payment schedules, but the Group cannot guarantee that such supplier goodwill will continue. Some suppliers have also required Afren to make up front payment before such supplier will provide materials, equipment or services to the Group. While Afren continues to align its capital expenditures with its 2015 Business Plan and liquidity position, if the Group is unable to make necessary payments to suppliers or obtain materials, equipment or services required, certain objectives and projects in its 2015 Business Plan may be delayed or restricted and Afren's business, prospects, financial condition and results of operations may be adversely affected.

In addition, some of Afren's equipment supply agreements, including its contract with Mercator Offshore (Nigeria) Limited ("Mercator") in respect of the Floating Storage and Offloading ("FSO") property for Ebok, permit Afren's equipment providers to assign, pledge or otherwise grant security interests to their creditors in the equipment Afren uses or assigns their rights in the contracts governing the services they provide. Although these contracts may contain provisions for services or supply to Afren to continue upon any enforcement of these security interests or otherwise permit Afren to purchase the equipment, any enforcement action by Afren's suppliers' creditors could interfere with its ability to use or obtain the necessary equipment or services, which could have a material and adverse effect on its business, prospects, financial condition and results of operations.

Afren relies upon transportation systems owned and operated by third parties to transport its oil and gas, which may become unavailable. Afren may be unable to access these or alternative transportation systems or could be subject to increased tariffs imposed by such third parties for transportation of its oil and gas. Further, Afren's offtakers could become subject to increased tariffs imposed by government regulators or the third party operators or owners of the transportation systems available for the transport of its oil and gas which could result in decreased offtaker demand and downward pricing pressure. Failure by Afren to secure necessary equipment, third party services and transportation systems could adversely affect Afren's business, prospects, financial condition and results of operations.

Some of the employees engaged by Afren contractors are unionised and wage demands or work stoppages by unionised employees could have an adverse effect on its business, prospects, financial condition and results of operations.

Afren employs local workers, including contractors, in each of the countries in which it operates. Additionally, the contractors which Afren hires have their own employees from the regions in which Afren operates. Some of the employees employed by Afren's contractors are represented by labour unions under collective bargaining agreements, which need to be renewed from time to time. Afren's contractors may not be able to negotiate acceptable new collective bargaining agreements or future restructuring agreements, which could result in labour disputes between the contractors and their employees. Work stoppages due to such disputes may lead to decreased productivity and/or revenue for Afren. For example, in October 2013, protests in northern Kenya related to local content-based activism led certain oil and gas industry participants to temporarily suspend exploration and appraisal operations. Also, Afren may become subject to material cost increases or additional work rules imposed by agreements with labour unions through their relationships with local contractors. This could increase expenses in absolute terms and/or as a percentage of revenue. Although Afren believes it has good relations with its employees and contractors, work stoppages or other labour disturbances may occur in the future, which could have an adverse effect on Afren's business, prospects, financial condition and results of operations.

The Group is subject to foreign exchange and inflation risks, which might adversely affect its financial condition and results of operations.

The Group reports its results of operations and financial condition in US dollars while Afren's share price is quoted on the London Stock Exchange in pounds sterling. As a consequence Shareholders may experience fluctuations in the market price of the Shares as a result of, amongst other factors, movements in the exchange rate between pounds sterling and the US dollar.

Afren's revenues and most of its working capital are in US dollars. Afren converts funds to foreign currencies as its payment obligations in jurisdictions where the US dollar is not an accepted currency become due. Certain of Afren's costs are incurred in currencies other than US dollars, including pounds sterling and Naira. Accordingly, Afren is subject to inflation in the countries in which it operates and fluctuations in the rates of currency exchange between the US dollar and these currencies, and such fluctuations may materially affect Afren's business, prospects, financial condition and results of operations. Consequently, construction, exploration, development, administration and other costs may be higher than Afren anticipates.

3. Risks Relating to the Oil and Gas Industry

The Group's exploration and production operations are dependent on the Group's compliance with the obligations under its licences, contracts and field development plans.

The Group's exploration and development operations must be carried out in accordance with the terms of its production sharing contracts ("PSCs"), oil production licences and oil mining licences (and related farm-in agreements), as applicable (together, the "Licences"), annual work programmes, field development plans and budgets as set forth therein. The relevant legislation provides that fines may be imposed or damages claimed and a Licence may be suspended or terminated if a Licence holder or party to the contract fails to (i) comply with its obligations under such Licence or agreement; (ii) make timely payments of levies and taxes for the licenced activity; (iii) provide the required geological information; or (iv) meet other reporting requirements. The extent of such obligations may be unclear or ambiguous and regulatory authorities in jurisdictions in which the Group does business may not confirm that such work obligations have been fulfilled, which can lead to operational uncertainty.

Each of the Ebok and the Okwok licences expired in March 2015 and to date the Department of Petroleum Resources ("DPR") has not granted any extension in respect of either Licence. However, Afren and its partners expect that the Licences will be renewed on the basis that they have made sufficient progress in the development of the relevant assets and the applications for renewal are in progress. In respect of the Ebok licence, the Group is entitled (under applicable legislation) to an extension for the lifespan of the field, which is in progress following expiry of the current term in March 2015. The Directors do not believe that the implementation of the Restructuring (or the Alternative Restructuring) will affect the renewal of these Licences.

In addition, the Group's subsidiaries, indigenous partners, joint venture partners and associates have obligations to develop the fields in accordance with the specific requirements under the applicable Licences, field development plans, laws and regulations. If they were to fail to satisfy such obligations with respect to a specific field, the Licence for that field may be suspended, revoked or terminated. In some instances, Afren may be jointly and severally liable for required payments pursuant to the terms of the PSCs under which it operates.

Each of Afren's exploration and production licences have incorporated within them detailed work programmes which have to be fulfilled and normally within a specified timeframe. These may include seismic surveys to be performed, wells to be drilled, production to be attained, limits to production levels and construction matters.

The authorities in the countries in which Afren operates can, and do from time to time, inspect the Group's and its indigenous or commercial partners' compliance with its Licences and relevant laws. There can be no assurance that the views of the relevant government agencies regarding the development of the Group's and its indigenous or commercial partners' fields or compliance with the terms of the Group's Licences will coincide with the Group's views, which might lead to disagreements that cannot be resolved.

If oil is discovered during the exploration licence term, Afren is required to apply for a production licence before commencing production. If Afren (and, where applicable, its joint venture partners) complies with the terms of the relevant licence then it would normally expect that a production licence would be issued, however, no assurance can be given that the necessary production licences will be granted by the relevant authorities.

Afren's activities with respect to assets and related agreements that are not currently producing oil or gas are generally limited to exploration and related activities. In accordance with its 2015 Business Plan, the Group intends to put all discretionary activities and spending on exploration within its portfolio on hold beyond 2015. Afren is also actively engaged in negotiations with host government and partners to defer exploration and development commitments to reduce capital expenditures and pressure on cash resources of the business in the near term and to preserve optionality with a portfolio of exploration projects, as these assets potentially hold significant value for the Company. However, there can be no assurance that extensions or deferrals will be granted with respect to expired Licences or that the administrative and regulatory process will not have a material and adverse impact on its business and operations.

In addition, the exploration licences and related agreements pursuant to which Afren operates typically have a limited life before the Group is obliged to seek to extend the exploration period, convert the licence to a production licence or relinquish the licence area. As the expiration date of Afren's Licences approaches, where appropriate in accordance with its 2015 Business Plan, the Group intends on behalf of itself, and its indigenous partners or commercial partners, to seek from the appropriate authorities, time extensions of the relevant Licences or conversions to production licences. However, there can be no assurance that extensions or conversions will be granted with respect to expired Licences or that the administrative and regulatory process will not have a material and adverse impact on the Group's business and operations.

The suspension, revocation or termination of any Licence or related agreements pursuant to which Afren operates, delays in the continuous development of or production at the Group's fields caused by the issues detailed above may have a material adverse effect on Afren's business, prospects, financial condition and results of operations. In addition, failure to comply with the obligations under the Licences or agreements pursuant to which Afren operates, whether inadvertent or otherwise, may lead to fines, penalties, restrictions, withdrawal of Licences and termination of related agreements, which could have a material and adverse effect on Afren's business, prospects, financial condition and results of operations.

Afren faces significant uncertainties in connection with its appraisal, exploration and development activities.

Exploration activities are capital intensive and their successful outcome cannot be assured. While Afren does not intend to pursue further exploration in the near term, it is the Group's vision to be a leading independent oil and gas exploration and production company ("E&P Company"). In a higher oil price environment, Afren's wide portfolio of exploration projects in Africa potentially hold significant value for the Group and Afren may determine to undertake certain exploration activities. For example, the Group believes near-field exploration at Ebok Deep could be quickly commercialised and would be profitable to monetise; gas development at OML 26 could also realise significant condensate upside; and exploration and development of OPL 310 and of the Aje and Ogo fields also presents potentially considerable upside.

In connection with potential exploration activities, Afren may incur significant costs with no guarantee that such expenditure will result in the discovery of commercially deliverable oil or natural gas. Afren's oil and natural gas exploration may involve unprofitable efforts, not only from dry wells, but from wells that are productive but do not produce sufficient net revenues to return a profit after drilling, operating and other costs. Completion of a well does not assure a profit on the investment or recovery of drilling, completion and operating costs.

Afren is exploring in geographic areas where environmental conditions are challenging and costs can be high. The costs of drilling, completing and operating wells are often uncertain. As a result, Afren may incur cost overruns or may be required to curtail, delay or cancel drilling operations because of many factors, including unexpected drilling conditions, pressure or irregularities in geological formations, equipment failures or accidents, adverse weather conditions, compliance with environmental regulations, governmental requirements and shortages or delays in the availability of drilling rigs and the delivery of equipment.

In addition, appraisal results for discoveries are uncertain. Appraisal and development activities involving the drilling of wells across a field may be unpredictable and not result in the outcome planned, targeted or predicted, as only by extensive testing can the properties of the entire field be fully understood. For example, an updated technical report on Barda Rash as at 31 December 2014, carried out as part of Afren's annual reserves review, resulted in a material reduction to previously published estimates of reserves and resources, essentially eliminating gross 2P reserves of 190 mmbbls and revising gross 2C resources from 1,243 mmbbls to around 250 mmbbls.

Under its PSCs and other similar agreements, Afren finances exploration, development and operations and the related facilities and equipment and will only recover its costs if there is successful production in accordance with the terms of these agreements. Difficulties with discovering new wells or wells that produce sufficient return, unexpected increases in appraisal, exploration and development costs, unanticipated decreases in expected returns and failing to meet the production terms under their agreements could adversely affect Afren's business, prospects, financial condition and results of operations.

Dry wells or wells discovering less oil and/or gas than expected may lead to a downgrading of the potential value of Afren's production sharing contracts or require further funds to continue exploration work, and if Afren is unable to replace the reserves, the Group's revenues may decline.

When exploring an area for oil and gas Afren investigates a number of prospects. Should Afren undertake drilling in a particular geographic area but discover no oil and gas (a "dry well") or discover less oil and/or gas than expected or be required to utilise more expensive drilling techniques and supporting infrastructure to extract oil in commercial quantities, this may lead to a downgrading of the potential value of the PSC or licence concerned and perhaps to other PSCs within the same geological basin. This may lead Afren to believe that the other prospects within that geographic area would be less likely to yield exploration success, potentially decreasing the value of Afren's assets. If this is the case, once the minimum work obligations under the relevant PSC have been satisfied or if Afren decides not to comply with the agreed field development plan, Afren may decide to relinquish or reduce its interests in that PSC, in which case it would have no further exploration rights, even though it may have identified a number of additional prospects.

For example, in Afren's annual reserves review, further analysis of 3D seismic and the results of the 2014 drilling campaign resulted in a material reduction to previously published estimates of reserves and resources related to the Barda Rash asset, essentially eliminating gross 2P reserves of 190 mmbbls and revising gross 2C resources from 1,243 mmbbls to around 250 mmbbls. Due in part to the downgrading of these reserves and the anticipated additional costs that would be required to extract oil from these fields, Afren is currently reviewing its strategic options with regard to its Kurdistan assets, including relinquishment of its interests in that region.

Dry wells, or wells in which less oil and/or gas has been discovered than expected, may also result in Afren requiring substantially more funds if it chooses to continue exploration work and drill further wells beyond Afren's existing minimum work commitments. Such funding may be unavailable or may have to be obtained on unfavourable terms, leading to a potential deterioration in Afren's financial position. Drilling a dry well or discovering less oil and/or gas than expected would also mean that Afren may not be able to recover the costs incurred in drilling that well or make a return on its investment resulting in significant exploration expenditure being written off.

Afren's long term future success depends on its ability to find, develop and acquire additional oil and gas reserves that are economically recoverable. While Afren's current reserves are being depleted by production, unsuccessful exploration activities, such as dry wells, would mean that Afren would not be able to replace such reserves and the Group's revenues would decline. Afren may not be able to find or acquire additional reserves at acceptable costs which could have a material adverse effect on its business, prospects, financial condition and results of operations.

The level of Afren's crude oil and gas reserves, their quality and production volumes may be lower than estimated or expected.

The reserves information described in this Prospectus represent estimates only and are based on reports prepared by technical experts, including Netherland Sewell & Associates, Inc. ("NSAI"), RPS Group Plc ("RPS") and AGR TRACS International Limited ("AGR TRACS"), and do not reflect events and activities subsequent to the relevant report dates. In general, estimates of economically recoverable oil reserves and the future revenues therefrom are based on a number of factors and assumptions made as at the date on which the reserves estimates were determined, such as geological and engineering estimates (which have inherent uncertainties), historical production from the properties, the assumed effects of regulation by governmental agencies and estimates of future commodity prices and operating costs, all of which may vary considerably from actual results.

Estimation of underground accumulations of hydrocarbons which cannot be measured in an exact manner is a subjective process aimed at understanding the statistical probabilities of recovery. Estimates of the quantity of economically recoverable oil and gas reserves, rates of production, net present value of future cash flows and the timing of development expenditures depend upon several variables and assumptions, including the following:

production history compared with production from other comparable producing areas;
interpretation of geological and geophysical data;
effects of regulations adopted by governmental agencies;
future percentages of international sales;
future oil prices;
capital expenditure; and
future operating costs, tax on the extraction of commercial minerals, development costs and workover and remedial costs.

As all reserve estimates are subjective, each of the following items may differ materially from those assumed in estimating reserves:

the quantities and qualities that are ultimately recovered;
the timing of the recovery of oil and gas reserves;
the production and operating costs incurred;
the amount and timing of additional exploration and future development expenditures; and
future oil sales prices.

Many of the factors in respect of which assumptions are made when estimating reserves are beyond Afren's control, and therefore these may prove to be incorrect over time. Evaluations of reserves necessarily involve multiple uncertainties. The accuracy of any reserves or resources evaluation depends on the quality of available information and petroleum engineering and geological interpretation. Exploration drilling, interpretation, testing and production after the date of the estimates may require substantial upward or downward revisions in Afren's reserves or resources data. Moreover, different reservoir engineers, including NSAI, RPS and AGR TRACS, may make different estimates of reserves and cash flows based on the same available data. Actual production, revenues and expenditures with respect to reserves and resources will vary from estimates, and the variances may be material.

The uncertainties in relation to the estimation of reserves summarised above also exist with respect to the estimation of resources. The probability that prospective resources will be discovered, or be economically recoverable, is considerably lower than for proven, probable and possible reserves. Volumes and values associated with prospective resources should be considered highly speculative.

If the assumptions upon which the estimates of Afren's oil and gas reserves and resources have been based prove to be incorrect, the Group may be unable to recover and produce the estimated levels or quality of oil, gas and other hydrocarbons set out in this Prospectus, which may have a material and adverse effect on its business, prospects, financial condition and results of operations. See, Presentation of Information and Notices to Investors—Hydrocarbon Data.

The Group faces drilling, exploration and production risks and hazards that may affect the Group's ability to produce crude oil and natural gas at expected levels, quality and costs.

Afren's oil and gas production operations are subject to the risks common to its industry, including premature decline of reservoirs and invasion of water into producing formations, encountering unexpected formations or pressures, premature declines of reservoirs, blowouts, oil spills, explosions, fires, equipment damage or failure, natural disasters, geological uncertainties, unusual or unexpected rock formations and abnormal geological pressures, uncontrollable flows of oil, natural gas or well fluids, adverse weather conditions, shortages of manpower, sabotage of oil and gas pipeline, pollution and other environmental risks.

Afren's operations involve utilising some of the latest drilling and completion techniques as developed by the Group and its service providers in order to maximise cumulative recoveries and therefore generate the highest possible returns. Risks that Afren faces while drilling include, but are not limited to, landing well bore in the desired drilling zone, staying in the desired drilling zone while drilling horizontally through the formation, running casing the entire length of the well bore and being able to run tools and other equipment consistently through the horizontal well bore. Risks that Afren faces while completing its wells include, but are not limited to, being able to fracture stimulate the planned number of stages, being able to run tools the entire length of the well bore during completion operations and successfully cleaning out the well bore after completion of the final fracture stimulation stage.

Afren's production facilities are also subject to hazards inherent in marine operations, such as capsizing, sinking, grounding, vessel collision and damage from severe storms or other severe weather conditions. The offshore drilling conducted by Afren involves increased drilling risks of high pressures and mechanical difficulties, including stuck pipe, collapsed casing and separated cable.

In the event that any of these occur, environmental damage, injury to persons and loss of life, failure to produce oil in commercial quantities or an inability to fully produce discovered reserves could result. They can also put at risk some or all of Afren's licences which enable it to explore and/or produce, and result in Afren incurring fines or penalties as well as criminal sanctions potentially being enforced against Afren and/or its officers. Consequent production delays and declines from normal field operating conditions may result in revenue and cash flow levels being adversely affected. Afren recorded the Group's first fatality in Block 1, onshore Kenya, in 2012 following a road traffic accident involving one of Afren's seismic contractors and there can be no assurances that similar accidents will not happen in the future.

Afren may be required to curtail, delay or cancel drilling operations, well operations or workovers because of a variety of factors, including unexpected drilling conditions, pressure or irregularities in geological formations, equipment failures or accidents, adverse weather conditions, compliance with governmental requirements and shortages or delays in the availability of drilling rigs and the delivery of equipment. The occurrence of any of these events could have a material adverse effect on Afren's business, prospects, financial condition and results of operations.

The marketability and price of oil and natural gas which may be acquired or discovered by Afren will be affected by numerous factors beyond the control of Afren. The ability of Afren to market any natural gas discovered may depend upon its ability to acquire capacity in pipelines which deliver natural gas to commercial markets. Difficulties with marketing its oil and gas may have a material adverse effect on Afren's business, prospects, financial condition and results of operations.

Afren's use of 2D and 3D seismic data is subject to interpretation and may not accurately identify the presence of oil and gas, which could adversely affect the results of its drilling operations.

Even when properly used and interpreted, 2D and 3D seismic data and visualisation techniques are only tools used to assist geoscientists in identifying subsurface structures and hydrocarbon indicators and do not enable geoscientists to know whether hydrocarbons are, in fact, present in those structures or the amount of hydrocarbons. Afren employs 3D seismic technology with respect to certain of its projects. The implementation and practical use of 3D seismic technology is relatively new, unproven and unconventional, which can lessen its effectiveness, at least in the near term, and increase costs. In addition, the use of 3D seismic and other advanced technologies requires greater pre-drilling expenditures than traditional drilling strategies, and the Group could incur greater drilling and exploration expenses as a result of such expenditures, which may result in a reduction in Afren's returns. As a result, Afren's drilling activities may not be successful or economical, and Afren's overall drilling success rate or its drilling success rate for activities in a particular area could decline.

The Group operates in a highly competitive industry.

The oil and gas industry is highly competitive including in the region in which Afren operates. The key areas in respect of which Afren faces competition are:

acquisition of exploration and production licences at auctions or sales run by governmental authorities;
acquisition of other companies that may already own licences or existing hydrocarbon producing assets;
engagement of third party service providers whose capacity to provide key services may be limited;
purchase of capital equipment that may be scarce; and
employment of the best qualified and most experienced skilled management and oil professionals.

The oil industry itself is currently subject to several important influences that impact its competitive landscape. In recent years, the oil industry has experienced consolidation, as well as increased deregulation and integration in strategic markets. Additionally, the expansion of production from shale oil fields in the United States in recent years has contributed to greater supply in world oil markets, driving down crude oil prices. The Group's ability to remain competitive will consequently require, among other things, management's continued focus on reducing unit costs, improving efficiency and maintaining long-term growth in the Group's reserves and production through continued technological innovation.

The oil and gas industry is also characterised by rapid and significant technological advancements and the introduction of new products and services, including alternative and renewable fuel resources, using new technologies. As others use or develop new technologies, Afren may be placed at a competitive disadvantage or may be forced by competitive pressures to implement those new technologies at substantial costs. In addition, other oil and gas companies may have greater financial, technical and personnel resources that allow them to enjoy technological advantages and that may in the future allow them to implement new technologies before Afren can. Afren may not be able to respond to these competitive pressures or implement new technologies on a timely basis or at an acceptable cost. If one or more of the technologies the Company uses now or in the future were to become obsolete, Afren's business, financial condition and results of operations could be materially adversely affected. In addition, any new technology that Afren implements may have unanticipated or unforeseen adverse consequences, either to its business or the industry as a whole.

Any failure by the Group to compete effectively could have a material adverse effect on the Group's business, prospects, financial condition and results of operations, and the trading price of the Ordinary Shares.

The Group may face unanticipated increased or incremental costs.

The crude oil and gas business is a capital-intensive industry. Afren intends to focus its near term future capital expenditures on targeted improvements to further develop and upgrade its core producing assets in Nigeria. The Group's current and planned expenditures on such projects may be subject to unexpected problems, costs and delays, and the economic results and the actual costs of these projects may differ significantly from the Group's current estimates. The Group may be required to restrict capital expenditures due to a further decline in revenue or the Group inability to obtain adequate financing, which may result in Afren being unable to fund projects as needed if unexpected costs arise. Further, while the Group has put all discretionary activities and spending on exploration within its portfolio on hold beyond 2015, the long term viability and success of the Group is dependent on its ability to continue to invest in drilling and exploration activities and infrastructure.

The Group relies on oil field suppliers and contractors to provide materials and services in conducting the exploration and production activities of the Group. See "—Failure to obtain necessary equipment, third party services and transportation systems could materially and adversely affect Afren's business, financial condition, and results of operations". Additionally, competitive pressures on the oil field suppliers and contractors, or substantial increases in the worldwide prices of commodities, such as steel, could result in a material increase in costs for the materials and services required by the Group to conduct its business. For example, due to high global demand and a limited number of suppliers, the cost of oil field services and goods has increased significantly in recent years and could continue to increase. Future increases could have a material adverse effect on the Group's operating income, cash flows and borrowing capacity and may require a reduction in the carrying value of the Group's properties, its planned level of spending for exploration and development and the level of its reserves. Prices for the materials and services the Group depends on to conduct its business may not be sustained at levels that enable the Group to operate profitability.

While the Group intends to pursue a disciplined approach to capital management in connection with its 2015 Business Plan, it may also need to incur various unanticipated costs, such as those associated with personnel, transportation and government taxes. Personnel costs, including salaries, are increasing as the standard of living rises in the countries in which the Group operates and as demand for suitably qualified personnel for the oil and gas industry increases. Although there have been no strikes in the history of the Group, industrial action, and the increased costs associated with such action, could occur.

With respect to decommissioning, licensees are invariably obliged under the terms of relevant licences or local law, to dismantle and remove equipment, to cap or seal wells and generally make good production sites. In certain circumstances the Company may be required to pay decommissioning costs into an escrow account, which would have a liquidity impact on the Company before incurrence of the actual costs related to decommissioning. Afren's accounts for the year ended 31 December 2014 make provisions based on Afren's estimate of the aggregate decommissioning costs to be incurred at the end of each of Afren's licences. These are estimates based on currently known facts and circumstances including the current extent of Afren's operations. No guarantee can be given that such provisions shall in due course turn out to be sufficient.

An increase in any of these decommissioning costs or the other costs detailed above could materially and adversely affect the Group's business, prospects, financial condition and results of operations.

The Group is obliged to comply with health and safety and environmental regulations and cannot guarantee that it will be able to comply with these regulations. I 8.2

Afren's operations are subject to laws and regulations relating to the protection of human health and safety and the environment. Failure, whether inadvertent or otherwise, by Afren to comply with applicable legal or regulatory requirements may give rise to significant liabilities and may result in loss of life, injury, or adverse impacts on the health of employees, contractors and third-parties or the environment. Afren's health, safety and environment policy observes local and national, legal and regulatory requirements and generally to applies best practices where local legislation does not exist.

The terms of licences or permissions may include more stringent environmental and/or health and safety requirements. Obtaining exploration, development or production licences and permits may become more difficult or be the subject of delay due to governmental, regional or local environmental consultation, approvals or other considerations or requirements.

Afren incurs, and expects to continue to incur, substantial capital and operating costs in order to comply with health, safety, environmental laws and regulations. New laws and regulations, the imposition of tougher requirements in licences, increasingly strict enforcement or new interpretations of existing laws, regulations and licences, or the discovery of previously unknown contamination, may require further expenditures to:

• modify operations;

install pollution control equipment;
perform site clean-ups;
curtail or cease certain operations; or
pay fees or fines or make other payments for pollution, discharges or other breaches of environmental requirements.

In the future, the costs of measures taken by Afren to comply with environmental regulations and liabilities related to environmental damage caused by the Group may increase, which could have a material adverse effect on its business, prospects, financial condition and results of operations. In addition, it is not possible to predict what future environmental regulations will be enacted or how current or future environmental regulations will be applied or enforced. Afren may have to incur significant expenditure for the installation and operation of systems and equipment in the event that environmental regulations become more stringent or governmental authorities elect to enforce them more vigorously. Any such expenditure may have a material adverse effect on Afren's business, prospects, financial condition and results of operations.

In addition, Afren's operations are inherently subject to risks associated with natural catastrophes, fires, explosions, blowouts, encountering formations with abnormal pressure and crude oil spills, each of which could result in substantial damage to the Group's property and the surrounding environment or in personal injury, biodiversity loss or habitat destruction and result in liability and reputational damage to Afren. Should any of these risks and hazards materialise the consequences of such events could have a material adverse effect on Afren's business, prospects, financial condition and results of operations.

Climate change abatement legislation may have a material adverse effect on Afren's industry.

Continued political attention to issues concerning climate change, the role of human activity in it and potential mitigation through regulation could have a material impact on the Group. International agreements, national and regional legislation, and regulatory measures to limit greenhouse emissions are currently in various stages of discussion or implementation. These and other greenhouse gas emissions-related laws, policies and regulations may result in substantial capital, compliance, operating and maintenance costs. The level of expenditure required to comply with these laws and regulations is uncertain and is expected to vary depending on the laws enacted by particular countries. As such, climate change legislation and regulatory initiatives restricting emissions of greenhouse gases may adversely affect Afren's operations, cost structure or the demand for oil and gas. Such legislation or regulatory initiatives could have a material adverse effect by diminishing the demand for oil and gas, increasing the Group's cost structure or causing disruption to its operations by regulators. In addition, Afren may be subject to activism from groups campaigning against fossil fuel extraction, which could affect its reputation, disrupt its campaigns or programs or otherwise negatively impact Afren's business.

Uncertainties associated with enhanced recovery methods may result in Afren not realising an acceptable return on its investment in such projects where these methods are used.

Afren injects water into formations at some of its assets to increase the production of oil and gas. Afren may in the future expand these efforts to more of its assets or employ other enhanced recovery methods in its operations. The additional production and reserves, if any, attributable to the use of enhanced recovery methods are inherently difficult to predict. If Afren's enhanced recovery methods do not allow for the extraction of oil and gas in a manner or to the extent that it anticipates, the Group may not realise an acceptable return on its investments in such projects.

4. Risks Relating to the Countries in which Afren Operates

Risks associated with emerging and developing markets generally.

Emerging markets, such as Nigeria, the Kurdistan region of Iraq, Kenya, Tanzania, Congo Brazzaville, Ghana, Ethiopia, Madagascar, Seychelles, Côte d'Ivoire and South Africa in which Afren operates, are subject to greater risk than more developed markets, including in some cases significant legal, fiscal, economic and political risks. Accordingly, investors should exercise particular care in evaluating the risks involved in an investment in Afren and must decide for themselves whether, in the light of those risks, their investment is appropriate. Generally, investment in a company, such as Afren, that operates in emerging and developing markets is suitable only for sophisticated investors who fully appreciate the significance of the risks involved. Investors are urged to consult with their own legal and financial advisers before making an investment in the Ordinary Shares.

The global economic crisis has impacted, and may continue to impact, the economies of the countries in which the Group operates.

The ongoing disruptions experienced in the international and domestic capital markets since 2008 have led to reduced liquidity and increased credit risk premiums for certain market participants and have resulted in a reduction of available financing. Companies with operations in countries in emerging markets where Afren operates may be particularly susceptible to these disruptions and reductions in the availability of credit or increases in financing costs, which could result in them experiencing financial difficulty. In addition, the availability of credit to entities operating within emerging and developing markets is significantly influenced by levels of investor confidence in such markets as a whole and, as such, any factors that impact market confidence—including, a decrease in credit ratings, state or central bank intervention or terrorist activity and conflict in these emerging or developing markets—could affect the price or availability of funding for entities operating within any of these markets. While some countries have made significant improvement since the credit crisis, new challenges such as the decline in oil prices and reduction in oil reserves are expected to continue to cause disruptions. If investor confidence in emerging or developing markets suffers, the Group's ability to access capital and its business financial condition and results of operations, may be negatively impacted.

The countries in which the Group operates face political, economic, fiscal, legal, regulatory and social uncertainties which could have a material adverse effect on Afren's business, prospects, financial condition and results of operations.

Afren's operations are exposed to the political, economic, fiscal, legal, regulatory and social environment of the countries in which it operates, including Nigeria, the Kurdistan region of Iraq, Kenya, Tanzania, Congo-Brazzaville, Ghana, Ethiopia, Madagascar, Seychelles, Côte d'Ivoire and South Africa. Afren's business involves a high degree of risk which a combination of experience, knowledge and careful evaluation may not overcome. These risks include, but are not limited to, corruption, civil strife or labour unrest, armed conflict, terrorism, limitations or price controls on oil exports, limitations or the imposition of tariffs or duties on imports of certain goods and imposition of currency controls.

The operations of Afren in certain developing countries expose it to potential civil unrest and political or currency risk. For example, in Nigeria, corruption, policy uncertainty and collapsing infrastructure, as well as terrorist actions by Boko Haram in Northern Nigeria and insecurity in the Niger Delta, present significant risks to business operations in that country. The emergence of a new president, Muhammadu Buhari, who took office with effect from 29 May 2015, may result in substantial uncertainty as to the manner in which the new president will seek to address the issues facing Nigeria. The significant decline in oil prices in late 2014 and continuing in 2015 have had and will continue to have a material impact on Nigeria's economy. Nigeria relies heavily on oil revenue to fund its budget and the decline in prices will result in significant budgetary constraints, leading to less investment in key projects such as infrastructure. Further, oil revenue is a key source of foreign currency in Nigeria and in March 2015 the Central Bank of Nigeria imposed foreign exchange controls (restricting the ability to make payments in US dollars in Nigeria) to slow the devaluation of the Naira, making it more difficult for foreign investors to exit their holdings in Nigeria. Such controls may also make it more difficult for the Company to transfer money out of Nigeria that may be required for the Company's operations outside of Nigeria. All of this together results in an uncertain operating environment for Afren in Nigeria.

Geopolitical instability and a poor security environment remain key risks associated with doing business in Iraq. The period following the 2003 United States-led invasion has been characterised by instability and security challenges in Iraq. Most notably, terrorism and armed insurgency have increased; while the Kurdistan region of Iraq has, in general, experienced less violence than the rest of Iraq, in 2014 military action by Islamic State resulted in the suspension of Afren's operations in Kurdistan from 8 August 2014 to 2 October 2014 and the security situation in the region remains unstable. Numerous military, police, civilian and religious institutions, as well as oil installations and other critical national infrastructure, have been targeted. Terrorism and insurgent activities have disrupted national and international business activities in the Kurdistan region of Iraq in the past and may affect Afren's operations or plans in the Kurdistan region of Iraq in the future.

Exploration and development activities in developing countries may require protracted negotiations with host governments, national oil companies and third parties and may be subject to economic and political considerations such as the risks of war, actions by terrorist or insurgent groups, community disturbances, expropriation, nationalisation, renegotiation, forced change or nullification of existing contracts or royalty rates, unenforceability of contractual rights, changing taxation policies or interpretations, adverse changes to laws (whether of general application or otherwise) or the interpretation thereof, change of policies, foreign exchange restrictions, inflation, changing political conditions, the death or incapacitation of political leaders, local currency devaluation, currency controls, and foreign governmental regulations that favour or require the awarding of contracts to local contractors or require foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction. Any of these factors detailed above or similar factors could have a material adverse effect on Afren's business, prospects, financial condition and results of operations.

Uncertainties in the interpretation and application of laws and regulations in the jurisdictions in which Afren operates may affect the Group's ability to comply with such laws and regulations which may increase the risks with respect to the Group's operations.

If a dispute arises in connection with operations, in developing countries, Afren may be subject to the exclusive jurisdiction of foreign courts or foreign arbitration tribunals and may experience difficulty enforcing judgements in such jurisdictions or may not be successful in subjecting foreign persons, especially foreign oil ministries and national oil companies, to the jurisdiction of England and Wales. The courts in the jurisdictions in which the Group operates may offer less certainty as to the judicial outcome or a more protracted judicial process than is the case in more established economies. Businesses can become involved in lengthy court cases over simple issues when rulings are not clearly defined, and the poor drafting of laws and excessive delays in the legal process for resolving issues or disputes compound such problems. Accordingly, the Group could face risks such as: (i) effective legal redress in the courts of such jurisdictions being more difficult to obtain, whether in respect of a breach of law or regulation, or, in an ownership dispute, being more difficult to obtain, (ii) a higher degree of discretion on the part of governmental authorities and therefore less certainty, (iii) the lack of judicial or administrative guidance on interpreting applicable rules and regulations, (iv) inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions, or (v) relative inexperience of the judiciary and courts in such matters.

Enforcement of laws in some of the jurisdictions in which Afren operates may depend on and be subject to the interpretation placed upon such laws by the relevant local authority, and such authority may adopt an interpretation of an aspect of local law which differs from the advice that has been given to Afren by local lawyers or even previously by the relevant local authority itself. There can be no assurance that contracts, joint ventures, licences, licence applications or other legal arrangements will not be adversely affected by the actions of government authorities and the effectiveness of and enforcement of such arrangements in these jurisdictions. In certain jurisdictions, the commitment of local businesses, government officials and agencies and the judicial system to abide by legal requirements and negotiated agreements may be more uncertain and may be susceptible to revision or cancellation, and legal redress may be uncertain or delayed.

In the countries in which Afren does business, the state generally retains ownership of the minerals within that State and consequently retains control of (and in many cases, participates in) the exploration and production of hydrocarbon reserves. Accordingly, Afren's operations may be materially affected by host governments through royalty payments, export taxes and regulations, surcharges, value added taxes, production bonuses and other charges to a greater extent than would be the case if its operations were largely in countries where mineral resources are not predominantly state owned. In addition, transfers of interests typically require government approval, which may delay or otherwise impede such transfers, and the government may impose obligations on Afren to complete minimum work within specified timeframes either generally or as a condition to approving such transfers. In the future, Afren may extend its interests in operations to other countries where similar circumstances may exist.

The Nigerian Oil and Gas Industry Content Development Act No. 2 of 2010 (the "Nigerian Content Act"), enacted in the first half of 2010, impacts Afren's operations in Nigeria. The legislation provides that Nigerian independent operators shall be given priority in consideration of the award of oil blocks, oil field licences, oil lifting licences and, generally, all projects for which a contract is to be awarded in the oil and gas industry. All projects or contracts with a budget of more than US\$100 million are required to contain a specific "Labour Clause" mandating a minimum percentage of Nigerian labour involvement and an operator or project promoter may retain a maximum of 5% of management positions held by expatriates. The approval of the Nigerian Content Development and Monitoring Board is also required to enable the operator or the project company to retain any such expatriates. In addition, certain restrictions are also placed on the maintenance of insurance risks outside Nigeria without the written approval of the National Insurance Commission.

As a result of the Nigerian Content Act, Afren, like all other operators in the industry, has streamlined its internal processes in respect of all its oil and gas operations, in line with the provisions of the legislation. The Nigerian Content Act also requires operators in the Nigerian oil and gas industry to retain a minimum of 10% of their total revenue accruing from Nigerian operations in a bank account maintained by them in Nigeria, which can be used for local operating expenses, such as taxes and royalties. In addition, the Nigerian Content Act requires that 1% of any contract awarded in the oil and gas industry be paid to a Nigeria Content Fund. A breach of these provisions may be an offence punishable by a fine of 5% of the project sum for each project in which the offence is committed or cancellation of the project.

In Iraq, the federal Ministry of Oil has disputed the authority of the KRG to grant rights to exploit petroleum resources without the approval of the federal authorities. The KRG has maintained that it has exclusive jurisdiction over oil and gas resources in the Kurdistan region of Iraq. Currently, all export sales are conducted by Iraq's State Oil Marketing Organisation and the proceeds of such sales are received by the federal government, which, in turn, should pass on oil contractors' entitlements to the contractors through the KRG. One of the consequences of the diverging views between the federal government and the KRG in relation to the validity of PSCs entered into by the KRG has been the federal government's withholding of partial or full payments to the KRG for oil exported from the Kurdistan region of Iraq, which caused exports from the Kurdistan region of Iraq to be suspended in December 2012. In May 2013, Turkey and the KRG announced plans to work together to build pipelines that would allow for crude oil exports directly to international markets from the Kurdistan region of Iraq via Turkey. The Iraqi federal government maintains that those agreements are beyond the KRG's national remit.

There can also be no assurance that the federal Ministry of Oil will not continue to challenge the validity of the PSCs entered into by the KRG. If such challenges are successful or existing contractor entitlements are changed, this could have a material adverse effect on Afren's ability to maintain its PSCs in the Kurdistan region of Iraq on their existing terms or at all.

The countries in which the Group operates suffer from high degrees of corruption which could have an adverse effect on Afren's business, prospects, financial condition and results of operations if Afren or its employees fail to comply with relevant laws.

Afren is exposed to a risk of violating anti-corruption laws and regulations applicable in countries where Afren, its partners or agents operate. Some of the jurisdictions in which Afren operates have higher levels of corruption than in more developed economies. For example, the Nigerian government is conducting on-going corruption and other investigations into the oil industry in Nigeria. In particular, the Nigerian Government has reviewed historical taxes of exploration and production companies, investigated production costs and generally renegotiated licence and lease renewals, and in some cases holders were required to pay additional amounts for the renewal of their licences. In early 2014, the Nigerian Government ordered a forensic audit of the accounts of the NNPC and has sought to make the oil and gas industry and operations more transparent. In early 2012, the Nigerian Government inaugurated the Petroleum Revenue Special Task Force, a body set up primarily to investigate, verify and recover all upstream and downstream petroleum revenues accruing and payable to the Nigerian Government. This task force is also charged with the responsibility of developing a system to determine and monitor all crude oil production and exportation in Nigeria. The UK government is also pursuing separate corruption investigations into the oil industry in Nigeria. For example, in July 2013, UK police began a money laundering investigation surrounding the Nigerian Government's sale of an offshore block to another oil and gas company.

Afren's worldwide operations, including in developing countries, its development of commercial partnerships worldwide and its employment of local agents in the countries in which it operates increase the risk of violations of anti-corruption laws and regulations or other regulatory and legal regimes. Violations of anti-corruption laws and regulations are punishable by civil penalties, including fines, denial of export privileges, injunctions, asset seizures, debarment from government contracts (and termination of existing contracts) and revocations or restrictions of licences, as well as criminal fines and imprisonment. In addition, any major violations could have a significant impact on Afren's reputation and consequently on its ability to win future business. See "— Violation or circumvention of Afren's corporate governance policies and code of conduct, or the Company's

internal controls and procedures, could have a material adverse effect on Afren's business, financial condition and results of operations".

Afren's international operations are subject to anti-corruption laws and regulations such as the US Foreign Corrupt Practices Act of 1977 ("FCPA") and the United Kingdom Bribery Act of 2010 ("UK Bribery Act"). The FCPA prohibits providing anything of value to government officials for the purposes of obtaining or retaining business or securing any improper business advantage. As part of Afren's business, Afren may deal with state-owned business enterprises, the employees of which are considered government officials for the purposes of the FCPA. The provisions of the UK Bribery Act extend beyond bribery of government officials and are more onerous than the FCPA in a number of other respects, including jurisdiction, non-exemption of facilitation payments and penalties. In particular, the UK Bribery Act (unlike the FCPA) does not require a corrupt or improper intent to be established in relation to the bribery of a public official and also applies to the active payment of bribes as well as the passive receiving of bribes. Furthermore, unlike the vicarious liability regime under the FCPA, whereby corporate entities can be liable for the acts of its employees, the UK Bribery Act introduced a new corporate offence directly applicable to corporate entities that fail to prevent bribery and did not establish and adopt adequate procedures to prevent bribery from occurring and, in certain circumstances, can render parties liable for the acts of their joint venture or commercial partners.

The Group maintains regular anti-corruption training programmes, strict codes of conduct and internal controls procedures and other safeguards designed to prevent the occurrence of bribery and corruption. However notwithstanding these strict controls, it may not be possible for the Group to detect or prevent every instance of bribery and corruption in every jurisdiction in which its employees, agents, sub-contractors or joint venture partners are located and accordingly the Group could be subject to civil and criminal penalties and reputational damage. In response to the findings regarding unauthorised payments, Afren provided full copies of the WFG Review reports on such unauthorised payments to the Serious Fraud Office. Similarly, on 20 March 2015, the Company also notified the Serious Fraud Office regarding the hire of certain individuals within its operations, in respect of which the Company has preliminary concerns about one hire, and about the payment of certain travel and accommodation expenses connected to Afren's activities, which arose in the course of the WFG Review. The Company is also in communication with the U.S. Attorney's Office for the Southern District of New York and intends to brief the agency on these issues. See "— Violation or circumvention of Afren's corporate governance policies and code of conduct, or the Company's internal controls and procedures, could have a material adverse effect on Afren's business, financial condition and results of operations".

If any investigations or findings are made and substantiated in the future against Afren, its directors, officers or employees, commercial partners, or such persons or partners are found to be involved in corruption or other illegal activity, this could result in criminal or civil penalties, including substantial monetary fines, against Afren, its directors, officers, employees or commercial or joint venture partners, loss of permits or licences, a refusal by a governmental or regulatory body to renew a licence or permit. Any such findings could damage Afren's reputation and its ability to do business, including by affecting its rights under the various PSCs or by the loss of key personnel, and could adversely affect its financial condition and results of operations. Furthermore, alleged or actual involvement in corrupt practices or other illegal activities by the joint venture partners of Afren, or others with whom Afren conducts business, could also damage Afren's reputation and business and adversely affect Afren's financial condition and results of operations.

The countries in which the Group operates suffer from piracy, terrorism and militant activity which could have a material adverse effect on Afren's business, prospects, financial condition and results of operations.

Afren operates and conducts business in countries or regions of Africa and elsewhere which suffer from terrorism, piracy and militant activity. Oil and gas companies may be particular targets of such activity. Any acts of terrorism, piracy, or armed conflict causing disruptions of oil and gas exports could materially and adversely affect the Group's business, financial condition, results of operations and prospects. Such acts may pose a threat to the Group's activities, which could range from unanticipated delays in project timetables to being forced to abandon a development to losing rights of future access to its assets and interests in licences. In addition, the fear of criminal or terrorist actions against Afren could have an adverse effect on the ability of Afren to adequately staff and/or manage its operations or could substantively increase the costs of doing so.

There has been an increase in piracy and hijacking in the Gulf of Guinea. The attacks typically target high value cargo, especially crude oil. Nigerian piracy has become more frequent and at greater distances from the coast. Any such criminal or terrorist attacks, hijackings and piracy directly or indirectly affecting the countries in which Afren operates could impact its ability to obtain insurance and transport equipment for any hydrocarbons discovered and attract employees and contractors, all of which could have a material adverse effect on the Group's exploration, development and production activities.

Terrorism and militant activity is a major problem in Nigeria, where a range of terrorist and militant groups with differing goals operate. Boko Haram, a terrorist group based primarily in Northeastern Nigeria, initially took up arms in 2009 and has increasingly received international attention for the number and frequency of attacks against the Nigerian people and villages. In April 2013, the Nigerian Government set up a committee to explore the possibility of an amnesty for the Boko Haram group in return for an end to the insurgency. However, on 14 May 2013 the Government declared a state of emergency in the three states affected by the Boko Haram conflict (Adamawa, Borno and Yobe states) and deployed troops to the states. However the Nigerian military has been ineffective at containing the Boko Haram threat and kidnappings and attacks have increased in scope and frequency in 2014. Most recently in January 2015 there are reports of as many as 2,000 people dying in attacks by Boko Haram in the Nigerian town of Baga. While the threat from Boko Haram is primarily in Northern Nigeria and Afren's operations are principally conducted off-shore in Southern Nigeria, the continued and ongoing disruption to Nigeria's economy and security caused by Boko Haram does present a threat to the stability of the Group's Nigerian operations. In April 2014, over 200 school girls (now commonly referred to as the "Chibok Girls") were abducted from a secondary school in Chibok, Borno State by persons believed to be Boko Haram militants. Also, in April and May 2014, militant activities continued to spread to the suburbs of the Nigeria capital city, Abuja. Although the Nigerian military has not yet secured the release of the Chibok Girls, Nigerian troops have recently recorded significant success in the fight against the Boko Haram militants, including among others the liberation and recapture of several towns such as Baga and Gamboru in Bornu States previously held by the militant group.

In addition to the instability caused by Boko Haram, the Niger Delta region of Nigeria continues to experience militant activity, creating a challenging operating environment for companies, particularly for companies in the oil and gas industry, which have been the main target of attacks. The security situation remains volatile, and while security installations and personnel remain the primary targets for any such incidents, foreign oil companies, such as Afren, and their employees may be singled out.

Separately, an ongoing feature of Iraq's social and political landscape since 2003 has been the emergence of certain sectarian and ethnic tensions. A number of terrorist attacks and other incidences of violence in Iraq have had sectarian motives based principally on religious, ethnic, geographical, territorial and tribal differences. Notably, there are differences and tensions between Sunni and Shi'a groups, and between Kurdish and Arab groups. Further divisions exist between the individual regions and governorates that constitute the Republic of Iraq and between the regions, governorates and the federal parliament. Additionally, 2014 saw the advance of fighting and military action by Islamic State in the Kurdistan region of Iraq, including fighting near Afren's Barda Rash and Ain Sifni operations, resulting in the suspension of operations there from 8 August 2014 to 2 October 2014. Any shift in such divisions or further advances by Islamic State may lead to further instability in the political and economic environment in the Kurdistan region of Iraq where Afren operates and may have a material adverse effect on Afren's business prospects, financial condition and results of operations.

Underdeveloped infrastructure in the countries in which the Group operates could have an adverse effect on Afren's business, prospects, financial condition and results of operations.

Underdeveloped infrastructure and inadequate management of such infrastructure in the countries in which Afren operates, including Nigeria, the Kurdistan region of Iraq, Kenya, Tanzania, Congo-Brazzaville, Ghana, Kenya, Ethiopia, Madagascar, Seychelles, Tanzania, Côte d'Ivoire and South Africa, could have a material adverse effect on its business, prospects, financial condition and results of operations.

For example, most parts of Nigeria experience regular electricity outages and water cuts. Inadequate and unreliable electricity supply has hindered investment in the country, resulting in underperformance in various important sectors. Many businesses rely on alternative electricity and water supplies, adding to overall business costs. Nigeria privatised its electricity sector in 2013 with the sale of successor companies unbundled from the Power Holding Group of Nigeria to multiple consortia of private investors. This transition may further aggravate the generation of an adequate electricity supply. The unstable pricing, and possible scarcity, of fuel for power generation also increases the operational challenges businesses face, adding to the potential fluctuation of overhead costs. Although rail and road networks are poor and limit land based transport, state governments are gradually investing in road repair and construction. Telecommunications networks (fixed line and mobile) have become more numerous and increasingly efficient. Although anti-corruption reforms by the Nigerian Government have led to some improvement, bureaucracy still presents a significant operational obstacle.

In addition, in the Kurdistan region of Iraq there are obstacles to the monetisation of future production. There is currently only one pipeline that is a commercially viable export route from the Kurdistan region of Iraq, which is controlled by the Iraqi federal authorities. In September 2012, a dispute between the Iraqi government and the KRG resulted in a halt of the export of oil through the pipeline which shut down most crude oil exports from the region. If additional pipelines are not constructed at all or within expected time periods, Afren's ability to monetise future production in the Kurdistan region of Iraq and sell crude oil on the international market may be limited. Afren's ability to sell crude oil on the international market will also be limited if Afren is unable to enter into sales agreements in respect of the Barda Rash field. Oil and gas prices for local sales are lower than prevailing international prices, and there is a limited market for natural gas and a limited refining capacity in the Kurdistan region of Iraq. If Afren is not able to address these obstacles, it may not realise an acceptable return on its investments in the Kurdistan region of Iraq.

In light of the background described above, there can be no assurance that the Iraqi Federal Ministry of Oil will not continue to challenge the validity of the PSCs entered into by the KRG. If such challenges are successful or existing contractor entitlements are changed, this could have a material adverse effect on Afren's ability to maintain its PSCs in the Kurdistan region of Iraq on their existing terms or at all.

Licensing and other regulatory requirements in the countries in which the Group operates may be subject to amendment or reform which could make compliance more challenging.

Afren's current operations are, and future operations will be, subject to licences, regulations and approvals of governmental authorities for exploration, development, construction, operation, production, marketing, pricing, transportation and storage of oil, taxation and environmental and health and safety matters. Afren cannot guarantee that such licences applied for will be granted or, if granted, will not be subject to possibly onerous conditions. Any changes to exploration, exploration and production, or production licences, regulations and approvals, or their availability to Afren may adversely affect Afren's assets, plans, targets and projections.

Afren is subject to extensive government laws and regulations governing prices, taxes, royalties, allowable production, waste disposal, pollution control and similar environmental laws, the export of oil and many other aspects of the oil business. Although Afren believes it has good relations with the current governments of the jurisdictions in which it operates, there can be no assurance that the actions of present or future governments in these countries, or of governments of other countries in which Afren may operate in the future, will not materially adversely affect the business or financial condition of Afren.

Furthermore, the oil and gas sector in Nigeria, in particular, is still developing, and there have been a number of changes in policy affecting the sector. Nigeria is pursuing a number of new policy directions with the aim of restructuring its upstream and deregulating its downstream sectors, but the adoption of new regulations and the implementation of suggested reforms may be subject to political and economic influences, which could create uncertainty in relevant sectors.

In 2008, a draft PIB was proposed as a new legal and regulatory framework for the oil and gas industry in Nigeria to replace several other laws. The PIB underwent several legislative reviews in the National Assembly between 2009 and 2011. Following mass protests against corruption in the oil and gas industry and the removal of government subsidies on some refined petroleum products, the Nigerian government set up a task force and technical committee. The task force presented a new version of the PIB to the National Assembly in July 2012 that seeks to overhaul and restructure the entire Nigerian petroleum industry, unbundling the NNPC into three successor companies, providing for the incorporation into limited liability entities of existing commercial partnerships and providing for a new legal regime for the exploitation of gas developments. In addition, the PIB seeks to effect wide reaching changes to the structure of the petroleum industry by creating new regulatory agencies, proposing the implementation of new licencing regimes for activities in both the upstream and downstream petroleum industry, as well as the introduction of a new tax regime in the upstream sector, which will supersede the current regime under the Petroleum Profits Tax Act ("PPTA"). The timing of the enactment of the PIB, if ever, as well as the content and impact of the final legislation remains uncertain.

This type of reform could, depending on its ultimate content, contain provisions that could have a material adverse effect on the Group's business, prospects, financial condition or results of operations. Risks associated with the PIB and related efforts to reform the Nigerian oil and gas industry may include that:

the proposed changes in the tax structure for oil and gas companies operating in Nigeria may lead companies to curtail their operations or future investment;
oil producers may be directed to supply the domestic market with oil for refining to reduce the amount of refined products currently being imported into Nigeria at prices significantly lower than those obtainable on the export market;
gas producers may be required to retain a specific volume of the gas that they produce for the local Nigerian market;
the PIB may include new fines and penalties for gas flaring; and
the PIB may fail to adequately address the concerns of communities in the Niger Delta region or create new grounds for further conflict.

The Gas Flaring (Prohibition and Punishment) Bill (the "Gas Flaring Bill"), to prohibit gas flaring and impose significantly increased fines, was passed by the Nigerian Senate in 2009 but has not yet been passed by the House of Representatives. Afren currently engages in a low level of flaring at the Ebok and Okoro fields and if legislation requiring the cessation of flaring is enacted and enforced, it may have a material and adverse effect on its business, prospects, financial condition and results of operations.

In Iraq, there is currently no law in place that addresses the licencing dispute between the KRG and the federal government in relation to the validity of PSCs entered into by the KRG. Thus, there can be no assurance of when, if ever, the diverging views between the KRG and the federal government will be resolved, or, if such resolution occurs, how an agreement would affect PSCs currently in effect.

In addition, Afren's ongoing and future success depends on securing and maintaining a "social licence to operate" from impacted communities and other stakeholders. Communities may become dissatisfied with Afren's activities or those of other companies in the oil and gas industry notwithstanding the fact that its operations can provide valuable benefits to surrounding communities, in terms of direct employment, training and skills development, creation of demand for products and services and other community benefits associated with ongoing payment of taxes and contribution to community development funds. Such dissatisfaction may result in civil unrest, protests, direct action or campaigns against Afren, and any such actions may impact its project costs or production, or in certain cases, project viability. Afren may be adversely affected by changes to tax legislation or its interpretation or increases in effective tax rates in the jurisdictions in which it operates.

Afren operates in multiple jurisdictions and its profits, royalties on production and sales revenues are taxed according to the tax laws of such jurisdictions. Afren's effective tax rate may be affected by changes in tax laws or interpretations of tax laws in any given jurisdiction.

Afren's effective tax rate in any given financial year reflects a variety of factors that may not be present in the succeeding financial year or years. As a result, Afren's effective tax rate may increase in future periods, which could have a material adverse effect on its financial results and, specifically, its net income, cash flow and earnings may decrease.

The tax laws in Nigeria do not fully anticipate some of the deal structures being implemented in oil and gas transactions in Nigeria. The structures that Afren has used for the acquisitions of the Okoro and Ebok assets may be subject to further assessment for tax purposes. With effect from 1 June 2011, Ebok was granted the Pioneer tax status incentive by the Nigerian Investment Promotion Commission for a five-year period. On 26 January 2015, Afren Resources received a letter from the Nigerian Investment Promotion Commission informing that the initial tax holiday period had been reduced from five to three years. If enforced, the tax holiday would have effectively ceased on 31 May 2014, although two further annual periods of extension can be applied for in order to restore the full five-year term. Afren intends to contest the reduction and apply for the two year extension as necessary. If it is the case that neither of these actions are successful, the Group's income tax credit would decrease significantly, its corresponding current income tax payable would increase, and the Group would also see a decrease in deferred tax asset.

The calculation of royalties in respect of Ebok production is subject to the Marginal Field (Fiscal Regime) Regulation and agreement with relevant authorities. Such royalties and, as a result, the Group's liabilities may change as these royalties are agreed with authorities.

The tax system applicable to international oil companies operating in the Kurdistan region of Iraq is uncertain. In particular, some KRG authorities have been unwilling to give practical effect to the tax exemptions and other benefits provided in the PSCs signed by the KRG. Afren understands that new legislation which might amend the tax regime for international oil companies operating in the Kurdistan region of Iraq is currently under consideration by the KRG. Iraqi federal oil legislation, if enacted, might also amend the tax regime applicable to its operations in the Kurdistan region of Iraq. In particular, such legislation might seek to bring the tax position of companies operating in the Kurdistan region of Iraq in line with that applicable to companies operating in the oil sector in the rest of Iraq; the latter are subject to a high rate of corporate income tax and do not benefit from an exemption from payment of personal income tax in respect of non-Iraqi employees or other exemptions stated in the PSCs signed by the KRG.

The Group is exposed to the risk of adverse sovereign action by governments in the countries in which it operates.

The oil and gas industry is central to the economies and future prospects for development in a number of the countries in which Afren operates, and therefore the industry can be expected to be the focus of continuing attention and debate for those countries. In certain developing countries, petroleum companies have faced the risks of expropriation or renationalisation, breach or abrogation of project agreements, application to such companies of laws and regulations from which they were intended to be exempt, denials of required permits and approvals, increases in royalty rates and taxes that were intended to be stable, application of exchange or capital controls, and other risks.

As with many countries, possible future changes in the government, major policy shifts or increased security arrangements could have adverse effects on the value of investments. These factors could have a material adverse effect on the Group's business, prospects, financial condition and results of operations.

The Nigerian government owns the country's mineral resources and grants hydrocarbon exploration and production rights under fixed term licences and OMLs, which can be renewed. It thus retains control over the exploration and exploitation of hydrocarbon reserves and, in numerous cases, acquires interests of its own through the state-owned oil company, NNPC, and its subsidiary, the Nigerian Petroleum Development Corporation ("NPDC"). The Petroleum Act ("PA") requires that the consent of the Minister of Petroleum Resources be obtained before the holder of an oil prospecting licence ("OPL") or oil mining licence ("OML") assigns its licence or lease, or any right, power or interest in such assets. In August 2014, the Ministry of Petroleum Resources released the Guidelines and Procedures for obtaining the Consent of the Minister to the Assignment of Interests in Oil and Gas Assets. Any adverse changes in the government's policy with respect to the oil and gas industry, including any which may occur in anticipation of or following the national elections in 2015 and a potential change in government, may adversely impact the interests of Afren.

Further, the strategy and business of Afren in Nigeria depend on it maintaining good relationships with the relevant Nigerian authorities. While Afren believes that it has an effective working relationship with the Nigerian authorities and NPDC, there is no guarantee that this positive relationship will continue or that actions by the current or future governments will not seriously affect the business or financial position of Afren. This relationship could be adversely impacted by future changes in the personnel or management of Afren, the Nigerian authorities or NPDC.

There is uncertainty relating to the payment mechanism for export oil in the Kurdistan region of Iraq. All export sales are conducted by the State Oil Marketing Organisation using infrastructure controlled by the federal authorities. The proceeds of such sales are received by the federal government, which, in turn, should pass on oil contractors' entitlements to the contractors through the KRG. To date, the federal government has not passed on the Kurdistan region of Iraq's oil contractors' full entitlements to export sales proceeds which led to the suspension of exports from the Kurdistan region of Iraq in December 2012. Thus, the opportunity to sell production internationally is currently limited. Under the current regime, Afren is only able to sell production from its assets in the Kurdistan region of Iraq either through the State Oil Marketing Organisation or through contractual arrangements with local refineries.

5. Risks Relating to An Investment in Ordinary Shares

Afren's share price may fluctuate.

Shareholders and prospective investors should be aware that the value of an investment in Ordinary Shares may go down as well as up. The market price of Ordinary Shares may be subject to fluctuations due to a change in sentiment in the market regarding Ordinary Shares and may not always reflect the underlying asset value. Such fluctuations depend on the market's perception of the likelihood of completion of the Open Offer as well as the market's response to various facts and events including:

fluctuations in the price of oil, gas and other petroleum products;
general economic and political conditions, including in the African region;
any regulatory changes affecting the Group's operations;
variations in the Group's anticipated or actual operating results;
business developments concerning the Group or its competitors;
the operating and share price performance of other companies in the industries and markets in which the Group operates;
speculation about the Group's business in the press, media or investment community;
fluctuations in the exchange rate between the US dollar and pounds sterling or other currencies affecting the Group's business; and
other factors unrelated to the Group's operating results.

Stock markets have, from time to time, experienced significant price and volume fluctuations that have affected market prices for securities and which may be unrelated to the Group's performance or prospects. Furthermore, the Group's operating results and prospects from time to time may be below the expectation of market analysts and/or investors. Any of these events may result in a decline in the market price of Ordinary Shares.

An investor in Afren whose principal currency is not pounds sterling is exposed to foreign currency risk.

The Ordinary Shares are, and any dividends to be paid in respect of them will be, denominated in pounds sterling. An investment in Ordinary Shares by an investor whose principal currency is not pounds sterling exposes the investor to foreign currency risk. Any depreciation of pounds sterling in relation to such foreign currency would reduce the value of the investment in Ordinary Shares or any dividends in foreign currency terms, and any appreciation of pounds sterling against such other currency would increase the value in foreign currency terms.

The ability of Shareholders from outside the United Kingdom to bring actions or enforce judgments against Afren or the Directors may be limited.

The ability of a Shareholder from outside the United Kingdom to bring an action against Afren may be limited under English law. Afren is a public limited company incorporated under the laws of England and Wales. The rights of holders of Ordinary Shares are governed by English law and by the Company's articles of association (the "Articles"). These rights differ from the rights of shareholders in typical US corporations and some other non-UK corporations. In particular, English law significantly limits the circumstances under which shareholders of English companies may bring derivative actions. Under English law generally, only Afren can be the proper claimant in proceedings in respect of wrongful acts committed against it. Neither an individual Shareholder nor any group of Shareholders has any right of action in such circumstances. In addition, it may be difficult for a Shareholder from outside the United Kingdom to effect service of process outside of the United Kingdom or prevail in a claim against Afren under, or to enforce liabilities predicated upon, non-UK securities laws, including US appraisal rights afforded to dissenting Shareholders, US disclosure liability laws or other US federal securities laws.

Shareholders may not be able to enforce a judgment against some or all of the Directors if they are located in a different jurisdiction. Consequently, it may not be possible for such a Shareholder to effect service of process upon the Directors within such Shareholder's country of residence nor to enforce against the Directors judgments of courts of such Shareholder's country of residence based on civil liabilities under that country's securities laws. There can be no assurance that such a Shareholder will be able to enforce any judgments in civil and commercial matters or any judgments under the securities laws of certain countries against the Directors who are residents of countries other than those in which judgment is made. In addition, certain courts may not impose civil liability on the Directors in any original action based solely on securities laws brought against the Directors in a court of competent jurisdiction in other countries.

Admission of the new Ordinary Shares may not occur when expected.

Application for Admission of the Ordinary Shares offered in the Open Offer and the new Ordinary Shares in the Restructuring is subject to the approval (subject to satisfaction of any conditions to which such approval is expressed to be subject) of the UK Listing Authority and Admission will become effective as soon as a dealing notice has been issued by the UK Listing Authority and the London Stock Exchange has acknowledged that Ordinary Shares (nil and fully paid) will be admitted to trading. There can be no guarantee that any conditions to which Admission is subject will be met or that the UK Listing Authority will issue a dealing notice. Please refer to the section entitled "Expected Timetable of Principal Events" of this document for further information on the expected dates of these events.

Subject to certain exceptions, the exercise of rights under the Open Offer will not be available to any Shareholders with a registered address in the United States, and such Shareholders may as a result experience dilution of ownership in Afren.

Subject to certain exceptions, the exercise of rights under the Open Offer will not be available to any Shareholder with a registered address in the United States. Shareholders with a registered address in the United States unable to exercise rights granted in respect of Existing Shares under the Open Offer may not receive the economic benefit of such rights. Such Shareholders would be subject to certain risks, including dilution of ownership and voting interests and insufficient consideration to compensate him or her fully for the dilution of his or her percentage ownership.

Shareholders who do not acquire Ordinary Shares in the Open Offer will experience a dilution in their ownership of Afren.

If Qualifying Shareholders do not acquire Ordinary Shares in the Open Offer, their proportionate ownership and voting interest in Ordinary Shares will be reduced. Qualifying Shareholders should note that even if they acquire Ordinary Shares in the Open Offer, their proportionate ownership and voting interest in the Ordinary Shares will be diluted as a result of the subsequent issues of Ordinary Shares as part of the Restructuring. Any future issues of Ordinary Shares could further dilute Shareholders holding Ordinary Shares and could materially affect the market price of the Ordinary Shares. The Group may make future acquisitions or enter into financings or other transactions involving the issuance of securities of the Company which may be dilutive. The sale of a substantial number of the Ordinary Shares in the public market or the perception that such sales may occur, could adversely affect the prevailing market price of the Ordinary Shares and negatively impact the Group's ability to raise equity capital in the future.

Ordinary Shares acquired pursuant to an exemption from the registration requirements of the Securities Act cannot be freely resold in the United States.

The offering of Ordinary Shares in the United States to certain persons reasonably believed to be qualified institutional buyers ("QIBs"), is being made in reliance on an exemption from the registration requirements of the Securities Act. Ordinary Shares have not been, nor will be, registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States. Accordingly, investors in the United States and who are acquiring Ordinary Shares pursuant to an exemption from the registration requirements of the Securities Act should note that Ordinary Shares may not be freely resold or transferred in the United States. Ordinary Shares may only be resold, renounced, pledged or otherwise transferred or delivered in an offshore transaction in accordance with Rule 903 or 904 of Regulation S, to QIBs in accordance with Rule 144A or pursuant to an exemption from registration provided by Rule 144 under the Securities Act (if available) and in accordance with any applicable securities laws of the United States and of any state of the United States.

The Shares may be delisted from the Official List if the Restructuring results in an insufficient free float in the Shares.

The UKLA requires issuers admitted to the premium listing segment of the Official List, such as Afren, to maintain at least 25% of its listed shares in public hands (that is, held in the EEA), or such lower threshold as the UKLA may determine in its discretion (the free float requirement). As of the date of this Prospectus, the Company maintains a free float sufficient to meet this requirement. However, upon completion of the Restructuring and depending upon the level of take up by existing Shareholders in the Open Offer, the Group may not have a sufficient free float in the Shares. Assuming full take up of the Open Offer by existing Shareholders only, the Company's free float will be between approximately 20% and 43% depending upon the jurisdiction of incorporation of the Shareholders. The level of the free float may also increase if Existing Noteholders elect to nominate an entity incorporated in the EEA to hold New Shares issued as part of the Restructuring.

If the resulting free float is less than 25%, the UKLA may require in certain circumstances the Group to delist from the Official List. A delisting of the Shares would adversely affect the ability of new Shareholders to buy the Shares and of holders to sell them. This may significantly adversely affect the price of the Shares. If the free float in the Shares is insufficient to meet the UKLA's requirements, the Board will consider what steps may be implemented in due course to satisfy such requirements.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Event	Time and date (2015)
Announcement of the Restructuring and Open Offer	13 March
Publication of Prospectus and Forms of Proxy	19 June
Annual General Meeting	11.00 a.m. on 25 June
Latest time and date for receipt of Forms of Proxy or submission of proxy votes electronically	11.00 a.m. on 22 July
General Meeting	11.00 a.m. on 24 July
Determination as to whether the Restructuring or Alternative Restructuring applies and the Open
Offer will proceed	24 July
Effective Date of the Scheme	5 August
Record Date for entitlements under the Open Offer	5.00 p.m. on 6 August
Ex entitlement Date for the Open Offer	8.00 a.m. on 7 August
Open Offer Entitlements and Excess Open Offer Entitlements credited to stock accounts in CREST of Qualifying CREST Shareholders	10 August
Latest recommended time and date for requesting withdrawal of Open Offer Entitlements and Excess Open Offer Entitlements from CREST	4.30 p.m. on 17 August
Latest recommended time and date for depositing Open Offer Entitlements and Excess Open
Offer Entitlements into CREST	3.00 p.m. on 18 August
Latest time and date for splitting Application Forms (to satisfy bona fide market claims)	3.00 p.m. on 19 August
Latest time and date for receipt of completed Application Forms and payment in full under the
Open Offer or settlement of relevant CREST instructions (as appropriate)	11.00 a.m. on 21 August
Results of the Open Offer announced through an RIS	7.00 a.m. on 24 August
Admission and commencement of dealings in the Ordinary Shares expected to commence	8.00 a.m. on 24 August
CREST stock accounts expected to be credited for the Ordinary Shares as soon as practicable
after	8.00 a.m. on 24 August
Share certificates for Ordinary Shares expected to be despatched	By 7 September

Notes:

(1) Each of the times and dates in the above timetable, and mentioned elsewhere in this document, is subject to change, in which event details of the new times and/or dates will be notified to the FCA and the London Stock Exchange and, where appropriate, Qualifying Shareholders. Please note that any Existing Shares sold prior to close of business on 6 August 2015, the last date on which the Existing Shares trade with entitlement, will be sold to the purchaser with the right to receive Open Offer Entitlements.
(2) If you have any queries on the procedure for acceptance and payment, you should contact Computershare Investor Services PLC, Corporate Actions Projects, BS99 6AH on 0870 889 3176 or from outside the United Kingdom on +44 (0)870 703 6101. Please note that Computershare Investor Services PLC cannot provide financial advice on the Open Offer or as to whether or not you should take up your rights under the Open Offer
(3) Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. The helpline cannot provide advice on the merits of the Open Offer or give any financial, legal or tax advice.
(4) All references to time in this document relate to London time.

SCHEME TIMETABLE	2015
Explanatory Statement sent to Existing Noteholders	30 June
General Meeting to approve the Resolution	24 July
Determination as to whether the Restructuring or Alternative Restructuring applies	24 July
Creditors' meeting to vote on the Scheme	29 July
Sanction Hearing (UK)	30 July
Chapter 15 Hearing (US)	31 July
Issue of New Senior Notes and repayment of Bridge Securities	5 August
Sub-Division of Ordinary Shares*	5 August
Debt for Equity Swap and New Senior Notes Share Issue*	5 August
Effective Date of the Scheme	5 August
Date from which Additional Commitment Applies*	11 August
Completion of Open Offer, Bridge Securities Share Issue and Early Subscriber Issue*	24 August
Consolidation of Ordinary Shares*	24 August
Expected completion date of the Restructuring*	24 August

* Assuming that the Resolution is approved

RESTRUCTURING AND OPEN OFFER STATISTICS

Number of Existing Shares in issue at the date of this document	1,107,560,524
Number of Shares to be issued for the purposes of the Debt for Equity Swap	4,430,242,096
Number of Shares to be issued for the purposes of the New Senior Notes Share Issue	5,537,802,620
Maximum number of Shares to be issued for the purposes of the Open Offer	Up to 4,922,491,218
Basis of Open Offer	4 Ordinary Shares for
	every 9 Existing
	Shares
Offer Price per Open Offer Share	1p
Number of Ordinary Shares to be allotted pursuant to the Open Offer	Up to 4,922,491,218
Number of Shares to be issued for the purposes of the Early Subscriber Issue	Up to 1,882,128,995
Number of Shares to be issued for the purposes of the Bridge Securities Share Issue	Up to 941,064,498
Estimated gross proceeds of the Open Offer(1)	£49,224,912.00
New Shares as a percentage of Afren's enlarged issued share capital immediately after	Between 91% and
the Restructuring(2)	94%
Number of Shares in issue immediately following the Restructuring(1)(3)	Up to 1,882,128,995

⁽¹⁾ Assuming the Open Offer is subscribed in full.

(2) Based on no subscriptions made under the Open Offer and the Open Offer being subscribed in full.

(3) Following the Consolidation.

_____________

PRESENTATION OF INFORMATION AND NOTICES TO INVESTORS

General

Investors should rely only on the information in this document. No person has been authorised to give any information or to make any representations in connection with the Open Offer or the Restructuring (including the Alternative Restructuring) other than the information and representations contained in this document and, if any other information is given or representations are made, such information or representations must not be relied upon as having been authorised by or on behalf of the Company, the Directors or the Sponsor.

Neither the Company nor the Directors accept any responsibility for the accuracy or completeness of any information reported by the press or other media, nor the fairness or appropriateness of any forecasts, views or opinions expressed by the press or other media regarding the Open Offer and the Restructuring (including the Alternative Restructuring), the Ordinary Shares, the Company or the Group. Neither the Company nor the Directors make any representation as to the appropriateness, accuracy, completeness or reliability of any such information or publication.

Without prejudice to any obligation of the Company to publish a supplementary prospectus pursuant to section 87G of the FSMA and paragraph 3.4.1 of the Prospectus Rules, neither the delivery of this document nor any subscription or sale made under this document shall, under any circumstances, create any implication that there has been no change in the business or affairs of the Company or of the Group taken as a whole since the date hereof or that the information contained herein is correct as of any time subsequent to its date.

The contents of this document are not to be construed as legal, business or tax advice. Each investor should consult his or her own lawyer, financial adviser or tax adviser for legal, financial or tax advice, as appropriate. In making an investment decision, each investor must rely on his or her own examination, analysis and enquiry of the Company, the Group and the contents of this document, including the merits and risks involved. Investors should read this document in its entirety and should not just rely on key information or information summarised within it.

None of the Company, the Directors, or the Sponsor is making any representation to any offeree or purchaser of the Ordinary Shares regarding the legality of an investment by such offeree or purchaser.

Morgan Stanley is acting exclusively for Afren in relation to the Open Offer and the Restructuring (including the Alternative Restructuring) and nobody else, and will not be responsible to anyone other than Afren for providing the protections afforded to customers of Morgan Stanley nor for providing advice in relation to the Open Offer and the Restructuring (including the Alternative Restructuring), the contents of this document, or any other matter referred to in this document.

Cautionary note regarding forward-looking statements

This document includes forward-looking statements including, but not limited to, the words "believe", "anticipate", "expect", "intend", "aim", "plan", "predict", "continue", "assume", "positioned", "may", "will", "should", "shall", "risk" and other similar expressions that are predictions of or indicate future events and future trends identify forward-looking statements. These forward-looking statements include all matters that are not historical facts. In particular, the statements under the headings "Summary", "Risk Factors", "Description of the Business" and "Operating and Financial Review" regarding Afren's strategy, dividend policy and other future events or prospects are forward-looking statements. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are in many cases beyond Afren's control. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Investors are cautioned that forward-looking statements are not guarantees of future performance and that Afren's actual results of operations, financial condition and the development of the industry in which Afren operates may differ materially from those made in or suggested by the forward-looking statements contained in this document. The cautionary statements set out above should be considered in connection with any subsequent written or oral forward-looking statements that Afren, or persons acting on its behalf, may issue. Factors that may cause Afren's actual results to differ materially from those expressed or implied by the forward-looking statements in this document include but are not limited to the risks described in the section entitled "Risk Factors" of this document.

These forward-looking statements reflect Afren's judgment at the date of this document and are not intended to give any assurances as to future results. Afren will update the information in this Prospectus as required by the Listing Rules, Disclosure Rules and Transparency Rules and/or the Prospectus Rules. Save for those forward-looking statements required by the Listing Rules, Disclosure Rules and Transparency Rules and/or the Prospectus Rules, Afren undertakes no obligation to update forward-looking statements and will not publicly release any revisions it may make to these forward-looking statements that may result from events or circumstances arising after the date of this document. Afren will comply with its obligations to publish updated information as required by law or by any regulatory authority but assumes no further obligation to publish additional information.

The forward-looking statements contained in this document do not in any way seek to qualify the working capital statement as set out in the section entitled "Working Capital" of Part IX (Additional Information) of this document.

Basis of presentation of financial information

Introduction

Unless otherwise indicated herein, the financial information included or incorporated by reference in this document is based on Adopted IFRS and those parts of the Companies Act which are applicable to the companies reporting under Adopted IFRS. Adopted IFRS differs in certain aspects from IFRS as issued by the International Accounting Standards Board.

The preparation of financial information in accordance with Adopted IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies.

Non-IFRS financial measures

This document contains references to certain non-IFRS measures and ratios, including net debt that are not required by, or presented in accordance with, IFRS or Adopted IFRS. The Group uses these measures to measure operating performance, in presentations to its Directors and as a basis for strategic planning and forecasting. In addition, the Group presents these non-IFRS measures because it believes that they and similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance and liquidity. The Group believes that EBITDAX and Adjusted EBITDAX are useful to investors in evaluating the Group's operating performance and its ability to incur and service its indebtedness because they:

are widely used by investors in the oil and gas industry to measure a company's operating performance before depreciation and amortisation among other items, which can vary substantially from company to company depending upon accounting methods, book value of assets, capital structure and the method by which assets were acquired, among other factors; and
help investors to more meaningfully evaluate and compare the results of the Group's operations from period to period by removing the effect of its capital structure from its operating structure.

The non-IFRS financial measures are included in this document as a supplemental disclosure, because the Directors believe that these measures provide useful comparative information to an investor, help investors evaluate the performance of the underlying business or are measures commonly used by certain investors and securities analysts for evaluating performance. In addition, the Group uses certain of the non-IFRS measures to assess the financial performance of its businesses.

EBITDAX, Adjusted EBITDAX and similar measures are used by different companies for differing purposes and are often calculated in ways that reflect the circumstances of those companies. They have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of our operating results as reported under IFRS or Adopted IFRS. These non-IFRS measures are not measurements of the Group's performance or liquidity under IFRS or Adopted IFRS and should not be considered as alternatives to operating profit or profit for the year or any other performance measures derived in accordance with IFRS, Adopted IFRS or any other generally accepted accounting principles, or as alternatives to cash flow from operating, investing or financing activities. The Group's definition, presentation or calculation of each of the non-IFRS financial measures may be different from definitions, presentations and calculations used by other companies and therefore comparability may be limited. Investors should therefore exercise caution in comparing EBITDAX or Adjusted EBITDAX as reported by the Group to EBITDAX or Adjusted EBITDAX of other companies.

EBITDAX is commonly defined as earnings before interest, taxes, depreciation, depletion, and amortisation and exploration costs. The Group further adjusts for finance income. Adjusted EBITDAX is defined as EBITDAX, plus impairment of property, plant and equipment, impairment of exploration and evaluation assets, impairment of goodwill, unrealised gains/(losses) on derivative financial instruments and share-based payments (credit)/charge. The Group excludes impairments from Adjusted EBITDAX due to their one-off nature which would distort year-on-year comparisons. The Group excludes from Adjusted EBITDAX unrealised gains/(losses) on derivative financial instruments because it does not believe that they relate to the Group's ongoing performance and the Group believes they may hinder comparison of the performance of its business either year-on-year or with other businesses. Similarly, differences exist among the Group's businesses to the extent their employees receive share-based payments. The Group therefore excludes the share-based payments (credit)/charge from Adjusted EBITDAX in order to assess the comparative performance of its businesses. EBITDAX and Adjusted EBITDAX are calculated based on continuing operations.

The Group defines net debt as total borrowings, excluding finance lease liabilities, less cash and cash equivalents. Total borrowings, excluding finance lease liabilities, includes current and non-current loan notes and bank borrowings.

The financial information included in this document is not intended to comply with reporting requirements of the SEC. Compliance with such requirements may require the modification or exclusion of certain financial measures.

Rounding adjustments

Percentages in tables have been rounded and accordingly may not add up to 100%. Certain financial data has been rounded. As a result of this rounding, the totals of data presented in this document may vary slightly from the actual arithmetic totals of such data.

Profit forecast

No statement in this document is intended as a profit forecast or a profit estimate and no statement in this document should be interpreted to mean that earnings per Existing Share or Ordinary Share for the current or future financial years would necessarily match or exceed the historical published earnings per Existing Shares.

Currency and exchange rates

References in this document to "pence", "pound", "pounds sterling", "sterling", "UK pound", "GBP" or "£" are to the lawful currency of the United Kingdom.

The Company prepares its financial statements in US dollars. Unless otherwise indicated, the financial information contained in this document has been expressed in US dollars.

The table below sets forth, for the periods and dates indicated, the high, low, period end and period average exchange rate of US dollars into sterling, based on the spot exchange rates quoted by The Bank of England for the relevant period. Fluctuations in the exchange rate between sterling and the US dollar in the past are not necessarily indicative of fluctuations that may occur in the future. These rates may also differ from the actual rates used in the preparation of the Group's financial statements included herein and other financial information presented in this document.

	US\$ per £1.00
Period	High	Low	Period end	Period average
Year
2012	1.6270	1.5319	1.6168	1.5851
2013	1.6528	1.4831	1.6528	1.5644
2014	1.7169	1.5522	1.5608	1.6477

No representation is made that the sterling or US dollar amounts referred to herein could have been or could be converted into sterling or US dollars, as the case may be, at these rates, at any particular rate or at all.

The sterling to US dollar exchange rate on 16 June 2015 (being the latest practicable date prior to the publication of this Prospectus) was US\$1.5627 = £1.00.

Sourcing of information

Certain information in this document has been sourced from third parties. Where information in this document has been sourced from third parties, the source of such information has been clearly stated adjacent to the reproduced information. Afren has obtained the necessary permissions for all non-public third party information that it has sourced.

All information contained in this document which has been sourced from third parties has been accurately reproduced and, as far as Afren is aware and is able to ascertain from information published by the relevant third party, no facts have been omitted which would render the reproduced information inaccurate or misleading.

Unless otherwise indicated, all sources for industry data and statistics are estimates or forecasts contained in or derived from internal or industry sources that the Directors believe to be reliable. Market data used throughout this document was obtained from independent experts, independent industry publications and other publicly available information. Although the Directors believe that these sources are reliable, they have not independently verified and do not guarantee the accuracy and completeness of this information.

Market data and statistics are inherently predictive and speculative and are not necessarily reflective of actual market conditions. Such statistics are based on market research, which itself is based on sampling and subjective judgments by both the researchers and the respondents, including judgments about what types of products and transactions should be included in the relevant market. In addition, the value of comparisons of statistics for different markets is limited by many factors, including that (i) the markets are defined differently, (ii) the underlying information was gathered by different methods and (iii) different assumptions were applied in compiling the data. Accordingly, the market statistics included in this document should be viewed with caution and no representation or warranty is given by any person as to their accuracy.

Hydrocarbon Data

General

The Company uses standards prepared by the Petroleum Resources Management System ("PRMS"). Unless otherwise stated herein, the estimates set forth in this Prospectus of the Company's reserves are based on reports prepared for Afren by (i) NSAI, (ii) RPS or (iii) AGR TRACS, in each case, in accordance with the standards established by the PRMS. The information regarding certain contingent resources and prospective resources presented in the Prospectus is based on operator estimates.

Each of the reports discussed in this Prospectus use the following estimates:

crude oil in standard millions of barrels ("mmbbl") (a barrel being the equivalent of 42 US gallons); and
natural gas and natural gas liquids in billions of cubic feet ("bcf") at standard temperature and pressure bases.

The actual number of barrels of crude oil produced, shipped or sold may vary from the barrel equivalents ("boe") of crude oil presented herein, as a tonne of heavier crude oil will yield fewer barrels than a tonne of lighter crude oil. Afren's conversion of data for tonnes into barrels and from cubic feet into boe may differ from that data used by other companies. Afren has assumed a conversion rate of 5.8 bcf to 1 mmboe.

The reserve, contingent resources and prospective resources information cited in this Prospectus based on the NSAI Report, RPS Reports or AGR TRACS Report, or based on operator estimates, each represent only estimates and such estimates are forward-looking statements which are based on judgments regarding future events that may be inaccurate. See "Forward-Looking Statements". Estimation of commercial reserves and contingent resources is a subjective process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact manner. The accuracy of any reserve, contingent resources and prospective resources estimate is a function of a number of variable factors and assumptions many of which are beyond the Company's control, including the quality of available data and of engineering and geological interpretation and judgment. As a result, estimates of different engineers may vary. In addition, results of drilling, testing and production subsequent to the date of an estimate may justify revising the original estimate. Accordingly, due to the inherent uncertainties and the necessarily limited nature of reservoir data, the inherently imprecise nature of reserves, contingent resources and prospective resources estimates, the initial reserve, contingent resources and prospective resources estimates are often different from the quantities of oil and natural gas that are ultimately recovered. The meaningfulness of such estimates depends primarily on the accuracy of the assumptions upon which they were based. Thus, potential investors should not place undue reliance on the ability of the information cited in this Prospectus regarding reserves, contingent resources and prospective resources based on the NSAI Report, RPS Reports or AGR TRACS Report, or based on operator estimates, to predict actual reserves, contingent resources and prospective resources, as applicable, or on comparisons of similar reports concerning other companies. This Prospectus should be accepted with the understanding that the Company's financial performance subsequent to the date of the estimates may necessitate revision of the commercial reserves and contingent resources information set forth herein. In addition, the Company's reserves will decline as due to production.

Potential investors should note that none of the NSAI Report, RPS Reports or AGR TRACS Report have calculated estimated 3P reserves under the standards of reserves measurement applied by the SEC (the "SEC basis") for any of the relevant periods reviewed in this Prospectus, or otherwise. The SEC basis differs from the PRMS.

Notice to all investors

Any person exercising their entitlement under the Open Offer will be required to represent and warrant to the Company that, except where proof has been provided to the Company's satisfaction that such person's use of the Application Form or such person's acceptance will not result in the contravention of any applicable legal requirement in any jurisdiction, such person is not: (a) acquiring Ordinary Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Ordinary Shares into the United States, any Excluded Territory or any other jurisdiction in which it is unlawful to make or accept an offer to acquire the Ordinary Shares; (b) resident or located (as applicable) within any of the Excluded Territories; (c) located in any jurisdiction in which it is unlawful to make or accept an offer to acquire the Ordinary Shares; (d) located within the United States (subject to certain exceptions); or (e) subject to certain exceptions, applying for the account of a person who is located in the United States, unless (i) the instruction to apply was received from a person outside the United States and (ii) the person giving such instruction has confirmed that it has the authority to give such instruction and either (A) has investment discretion over such account or (B) is an investment manager or investment company that is applying for the Ordinary Shares in an "offshore transaction" within the meaning of Regulation S.

Notwithstanding (a) to (e) above, the Company reserves the right to permit any Qualifying Shareholder to take up his rights on the terms and conditions and subject to the requirements set out in paragraph 6 "Overseas Shareholders" of Part VII (Terms and Conditions of the Open Offer) of this document if the Company, in its sole and absolute discretion, is satisfied that the transaction in question will not result in the contravention of any applicable regulatory or legal requirements in any jurisdiction.

The Ordinary Shares have not been and will not be registered under the relevant laws of any Excluded Territory and may not be offered, sold, taken up, exercised, resold, transferred or delivered, directly or indirectly, within the Excluded Territories, except pursuant to an applicable exemption from registration, and in compliance with, any applicable securities laws.

Any reproduction or distribution of this document, in whole or in part, and any disclosure of its contents or use of any information contained in this document for any purpose other than considering an investment in Ordinary Shares is prohibited. By accepting delivery of this document, each offeree of the Ordinary Shares agrees to the foregoing.

The distribution of this document and/or the Application Form and/or the transfer of the Ordinary Shares into jurisdictions other than the UK may be restricted by law. Persons into whose possession these documents come are required to inform themselves about and observe any such restrictions including those set out in the preceding paragraphs. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, subject to certain exceptions, such documents should not be distributed, forwarded to or transmitted in or into the United States or the Excluded Territories or into any other jurisdiction where the extension or availability of the Open Offer would breach any applicable law.

The Ordinary Shares are transferable, except in accordance with, and subject to the restrictions relating to Overseas Shareholders set out in paragraph 6 "Overseas Shareholders" of Part VII (Terms and Conditions of the Open Offer) of this document. No action has been taken by the Company that would permit an offer of the Ordinary Shares or possession or distribution of this document or any other offering or publicity material in any jurisdiction where action for that purpose is required, other than in the United Kingdom.

No person has been authorised to give any information or make any representations other than those contained in this document and, if given or made, such information or representations must not be relied upon as having been authorised by the Company. Neither the delivery of this document nor any acquisition or sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this document or that the information in this document is correct as at any time subsequent to its date.

Each investor also acknowledges that: (i) it has not relied on the Sponsor or any person affiliated with the Sponsor in connection with any investigation of the accuracy of any information contained in this document or its investment decision; and (ii) it has relied only on the information contained in this document, and that no person has been authorised to give any information or to make any representation concerning the Company or its subsidiaries or the Shares (other than as contained in this document) and, if given or made, any such other information or representation should not be relied upon as having been authorised by the Company or the Sponsor.

Notice to investors in the European Economic Area (other than the UK)

In relation to each member state of the European Economic Area which has implemented the Prospectus Directive (except for the UK) (each, a "relevant member state"), no Ordinary Shares have been offered or will be offered pursuant to the Open Offer to the public in that relevant member state prior to the publication of a prospectus in relation to the Ordinary Shares which has been approved by the competent authority in the relevant member state or, where appropriate, approved in another relevant member state and notified to the competent authority in the relevant member state all in accordance with the Prospectus Directive, except that offers of Ordinary Shares may be made to the public in that relevant member state at any time:

(a) to any legal entity which is a qualified investor as defined under the Prospectus Directive;
(b) to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive); or
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of Ordinary Shares shall result in a requirement for the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive or any measure implementing the Prospective Directive in a relevant member state and each person who initially acquires any Ordinary Shares or to whom any offer is made under the Open Offer will be deemed to have represented, acknowledged, and agreed that it is a "qualified investor" within the meaning of Articles 2(1)(e) of the Prospectus Directive.

For the purposes of this provision, the expression "an offer of shares to the public" in relation to any Ordinary Shares in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the Open Offer and the Ordinary Shares to be offered so as to enable an investor to decide to purchase or subscribe for the Ordinary Shares, as the same may be varied in that relevant member state by any measure implementing the Prospectus Directive in that relevant member state. The expression "Prospectus Directive" means Directive 2003/71/EC (and any amendments thereto) and includes any relevant implementing measure in each relevant member state.

In the case of any Ordinary Shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, such financial intermediary will also be deemed to have represented, acknowledged and agreed that the Ordinary Shares acquired by it in the Open Offer have not been acquired on a nondiscretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any Ordinary Shares to the public other than their offer or resale in a relevant member state to "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive. The Company, the Sponsor and their respective affiliates will rely upon the truth and accuracy of the foregoing representation, acknowledgement and agreement.

Notice to all overseas investors

All Overseas Shareholders and any person (including, without limitation, a nominee or trustee) who has a contractual or legal obligation to forward this document or any Application Forms, if and when received, or other document to a jurisdiction outside the United Kingdom should read paragraph 6 of "Overseas Shareholders" of Part VII (Terms and Conditions of the Open Offer) of this document.

Notice to persons in the United States

Subject to certain exceptions, neither this document nor the Application Form constitutes or will constitute or forms or will form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or acquire the Ordinary Shares to any Shareholder with a registered address in, or who is located in, the United States. Subject to certain exceptions, if you are in the United States, you may not exercise your entitlement to acquire any Ordinary Shares offered hereby. The Ordinary Shares have not been and will not be registered under the Securities Act or the securities laws of any state of the United States and, subject to certain exceptions, may not be offered or sold within the United States. Subject to certain exceptions, the Ordinary Shares are being offered outside the United States only in reliance on Regulation S.

In addition, until 40 days after the commencement of the Open Offer, any offer, sale or transfer of the Ordinary Shares within the United States by a dealer (whether or not participating in the Open Offer) may violate the registration requirements of the Securities Act.

Subject to certain exceptions, Application Forms are not being sent to, and Open Offer Entitlements and Excess Open Offer Entitlements are not being credited to a stock account in CREST of, any Shareholder with a registered address in the United States. The Company reserves the right to treat as invalid any Application Form that appears to the Company or its agents to have been executed in or despatched from the United States, or that provides an address in the United States for the acceptance of Ordinary Shares, or which does not make the warranty set out in the Application Form to the effect that the person accepting Ordinary Shares does not have a registered address and is not otherwise located in the United States and is not acquiring Ordinary Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Ordinary Shares in the United States or where the Company believes the offer, sale, resale, transfer, delivery or distribution of such Ordinary Shares may infringe applicable legal or regulatory requirements. The Company will not be bound to allot or issue any Ordinary Shares to any person with an address in, or who is otherwise located in, the United States in whose favour Ordinary Shares may be transferred. In addition, the Group reserves the right to reject any MTM instruction sent by or on behalf of any CREST member with a registered address in the United States in respect of the Ordinary Shares. Any payment made in respect of an Application Form under any of these circumstances will be returned without interest.

Any person in the United States who obtains a copy of this document should inform themselves about and observe any legal restrictions.

Notice to investors in Canada

The Existing Shares, Open Offer Entitlements and Ordinary Shares have not been or will not be registered under the securities legislation of any province or territory of Canada. Subject to certain exceptions, the Existing Shares, Open Offer Entitlements and Ordinary Shares will not be directly or indirectly offered for subscription or purchase, taken up, sold, delivered, renounced or transferred in or into Canada. Therefore, subject to certain exceptions, no offer or sale of Existing Shares or Ordinary Shares will be made within Canada and no Application Form will be sent to, nor will any Open Offer Entitlements be credited to, a stock account in CREST on behalf of any Shareholder with a registered address or who is resident or located in Canada.

Switzerland

This document is being communicated to a small number of selected investors only in or from Switzerland. Each copy of this document is addressed to a specifically named recipient and may not be passed on to third parties. The Ordinary Shares are not being offered to the public in or from Switzerland, and neither this document nor any other offering material in relation to the Ordinary Shares may be distributed in connection with any such public offering.

Nigeria

The Existing Shares, the Open Offer Entitlements and the Ordinary Shares have not been and will not be registered with the Nigerian Securities and Exchange Commission (the "Nigerian SEC"), or under the Nigerian Investments and Securities Act No. 29 of 2007 (the "Nigerian ISA"). Further, neither this Prospectus nor any other offering material related to the Existing Shares, the Open Offer Entitlements and the Ordinary Shares may be utilised in connection with any offering to the public within Nigeria, and the Existing Shares, the Open Offer Entitlements and the Ordinary Shares may not be offered or sold within Nigeria or to, or for the account or benefit of, persons resident in Nigeria, except to the extent that the Existing Shares, the Open Offer Entitlements and the Ordinary Shares have been registered with the Nigerian SEC and its written approval obtained in accordance with the provisions of the Nigerian ISA and other Nigerian securities laws and regulations. Accordingly, this Prospectus is not directed to, and the Open Offer Entitlements and the Ordinary Shares are not available for subscription by, any person within Nigeria.

Own investigation

Any decision in connection with the Open Offer should be made solely on the basis of the information contained in this document. Without limitation to the foregoing, reliance should not be placed on any information in announcements released by Afren prior to the date hereof, except to the extent that such information is repeated or incorporated by reference into this document.

Apart from the responsibilities and liabilities, if any, which may be imposed upon Morgan Stanley under the FSMA or the regulatory regime established thereunder: (i) Morgan Stanley accepts no responsibility whatsoever and makes no representation or warranty, express or implied, in relation to the content of this document, including its accuracy, completeness or verification or in relation to any other statement made or purported to be made by it, or on its behalf, in connection with Afren, the Existing Shares, the Open Offer Entitlements, the Ordinary Shares or the Open Offer and nothing in this document is or shall be relied upon as a promise or representation in this respect, whether as to the past or future; and (ii) Morgan Stanley accordingly disclaims, to the fullest extent permitted by law, all and any liability whatsoever, whether arising in tort, contract or otherwise (except as referred to above) which it might otherwise have in respect of this document or any such statement.

The Sponsor and any person acting on behalf of it does not accept any responsibility or obligation to update, review or revise the information in this document or to publish or distribute any information which comes to its attention after the date of this document, and the distribution of this document shall not constitute a representation by the Sponsor or any such person, that this document will be updated, reviewed or revised or that any such information will be published or distributed after the date hereof.

No representation or warranty, express or implied, is made by Morgan Stanley as to the accuracy, completeness or verification of the information set forth in this document, and nothing contained in this document is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or the future. Morgan Stanley assumes any responsibility for its accuracy, completeness or verification and accordingly disclaim, to the fullest extent permitted by applicable law, any and all liability whether arising in tort, contract or otherwise which they might otherwise be found to have in respect of this document or any such statement.

No incorporation of website information

The contents of Afren's website or any website mentioned in this document or any website directly or indirectly linked to Afren's website have not been verified and do not form part of this document and investors should not rely on it.

References to time

Unless otherwise stated, all references to time in this document are references to the time in London, United Kingdom.

Defined terms

Certain terms used in this document, including all capitalised terms and certain technical and other items, are defined in the Definitions section of this document.

DIRECTORS, SECRETARY AND ADVISERS

Directors

Mr. Egbert Imomoh	(Executive Chairman)
Mr. Alan Linn	(Chief Executive Officer)
Mr. Darra Comyn	(Group Finance Director)
Mr. Toby Hayward	(Non-Executive Director)
Mr. Peter Bingham	(Non-Executive Director)
Mr. John St. John	(Non-Executive Director)
Mr. Patrick Obath	(Non-Executive Director)
Ms. Sheree Bryant	(Non-Executive Director)
Mr. Iain McLaren	(Non-Executive Director)
Company secretary	Mr. Elekwachi Ukwu
Registered office	Kinnaird House
	1 Pall Mall East
	London SW1Y 5AU
Sponsor and financial adviser to Afren	Morgan Stanley & Co. International plc
	20 Bank Street
	Canary Wharf
	London E14 4AD
Independent auditors	Deloitte LLP
	2 New Street Square
	London EC4A 3BZ
Reporting accountants	Deloitte LLP
	2 New Street Square
	London EC4A 3BZ
Legal advisers to Afren as to English and	White & Case LLP
US law	5 Old Broad Street
	London EC2N 1DW
Legal adviser to the Sponsor as to English	Freshfields Bruckhaus Deringer LLP
and US law	65 Fleet Street
	London EC4Y 1HT
Registrar and Receiving Agent	Computershare Investor Services PLC
	The Pavilions
	Bridgwater Road
	Bristol BS99 6AH

PART I

LETTER FROM THE CHAIRMAN TO SHAREHOLDERS

Kinnaird House 1 Pall Mall East London SW1Y 5AU England

Egbert Imomoh (Chairman) Alan Linn (Group CEO) Darra Comyn (Group Finance Director) Toby Hayward (Independent Non-Executive Director) Peter Bingham (Independent Non-Executive Director) John St. John (Independent Non-Executive Director) Patrick Obath (Independent Non-Executive Director) Sheree Bryant (Independent Non-Executive Director) Iain McLaren (Independent Non-Executive Director)

19 June 2015

Dear Shareholders, and for information purposes only, optionholders

Proposed capital and financial restructuring

Scheme of Arrangement in respect of the Existing Notes and the issue of New Senior Notes

Issue of Ordinary Shares in connection with the repayment of the Bridge Securities and the issue of New Senior Notes

Proposed Open Offer of up to 4,922,491,218 Ordinary Shares

Amendment of Credit Facilities

Notice of General Meeting

1. Introduction and Overview

I am writing to you on behalf of the Afren Board to provide you with background and financial rationale for the proposed capital and financial restructuring, to explain further details of the restructuring and to recommend that you vote in favour of the Resolution at the General Meeting related to the Restructuring. The key features of the proposed restructuring are:

the implementation of a scheme of arrangement in respect of the Existing Notes, including:
o the issue of US\$369 million of new high yield notes due 2017 to refinance and repay the Bridge Securities and to provide an additional US\$148 million in net cash proceeds to the Group;
o the conversion of approximately US\$234 million of the Existing Notes (representing 25% of the face value of the outstanding principal amount and accrued interest of each of the 2016 Notes, the 2019 Notes and the 2020 Notes) into new Ordinary Shares in the Company, representing 80% of the existing issued share capital; and
o the remainder of the Existing Notes to be cancelled and reissued in equal amounts of US\$350 million each of new notes due December 2019 and December 2020 respectively, with an annual interest rate of 9.1%;
the issue of additional new Ordinary Shares, equal to 50% of the issued share capital of the Company following the Debt for Equity Swap described above, to holders of the New Senior Notes;
the issue of up to US\$75 million (approximately £49.2 million) of new Ordinary Shares by way of

an open offer to Shareholders;

the issue of new Ordinary Shares, equal to 10% of the fully diluted share capital of the Company following the completion of the Open Offer, to holders of the New Senior Notes in order of priority of their agreement to subscribe for the New Senior Notes;
the issue of new Ordinary Shares, equal to 5% of the fully diluted share capital of the Company following the completion of the Open Offer, to the holders of the Bridge Securities in partial repayment of the Bridge Securities;
the entry into an amended term facility with the Ebok Lenders, including to extend the period for repayment of the US\$300 million Ebok Facility until June 2019; and
the entry into an amended loan agreement with the Okwok/OML 113 Lender, including to extend the period for repayment of the US\$50 million Okwok/OML 113 Facility until June 2019,

together the "Restructuring").

The terms of the Restructuring are summarised, and terms related thereto defined, in the sections entitled "Overview of the Restructuring" and "Details of the Open Offer" of this Part I (Letter from the Chairman to Shareholders). In particular, your attention is drawn to the section entitled "Importance of vote and consequences of failure to implement the Restructuring" of this Part I (Letter from the Chairman to Shareholders).

In the opinion of the Directors, voting for the Resolution and authorising the implementation of the Restructuring will:

provide Existing Shareholders the only opportunity to realise value and participate in the recovery of the Group;
provide Existing Shareholders an opportunity to participate in the Open Offer to increase their ownership position on favourable terms;
improve the capital structure of the Group to provide it the time to implement its business plan and grow the value of its assets; and
prevent a formal insolvency filing.

If Shareholders do not approve the Resolution at the General Meeting, Existing Shareholders have no prospect of any value. Upon a No vote:

the Alternative Restructuring will still proceed without delay;
the amount of debt will increase by approximately US\$265 million immediately as compared to a Yes vote and the interest rates on the Group's new debt will cause outstanding debt to increase significantly. There is no value for shareholders unless all of this debt is repaid;
holders of the New Senior Notes will have share pledge security over all of the Group's assets; and
the Company will be required to have entered into a binding agreement by no later than 31 December 2016 to sell all of its assets. These assets can be sold to any party, including the Noteholders, and can be completed with or without shareholder approval.

The Directors consider that if Shareholders do not approve the Resolution at the General Meeting, the Shareholders would be unlikely to receive any proceeds from the sale of the Group or the required disposal of the Group's assets or other return of income or capital by the Company, and therefore the Shareholders would be unlikely to see any return of their current investment.

2. Background to and reasons for the Restructuring

In light of the significant uncertainty in the industry and related financing markets resulting from the rapid decline in oil prices in the second half of 2014, and the material funding constraints faced by the business, from January 2015 the Board initiated a series of actions to stabilise its capital structure and a process to review its capital structure, liquidity requirements and funding sources. The actions and review were intended to address the immediate funding requirements of the business and manage the overall high leverage of the Group. This process ultimately resulted in the Board's approval of the Interim Funding to enable the Group to continue to trade whilst Restructuring was developed so as to be capable of implementation.

2014 results and financial position of the Group

At 31 December 2014, the Group had a consolidated cash position of approximately US\$237 million. Available liquidity, however, was significantly lower as a result of restricted or segregated cash balances in place to address operational requirements. These balances are held in project accounts and ring fenced for expenditure on specific assets and therefore cannot be freely used to meet other liabilities of the Group. The Company's near term cash flow was also impacted by ongoing development programmes on the Group's producing assets and capital expenditures incurred in late 2014 before operational changes had been implemented to adapt to the new lower oil price environment. In order to improve the Group's cash position and ensure sufficient funding existed to meet short term requirements, in December 2014, the Company sold its 2015 hedges of 2.85 mmbbls of crude oil realising a cash benefit of US\$80 million.

Furthermore, the Company faced significant debt service obligations in 2015 and 2016 as it had been unable to close its planned refinancing of its Ebok Facility (which was fully documented and due to be signed during the week that the former CEO and COO were suspended) in the second half of 2014 or close other financing activities following their dismissal, based upon a combination of the continuing fall in oil prices, the ongoing review work by Willkie Farr & Gallagher and there being no permanent CEO or COO in place to address a revised business plan in the lower oil price environment.

Despite the challenging operational and macro-economic conditions during the year, Afren delivered full year 2014 gross and net production of approximately 47.6 kbopd and 31.8 kbopd, respectively (excluding Barda Rash). Full year net production was below the production guidance range of between 32 to 36 kbopd principally due to the lower production at Ebok caused by delays with the installation of the Ebok Central Fault Block platform extension as well as lower than planned production from Barda Rash. As a result, full year 2014 revenue was US\$946 million (31 December 2013: US\$1,644 million), reflecting both lower production volumes and lower realised oil prices in the second half of the year (1H 2014: US\$108/bbl, 2H 2014: US\$86/bbl).

On 12 January 2015, Afren announced its intention to review its strategic options in respect of the Barda Rash field, Kurdistan region of Iraq, reflecting both disappointing operational results at the field and a significant reserves and resources downgrade following an updated reserves report by RPS Energy. The reserves movement at Barda Rash combined with the impact of lower oil prices on producing assets resulted in a material impairment charge in 2014 in respect of the reserves relating to production and development assets (including goodwill) with Barda Rash fully written off. In addition material impairment charges were recorded in relation to the Group's exploration and evaluation assets as future capital expenditure is curtailed due to the materially lower oil price environment and Afren's current financing constraints. As a result, the Group incurred pre-tax impairment charges of approximately US\$2.2 billion in 2014.

Overall, the Board concluded in its results for the year ended 31 December 2014 that there was material uncertainty as to whether the Group can continue as a going concern. Notwithstanding, the Board had commenced actions prior to the approval of these results in order to secure the Group's operating future.

Actions to preserve cash

As a result of the Board's deliberations and the need to preserve cash in light of insufficient cash flow to fund working capital, committed capex requirements and forthcoming interest and principal payments, the Group took a number of significant steps in early 2015 as a means to avoid potential insolvency proceedings. These included significant reductions in expenditures, including cutting capex by suspending major developments on Okwok and Okoro, stopping all discretionary exploration activity and curtailing all non-essential expenses.

The Company engaged Alvarez & Marsal to provide services as chief restructuring officer, for cash management support and to assist with the process for payments to suppliers. Such actions included agreeing extended payment terms with certain suppliers, which has resulted in relationships with such suppliers becoming strained. The Group has spent considerable management time in seeking to maintain good relationships with its suppliers during this period. However, the Group has received certain claims for breaches of contract arising from its management of contractual terms with suppliers and/or the termination of existing contracts, including those relating to the cutting of capex on Okwok and Okoro.

In early January, the Group commenced discussions with its Ebok Lenders regarding potential events of default and a deferral of upcoming amortisation payments. On 2 February 2015, the Group agreed with the Ebok Lenders a deferral of the US\$50 million amortisation payment due on 31 January 2015 until 27 February 2015. This was subsequently deferred on a number of occasions until the completion of the issue of the Bridge Securities, since when it has been further deferred until the completion of the Restructuring (conditional upon the Restructuring completing by 7 September 2015). Additionally, the Ebok Lenders agreed to a deferral of the US\$50 million amortisation payment due on 30 April 2015 until the completion of the Restructuring (conditional upon the Restructuring completing by 7 September 2015).

The Company also took advantage of a 30 day grace period under its 2016 Notes on interest payments while the review of the capital structure progressed and consequently it did not pay US\$15 million of interest due under its 2016 Notes on 1 February 2015. Certain holders of the 2016 Notes agreed to forbear from taking certain actions with regard to specified events of default under the 2016 Notes, including, among others, to refrain from accelerating amounts owing under the 2016 Notes (in particular the missed interest payment due in February 2015) and to take actions to rescind any such acceleration.

On 3 March 2015, the Group announced that it would not make the US\$15 million of interest payment due on 1 February 2015 under the 2016 Notes and on 9 April 2015, the Group announced that it would not make the US\$12.8 million of interest payment due on 8 April 2015 under the 2019 Notes. Further, on 10 June 2015, the Group announced that it would take advantage of a 30 day grace period in respect of the obligation to pay US\$11.9 million of interest due on 9 June 2015 under the 2020 Notes and that the Directors anticipated that it would not make this payment once the grace period expires. The Group remains in default of its obligations under the 2016 Notes and the 2019 Notes and will be in default under the 2020 Notes if it does not pay US\$11.9 million of interest which was due on 9 June 2015.

Engagement with stakeholders and pursuit of funding arrangements

Given the substantial constraints on the Group's cash flow and in order to improve its near term liquidity position, in early 2015 the Board initiated on an urgent basis, a number of refinancing measures with the aim of recapitalising the business, extending debt maturities, lowering the Group's cost base and focussing the Company's operational efforts towards its existing Nigerian production base. The measures considered included raising new equity and debt, liability management alternatives and potential transactions with strategic and financial investors. The Board retained Morgan Stanley as financial adviser to the Company. In order to support these measures, the Group prepared a revised business plan, focused on its core producing assets in Nigeria, which assumes a lower oil price environment for the foreseeable future and is expected to lead to a year-on-year growth in the underlying net production base through to 2017. On 27 January 2015, the Company announced that, assuming its current debt structure remained unchanged, there was an equity funding requirement which was likely to be significant and in excess of the Company's then market capitalisation. The Company indicated that new funds would be required to meet interest and principal repayments, working capital and a reduced capital expenditure programme.

The Board commenced detailed discussions with its key creditors in January 2015, including the Ebok Lenders and an ad hoc committee of the holders of its Existing Notes, with a view to determining whether such creditors would be prepared to provide additional funding or otherwise amend the terms of their existing credit facilities. The Board indicated that it was in discussions with the advisers to the ad hoc committee of bondholders regarding the immediate liquidity and funding needs of the business.

In parallel, the Board undertook a comprehensive process to find alternative sources of funding, ranging from short term funding, an investment to fund the revised business plan and a cornerstone investor to lead any recapitalisation of the business. Alternative sale or merger transactions were also considered. 50 parties were contacted, including both strategic and financial investors and the Group's existing creditors. In addition a number of unsolicited enquiries were received. 15 non-disclosure agreements were signed to allow more substantive access to a data room and six indicative offers were received. However each of these third party offers were below the aggregate value of the Group's debt, were subject to substantial due diligence processes or other conditions precedent, and none were capable of being executed without a significant restructuring of the Group's existing debt (including an appropriate revised security package). The Board was of the view that, given the terms offered and the significant uncertainty that any of the offers were capable of being implemented, no third party alternative additional funding was either available or could be completed within the relevant time frame available to avoid insolvency.

The only offer that was available, capable of execution within the timeframe of the Group's liquidity requirements, was capable of garnering the support of the creditors necessary to receive such funding within the structure and terms of the Group's existing debt was from the ad hoc committee of noteholders, who were prepared to step in to protect their existing exposure to the Group. This offer addressed both the short term and longer term funding requirements of the business and was structured in a manner that was capable of being implemented. This offer required the agreement of the Ebok Lenders and the Okwok/OML 113 Lender, and the proposed interim funding was to be made on a senior secured basis to the Ebok Facility.

The Board also considered whether a substantial capital raising by way of a rights offer (or similar equity offering) to existing shareholders would have been capable of being implemented on an urgent basis. Any such equity offering was not a stand-alone solution and would have needed to be undertaken in conjunction with amendments to the Group's existing indebtedness, in particular the Ebok Facility and the 2016 Notes, as a result of the need (amongst other items) to commence amortisation payments under the Ebok Facility of US\$50 million per quarter from January 2015 and the required repayment of the 2016 Notes in full in February 2016. Given the size of the required funding amount (being significantly in excess of the Company's then market capitalisation at the end of January 2015), the material decline and continuing downward trend in the trading price of the Company's shares and debt securities and the turnover in the Company's shareholder base, the Board considered that it was not possible to secure an underwritten equity offering of any substantial amount that would have assured the Company of sufficient proceeds to reduce the Group's leverage and manage its urgent liquidity demands.

The Board has continued to review any further proposals received to assess whether a better alternative is available and remains of the view that no such alternative proposal has been received or is capable of being implemented.

Discussions with Seplat

In late 2014, the Company was in receipt of an approach from SEPLAT Petroleum Development Company plc ("Seplat") about a potential business combination. This approach was subject to the requirements of the Takeover Code, including as to certain time periods during which Seplat either had to announce a firm intention to make an offer for the Company or cease discussions ("put up or shut up"). The Company agreed to two extensions of this "put up or shut up" period during early 2015 to allow more time for discussions. However, the Board did not receive any proposal from Seplat that it believed was capable of being implemented on terms satisfactory to all relevant stakeholders in the Company, not least because the indicated value from Seplat was significantly below the aggregate value of the debt of the Company. Accordingly, the Board concluded that continuing discussions with Seplat was not in the best interests of the Company's stakeholders and ceased further discussions about such a combination.

Agreement on the terms of the Restructuring

Since early 2015 Afren has engaged in discussions with representatives of many of the Group's key stakeholders, including the Existing Noteholders and the Ebok Lenders, with the aim of recapitalising the business, extending debt maturities, lowering the Group's cost base and focusing the Group's operational efforts towards its existing Nigerian production base as outlined in the Group's revised business plan.

On 13 March 2015, Afren announced it had agreed in principle the terms of the Restructuring with certain holders of the 2016 Notes, 2019 Notes and 2020 Notes, representing approximately 42% in total of the Existing Notes and lenders representing approximately 97% by value of the lenders under the Ebok Facility. This agreement in principle included a conditional commitment to provide US\$200 million in net cash proceeds to the Company as an interim funding measure. Without the provision of such interim funding, the Board considered that the Company would have been unable to continue as a going concern and would have filed for insolvency proceedings prior to the publication of its accounts for the year ended 31 December 2014.

Afren and certain other members of the Group also entered into a lock up and restructuring agreement (the "Restructuring Agreement") with the above creditors, pursuant to which those members of the Group agreed to implement the Restructuring and such creditors agreed to take all actions reasonably requested by those members of the Group to support, facilitate, implement or give effect to the Interim Funding and the Restructuring (described below). The creditors party to the Restructuring Agreement also agreed to refrain from taking actions, such as accelerating sums owing by the Group or taking enforcement action over any security, which may frustrate the implementation of the Restructuring. See "Material Contracts—Restructuring Agreement" in Part IX (Additional Information).

On 30 April 2015, in connection with the provision of Interim Funding described below, the Restructuring Agreement was amended and restated to provide for, among other things, the final negotiated position between Afren and the Consenting Creditors in respect of the terms of the Interim Funding and the Restructuring. Holders of approximately 42% of the aggregate principal amount of the Existing Notes as at 13 March 2015 and holders of 100% of the aggregate principal amount of the Ebok Facility were parties to or acceded to the Restructuring Agreement, as amended and restated.

Interim funding

On 30 April 2015, the Company entered into a note purchase agreement with certain holders of the Existing Notes and certain of their respective affiliates (the "Bridge Noteholders") for the provision of US\$200 million in net interim funding (the "Interim Funding") in the form of senior secured private placement notes (the "Bridge Securities"). The Bridge Securities were issued for a term of 360 days at an original issue discount of 5.5% and have an annual interest rate, payable in kind, of 15%.

It is intended that the Bridge Securities will be repaid through a combination of the issue of New Senior Notes and the issue to Bridge Noteholders (or their nominees) of new Ordinary Shares representing 5% of the fully diluted share capital of the Company following the Debt for Equity Swap, the New Senior Notes Share Issue and the Open Offer, each as further described below.

In connection with the implementation of the Interim Funding, Afren entered into an additional Ebok intercreditor agreement ("ICA 2") which, amongst other things, provides that the Interim Funding and the security in respect thereof ranks ahead of the 2016 Notes, the 2019 Notes and the 2020 Notes, and the Subordinated Ebok Security (respectively) and a separate intercreditor agreement ("ICA 3") which, amongst other things, provides that the Interim Funding and the security in respect thereof ranks ahead of the Senior Ebok Debt and the Senior Ebok Security (respectively).

After the issue of the Bridge Securities, the Company received additional commitments from other holders of the Existing Notes to subscribe for additional New Senior Notes so as to increase the principal amount of the New Senior Notes to the maximum level permitted of US\$369 million. This will result in the Group receiving an additional US\$148 million in net cash proceeds as compared to the receipt of proceeds under the Bridge Securities.

The Interim Funding has provided the Group initial, immediate liquidity and necessary time to implement the required steps to complete the Restructuring.

3. Overview of the Restructuring

Objectives of the Restructuring

The primary objectives of the Restructuring are to:

(a) mitigate the risk of any of the Group companies having to file for a formal insolvency process, as a result of which the recoveries for creditors would be materially lower than if the Restructuring or Alternative Restructuring were to be successfully completed;
(b) implement a new capital structure so that the Group will possess a strengthened balance sheet and a more appropriate debt service and maturity profile in light of the ongoing difficult trading conditions in the global crude oil market;
(c) ensure that the Group can service its general corporate and working capital obligations thereby allowing the Group to continue trading; and
(d) provide holders of the Existing Shares with the opportunity to participate further in any potential upside arising from any increase in oil prices and the Group's exploration and appraisal portfolio.

Terms of the Restructuring

(A) Overview of the Scheme in respect of the Existing Notes

As part of the Restructuring, a scheme of arrangement in respect of the Existing Notes will be implemented. The issue of the New Senior Notes, the Debt for Equity Swap, the New Senior Notes Share Issue and the issue of the New 2019 and New 2020 Notes (each as defined and described below) will be made by way of a scheme of arrangement between the Group and the Existing Noteholders in accordance with Part 26 of the Companies Act (the "Scheme").

Issue of New Senior Notes and repayment of the Bridge Securities

As part of the Scheme, the Company (or a newly incorporated direct subsidiary of the Company (the "Issuer")) will issue US\$369 million of new high yield notes due August 2017 ("New Senior Notes") to refinance and repay substantially all of the Bridge Securities and provide an additional US\$148 million in net cash proceeds to the Group (as compared to the funding under the Bridge Securities agreed on 30 April 2015). The issue of the New Senior Notes has been fully subscribed by the Bridge Noteholders, while all Existing Noteholders will be eligible to participate in the subscription for the New Senior Notes pro rata to their existing holdings (by way of claw back of the initial subscription by the Bridge Noteholders). The New Senior Notes will carry an annual interest rate of 15% (7.5% payable in cash and 7.5% payable in kind).

Debt for Equity Swap

As part of the Scheme, 25% of the face value of the outstanding principal amount and accrued interest of the Existing Notes (being approximately US\$234 million) will be released and converted into equity pursuant to the issue of new Ordinary Shares to Existing Noteholders, which will result in Existing Noteholders holding 80% of the increased share capital of the Company immediately following such conversion (the "Debt for Equity Swap").

Issue of New 2019 Notes and New 2020 Notes

As part of the Scheme, the remainder of the Existing Notes will be cancelled and reissued into two equal amounts of US\$350 million of new notes due 2019 and 2020 respectively to be issued by the Company (or the Issuer) (the "New 2019 Notes" and the "New 2020 Notes", respectively). The New 2019 Notes and the New 2020 Notes will have an annual interest rate of 9.1%, payable in kind until the New Senior Notes are fully repaid and then payable in cash.

(B) Overview of New Senior Notes Share Issue

As part of the Scheme, immediately following the implementation of the Scheme, the Company shall

issue new Ordinary Shares for cash at nominal value to those Existing Noteholders who subscribe for New Senior Notes. The Company has agreed to issue a total aggregate amount of new Ordinary Shares representing 50% of the fully diluted share capital of the Company following the completion of the Debt for Equity Swap (the "New Senior Notes Share Issue").

(C) Overview of the Open Offer

The Company will subsequently commence a pre-emptive open offer (the "Open Offer") to all Shareholders, including those Existing Noteholders who acquire shares pursuant to the Debt for Equity Swap and the New Senior Notes Share Issue. The Open Offer will comprise up to £49.2 million in new Ordinary Shares (being up to approximately 44% of the Ordinary Shares immediately following the Debt for Equity Swap and New Senior Notes Share Issue) and Shareholders will have the ability to subscribe for more than their pro rata interest (subject to an overall limit for Existing Shareholders). The Open Offer will not be underwritten. Further details of the Open Offer are described in "Details of the Open Offer" below.

(D) Early Subscriber Issue

Upon completion of the Open Offer, as part of the Scheme the Company has agreed to issue for cash at nominal value to certain of the Existing Noteholders who subscribed for New Senior Notes additional new Ordinary Shares representing 10% of the fully diluted share capital of the Company following the completion of the Debt for Equity Swap, the New Senior Notes Share Issue, the Open Offer and the Bridge Securities Share Issue (the "Early Subscriber Issue"). Such additional Ordinary Shares will be allocated to noteholders who subscribed for New Senior Notes, as an "early bird" incentive payment, in the order of priority of their agreement to subscribe for New Senior Notes.

If the New Senior Notes are issued after 7 August 2015, the amount of the Early Subscriber Issue will increase by 0.1205% of the fully diluted share capital of the Company for each day from 8 August 2015 until the date of issue of the New Senior Notes (the "Additional Commitment Issue"). This is intended as a form of commitment fee for subscribing early to the issue of the New Senior Notes. If the Restructuring proceeds on the indicative timetable outlined in this Prospectus, the Additional Commitment Issue will not become payable by the Company.

(E) Conversion of part of the Bridge Securities

Under the terms of the Restructuring, US\$5 million of the Bridge Securities will not be repaid by the New Senior Notes, but will instead be released and converted into equity pursuant to the issue of new Ordinary Shares to Bridge Noteholders (or their nominees), in an aggregate amount representing 5% of the fully diluted share capital of the Company following the completion of the Debt for Equity Swap, the New Senior Notes Share Issue, the Open Offer and the Early Subscriber Issue (the "Bridge Securities Share Issue").

(F) Overview of amendments to the Ebok Facility

As part of the proposed Restructuring, Afren will enter into an amendment agreement with the Ebok Lenders in respect of the Ebok Facility (the "Amended Ebok Facility"), pursuant to which, amongst other things, the period for repayment of the US\$300 million Ebok Facility will be extended until 30 June 2019. An additional element of PIK interest shall be added and such PIK interest shall accrue at a rate of 1.5%, 2.0% or 3.5% (as applicable to specified the interest periods) payable upon repayment of the facility. Upon closing of the Restructuring, an amendment fee equal to 3% of the initial principal amount will be capitalised and payable upon repayment of the facility. These amendments will come into effect only if the Restructuring is completed.

The amortisation profile under the Ebok Facility will also be amended as follows:

no amortisation payments will be made until the earlier of the first quarter date following the New Senior Notes being repaid and 30 September 2018; and
thereafter, eight quarterly amortisations of up to a maximum of US\$39.2 million, including:
o a fixed amortisation of US\$15.56 million rising to US\$27.22 million; and
o the remaining amortisation (up to US\$39.2 million in aggregate together with the fixed amortisation) being subject to a DSCR and cash test.

To the extent that the full amortisation amount has not been paid in a given quarter, it will be deferred until the maturity of the loan (unless there are certain minimum cash balances in the Group). The Amended Ebok Facility is conditional upon the other parts of the Restructuring being implemented.

Any default under the Amended Okwok/OML 113 Facility or the New Senior Notes will be a crossdefault under the Amended Ebok Facility.

(G) Overview of amendments to the Okwok/OML 113 Facility

The amortisation profile under the Okwok/OML 113 Facility will also be amended such that US\$20 million of amortisation payments will be made by the end of March 2016, with the balance being amortised through equal quarterly payments until June 2018 (which will be paid out of cash flow generated by the business or from the proceeds of the issue of the New Senior Notes). The interest rate under this facility will remain at 9.5% per annum, but the lender will receive a fee equal to 1.5% of the facility, payable in kind at the maturity of the facility.

The Amended Okwok/OML 113 Facility is conditional upon the other parts of the Restructuring being implemented.

Please see paragraphs 5 and 10 below for details of the effect of the Restructuring and the Alternative Restructuring on the Group's debt, capitalisation and maturity profile.

Paragraph 15 (Material Contracts) of Part IX (Additional Information) contains more detailed summaries of the terms of the Bridge Securities, the New Senior Notes, the Existing Notes, the Ebok Facility, the Okwok/OML 113 Facility and the agreements governing the terms of the Restructuring.

(H) Global Intercreditor Agreement

As part of the proposed Restructuring, Afren will enter into a global intercreditor agreement (the "Global Intercreditor Agreement") which will replace the Ebok Intercreditor Agreement, ICA 2 and ICA 3 and pursuant to which, amongst other things, with respect to the Okoro Collateral and the Ebok Collateral, the New Senior Notes will rank ahead of the Amended Ebok Facility and the Reinstated Notes (and the Amended Ebok Facility and the Reinstated Notes will rank pari passu except in relation to the Ebok Collateral, in respect of which the Amended Ebok Facility will rank ahead of the Reinstated Notes).

The Global Intercreditor Agreement will come into effect only if the Restructuring is completed.

(I) Security Reorganisation

Prior to the implementation of the Scheme, the Group will undertake an internal reorganisation and the Notes Issuer will become an intermediate holding company of the Group. The Notes Issuer (together with Afren International Limited) will subsequently hold all of the Company's investments in its operating subsidiaries and will also acquire all (or substantially all) of the Company's assets, though the contractual liabilities of the Company, including guarantees will remain with the Company (the "Security Reorganisation"). After the completion of the Security Reorganisation, the Company would be dependent on cash from its operating subsidiaries for any of its funding requirements or to satisfy any of its payment obligations.

The Security Reorganisation and security structure is intended to make it easier for the holders of the New Senior Notes (or as applicable the Alternative New Senior Notes) to exercise and enforce their security upon any default under such notes. The Security Reorganisation will also provide the necessary flexibility for the Company to dispose of its assets (subject to shareholder approval as required by the Listing Rules) either as a single disposal of shares in the Notes Issuer or the sale of separate operating assets as required by the terms of the Alternative New Senior Notes. The Security Reorganisation will also mean that after any sale of all or substantially all of the Group's business there will be few if any assets left in the Company to meet the claims of Shareholders on any liquidation of the Company following any disposal of the Group's assets as required by the Alternative Restructuring.

Conditionality of the Restructuring

Each part of the Restructuring is conditional and each of the relevant transactions are inter-conditional. If Shareholders do not vote in favour of the Resolution, but the other conditions to the implementation of the Restructuring are satisfied or waived, the Restructuring will still be implemented, but on adjusted terms (the "Alternative Restructuring"). Details of the Alternative Restructuring are set out in paragraph 5 below. The Board considers that the Alternative Restructuring is far less favourable to Shareholders for the reasons set out in paragraph 5 below.

It should be noted that in addition to obtaining Shareholder approval for the passing of the Resolution, the Restructuring will require the Amended Ebok Facility and Amended Okwok/OML 113 Facility to have been executed, as well as the completion of the Security Reorganisation. The Scheme will require the consent of not less 75% of holders (by value) and a majority in number of the 2016 Notes, 2019 Notes and 2020 Notes that attend and vote at the Scheme meeting. The Scheme will also require the sanction of the English High Court and the granting of the order for the recognition of the Scheme as a 'foreign main proceeding' under Chapter 15 of the U.S. Bankruptcy Code and enforcement of the Scheme in the United States by the Delaware Court. As at 16 June 2015 (being the latest practicable date prior to the publication of this Prospectus), holders of Existing Notes representing at least 54.56% in aggregate of the 2016 Notes, the 2019 Notes and the 2020 Notes have contractually undertaken to vote in favour of the relevant resolutions at the Scheme meeting.

Even if Shareholders approve the Resolution, if the remaining conditions to the Restructuring are not satisfied (or where possible waived) no form of restructuring will be implemented. In such circumstances, the Directors believe that the Group would face an immediate risk of being unable to meet its contractual obligations when they fall due and would become subject to applicable insolvency processes, among other consequences. Further details of the consequences of not implementing the Restructuring or the Alternative Restructuring are set out in paragraph 5 below.

4. Description of the Resolution related to the Restructuring

In order to implement the Restructuring, a single resolution is being put to Shareholders at the General Meeting, to be approved as a special resolution, to grant the Directors all relevant authorities needed to issue the new Ordinary Shares in connection with the Restructuring. It should be noted that no Shareholder approval is required for the implementation of the Scheme. However, as noted above, if Shareholders do not approve the Resolution, the terms of the Scheme provide that the Alternative Restructuring will be implemented.

As the General Meeting is due to be held on 24 July 2015 and the Scheme Meeting held on 29 July 2015, the Company and Existing Noteholders will know in advance of the Scheme Meeting whether the Restructuring or the Alternative Restructuring will be implemented as part of the Scheme.

Reduction in the nominal value of the ordinary shares of the Company and subsequent consolidation

In order to facilitate the Restructuring, Shareholders are being asked to approve an initial reduction in the nominal value of the ordinary shares of the Company (the "Sub-Division"). The issued Shares of the Company currently have a nominal value of 1p per ordinary share (the "Existing Shares"). The Company is proposing that each Existing Share will be subdivided at a ratio of 1:100,000 into one ordinary share of nominal value of 0.00001p each together with 99,999 deferred shares of nominal value 0.00001p each (the "Deferred Shares"). The Deferred Shares will (in practice) have no economic or voting rights in the capital of the Company and it is expected that they will be cancelled following the implementation of the Restructuring.

Following the implementation of the Restructuring, including the associated issues of Ordinary Shares, it is proposed that the Company undergoes a share consolidation by which the Ordinary Shares are consolidated at a ratio of 10:1 (the "Consolidation") such that the total number of issued ordinary shares of the Company is more appropriate for the expected market capitalisation of the Company and therefore improve the trading price of the ordinary shares. The nominal value of the Ordinary Shares following the Consolidation will be 0.0001p each.

Approval of issuances of Ordinary Shares

Shareholders are also being asked to approve the necessary authorities which are required to be passed in order to implement various aspects of the Restructuring:

to approve the Sub-Division and Consolidation of the Ordinary Shares;
to give the Directors the authority to allot Ordinary Shares for the purposes of the Debt for Equity Swap, New Senior Notes Share Issue, the Open Offer, Bridge Securities Share Issue and the Early Subscriber Issue (and, if applicable, the Additional Commitment Issue);
to authorise the issue of the Open Offer Shares at a discount of more than 10% to the prevailing market price;
to empower the Directors to allot Ordinary Shares pursuant to that authorisation as if Shareholders' rights of pre-emption did not apply to the allotment in respect of the Debt for Equity Swap, New Senior Notes Share Issue, the Open Offer, the Bridge Securities Share Issue and the Early Subscriber Issue (and, if applicable, the Additional Commitment Issue), or applied to the allotment with such modifications as the Directors may determine; and
approve the Restructuring and ratify the actions of the Directors in respect of the implementation of the Restructuring.

Further explanatory notes regarding the terms of the Resolution are set out in this document immediately following the Notice of General Meeting.

It should be noted that the authorities sought by the Resolution are entirely separate from the resolutions being sought at the Company's annual general meeting to be held at 11.00 a.m. on 25 June 2015. The resolutions to be proposed at the General Meeting are in respect of the Restructuring only, while the resolutions to be proposed at the Company's AGM are in line with its usual business and are intended to allow the Company to operate in the ordinary course whether or not the Restructuring (or the Alternative Restructuring) is implemented.

5. Importance of the vote and consequences of a failure to implement the Restructuring

If Shareholders do not approve the Resolution at the General Meeting, but the other conditions to the Restructuring are satisfied (including the approval of the Scheme by the Existing Noteholders at the Scheme Meeting), the Restructuring will still be implemented, but on the terms of the Alternative Restructuring.

The Alternative Restructuring

If the Alternative Restructuring is implemented, the Directors believe that the Shareholders would be unlikely to receive any proceeds from the sale of the Group or the disposal of the Group's assets or other return of income or capital by the Company. The Alternative Restructuring, if implemented, should allow the Group to continue operations on a funded basis to enable an orderly sale process in accordance with the requirements of the New Senior Notes. Under the Alternative Restructuring, the Amended Ebok Facility will still be effective on the terms outlined in paragraph 3 above and the New Senior Notes will still be issued, but on amended terms. No new ordinary shares will be issued in connection with the Alternative Restructuring and the Open Offer will not be made available to Shareholders, so the Existing Shareholders will continue to own 100% of the Company's issued share capital and will not suffer dilution to their shares. However, the Company will not receive any proceeds from the Open Offer.

Furthermore, the Alternative Restructuring will include the following amendments to the terms of the Restructuring:

US\$5 million of the Bridge Securities will not be repaid via the issue of new ordinary shares under the Bridge Securities Share Issue and the Bridge Securities will become repayable in full pursuant to the issue of the New Senior Notes;
the Debt for Equity Swap will not be implemented and, instead, approximately US\$234 million of Existing Notes which would have been repaid under the Debt for Equity Swap will be reinstated as a new series of notes that will become due in December 2021, with interest at 20.2% per annum payable in kind (the "New 2021 Notes");
the terms of the New Senior Notes will be amended (the "Alternative New Senior Notes") such that:
the principal amount of the New Senior Notes will be increased to approximately US\$401 million (from US\$369 million) due to (i) an increased discount of 5% to the issue price of the New Senior Notes, (ii) the early subscription fee being payable by the issue of additional New Senior Notes (rather than in Ordinary Shares pursuant to the Early Subscriber Issue) and (iii) US\$5 million of the Bridge Securities being payable by the issue of additional New Senior Notes; and
the interest rate on the New Senior Notes will be adjusted, with (i) interest of 7.1% per annum payable in cash on the principal amount of the New Senior Notes, (ii) interest of 2.5% per annum on the principal amount of the New Senior Notes being payable in kind and capitalised quarterly in arrears by the issuance of new payment in kind notes (due in August 2017) with the same terms as the New Senior Notes (the "New Senior PIK Notes") and (iii) interest of 26.9% per annum on the principal amount of the New Senior Notes being payable in kind and capitalised quarterly in arrears by the issuance of new payment in kind notes (due no earlier than six months after the maturity date of the Amended Ebok Facility) which will accrue PIK interest only and rank junior to the New 2019 Notes and the New 2020 Notes (the "New Junior PIK Notes").
no new Ordinary Shares will be issued, either under the terms of the Bridge Securities, the New Senior Notes or pursuant to any equity offering to existing Shareholders;
the holders of the Alternative New Senior Notes will also have the right to appoint a majority of the Company's Board and the board of Directors of the Notes Issuer and Afren International Limited (each such member, a "Director Nominee"), with control over the process for the sale of the Group's business, under the terms of the Investor Rights Agreement; and
it will be an event of default under the Alternative New Senior Notes if:
the Company does not take certain steps to initiate a sale of all or substantially all of the Group's business by the end of 2015; and/or
the Company has not entered into an agreement or agreements (each a "sale agreement") for the sale of all or substantially all of the Group's business by the end of 2016; and/or
Shareholders do not approve the terms of any sale agreement when put to them for approval; and/or
any binding sale agreement is terminated as a result of a failure to satisfy conditions of such agreement (other than shareholder approval), provided that such termination shall not in any event be an event of default before 31 March 2017; and/or
the Company, the Notes Investor or Afren International Limited breaches the terms of the Investor Rights Agreement.

Any sale or disposal of the business or assets of the Group pursuant to the Alternative Restructuring will be subject to the provisions of the Listing Rules on substantial transactions and may require shareholder approval as appropriate.

If Shareholders fail to approve the sale of such assets (by way of a simple majority of Shareholders attending and voting in general meeting), holders of the Alternative New Senior Notes will be able to accelerate repayment of such notes upon such event of default and enforce their security under the Alternative New Senior Notes (as noted above) without further recourse to shareholder approval. Additionally, there would be cross-defaults to the Group's other facilities which would allow the relevant holders and/or lenders to accelerate the repayment of such facilities at such time. Accordingly, any failure by Shareholders to approve the terms of the disposal of all or substantially all of the Group's assets would allow holders of the Alternative New Senior Notes, as well as the Group's other secured lenders, to enforce their security and Shareholders would be unlikely to receive any return of income or capital by the Company following such enforcement.

In addition to the outstanding aggregate principal amount of US\$1,789 million due under the Alternative New Senior Notes, the New 2019 Notes, the New 2020 Notes, the New 2021 Notes, the Amended Ebok Facility, the Amended Okwok/OML 113 Facility and the OML 26 Facility, payment in kind interest will accrue on the Alternative New Senior Notes (under the New Senior PIK Notes and the New Junior PIK Notes) as specified above, as well as cash and payment in kind interest accruing on the Group's other indebtedness. Accordingly, it is highly likely that the value of the Group's debt will exceed the value of the Group if the Group is sold or if the Group's assets are sold as required by the terms of the Alternative New Senior Notes.

Furthermore, if the Alternative Restructuring is implemented, under the RWC Scenario there is a forecast maximum cash deficit of US\$302.2 million in the next 12 months (occurring in May 2016), taking into account the proceeds of the Alternative Restructuring and the mitigating actions under the Company's control, with the initial headroom breach of approximately US\$18.8 million forecast to occur in August 2015. However, the implementation of the Alternative Restructuring should allow the Company to continue operations on a funded basis while it negotiates the sale of its business.

Therefore, if Shareholders do not approve the Resolution at the General Meeting, including granting authority for the issue of new Ordinary Shares in connection with the Restructuring, it is expected that the economic terms of the Alternative Restructuring (being the terms of the Alternative New Senior Notes, the obligation to pay US\$934 million in principal and accrued interest under the New 2019 Notes, the New 2020 Notes and the New 2021 Notes, together with the requirement to initiate a sale of the Group's business), will mean that the Shareholders would be unlikely to receive any proceeds from the sale of the Group or the required disposal of the Group's assets or other return of income or capital by the Company, and therefore the Shareholders would be unlikely to see any return of their current investment.

No Restructuring or Alternative Restructuring is implemented

satisfying all relevant conditions precedent under the Amended Ebok Facility and the Amended Okwok/OML 113 Facility;
the approval of the Scheme by the necessary majority of holders of Existing Notes at the Scheme Meeting (being not less than 75% by value and a majority by number of those attending and voting at the Scheme Meeting);
the implementation of the Security Reorganisation;
the sanction of the Scheme by the Court; and
the granting of the order for the recognition of the Scheme as a 'foreign main proceeding' under Chapter 15 of the U.S. Bankruptcy Code and enforcement of the Scheme in the United States by the Delaware Court.

Afren Resources will be in breach of its obligations under the Ebok Facility and Afren Resources will be required to pay the two amortisation payments of US\$50 million under the Ebok Facility which were due on 31 January 2015 and 30 April 2015 and which were deferred as part of the negotiation of the terms of the Restructuring;
the Company shall be liable to pay US\$15 million of accrued and unpaid interest under the 2016 Notes which was due on 1 February 2015 and which was deferred as part of the negotiation of the terms of the Restructuring;
the Company shall be liable to pay US\$12.8 million of accrued and unpaid interest under the 2019 Notes which was due on 8 April 2015 and which was deferred as part of the negotiation of the terms of the Restructuring;
the Company shall be liable to pay US\$11.9 million of accrued and unpaid interest under the 2020 Notes which was due on 9 June 2015 and which is unlikely to be paid following the expiry of the 30 day grace period;
the Company will be required to pay further amortisation payments of US\$50 million each under the Ebok Facility which are due on 31 July and 31 October 2015 and 31 January 2016;
the Okwok/OML 113 Facility will be due and payable in full (in the amount of US\$50 million plus accrued interest) on 30 September 2015;
the 2016 Notes will be due and payable in full (in the amount of US\$253 million plus accrued interest) on 1 February 2016;
the Bridge Securities will be due and payable in full (in the amount of US\$211.6 million plus accrued interest) on 25 April 2016 (save that the non-approval of the Restructuring or the Alternative Restructuring shall be an event of default); and
the New Senior Notes, which would have provided a further net US\$148 million in cash to the Group, will not be issued.

The Group will also be in default under the 2016 Notes and 2019 Notes (and the 2020 Notes upon the expiry of the grace period noted above) for non-payment of interest when previously due.

If neither the Restructuring nor the Alternative Restructuring proceeds, the Directors are of the opinion that, given the defaults under the Group's existing borrowings, the Group will be unable to meet its debts as they fall due. This is because the Directors believe that the Group's lenders would be highly likely to accelerate the Group's borrowings given the existing events of default under the Group's facilities and other borrowings and the failure of the Group to complete a consensual restructuring. In such circumstances:

the Company would cease trading and the subsidiaries of the Company would become subject to applicable insolvency processes; and/or
the Ebok Lenders would be able to enforce their security over the shares in Afren Resources and thereby acquire the Group's interest in OML 67; and/or
the OML 26 Lender would be able to enforce its security over the shares in FHN and thereby acquire the Group's interest in OML 26; and/or
the Okwok/OML 113 Lender would be able to enforce its security and thereby acquire the Group's interest in Okwok; and
Shareholders would be very unlikely to receive any proceeds from the sale of the Group's assets or other return of income or capital by the Company.

6. Details of the Open Offer

The Company proposes to raise up to £49.2 million (approximately US\$75 million) by way of Open Offer subject to, inter alia, the passing by Shareholders of the Resolution at the General Meeting, by the issue of up to 4,922,491,218 new Ordinary Shares. The Offer Price of 1 pence per Ordinary Share, which is payable in full on acceptance by not later than 11:00 a.m. on 21 August 2015, represents a 46.5% discount to the closing middle market price of an Existing Share on 18 June 2015 (being the last business day before the announcement by Afren of the Open Offer) and a 28.3% discount to the theoretical ex-right price of an Existing Share based on that closing price.

The Open Offer is open to all Shareholders, including those Existing Noteholders who acquire Ordinary Shares pursuant to the Debt for Equity Swap and the New Senior Notes Share Issue.

Under the Open Offer, Qualifying Shareholders may apply for Open Offer Shares at the Offer Price, payable in full on application, free of all expenses, up to a maximum of their pro rata entitlement, which shall be calculated on the basis of:

4 Open Offer Shares for every 9 Existing Shares

held by them and registered in their names at 5.00 p.m. on the Record Date and so in proportion for any other number of Existing Shares then held and otherwise on the terms and conditions set out in this document and, in the case of Qualifying non-CREST Shareholders, the Application Form.

Holdings of Existing Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Open Offer. Fractional entitlements to Ordinary Shares will not be allotted to Qualifying Shareholders and, where necessary, entitlements will be rounded down to the nearest whole number of Ordinary Shares. Ordinary Shares representing fractional entitlements will not be allotted to Qualifying Shareholders but will be aggregated. Accordingly, Qualifying Shareholders with fewer than three Existing Shares will not be entitled to any Ordinary Shares.

The Open Offer will include an excess application facility, which will allow Qualifying Shareholders to subscribe for additional Open Offer Shares. The maximum number of Shares available under the excess application facility will be up to the full number of Open Offer Shares, but applications from Existing Shareholders will be limited so that the maximum number of Open Offer Shares issued in total under the Open Offer to Existing Shareholders is capped at 984,498,244 Open Offer Shares. This is to ensure that Existing Shareholders will hold up to a maximum of 15% of the total issued share capital of the Company following the Restructuring.

If applications for additional Open Offer Shares under the excess application facility exceed the aggregate number of Excess Application Shares, subscriptions will be scaled back at the discretion of the Company. The Company intends to allocate on a priority basis applications received from Shareholders who hold shares prior to the implementation of the Scheme. The members of the Ad Hoc Committee have indicated that they do not intend to participate in the Open Offer, which would allow their basic entitlements to be available to satisfy applications under the excess application facility.

The Ordinary Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Shares, including the right to all future dividends and other distributions declared, made or paid.

The Open Offer is conditional, amongst other things, upon:

(a) the passing of the Resolution (without amendment) at the General Meeting;
(b) the Scheme having become effective; and
(c) Admission becoming effective by not later than 8.00 a.m. on 24 August 2015 (or such later time and/or date as Afren and the Sponsor may agree, being not later than 8.00 a.m. on 7 September 2015).

Applications have been made to the FCA for the new Ordinary Shares to be admitted to the premium listing segment of the Official List and to the London Stock Exchange for the new Ordinary Shares to be admitted to trading on the main market for listed securities. It is expected that Admission will become effective and dealings (for normal settlement) in the Open Offer Shares will commence at 8.00 a.m. on 24 August 2015.

Qualifying Shareholders who have registered addresses, or who are resident or located in or citizens or nationals of any country outside the United Kingdom, and persons who hold Existing Shares for the account or benefit of any such person or who have a contractual or other legal obligation to forward this document, or an Application Form if and when received, or any other document relevant to the Open Offer to a jurisdiction outside the United Kingdom, should read the section entitled "Overseas Shareholders" of this Part I (Letter from the Chairman to Shareholders) and the section entitled "Overseas Shareholders" of Part VII (Terms and Conditions of the Open Offer) of this document.

The Open Offer is not underwritten.

7. Use of proceeds of the Open Offer

Assuming the Open Offer is subscribed in full, the Open Offer proceeds of £49.2 million (before expenses), will be applied by Afren as follows:

50% of the gross proceeds will be used to make payments for a pro rata reduction in the principal amount outstanding under the Ebok Facility and Okwok/OML 113 Facility; and
the balance of £24.6 million (before expenses), for general working capital purposes.

Any repayment of existing indebtedness under the Ebok Facility and the Okwok/OML 113 Facility out of the proceeds of the Open Offer is in addition to, and not in replacement of, the amended amortisation payments schedule. Only to the extent the Company receives proceeds from the Open Offer will it be required to make the payments under the Ebok Facility and Okwok/OML 113 Facility described above.

However, as the Open Offer is not underwritten, there is no assurance that the Company will receive any proceeds under the Open Offer. The Company can implement the Restructuring (provided the Resolution is passed) or the Alternative Restructuring (if Resolution is not passed) and continue as a going concern even if it does not receive any proceeds from the Open Offer.

In addition to any proceeds received under the Open Offer, the Company expects to use the net proceeds of the issue of the New Senior Notes (being US\$148 million before expenses, less any amount used to repay the potential further draw down under the Bridge Securities noted in paragraph 2 above) for general working capital purposes, including capital expenditure for its core producing assets in Nigeria. The Company will also receive the nominal value of the Ordinary Shares comprised in the New Senior Notes Share Issue and Early Subscriber Issue, which will amount to less than £1,500. The Company estimates expenses of the Restructuring will be approximately US\$63 million, which it intends to pay with any proceeds of the Open Offer, as well as the net proceeds of the issue of the New Senior Notes and existing cash balances.

8. Dilution

The Restructuring will result in substantial dilution for Existing Shareholders in their interests in the Company. Following the implementation of the Restructuring (and assuming that the Open Offer is subscribed in full by all Qualifying Shareholders), the Existing Shareholders, in aggregate, will own up to approximately 9% of the share capital in the Company, and the holders of the Existing Notes, in aggregate, will own approximately 91% of the share capital in the Company. This level assumes that the holders of the Ordinary Shares issued pursuant to the Debt for Equity Swap shares and the New Senior Notes Share Issue take up their Open Offer Entitlements in full. However, the members of the Ad Hoc Committee have indicated that they do not intend to participate in the Open Offer, which would allow their basic entitlements to be available to satisfy applications under the excess application facility and reduce this level of dilution.

If only Existing Shareholders subscribe under the Open Offer, including taking up their entitlements under the excess application facility in full, it has been agreed that Existing Shareholders will own up to 15% of the share capital in the Company following the completion of the Restructuring. This shareholding level has been increased from 11% as announced on 13 March 2015 when the Restructuring was agreed in principle.

The following table shows the dilution to the issued share capital for each stage of the Restructuring and the cumulative dilution effect for Existing Shareholders.

	Dilution to issued	Cumulative Interests of
Step	share capital	Existing Shareholders
Current position	-	100%
Debt for Equity Swap	80%	20%
New Senior Notes Share Issue	50%	10%
Open Offer	-	17%(1)
Bridge Securities Share Issue	5%	(1) 16%
Early Subscriber Issue	10%	(1)(2) 15%
Completion of Restructuring	-	15% (1)(2)

(1) Assumes that Existing Shareholders subscribe for their Open Offer Entitlements in full and no holder of Existing Notes subscribes for any Open Offer Shares.

(2) Assumes that the New Senior Notes are issued on or before 7 August 2015 so that the Additional Commitment Issue does not become payable.

Additionally, if the New Senior Notes are issued after 7 August 2015, the Additional Commitment Issue will become payable and the amount of the Early Subscriber Issue will increase by 0.1205% of the fully diluted share capital of the Company for each day from 8 August 2015 until the date of issue of the New Senior Notes.

The total number of Ordinary Shares in issue immediately prior to the Restructuring will represent between approximately 6% and 9% of the total number of Ordinary Shares in issue immediately following completion of the Restructuring (depending upon the level of take up in the Open Offer and before the implementation of the Consolidation). The new equity being injected will therefore be represented by between approximately 91% and 94% of the total number of Ordinary Shares in issue immediately following completion of the Restructuring but before the implementation of the Consolidation.

If you decide to not take up some or all of your Open Offer Entitlements, the proportion of Afren you will own will be significantly smaller once the Restructuring has been completed, as Ordinary Shares are being issued for the purposes of the Restructuring. In these circumstances your interest in Afren will be diluted further and the maximum dilution you would suffer immediately following completion of the Restructuring in the event that you do not take up any of your Open Offer Entitlements would be 94%.

9. Free float

10. Financial Effects of the Restructuring

Position after the Restructuring

The Directors cannot give any assurance (even if the Restructuring is successfully completed) that the Group's business will be successful in the future. Please refer to the section entitled "Risk Factors" of this document for a more detailed discussion of some of the principal risks and uncertainties to which the business of the Group will be subject.

Even if the Restructuring does proceed, the ability of the Group to be in a position to return value to Shareholders (either through an increased share price or payment of dividends or a return of capital in the longer term) for their investment is highly dependent on the ability of the Group to restructure its operations in order to reduce its cost base, through headcount reductions, renegotiating pricing and terms with suppliers to reflect the current lower oil price environment, and also developing and monetising its reserves. The Group anticipates that its operating expenses will benefit from a targeted 15% in efficiency savings through a reduction in market rates and renegotiating contracts with suppliers. The Group will also need to successfully drive operational improvements, in particular improving recovery rates and increasing production.

The Group will be dependent on the prevailing market oil price, even though the cost reductions and operational improvements described above should allow the business to be more sustainable in a lower oil price environment compared to the last quarter of 2014. The Group's aim is to ensure that its business is in a strong position to sustain operations at current oil price levels, although it will take time to implement the operational restructuring and see the benefits of such changes. If oil price levels return to or even fall below levels seen in early 2015, the Company will need to review ongoing capital expenditures and operational costs. Additionally, while the Group's 2015 Business Plan focuses on capital investment in producing assets, all discretionary spending on exploration projects has been put on hold beyond 2015.

If the crude oil price remains at or near its current level, production remains static or decreases, cost reductions and operational improvements are not successfully implemented, appraisal assets are not developed and/or if no new discoveries are made and monetised, it is likely that no dividends would be declared, made or paid and that Afren would be unable otherwise to return any value to its Shareholders. The decrease in crude oil prices in the second half of 2014 has impacted the Group's revenue, and has and may continue to reduce the amount of cash flow available to fund the Group's operations and certain capital expenditure projects, which in turn would reduce production volume and exacerbate the decrease in revenue. If prices for the Group's crude oil fall further or remain at lower levels, this would materially adversely affect the Group's business, results of operations, financial condition and prospects, and the trading price of the Ordinary Shares. Please refer to the section entitled "Risks Relating to Afren's Business" in the "Risk Factors" part of this document for further details.

As set out in the section entitled "Overview of the Restructuring" of this Part I (Letter from the Chairman to Shareholders), the injection of additional equity capital in Afren pursuant to the Open Offer will reduce the financial burden on the Group's business, enabling the Group to continue to trade despite the weak macroeconomic climate in the oil industry.

Debt structure of the Group prior to the Restructuring

As at the date of this Prospectus, the Group has the following indebtedness:

the 2016 Notes, being US\$253 million of 11.5% senior secured notes due 1 February 2016;
the 2019 Notes, being US\$250 million of 10.25% senior secured notes due 8 April 2019;
the 2020 Notes, being US\$360 million of 6.625% senior secured notes due 9 December 2020;
the Bridge Securities, being US\$212 million of 15% senior secured notes due 25 April 2016;
the Ebok Facility, being a US\$300 million senior secured loan and letter of credit facility under an agreement dated 24 March 2010 (as amended and as amended and restated from time to time) between, among others, Afren Resources, BNP Paribas as facility agent and the lenders named therein (the "Ebok Lenders"), which is fully drawn;
the Okwok/OML 113 Facility, being a US\$50 million loan under an agreement dated 30 September 2014 made between Afren Exploration & Production Nigeria Alpha Limited ("AEPNA") as borrower and Access Bank as lender, which is fully drawn;
a US\$100 million loan under an agreement dated 25 February 2014 made between FHN 26 as borrower and Zenith Bank plc as lender (the "OML 26 Facility"), which is fully drawn; and
certain other debt for borrowed money under agreements with its bank lenders, as summarised in the section entitled "Material Contracts" in Part IX (Additional Information) of this document.

As of 16 June 2015 (being the latest practicable date prior to the publication of this Prospectus), the Group's outstanding aggregate debt under such indebtedness was approximately US\$1,584 million, and interest on such debt continues to accrue.

Debt structure of the Group after the Restructuring

Immediately following the completion of the Restructuring, the Group will have aggregate borrowings to financial institutions of approximately US\$1,534 million. This will comprise the following:

• the Issuer will have indebtedness of approximately US\$700 million pursuant to the New 2019 Notes

and the New 2020 Notes;

the Issuer will not be required to make any interest payments in cash under the New 2019 Notes and New 2020 Notes, as the obligation to make interest payments has been converted to a "payment in kind" obligation whereby the amount of interest due is converted to principal and becomes repayable at the term of the relevant series of New 2019 Notes and New 2020 Notes;
the Issuer will have indebtedness of approximately US\$369 million pursuant to the New Senior Notes due for repayment by August 2017; and
the Group will have indebtedness of approximately US\$465 million pursuant to the Amended Ebok Facility, the Amended Okwok/OML 113 Facility and the OML 26 Facility.

The Group will have certain other debt for borrowed money under agreements with its bank lenders, as summarised in the section entitled "Material Contracts" in Part IX (Additional Information) of this document.

Debt maturity profile

The following table sets out the current debt maturity profile and expected payment obligations of the Group under its relevant debt facilities from financial institutions (without giving effect to the Restructuring or the Alternative Restructuring).

Debt Obligations	Current
	(US\$ millions)
Due by 31 December 2015	268
Ebok Facility	200
Okwok/OML 113 Facility(1)	50
OML26 Facility	18
Due by 31 December 2016	638
Bridge Securities(2)	249
Ebok Facility	100
OML26 Facility	36
2016 Notes	253
Due by 31 December 2017	36
OML26 Facility	36
Due by 31 December 2018	9
OML 26 Facility	9
Due by 31 December 2019	250
2019 Notes	250
Due by 31 December 2020	360
2020 Notes	360
Total	1,562

(1) Pro Forma for US\$10 million repayment in January 2015.

The following table sets out the amended debt maturity profile and expected payment obligations of the Group under its revised debt facilities from financial institutions giving effect to the Restructuring or the Alternative Restructuring.

		Alternative
Debt Obligations	Restructuring	Restructuring
		(US\$ millions)
Due by 31 December 2015	253	253
Bridge Securities(1)	220	220

²⁾ Assuming the Restructuring and Alternative Restructuring do not complete. Including 15% payment in kind capitalising on a monthly basis until maturity

Amended Okwok/OML 113 Facility	15(2)	15
Amended Ebok Facility	nil(2)	nil
OML26 Facility(3)	18	18
Due by 31 December 2016	51	51
Amended Okwok/OML 113 Facility	15	15
OML26 Facility(3)	36	36
Due by 31 December 2017	559	550
New Senior Notes	431(4)	422(5)
Amended Okwok/OML 113 Facility	13	13
Amended Ebok Facility(6)	78	78
OML26 Facility	36	36
Due by 31 December 2018	174	174
OML 26 Facility (3)	9	9
Amended Okwok/OML 113 Facility	8	8
Amended Ebok Facility(6)	157	157
Due by 31 December 2019	520	520
Amended Ebok Facility(6)	98	98
New 2019 Notes(7)	421	421
Due by 31 December 2020	421	421
New 2020 Notes(7)	421	421
Due by 31 December 2021	n/a	1,719
New Senior Notes Junior PIK(8)	n/a	891
New 2021 Notes(9)	n/a	828
Total	1,979	3,688

⁽¹⁾ The Bridge Securities will be repaid prior to their maturity date under the Restructuring and the Alternative Restructuring. Including 15% payment in kind capitalising on a monthly basis until repayment.

(9) Including payment in kind interest of 20.2% until maturity.

11. Current trading and future prospects

Current trading

_____________

See "Current Trading" in Part II (Description of the Business)

Future prospects

The Company expects full year 2015 net production to average between 23,000 to 32,000 bopd, with forecast capital expenditure of approximately US\$0.5 billion, giving priority to the Group's existing Nigerian high-margin producing asset base. This guidance reflects the impact of operating in a significantly lower oil price environment, and includes a single rig drilling campaign throughout the year on Ebok, completion of the five well programme on OML26 that began in 2014 and the optimisation of the forward programme at Okoro. Furthermore, a decision has been made to postpone discretionary spending subject to an improvement in oil prices and the outcome of the wider recapitalisation initiatives which are under discussion. The Group's postponed discretionary spend includes planned expenditure on projects which are lower margin, higher cost projects compared with its existing producing Nigerian asset base. In respect of the Group's exploration and appraisal

⁽²⁾ The payment obligation will depend upon the amount of gross proceeds received under the Open Offer. 50% of the Open Offer gross proceeds will be used to make payments for a pro rata reduction in the principal amount outstanding under the Ebok Facility and Okwok/OML113 Facility. Amount hereby shown does not include this impact.

⁽³⁾ Repayment terms not amended by the Restructuring or the Alternative Restructuring

⁽⁴⁾ Including payment in kind interest of 7.5% until maturity.

⁽⁵⁾ Including senior payment in kind interest of 2.5% until maturity.

⁽⁶⁾ Including repayment under fixed amortisation and maximum variable amortisation.

⁽⁷⁾ Including payment in kind interest of 9.1% until maturity of New Senior Notes and 9.1% cash pay thereafter and until maturity.

⁽⁸⁾ Junior payment in kind interest of 26.9% under the New Senior Notes, capitalising payment in kind interest only and rank behind and have a Maturity Date after the New 2019 Notes and New 2020 Notes but before New 2021 Notes. Assumed for illustration purposes to mature one month before the New 2021 Notes

commitments this year, the Company will continue to engage with host governments including discussing opportunities for strategic divestments. In light of current low oil prices, the Company anticipates that its operating expenses will benefit from a targeted 15% in efficiency savings through a reduction in market rates and renegotiation of contracts.

12. Risk factors

The section entitled "Risk Factors" of this document, sets out a number of risks and other factors that should be carefully considered when deciding on what action to take in relation to the Open Offer, and whether or not to subscribe for Ordinary Shares. They are based on information known as at the date of this document which the Board considers to be material. Additional risks and uncertainties not presently known to Afren or the Directors, or that Afren or the Directors currently consider to be immaterial, may also have a material adverse effect on the Group's business, results of operations, financial condition and prospects. If any or a combination of these risks occurs, the market price of the Shares could decline and investors may lose all or part of their investment.

13. Directors' intentions

Each of the Directors who holds Existing Shares, being Alan Linn, Darra Comyn, Egbert Imomoh, Iain McLaren, John St. John and Toby Hayward, have irrevocably undertaken to vote in favour of the Resolution to be proposed at the General Meeting in respect of their own beneficial holdings of Existing Shares, amounting to 6,640,839 Existing Shares and 0.6% of the total number of votes available to be cast at the General Meeting.

14. Taxation

Information on UK taxation with regard to the Open Offer is set out in the sections entitled "UK taxation" of Part VIII (Taxation) of this document. This information is intended only as a general guide to the current UK tax position.

If you are in any doubt as to your own tax position, or are subject to tax in a jurisdiction other than the UK you should consult your own independent professional adviser without delay.

15. Outstanding awards under employee share plans

Appropriate adjustments may be made to outstanding awards (including options) granted under the Performance Share Plan and Long Term Incentive Plan (together, the "Share Plans" and each a "Share Plan") in accordance with the rules of the relevant Share Plan, in order to compensate the holders of such outstanding awards for any reduction in the value of their awards resulting from the Open Offer.

Any such adjustments:

will be made after completion of the Open Offer by the Remuneration Committee;
may include adjustment of the number of shares subject to awards and, in the case of options, the exercise price; and
will not require shareholder approval.

The holders of outstanding awards under the Share Plans will be contacted separately with further information on how their awards will be affected by the Open Offer.

Descriptions of the Share Plans appear in the section entitled "Incentive plans" of Part V (Directors, Senior Management and Corporate Governance).

16. Overseas Shareholders

Qualifying Shareholders who have registered addresses, or who are resident or located in or are citizens or nationals of any country outside the United Kingdom and persons who hold Existing Shares for the account or benefit of any such person or who have a contractual or other legal obligation to forward this document, or an Application Form if and when received, or any other document relevant to the Open Offer, to a jurisdiction outside the United Kingdom should refer to the section entitled "Overseas Shareholders" of Part VII (Terms and Conditions of the Open Offer) of this document.

Ordinary Shares will be provisionally allotted to all Qualifying Shareholders, including Overseas

Shareholders. However, Application Forms will not be sent to Qualifying non-CREST Shareholders with registered addresses in the United States or any of the Excluded Territories, nor will the CREST stock account of Qualifying CREST Shareholders with registered addresses in the United States or any of the Excluded Territories be credited, unless the relevant Shareholder is able to provide appropriate representation letters.

17. General Meeting

A notice convening a General Meeting to be held at the offices of White & Case LLP, 5 Old Broad Street, London EC2N 1DW at 11:00 a.m. on 24 July 2015 at which the Resolution will be proposed is set out at the end of this document. The purpose of the General Meeting is to consider and, if thought fit, pass the Resolution as set out in full in the Notice of General Meeting. The Restructuring is conditional on the passing of the Resolution. Unless the Resolution is approved by the Shareholders, the Restructuring will not occur but the Alternative Restructuring is capable of being implemented (subject to the satisfaction of the other conditions precedent to the Restructuring).

The Resolution authorises:

the Directors to allot shares for cash and offer Shareholders the ability to subscribe for, or convert any security into, shares for cash up to an aggregate nominal amount of £1,771.372946 in connection with the Open Offer, the Debt for Equity Swap, the New Senior Notes Share Issue, the Early Subscriber Issue and the Bridge Securities Issue, representing approximately 1,600% of the existing issued share capital of Afren;
the issue of the Open Offer Shares at a discount of more than 10% to the closing price of Afren Shares on 18 June 2015, the last day before the announcement of the Open Offer (as required under the Listing Rules); and
the reduction in nominal value of the Existing Shares, the creation of the Deferred Shares and the subsequent consolidation of the Ordinary Shares.

The Directors intend to use the authorities granted at the General Meeting to allot Ordinary Shares pursuant to the Open Offer, the Debt for Equity Swap, the New Senior Notes Share Issue, the Early Subscriber Issue and the Bridge Securities Share Issue. The general authorities to allot shares are intended to replace the equivalent authorities which are being sought at the Company's Annual General Meeting on 25 June 2015, save that the new authorities will be in respect of a different nominal amount of ordinary share capital, to reflect the intended issues of ordinary shares and the Sub-Division and Consolidation under the Restructuring.

It is intended that, in accordance with section 307(A) of the Companies Act, the Notice of General Meeting will be given less than the ordinary 21 days' notice period. This is intended to address the urgency of implementing the Restructuring, and if the Shareholders vote against the Resolution, the Company would take advantage of the additional period of time to prepare for the Alternative Restructuring.

For further explanation as to the terms of the Resolution, please see "Explanatory Notes on the Resolution" set out on pages 304 to 306 of this document.

18. Action to be taken

In respect of the General Meeting

A Form of Proxy for your use in connection with the Resolution to be proposed at the General Meeting is enclosed with this document. Whether or not you propose to attend the General Meeting, you are requested to complete, sign and return the Form of Proxy in accordance with the instructions printed on it to the Registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6AH, United Kingdom so as to be received as soon as possible and, in any event, by not later than 11:00 a.m. on 22 July 2015. Apart from completing and returning the Form of Proxy, you need take no further action. Completion and return of the Form of Proxy will not prevent you from attending the meeting and voting in person should you wish to do so. Further details relating to voting by proxy appointments are set out in the notes to the Notice of General Meeting on pages 307 to 310 of this document.

In respect of the Open Offer

If you are a Qualifying non-CREST Shareholder, unless you are a Qualifying non-CREST Shareholder with a registered address in certain countries outside the UK, you will be sent an Application Form. This will show the number of Ordinary Shares that you are entitled to take up and will contain full details regarding the procedure for acceptance and payment, renunciation, splitting and registration in respect of the Ordinary Shares.

If you sell or otherwise transfer all your Existing Shares before 6 August 2015 (the date on which the Ordinary Shares start trading without the right to participate in the Open Offer), you will not be entitled to participate in the Open Offer. However, the purchaser or transferee of your Ordinary Shares may be entitled to participate in the Open Offer in your place. In this case, please send this document to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was made, for delivery to the purchaser or transferee.

If you are a Qualifying CREST Shareholder, no Application Form will be sent to you and, unless you are a Qualifying CREST Shareholder with a registered address in certain countries outside the UK, you will receive a credit to your appropriate stock account in CREST in respect of the Open Offer Entitlements to which you are entitled. If you are a Qualifying CREST Shareholder with a registered address in certain countries outside the UK, no Open Offer Entitlements will be credited to your stock account. Qualifying Shareholders who are resident in any jurisdiction outside the UK should refer to the section entitled "Overseas Shareholders" of Part VII (Terms and Conditions of the Open Offer) of this document for further information.

The latest time and date for acceptance and payment in full in respect of the Open Offer by Qualifying Shareholders under the Open Offer is 11.00 a.m. (London time) on 21 August 2015, unless otherwise announced by Afren. The procedure for acceptance and payment is set out in Part VII (Terms and Conditions of the Open Offer) of this document. Further details also appear in the Application Form which will be sent to all Qualifying non-CREST Shareholders (other than, subject to certain exceptions, those Qualifying non-CREST Shareholders with a registered address in the United States or any of the Excluded Territories).

If you are in any doubt as to what action you should take, you should immediately seek your own financial advice from your stockbroker, bank manager, solicitor, accountant or other independent professional adviser duly authorised under the Financial Services and Markets Act 2000 who specialises in advice on the acquisition of shares and other securities if you are resident in the United Kingdom or, if not, from another appropriately authorised independent adviser.

19. Further information

Your attention is drawn to Part IX (Additional Information) of this document. You should read all the information contained in, or incorporated by reference into, this document before deciding what action to take in respect of the General Meeting.

Part V (Questions and answers about the Open Offer) of this document answers some of the questions most often asked by Shareholders about the Open Offer and the procedure for acceptance and payment and sets out further information on the Open Offer.

20. Board of Directors

As announced on 15 March 2015, Mr. Peter Bingham and Mr. John St. John will not stand for reelection at the Company's 2015 annual general meeting. Mr. Bingham and Mr. St. John will cease to be directors from the close of the 2015 annual general meeting which is due to be held on 25 June 2015. Additionally, as announced 12 June 2015, Mr. Darra Comyn resigned as a Director, such resignation to take effect from the close of the annual general meeting. Mr. Comyn has been a member of the Board since on March 2010. Mr. Bingham has served as a Director since May 2005 and Mr. St. John has served as a Director since June 2007 and each considered that it was an appropriate point for them to step down from the Board, given their other interests. Following their ceasing to be Directors, more than half of the Board will still comprise independent directors in compliance with the best practice provisions of the UK Corporate Governance Code, as noted in paragraph 4 of Part V (Directors, Senior Managers and Corporate Governance).

The Company is seeking to appoint additional non-executive directors to the Board and will make further announcements in due course as appropriate.

21. Financial Advice

The Board has received financial advice from Morgan Stanley in relation to the Open Offer. In providing advice to the Board, Morgan Stanley has relied upon the Directors' commercial assessments of the Open Offer.

22. Recommendation

If Shareholders do not approve the Resolution at the General Meeting, including granting authority for the issue of new Ordinary Shares in connection with the Restructuring, it is expected that the economic terms of the Alternative Restructuring (being the terms of the Alternative New Senior Notes, the obligation to pay US\$934 million in principal and accrued interest under the New 2019 Notes, the New 2020 Notes and the New 2021 Notes, together with the requirement to initiate a sale of the Group's business), will mean that the Shareholders would be unlikely to receive any proceeds from the sale of the Group or the required disposal of the Group's assets or other return of income or capital by the Company, and therefore the Shareholders would be unlikely to see any return of their current investment.

In the Board's opinion, the Restructuring, including the Open Offer is in the best interests of Afren and the Shareholders taken as a whole. Accordingly, the Afren Board unanimously recommends Shareholders to vote in favour of the Resolution to be proposed at the General Meeting, as all Directors have irrevocably undertaken to do in respect of their own beneficial holdings of Existing Shares, amounting to 6,640,839 Existing Shares and 0.6% of the total number of votes available to be cast at the General Meeting.

Yours faithfully,

Egbert Imomoh Chairman

PART II

DESCRIPTION OF THE BUSINESS

1. Business Overview

Introduction

The Company's portfolio of 20 assets consists of oil production, development and exploration opportunities. The Company's three core producing assets – Ebok, Okoro and OML 26 – are located in Nigeria. The Ebok field and the Okoro field offshore Nigeria are the Company's two primary producing assets.

For the year ended 31 December 2014, gross production at Ebok was approximately 10.1 mmbbls, with an average gross daily production rate of approximately 27,767 bopd. Average net daily production at Ebok was 22,090 bopd for the year ended 31 December 2014. This represented 58% of Afren's average net production in the period. Cumulative production from Ebok from initial field production through 31 December 2014 was approximately 36.7 mmbbls.
For the year ended 31 December 2014, the gross production at Okoro was approximately 6.0 mmbbls, with an average gross daily production rate of approximately 16,451 bopd. Average net daily production at Okoro was 8,225 bopd for the year ended 31 December 2014. This represented 26.0% of Afren's average net production in the period. Cumulative production from Okoro from initial field production through 31 December 2014 was approximately 39.4 mmbbls.
Afren also has a significant interest in the producing asset OML 26 onshore Nigeria through its subsidiary FHN, which includes the production fields Ogini and Isoko. For the year ended 31 December 2014, gross production at OML 26 was approximately 1.2 mmbbls, with an average gross daily production rate of approximately 3,342 bopd. Average net daily production at OML 26 was 1,504 bopd for the year ended 31 December 2014. Cumulative production from OML 26 from 1 December 2011 until 31 December 2014 was approximately 4.9 mmbbls.

Afren has further development or exploration interests in Nigeria, and in East, West and South Africa, including in the countries of Kenya, Tanzania, Ethiopia, Seychelles, Madagascar, Côte d'Ivoire, Ghana, Congo Brazzaville and South Africa.

Afren also holds assets in the Kurdistan region of Iraq, operating the Barda Rash field and holding a minority interest in the Ain Sifni block. In 2015, following an updated technical report that materially reduced previously published estimates of reserves and resources of Barda Rash, Afren is considering strategic options for its interest in the Barda Rash field and Ain Sifni, including exit strategies. The Company is also reviewing the potential disposal of certain of its exploration and/or appraisal assets.

Afren's shares are listed on the premium segment of the Official List and trade on the main market for listed securities of the London Stock Exchange. The Company's market capitalisation was approximately £20.7 million, based on a share price of 1.87 pence at the close of business on 18 June 2015.

2. Afren's Strategic Objectives

The Group's 2015 Business Plan is focused on cash optimisation in a lower oil price environment by allocating capital to its core producing asset base in Nigeria, while managing its exploration and appraisal commitments across its portfolio with new funding alongside targeted farm-out and divestment opportunities.

Focus on core producing asset base in Nigeria

Afren's core producing asset base is in Nigeria with three producing assets, consisting of the Ebok field, the Okoro field, and OML 26. These assets collectively produced a gross average of 47,560 bopd in 2014 and constitute the main source of revenue generation for the Company. Historic capital expenditure to improve or expand these producing assets has consistently provided the Company with strong returns on such expenditures.

The Company intends to focus near term future capital expenditures on targeted improvements to further develop and upgrade these assets with the goal of optimising production and maximising oil recovery. For example, the Company plans topside and facilities expenditures to de-bottleneck production facilities, upgrade power and complete the CFBx installation at Ebok in 2015. Similarly, Afren intends to re-engineer the forward work programme at Okoro to develop the Okoro FFD over two phases from the Okoro WHP, which should enable production decline from the main field to be offset with new wells coming on stream from the Okoro FFD. The 2015 programme for OML 26 includes completion of the current five well drilling programme (three wells completed to-date) and five workovers in the second half of 2015. The Company believes the limited, targeted capital investments in these high-return, cash generative core producing assets will produce near term revenues to support the recovery of the business.

Operate a disciplined approach to capital management

To support the Company's focus on its core producing assets and protect its liquidity position, the Company intends to pursue a disciplined approach to capital management. The Company has currently put all discretionary activities and spending on exploration within its portfolio on hold beyond 2015. Afren is also actively engaged in negotiations with host government and partners to defer exploration and development commitments to reduce capital expenditures and pressure on cash resources of the business in the near term.

The Company is also actively working on a strategic review of a number of its assets, including those in the Kurdistan region of Iraq. The Company has currently suspended operations in Barda Rash and is analysing exit strategies in the Kurdistan region of Iraq, including relinquishment of its interests in that region. The Company is considering a range of options, including farm-out agreements and/or disposal of interests, with the purpose of either sharing costs for development of certain assets or reducing the size of its portfolio to provide potential revenue to the business and enable the Company to focus on its core producing assets.

Maintain optionality with a portfolio of exploration projects

The Company has a wide portfolio of exploration projects in Africa, including in Nigeria, Kenya, Tanzania, Ethiopia, Seychelles, Madagascar, Côte d'Ivoire, Ghana, Congo Brazzaville and South Africa, with gross unrisked prospective resources of 9.7 bnboe. Afren's exploration assets are located in basins where hydrocarbons are known to exist but are typically under-explored and hold potential for large discoveries.

While Afren does not intend to pursue further exploration of these in the near term, in a higher oil price environment, these assets potentially hold significant value for the Company, particularly providing flexibility for future in-house development, farm-out or sale alternatives with respect to these assets. For example, in Nigeria the Company believes near-field exploration at Ebok Deep could be quickly commercialised and would be profitable to monetise; gas development at OML 26 could also realise significant condensate upside; and exploration and development of OPL 310 and OML 113 also present potentially considerable upside. The Company also has significant exploration targets in diverse geographies in East Africa.

The Company believes the depth and diversity of its exploration assets presents valuable near term farm-out or strategic options and has the potential to allow Afren to capitalise on the favourable long term industry outlook.

3. Structure of the Group

The Company is the holding company of the Group. The following chart provides a summary of the Group structure following the completion of the Security Reorganisation.

Company History and Background

Afren was incorporated in December 2004, listed on AIM in March 2005 and in December 2009 moved to the premium section of the main market of the London Stock Exchange.

In March 2006, AERL signed a production sharing and technical services agreement with Amni for the development of the Okoro and Setu fields offshore Nigeria, achieving first oil in June 2008 and successfully delivering the Company's first greenfield development project.

In March 2008, Afren Resources signed a farm-in agreement with Oriental to appraise and develop Ebok located in the Gulf of Guinea, offshore Nigeria. Afren began development of Ebok in December 2009, which came on-stream in April 2011. The Group farmed-in to the nearby undeveloped Okwok field in August 2009 and the surrounding OML 115 acreage in January 2010, further establishing its presence around the core Ebok development and extending its partnership with Oriental.

In 2009, Afren jointly established FHN with two leading Nigerian financial institutions, First City Monument Bank Plc ("FCMB") and Guaranty Trust Bank Plc. On 1 December 2011, FHN completed the acquisition of a 45% interest in OML 26 through its wholly owned subsidiary, FHN 26 Limited ("FHN 26"). In May 2013, Afren completed the acquisition of an additional 10.4% beneficial interest in FHN. Afren consequently consolidated its holding of FHN's reserves and production as a subsidiary (including prior year comparatives) in its financial results. In July 2013, Afren further increased its holding in FHN by acquiring an additional 23.3% beneficial interest, taking its total holding of FHN, directly and indirectly, to 78.0%. Currently Afren directly owns approximately 43.1% of FHN, with the remaining 34.9% being held in trust for the benefit of the Group and the Group's Nigerian employees by Adcax Investments Limited, a Nigerian-formed trust company. Afren also agreed to grant a put option to Earl-Act, an affiliate of FCMB to acquire a further 12% of FHN's shares; in April 2015, Afren amended this put option to agree to purchase the remaining 22% of FHN held by another affiliate of FCMB so that it has the contractual ability to acquire all of the issued share capital of FHN.

In October 2010, Afren completed the acquisition of Black Marlin Energy Holdings Limited, an exploration and development company focused on East Africa. In March 2011, the Company further expanded its geological exposure to the Coastal High play in East Africa through the acquisition of an interest in the Tanga Block, offshore and onshore North East Tanzania. Afren also acquired an interest in a block in South Africa.

In 2011, Afren extended its footprint beyond Africa through the acquisition of two assets in the Kurdistan region of Iraq - a 60% interest in the Barda Rash PSC and a 20% interest in the Ain Sifni PSC. Production at the Barda Rash field was initiated in August 2012 and in July 2013 the Company commenced preliminary crude oil sales to the local market. Afren temporarily suspended operations in the Barda Rash field from 8 August 2014 to 2 October 2014 in light of regional security issues and, following a downgrade in estimated reserves and resources in January 2015, is currently considering exit options for this asset. The Company's economic interest in Ain Sifni is dependent on the share of operating costs paid by the Company, and is currently approximately 17%, which may be reduced to nil if Afren does not pay outstanding cash calls. The Company is currently in discussions relating to the disposal of its interests in the Kurdistan region of Iraq.

On 30 August 2013, Afren sold shares in Afren Côte d'Ivoire Limited and Lion GPL SA, the holding companies for its producing assets in Côte d'Ivoire including the CI-11 Block and Lion Gas Plant, to Petroci.

Prior to the implementation of the Scheme, the Group will undertake an internal reorganisation and the Notes Issuer will become an intermediate holding company of the Group. The Notes Issuer (together with Afren International Limited, another direct subsidiary of the Company) will subsequently hold all of the Company's investments in its operating subsidiaries and will also acquire all (or substantially all) of the Company's assets. The Company has also agreed to grant security over its interests in the Notes Issuer's shares in favour of the New Senior Notes Trustee (for the benefit of the holders of the New Senior Notes (or as applicable the Alternative New Senior Notes)).

4. Description of the Company's Assets

Afren has a portfolio of 20 assets, consisting of oil, natural gas and natural gas liquids production, appraisal and development, and exploration assets. Afren's core producing assets are in Nigeria. Afren has appraisal and development, and exploration assets in Nigeria and East, South and West Africa, including in the countries of Kenya, Tanzania, Ethiopia, Seychelles, Madagascar, Côte d'Ivoire, Ghana, Congo Brazzaville and South Africa. Afren also holds two assets in the Kurdistan region of Iraq.

The following map sets forth the assets in Afren's portfolio. For a discussion on the risks related to countries in which Afren operates, see "Risk Factors—Risk Factors Relating to the Countries in which Afren Operates".

Licence Overview

The authorities in the regions in which Afren operates generally award licences and contracts for a period of between approximately 10 and 30 years depending on whether certain work programmes have been completed and whether a commercial discovery has been declared. Typically, the first five to 10 years of the licence are categorised as an "exploration period" during which time certain agreed work programmes are completed, including the acquisition of seismic data and the drilling of exploration wells. If at the end of the exploration period no commercial discovery has been declared, a licence or contract is typically relinquished. However, if during the exploration period a commercial discovery is declared, the licence or contract transitions into a "production period" for up to 20 years, which can typically be extended for a further five years, subject to standard government and regulatory approvals. For certain assets listed below, Afren is not the designated licence holder and must work with partners to develop and adhere to work programmes with the respective authorities. For further discussion, see "Risk Factors—The Group's exploration and production operations are dependent on the Group's compliance with the obligations under its licences, contracts and field development plans".

The following table summarises the Group's current licences and interests:

	Role	Legal/Equity Interest(1)	Effective Interest(1) Pre cost recovery	Working Interest Post cost recovery	Fiscal system	Expiry/Status
Nigerian Production Assets(2)
Ebok (OML 67)(3)	Technical Services Provider	40%	100%	50%(5)	Royalty Tax Concession	14 March 2015(4)
Okoro and Setu (OML 112)(3)	Technical Services	0%	95%	50%	Royalty Tax Concession	12 February 2018
OML 26(3)	Provider Joint venture partner	45%	45%	45%	Royalty Tax Concession	1 July 2019
African Exploration Assets
Nigerian Exploration Assets(2)
Okwok (OML 67)	Technical Services Provider	28%	70%	56%	Royalty Tax Concession	14 March 2015(4)
OML 115	Technical Services Provider	40%	100%	50%	Royalty Tax Concession	14 March 2015(4)(5)
OPL 310	Technical Services Provider	22.86%	52%	40%(6)	Royalty Tax Concession	10 February 2019
OML 113	Technical Services Provider	9%	__	16.875%		11 June 2018
Other African Exploration Assets Ghana
Keta Block	Partner	35%	—		Royalty Tax Concession	18 February 2016
Congo Brazzaville La Noumbi	Partner	22%	—		PSC	18 June 2016
Ethiopia Block 8 Kenya	Partner	42.9%	—		PSC	31 October 2015
Block L17/L18 Block 1	Operator Operator	100% 80%	— —		PSC PSC	24 October 2015 8 October 2016
Madagascar
Block 1101 Seychelles	Operator	90%	—		PSC	29 July 2015
Blocks A and B South Africa	Operator	75%	—		PSC	27 November 2016
Block 2B	Partner	25%	—		Exploration Right	12 March 2017
Tanzania Tanga Block	Operator	74%	—		PSC	20 November 2017(7)
Côte d'Ivoire CI 523	Partner	20%	22.22%	22.22%	PSC	4 September 2020
CI 525	Operator	51.75%	57.50%	57.50%	PSC	18 November 2019
Assets in Kurdistan region of Iraq Barda Rash(3) Ain Sifni(8)	Operator Partner	60% 20%	— —		PSC PSC	November 2032 1 October 2039

____________ (1) For an explanation of Afren's legal interest versus its effective working interest in Nigeria, see "Legal and Regulatory—Nigeria—Government Regulations— Exploration and Production Regulations".

(2) Marginal field licences granted in Nigeria reference an initial expiry date which is subject to renewal under the Nigerian Government's indigenous licensing programme. As these licences are granted exclusively to indigenous companies, Afren has partnered with a number of partners in the development of the fields. For further discussion on the treatment and extension of these licences, see "Legal and Regulatory—Nigeria—Government Regulations—Exploration and Production Regulations" and "Risk Factors—Risks Relating to Governmental Regulations and Governmental Relationships—The Group's exploration and production operations are dependent on the Group's compliance with the obligations under its licences, contracts and field development plans".

(4) In the exploration period extension letter dated 28 March 2011, the Nigerian Government noted that the licence would be granted for the life of the field once there was verifiable evidence of production. Afren commenced production at Ebok in April 2011. Afren's partner, Oriental Energy Resources Limited, has applied for the term of the Ebok licence and the Okwok licence to be extended. The Group has agreed that in order to retain its participation in OML 115 licence, it will decide by the end of 2015 to commit to a development plan.

(5) Afren achieved cost recovery at Ebok in the first quarter of 2014. Afren will continue to incur and recover costs after initial cost recovery and, as a result, Afren's entitlement production going forward will vary.

(6) Afren will hold a 40% economic interest in the licence once Afren, Lekoil and Optimum achieve cost recovery. Prior to that point, Afren's economic interest will vary depending on the costs incurred and recovered by the three partners.

(7) Currently waiting for approval by the Ministry of Energy and Minerals for application to move into the second extension period.

(8) The Company's economic interest in Ain Sifni is dependent on the share of operating costs paid by the Company, and is currently approximately 17%. If Afren fails to pay its share of operating costs, its effective working interest may be reduced to nil.

Nigerian Production Assets

Overview of Afren's Core Producing Assets in Nigeria

The Company's three core producing assets – Ebok, Okoro and OML 26 – are located in Nigeria and collectively produced 47,560 bopd average gross production and 31,819 bopd average net production in 2014.

⁽³⁾ Assets that are currently producing.

Ebok (OML 67)

Overview

The Ebok field is located in OML 67 in the Gulf of Guinea, approximately 55 km offshore Nigeria at a depth of 137 feet of water. The following table sets forth certain details of the Ebok (OML 67) licence including Afren's legal and effective working interest and partner.

Licence details—Ebok (OML 67)
Area km2	42
Expiry	Initial term extended to 14 March 2015(1)
Licence type	Royalty Tax Concession
Main plays	Tertiary Agbada 'D' series of reservoirs, Qua Iboe, Biafra and Isongo formations
Partner	Oriental Energy Resources Ltd
Afren's legal interest	40%
Afren's effective working interest:(2)
Pre cost recovery	100%
Post cost recovery	50%
Data available	3D seismic data. Exploration and appraisal well data. Field studies

____________ (1) Afren's partner, Oriental Energy Resources Limited, has applied for the term of the licence to be extended.

(2) Afren is entitled to 100% of the production until initial cost recovery, which was achieved in the first quarter of 2014. Afren will continue to incur and recover costs and, as a result, its entitlement production going forward will vary.

Field Development

The first discovery well, Ebok-1, was drilled by the Mobil Producing Nigeria Unlimited ("Mobil")/NNPC Joint Venture in 1968 resulting in a discovery of 271 feet of net oil pay in four sands between 2,600 feet and 3,600 feet. The Ebok field was awarded to Oriental by the Mobil/NNPC Joint Venture pursuant to a farm-out agreement between Mobil, NNPC and Oriental dated 25 May 2007. On 31 March 2008, Afren Resources signed a farm-in agreement and a JOA with Oriental. Under the terms of these agreements, Afren Resources is responsible for funding all capital and operating costs for the development of the field. For a more detailed discussion of these agreements, see "Material Contracts—Material Agreements Relating to the Company's Assets" of Part IX (Additional Information).

Ebok currently comprises the largest capacity mobile offshore production unit installation in Nigeria. By the end of 2011, Afren had commissioned all 14 production wells associated with the initial phases of the field development. By the end of 2013, Afren had drilled an additional three production wells and one water injection well into the Ebok North Fault Block. These wells have been tied back to the existing West Fault Block infrastructure. Afren also drilled and brought on stream a production well in the West Fault Block.

In 2015, Afren intends to undertake further field development at Ebok, including a CFBx platform and West Fault Block upgrades and debottlenecking. The CFBx is a 12 slot (24-well) wellhead platform designed to support 10 production wells and five water injection wells, as well as providing additional slots for future wells, power generation and compression capacity. In 2014, the wellhead jacket for the Central Fault Block platform was installed. The installation of the decks and bridge at the Central Fault Block was completed in early March 2015, and Afren is targeting hook-up and commissioning of the CFBx platform by the third quarter of 2015. The North Fault Block extension includes drilling up to 6 wells from an extended West Fault Block platform with production to flow through to the existing mobile offshore production unit, and has been completed. The West Fault Block platform has been extended and an additional eight slots added. The facilities debottlenecking work remains to be completed.

The Ebok licence expired in March 2015 and to date the DPR has not granted any extension in respect of such Licence. However, Afren and Oriental expect that the Licence will be renewed on the basis that they have made sufficient progress in the development of the Ebok asset and the application for renewal is in progress. In respect of the Ebok licence, the Group is entitled (under applicable legislation) to an extension for the lifespan of the field, which is in progress following expiry of the current term in March 2015. The Directors do not believe that the implementation of the Restructuring (or the Alternative Restructuring) will affect the renewal of this Licence.

Production

Afren commenced production at Ebok in April 2011. Since inception, Ebok has produced approximately 37.4 mmbbls of oil, with a peak rate of approximately 45,000 bopd. In 2014, Ebok produced approximately 10.1 mmbbls of oil, representing a gross average daily rate of 27,767 bopd. As at 31 December 2014, NSAI certified an estimate of 59.3 mmbbls of 1P and 83.3 mmbbls of 2P reserves. Afren achieved initial cost recovery in the first quarter of 2014, and until that time was entitled to 100% of the production at Ebok. Thereafter, Afren is entitled to 50% of the production, however, the Company will continue to incur and recover costs and, as a result, the Company's entitlement to production will vary. Afren currently sells its Ebok crude oil production under spot arrangements.See "—Marketing and Major Customers".

Okoro and Setu (OML 112)

Overview

The Okoro and Setu fields, Afren's first greenfield developments, are two oil and gas fields located within OML 112 in shallow water in the eastern part of the offshore Niger Delta. The following table sets forth certain details of the OML 112 licence related to the Okoro and Setu fields including Afren's legal and effective working interest and partner.

Licence details—Okoro and Setu (OML 112)
------------------------------------------

Area km2	438
Expiry	12 February 2018
Licence type	Royalty Tax Concession
Main plays	Tertiary Agbada reservoirs
Partner	Amni International Petroleum Development Company Ltd
Afren's legal interest	0%
Afren's effective working interest:(1)
Pre cost recovery	95%
Post cost recovery	50%
Data available	3D seismic data, exploration, appraisal and production well
	data plus oil and gas production data, downhole temperature
	and pressure data

(1) Cost-recovery at Okoro was initially reached in mid-2010. Subsequent costs associated with expenditures are subject to negotiated cost-recovery arrangements.

Field Development

The Okoro field was discovered by Japan Petroleum in 1973. OML 112 was originally awarded to Amni in 1998 as part of the Nigerian Government's indigenous concession programme. In March 2006, Afren and Afren Energy Resources Limited ("AERL") entered into a production sharing and technical services agreement with Amni to appraise and develop the Okoro and Setu fields within a defined area in the eastern part of the OML 112 block. For a more detailed discussion of this agreement, see "Material Contracts—Material Agreements Relating to the Company's Assets—Okoro and Setu" of Part IX (Additional Information).

The initial field development plan, approved by the Nigerian authorities, called for the drilling of seven horizontal wells (Okoro-4 through Okoro-10) from a wellhead platform location with fluids to be transported via flexible pipelines to a FPSO site. Production commenced from the first two production wells (Okoro-4 and Okoro-5) at a rate in excess of 3,000 bopd. With the batch drilling of a further three wells (Okoro-6 through Okoro-8), production was increased to approximately 14,000 bopd, and then to approximately 20,000 bopd when the final two production wells (Okoro-9 through Okoro-10) were drilled in December 2008.

In 2011, Afren successfully completed infill wells, bringing the Okoro-11 and Okoro-12 horizontal production wells onstream. During December 2011 and January 2012, Afren successfully drilled an exploration well, Okoro-13, at the Okoro FFD which has similar sub-surface characteristics to the main Okoro field. The well encountered 549 feet true vertical thickness of net oil pay (580 feet gross) and 41 feet of net gas pay. In July 2012, Afren commenced early development drilling at the Okoro-14, the Okoro FFD. The well was subsequently completed and brought on stream at a stabilised rate of approximately 5,000 bopd on 14 October 2012.

In 2012, Afren received approval from the Nigerian authorities for full development of the Okoro FFD. As part of the development programme, the Okoro-15 producer and the Okoro-12 ST1 producer were completed and brought on stream in September and October 2014, respectively. Currently, the forward work programme for Okoro FFD is being re-engineered and the Company anticipates no further associated capital expenditure until 2016. The re-engineered Okoro FFD may utilise the existing infrastructure at the field and will incorporate development in two phases.

Production

Afren commenced production at Okoro on 10 June 2008. Since inception, as at December 2014, Okoro has produced approximately 38.4 mmbbls of oil, with a peak rate of 21,360 bopd. In 2014, Okoro produced approximately 6.0 mmbbls of oil, representing a gross average daily rate of 16,451 bopd. As at 31 December 2014, NSAI certified an estimate of 27.2 mmbbls of 1P and 44.5 mmbbls of 2P reserves. Afren achieved cost-recovery at the field in mid-2010, after which its effective working interest became 50%. Afren sold its Okoro crude oil production to BP Oil International Limited under an agreed marketing agreement that expired on 31 March 2015, and is currently tendering for a spot cargo. See "—Marketing and Major Customers".

OML 26

Overview

OML 26 is located onshore Nigeria and holds two production fields, the Ogini and Isoko fields, and three discovered but undeveloped fields, the Aboh, Ovo and Ozoro fields. The following table sets forth certain details of the OML 26 licence including Afren's legal and effective working interest and partner.

Licence details—OML 26
Area km2	480
Expiry	1 July 2019
Licence type	Oil Mining Lease
Main plays	Ogini and Isoko
Partner	NPDC
FHN legal interest	45%
FHN effective working interest:
Pre cost recovery	45%
Post cost recovery	45%
Data available	3D seismic data, exploration, appraisal and production well
	data plus oil and gas production data

Field Development

The Isoko field was discovered in 1956 and the Ogini field was discovered in 1964. First production at Ogini and Isoko occurred in 1971 and 1976, respectively. Afren has an interest in OML 26 through its subsidiary FHN. In 2009, Afren jointly established FHN with two leading Nigerian financial institutions, First City Monument Bank Plc and Guaranty Trust Bank Plc. Afren currently owns, directly and indirectly, 78.0% of FHN with voting interests of 43.1% and the remaining 34.9% of its legal interest held in trust in trust for the benefit of the Group and the Group's Nigerian employees by Adcax Investments Limited, a Nigerian-formed trust company. FHN is a majority Nigerian controlled indigenous oil and gas company that fulfils the Nigerian Government's criteria for local operators who are eligible to apply for and acquire substantial oil and gas assets in the country.

On 1 December 2011, FHN completed the acquisition of a 45% interest in OML 26 through its wholly-owned subsidiary, FHN 26, from Shell Petroleum Development Company of Nigeria Ltd ("SPDC"), Total E&P Nigeria Ltd and Nigeria Agip Oil Company. In the re-development of the block, FHN has partnered with the NPDC, the oil and gas exploration and production subsidiary of the NNPC.

The OML 26 full field development plan for Ogini consists of a collective 37 new production wells, the execution of 10 short-to-medium term work-overs, installing a new 18" export pipeline, phased installation of two 50,000 bbl/d 3-phase separation trains, and a new tie in to the nearby Irri-Kwale gas pipeline for evacuation of associated gas. Afren has received approval by the Nigerian authorities for the initial five wells in the OML 26 full field development plan for Ogini. Afren has completed four of the five new wells in connection with the current drilling programme. Submission of the OML 26 field development plan to Nigerian authorities for Isoko is expected in the second quarter of 2015.

Production

Since inception, as at December 2014, OML 26 has produced approximately 81 mmbbl of oil, with a peak rate of 27,833 bopd (net 12,107 bopd) since acquisition. In 2014, OML 26 produced approximately 1.1 mmbbls of oil, representing a gross average daily rate of 3,342 bopd. As at 31 December 2014, NSAI certified an estimate of 57.6 mmbls of 1P and 124.1 mmbbls of 2P oil reserves at OML 26.

Crude export is via the Forcados terminal through a 29km Ogini-Eriemu delivery pipeline and a 89km Trans Forcados Pipeline from Eriemu to Forcados. Production from OML 26 in 2012 and 2013 was affected by periodic repairs on Trans Forcados Pipeline and delivery lines as well as gas lift compressor outage and in 2014 due to the challenges in carrying out repairs on the export line leak. Afren sells its OML 26 crude oil production to Shell Western Supply and Trading Limited under an agreement between Shell Western Supply and Trading Limited and FHN 26, dated 19 October, 2010. See "— Marketing and Major Customers".

The undeveloped Aboh, Ovo and Ozoro fields collectively contain estimated gross contingent resources of 144 mmboe. These discovered and yet undeveloped fields present a readily accessible opportunity for additional development in OML 26 and potential integration with the Ogini and Isoko field development plans. In addition, there is an estimated 615 mmboe gross unrisked prospective resources defined across multiple prospects on the OML 26 licence area.

African Appraisal and Development and Exploration Assets

Overview of Afren's African Appraisal and Development and Exploration Assets

Afren has further appraisal and development, or exploration interests in Nigeria and in other parts of Africa. While Afren does not currently intend to pursue further exploration of these assets beyond its 2015 commitments, in a higher oil price environment these assets potentially hold significant value for the Company, particularly providing flexibility for future in-house development, farm-out or divestment alternatives with respect to these assets.

Nigerian Appraisal and Development, and Exploration Assets

Afren has a portfolio of appraisal and development, and exploration projects in Nigeria. The following table sets forth certain information regarding these development and exploration assets in Nigeria, including the Company's indigenous partner and the work programme at each field.

Nigeria	Indigenous Partner	Work Programme
Okwok (OML 67)	Oriental Energy	Development
	Resources Ltd/ Addax
	Petroleum (Nigeria
	Offshore) Ltd
OML 113	FHN	Appraisal and Development; Exploration
OPL 310	Optimum	Exploration
OML 115	Oriental	Exploration

Okwok (OML 67)

Overview

The Okwok field is located in OML 67 in the Gulf of Guinea, 50 km offshore southeast Nigeria at a depth of 132 feet of water. The Okwok field is approximately 15 km east of the Ebok development and adjacent to and surrounded by OML 115. The following table sets out certain details of the Okwok licence including Afren's legal and effective working interest and partners.

Licence details—Okwok
Area km2	40
Expiry	Initial term extended to 14 March 2015(1)
Licence type	Royalty Tax Concession
Main plays	Tertiary Agbada 'D' series of reservoirs, Qua Iboe, Biafra and Isongo formations
Partner	Oriental Energy Resources Ltd, Addax Petroleum (Nigeria
	Offshore) Ltd
Afren's legal interest	28%
Afren's effective working interest:
Pre cost recovery	70%
Post cost recovery(2)	56%
Data available	3D seismic data and well data plus field studies

(1) Afren's partner, Oriental Energy Resources Limited, has applied for the term of the licence to be extended.

(2) Afren's interest is 56% pre hurdle point and 35% post hurdle point. Hurdle point is the point following the cost recovery period when available petroleum lifted equals US\$1.2 billion in value.

Field Development

The Okwok field was discovered in 1967 by a Mobil/NNPC Joint Venture. In 2001, Mobil contributed Okwok to the Nigerian Government's indigenous licensing programme. Pursuant to this programme, Oriental completed a farm-out agreement for Okwok with Mobil and the NNPC in June 2006. Addax Petroleum (Nigeria Offshore) Ltd ("Addax") subsequently entered into a joint venture agreement with Oriental, acquiring a 40% interest in Okwok and assumed the role of technical advisor. On 7 July 2009, Afren entered into a farm-in agreement with Addax to jointly develop the Okwok field. As at 31 December 2014, NSAI certified an estimate of 29.4 mmbbls of 1P and 46.8 mmbbls of 2P reserves at Okwok.

In January 2014, Afren received approval for the field development plan for Okwok from the Nigerian authorities. During 2014, Afren and its partners completed the fabrication and installation of the well head jacket and plan to drill an additional well in the first quarter of 2015. Afren intends to suspend further work and, along with Oriental, will review the optimal development plan for Okwok given the oil price environment. In connection with the suspension of further development at Okwok, Afren has assumed it will be required to pay approximately US\$18 million in costs associated with terminated contracts, cancellation and storage fees, administrative costs, and similar expenses. The carrying value of Okwok at 31 December 2014 was US\$200.2 million.

The Okwok licence expired in March 2015 and to date the DPR has not granted any extension in respect of this Licence. However, Afren and its partners expect that the Licence will be renewed on the basis that they have made sufficient progress in the development of the Okwok asset and the application for renewal is in progress. The Directors do not believe that the implementation of the Restructuring (or the Alternative Restructuring) will affect the renewal of this Licence.

On 30 April 2015, Afren Resources and Oriental, signed a settlement agreement in respect of (inter alia) Okwok. Afren has agreed with Oriental that in order to retain its participation in the Okwok licence, it will decide by the end of June 2015 on the further development plan and commit to the funding of the field, following completion of the recent development well and a review of the optimum development plan. If Afren elects not to participate in such further development plan, it has agreed to transfer its interest in the Okwok licence to Oriental.

OPL 310

Overview

OPL 310 is located in the Upper Cretaceous fairway that runs along the West African Transform Margin and includes the Ogo discovery in 2014. The following table sets forth certain details of the OPL 310 licence including Afren's legal and effective working interest and its partner.

Licence details—OPL 310

Area km2	1,850
Expiry	10 February 2019
Licence type	Royalty Tax Concession

Main plays	Cretaceous shelfal to deep water clastics in structural and stratigraphic traps over basement highs
Partner	Optimum Petroleum Development Ltd, Lekoil Ltd
Afren's legal interest	22.86%
Afren's effective working interest:(1)
Pre cost recovery	52%
Post cost recovery	40%
Data available	2D and 3D seismic and regional well data

____________ (1) Afren will hold a 40% economic interest in the licence once Afren, Lekoil Ltd and Optimum achieve cost recovery. Prior to that point, Afren's economic interest will vary depending on the costs incurred and recovered by the three partners.

Field Development

Evaluation of the block has identified several prospects lying in the Turonian, Cenomanian and Albian sandstone intervals. Exploration drilling to-date on Ogo has encountered a significant accumulation of light oil. Afren has commenced a 3D seismic programme across both the OPL 310 and adjacent OML 113 licence areas and data processing is ongoing. Afren has instructed NSAI to commence the preparation of a CPR for OPL 310 once the processing is completed. Timing of exploration drilling is dependent on an improvement in the oil price environment and prospective financing arrangements.

OML 113

Overview

OML 113 is contiguous to Afren's operated OPL 310 block. OML 113 includes the Aje oil and gas field is located 24 km offshore Nigeria in water depths up to 1,476 feet. The following table sets forth certain details of the OML 113 licence including Afren's legal and effective working interest and partner.

Licence details—OML 113
Area km2	1,669.96
Expiry	11 June 2018
Licence type	Royalty tax concession
Main plays	Sandstone reservoirs of Mid to Late Cretaceous, with oil and gas in Turonian, Cenomanian and Albian intervals
Partner	Yinka Folawiyo (operator); New Age, Panoro, Energy Equity Resources, Jacka (JV partners)
FHN legal interest	9%
FHN effective working interest:
Pre cost recovery	16.9%
Post cost recovery	22.5%
Data available	2D and 3D seismic and regional well data

Field Development

The Aje oil and gas field on block OML 113 was discovered in 1996. Afren has an interest in OML 113 through its subsidiary FHN. On 17 July 2013, FHN completed the acquisition of a 16.9% economic interest in OML 113.

Three of the four wells drilled on the field, Aje-1, Aje-2 and Aje-4, have encountered oil and gas in various intervals across the Turonian, Cenomanian and Albian sands, and two such wells have tested at commercial rates. A field development plan for the Aje field has been approved by the Nigerian DPR. In a higher oil price environment, the exploration and development of the Aje and Ogo complex presents potentially considerable upside and flexibility for future in-house development, farm-out or sale alternatives with respect to these assets.

OML 115

Overview

OML 115 is located in the translational structural setting of the prolific offshore eastern Niger Delta (Southeast Nigeria), surrounding the Ebok and Okwok development areas and close to the giant Zafiro Complex. The following table sets forth certain details of the OML 115 licence including Afren's legal and effective working interest and partner.

Licence details—OML 115
Area km2	228
Expiry	20 May 2019
Licence type	Royalty Tax Concession
Main plays	Tertiary Agbada 'D' series of reservoirs, Qua Iboe, Biafra and Isongo formations
Partner	Oriental Energy Resources Ltd
Afren's legal interest	40%
Afren's effective working interest:
Pre cost recovery	100%
Post cost recovery	50%
Data available	3D seismic data. Exploration well data. Subsurface studies

Field Development

OML 115 was originally awarded to Oriental in 1999 as part of the Nigerian Government's indigenous concession programme. In January 2010, Afren entered into a joint venture agreement with Oriental and Energy Equity Resources to participate in the exploration, appraisal and development of OML 115. In July 2010, Afren acquired Energy Equity Resources' remaining 7.5% licence interest in OML 115, increasing the Company's legal interest to 40%.

Following the collection of 3D seismic data covering the Ebok/Okwok/OML 115 area, Afren spudded the first exploration well on the Ameena East prospect in November 2014 and the well was completed in January 2015. The well has been temporarily abandoned and made available for potential re-entry at a future time. The southern portion of the Okwok structure (Okwok South) extends into OML 115 and significant additional prospectivity has been defined within the channelised Qua Iboe system.

The Group has agreed that in order to retain its participation in OML 115 licence, it will decide by the end of 2015 to commit to a development plan. The carrying value of OML 115 at 31 December 2014 was US\$82.4 million.

On 30 April 2015, Afren Resources and Oriental, signed a settlement agreement in respect of (inter alia) OML 115. Afren has agreed with Oriental that in order to retain its participation in the OML 115 licence, it will decide by the end of 2015 on the development plan and commit to the funding of the field. If Afren elects not to participate in such development plan, it has agreed to transfer its interest in the OML 115 Licence to Oriental.

Non-Nigerian African Exploration Assets

Afren has a portfolio of exploration projects outside of Nigeria in East, West and South Africa, with gross unrisked prospective resources of 9.7 bnboe across these jurisdictions. Total spend to-date for exploration activities related to the non-Nigerian African exploration assets is approximately US\$577 million and the Company intends to suspend exploration spending related to all of these assets beyond its 2015 commitments or will consider targeted spending, to the extent necessary to retain the Company's optionality in the certain assets.

East Africa

Overview of Afren's Operations in East Africa

Afren's East African exploration acreage covers over 68,000 km2 and approximately 57,000 km2 of this acreage is operated by Afren. Across five countries, each block contains evidence of a work oil prone petroleum system.

Ethiopia

Block 8

Overview

Block 8 is located on the edge of the Paleozoic—Mesozoic Ogaden Basin in Southern Ethiopia. The following table sets forth certain details of the Block 8 licence including Afren's working interest and partner.

Licence details—Block 8
-------------------------	--	--	--	--

Area km2	11,062
Expiry	31 October 2015
Licence type	Production Sharing Contract
Main plays	Gas in Triassic sandstones and oil in Jurassic carbonates in
	structural traps
Partners	New Age (African Global Energy) Limited
Afren's working interest	42.9%
Data available	2D seismic and well data

Field Development

The operator of the blocks is New Age (African Global Energy) Limited, which currently holds a 57.1% interest. During 2010, Afren completed a 173 line km 2D seismic acquisition programme across the onshore Block 8 which complemented 962 km of existing 2D seismic data. One appraisal well was spudded in 2013, indicating hydrocarbons, and was extended to evaluate the deeper Gumboro zone.

Kenya

Blocks L17/L18

Overview

Block L17/L18 area is located in the Lamu coastal basin, in southern on and offshore Kenya. The individual blocks L17 and L18 cover an area of approximately 1,275 km2 and 3,630 km2 , respectively, and are situated both onshore and in water depths varying from a few meters along the shoreline up to approximately 500 m. The following table sets forth certain details of the Blocks L17/L18 licence including Afren's working interest.

Licence details—Blocks L17/L18

Area km2	4,881
Expiry	24 October 2015
Licence type	Production Sharing Contract
Main plays	Kenya/Tanzania Cretaceous to Tertiary reservoirs sourced by
	the Jurassic and Eocene
Partner	—
Afren's working interest	100%
Data available	2D and 3D seismic with potential fields data.

Field Development

Afren acquired a 100% interest in Blocks L17 and L18 and operates the blocks. To-date Afren has completed the acquisition and analysis of 2D and 3D seismic data and airborne gravity and magnetic survey results to better understand the prospectivity prior to undertaking exploration drilling.

Block 1

Overview

Block 1 is located on the western margin of the Mandera-Lugh basin. The following table sets forth certain details of the Block 1 licence including Afren's working interest and partner.

	Licence details—Block 1

Area km2	24,773
Expiry	8 October 2016
Licence type	Production Sharing Contract
Main plays	Mesozoic Passive Margin and Karoo Rift play systems
Partner	Lion Petroleum Corporation
Afren's working interest	80%
Data available	2D Seismic data, gravity/magnetic data

Field Development

Afren has an 80% interest in the asset and is currently the operator, with Lion Petroleum Corporation owning the remaining 20% interest. 2D seismic data has identified six leads and prospects as well as a number of new play concepts. No exploration drilling has been undertaken at Block 1.

Madagascar

Block 1101

Overview

Block 1101 is located on the eastern flank of the Ambilobe basin in Northern Madagascar and lies adjacent to ExxonMobil's Ampasindava Block and Sterling Energy's Ambilobe Block. The following table sets forth certain details of the Block 1101 licence including Afren's equity interest and partner.

Area km2	11,175
Expiry	29 July 2015
Licence type	Production Sharing Contract
Main plays	Karoo reservoirs charged by offshore Mesozoic source rocks
Partner	Oyster Madagascar Limited
Afren's equity interest	90%
Data available	2D seismic, potential fields and borehole data

Field Development

Afren has a 90% interest to in Block 1101 and operates the asset. Afren has completed an airborne gravity and magnetic survey, geological fieldwork on the block, and acquired 443 km of 2D seismic data. Hydrocarbons were encountered in 2 cores over multiple reservoir zones in a shallow drilling and coring programme, however, further analysis in early 2015 is expected to be undertaken to confirm the nature and extent of the hydrocarbons. The key prospects of Block 1101 include Bandrany, an approximately 850km2 4-way dip closed prospect, Antso/Mantaly, Karroo-aged 3-way tilted fault blocks, and Ankaramy, an existing heavy oil discovery.

Seychelles

Blocks A and B

Overview

Blocks A and B are located in the Seychelles micro-continent. The following table sets forth certain details of the Blocks A and B licence including Afren's equity interest and partner.

Licence details—Blocks A and B
Area km2	14,284
Expiry	27 November 2016
Licence type	Production Sharing Contract
Main plays	Cretaceous and Jurassic deepwater play system and Karoo
	Rift play system
Partner	Avana Petroleum Ltd.
Afren's equity interest	75%
Data available	2D/3D seismic, potential fields and well data

Field Development

Afren is the operator of the blocks, holding a 75% interest, and its partner Avana Petroleum Ltd. holds the remaining 25% interest in the blocks. Afren has completed a 3D seismic programme for this asset. The key prospects of Block A and B include Bonit, a Jurassic salt cored structure with pre and post-salt potential and an estimated 700 mmbbls of Pmean prospective resources, Espadon with an estimated 176 mmbbls of Pmean prospective resources, and Karang, the shoulder to a failed Jurassic rift and an estimated 250 mmbbls of Pmean prospective resources.

Tanzania

Tanga Block

Overview

The Tanga Block is located offshore Tanzania. The following table sets forth certain details of the Tanga Block licence including Afren's equity interest and partner.

Licence details—Tanga Block

Area km2	1,935
Expiry	20 November 2017
Licence type	Production Sharing Contract
Main plays	Kenya/Tanzania Cretaceous to Tertiary reservoir sourced by
	the Jurassic and Eocene
Partner	Petrodel Resources Limited
Afren's equity interest	74%
Data available	2D/3D seismic, potential fields and well data

Field Development

Afren is the operator of the block. The licence is divided in three exploration periods of two four-year period and one three-year period. Afren has completed acquisition and analysis of 2D and 3D seismic data. The prospects Chungwa-1, Mkonge-1 and Nanasi are in ready-to-drill status, however a further shallow water 3D seismic survey may be required to properly rank the three exploration opportunities.

West Africa

Afren's West African exploration acreage (excluding Nigeria) covers over 8,172 km2 and approximately 1,221 km2 of this acreage is operated by Afren. Across three countries, Afren's assets include mainly exploration acreage.

Overview of Afren's Operations in West Africa

The following table sets forth certain information concerning Afren's operations in West Africa including the Company's partners and the current work programme at each field.

	Partner	Work Programme
Ghana
Keta Block	Eni	Exploration
Congo Brazzaville
La Noumbi	Maurel et Prom	Exploration
Côte d'Ivoire
Block 525 and 523	Petroci, Taleveras	Exploration

For more information about the oil and gas reserves at Afren's West African assets, see "—Summary of Reserves and Resources—Prospective Resources—West and South Africa".

Ghana

Keta Block

Overview

The Keta Block is located offshore eastern Ghana along the West African Transform Margin covering an area of 4,400 km2 at the Volta River Basin in water depths ranging from 1,000 m to 2,800 m.

The following table sets forth certain details of the Keta Block licence including Afren's legal and effective working interest and its partners.

Licence details—Keta Block

Area km2	4,400
Expiry	18 February 2016
Licence type	Royalty Tax Concession
Main plays	Cretaceous deepwater clastics in combined structural/stratigraphic traps
Partners	Eni
Afren's legal interest	35%
Afren's effective working interest:
Pre cost recovery	35%
Post cost recovery	35%
Data available	2D and 3D seismic and well data

Following an economic evaluation in 2014, Afren took the precautionary step to fully impair its holding in the Keta block. The Group retains its interest in the asset and is in discussions with its partners regarding an exit of the joint venture

Congo Brazzaville

La Noumbi Permit

Overview

The La Noumbi Permit covers approximately 1,057 km2 of onshore Congo directly to the south of the Gabon border. The following table sets forth certain details of the La Noumbi Permit licence including Afren's legal and effective working interest and partner.

Licence details—La Noumbi Permit

Area km2	1,057
Expiry	18 June 2016
Licence type	Production Sharing Contract
Partner	Maurel et Prom (Op.)
Afren's legal interest	22%
Afren's effective working interest:
Pre cost recovery	22%
Post cost recovery	22%

In June 2013, Afren relinquished 50% of the block. Maurel et Prom is the operator of any forward work programme at the La Noumbi Permit.

Côte d'Ivoire

Blocks CI-523 and CI-525

Overview

Blocks CI-523 and CI-525 are located in the Republic of Ivory Coast, covering 1,494 and 1,221 square kilometres, respectively.

The following table sets forth certain details of the Block CI-523 (Kudu and Eland fields) licence including Afren's legal and effective working interest and partners.

Licence details—Block CI 523 (Kudu and Eland fields)

Area km2	1,494
Expiry	4 September 2020
Licence type	Production Sharing Contract
Main plays	Late Cretaceous shelfal to deep water clastics in
	structural and stratigraphic traps
Partners	Petroci, Taleveras
Afren's legal interest	20%
Afren's effective working interest:
Pre cost recovery	22.22%
Post cost recovery	22.22%
Data available	3D seismic data

The following table sets forth certain details of the Block CI-525 (including the Kudu and Eland Field development areas, which comprise 58 km2 ) licence including Afren's legal and effective working interest and partners.

Eland Fields)
Area km2	1,221 (of which Kudu and Eland comprise 58 km2 )
Expiry	18 November 2019
Licence type	Production Sharing Contract
Main plays	Late Cretaceous shelfal to deep water clastics in structural and stratigraphic traps
Partners	Petroci, Taleveras
Afren's legal interest	51.75%
Afren's effective working interest:
Pre cost recovery	57.5%
Post cost recovery	57.5% (Eland and Kudu fields WI 68.75%)
Data available	3D and 2D seismic and well data

Licence details—Block CI 525 (including the Kudu and

Field Development

Afren's partner, Taleveras Energy Resources Ltd ("Taleveras"), is the operator of CI-523 and Afren is the operator of CI-525. Afren has acquired 1,824 km2 of marine 3D seismic survey over CI-525 and CI-523.

South Africa

Block 2B

Overview

Block 2B is located in the offshore shallow water of the Orange River Basin, lying between the Ibhubesi gas field and the Namaqualand coast, with water depths ranging from shore line to 250 m. The following table sets forth certain details of the Block 2B licence including Afren's equity interest and partner.

Licence details—Block 2B
Area km2	4,358
Expiry	12 March 2017
Licence type	Exploration Right
Main plays	South Atlantic Lower Cretaceous Rift Play system
Partner	Thombo Petroleum Limited
Afren's equity interest	25%(1)
Data available	2D seismic and well data
______

(1) Option to increase and take up costs of drilling one exploration well upon completion of seismic acquisition programme.

Field Development

Afren's partner, Thombo Petroleum Limited, is the operator of the block. Afren completed the primary work commitment of acquiring, processing and interpreting 3D seismic survey over the A-J1 graben. On 8 April 2014, Afren made an application to the Petroleum Agency of South Africa to enter the next phase of the licence, however the Company does not currently intend to pursue additional exploration activities on the block.

Kurdistan Region of Iraq

Overview of Afren's Operations in the Kurdistan region of Iraq

Afren holds two assets in the Kurdistan region of Iraq – the Barda Rash block and Ain Sifni. The Barda Rash block is located 55 km northwest of Erbil. The Ain Sifni block is located approximately 70 km northwest of Erbil, and holds the Jebel Simrit, Betnar and Maqlub structures.

Licence details—Barda Rash
Area km2	265
Expiry	November 2032
Licence type	Production Sharing Contract
Main plays	Cretaceous, Jurassic and Triassic carbonates
Partners	KRG
Afren's equity interest	60%
Data available	2D seismic data; well data
Licence details—Ain Sifni
Area km2	672
Expiry	1 October 2039
Licence type	Production Sharing Contract
Main plays	Jebel Simrit, Betnar and Maqlub
Partner	Hunt Oil
Afren's equity interest	20%*
Data available	2D and 3D seismic data; well data
	* The Company's economic interest in Ain Sifni is dependent on the share of operating costs paid by the Company, and is currently approximately 17%. If Afren

fails to pay its share of operating costs, its effective working interest may be reduced to nil.

For more information about the oil and gas reserves at Afren's Kurdistan region of Iraq assets, see "— Summary of Reserves and Resources—Contingent Resources—Kurdistan Region of Iraq" and "— Summary of Reserves and Resources—Prospective Resources—Kurdistan Region of Iraq".

Field Development and Production in Kurdistan Region of Iraq

Afren initiated production operations at Barda Rash in August 2012 and in July 2013 the Company commenced preliminary crude oil sales to the local market. Following an updated technical report that materially reduced previously published estimates of reserves and resources of Barda Rash, Afren is currently considering strategic options for its interest in the Barda Rash field, including exit and/or relinquishment of the asset.

Hunt Oil Middle East Limited (previously known as Hunt Oil Company of the Kurdistan region of Iraq) ("Hunt Oil") serves as the operator of the Ain Sifni field and Afren holds a minority 20% interest in the asset. Exploration activities related to the asset are currently on hold. The Company's economic interest in Ain Sifni is dependent on the share of operating costs paid by the Company, and is currently approximately 17%, which may be reduced to nil if Afren does not pay outstanding cash calls. The Company is currently in discussions relating to the disposal of its interests in the Kurdistan region of Iraq.

5. Summary of Reserves and Resources

The below summary of reserves and resources reflects information from the NSAI Report, RPS Reports and AGR TRACS Report produced for the Company, as well as operator estimates. Operator estimates are internally calculated estimates of the reserves and resources, using acceptable engineering and geological methods, similar to what a third party would have used for a CPR. All reserves and contingent resources are from CPRs by NSAI, RPS and AGR TRACS for the year end 2014; prospective resources for certain exploration assets have been estimated internally.

NSAI prepared its assessment of Ebok, Okoro, OML 26 and Okwok as at 31 December 2014 and reviewed and incorporated only field studies and data that were available as of those dates in relation to the assets covered by the relevant report. AGR TRACS prepared its assessment of Aje field in OML 113 as at 25 July 2014 and reviewed and incorporated only field studies and data that were available as of the date.

RPS prepared its assessment of the Barda Rash block and the Ain Sifni block in a report published 12 January 2015.

For a summary of certain assumptions used in the NSAI Report, RPS Reports and AGR TRACS Report, see "Presentation of Information and Notes to Investors—Hydrocarbon Data".

Reserves

Nigeria

NSAI has estimated the 1P, 2P and 3P reserves related to Afren's interest in the Ebok field located in OML 67, Okoro located in OML 112, the Okwok field located in OML 67 and the Ogini and Isoko fields located in OML 26. AGR TRACS has estimated the 1P and 2P reserves related to Afren's interest in Aje field located in OML 113.

The information in the table below has been extracted without material adjustment from the NSAI Report as at 31 December 2014 for Ebok, Okoro, OML 26, Okwok and from the AGR TRACS Report as at 25 July 2014 for Aje. The information in the following table does not give any effect to any commodity hedges. For convenience, aggregate totals are also provided for the Company's estimated 1P, 2P and 3P reserves at each of Afren's interests in Ebok, Okoro, OML 26, Okwok, and OML 113.

Oil Oil Area/Field/Category(1)(2) (mmbbl) (mmbbl) Ebok Field Proved (1P) 33.0 29.0 Proved + Probable (2P) 49.1 43.0 Proved + Probable + Possible (3P) 65.2 56.9 Okoro Field Proved (1P) 13.7 11.1 Proved + Probable (2P) 22.2 18.1 Proved + Probable + Possible (3P) 32.6 26.6 OML 26 Proved (1P) 16.8 12.1 Proved + Probable (2P) 55.9 40.2 Proved + Probable + Possible (3P) 67.2 48.7 Okwok Field Proved (1P) 19.9 18.3 Proved + Probable (2P) 29.9 27.0 Proved + Probable + Possible (3P) 38.6 34.3 OML 113 Proved (1P) 2.4 N/A Proved + Probable (2P) 4.4 N/A Proved + Probable + Possible (3P) N/A N/A Total Proved (1P) 85.8 70.5 Proved + Probable (2P) 161.5 128.3	Afren Effective Working Interest Reserves before Royalty	Net Entitlement Reserves

























Proved + Probable + Possible (3P) 203.6 166.5

Source: Netherland, Sewell & Associates, Inc. and AGR TRACS International Limited

(1) The NSAI Report and AGR TRACS Report were prepared using oil and gas prices and cost parameters specified by Afren.

(2) 1P, 2P and 3P reserves have been prepared in accordance with the definitions and guidelines set forth in 2007 by the PRMS.

Contingent Resources

Contingent resources refers to those quantities of petroleum estimated, as at a given date, to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable due to one or more contingencies. The low estimate scenario of contingent resources ("1C") indicates the probability that the quantities of contingent resources actually recovered will equal or exceed the estimated amounts is at least 90%. The best estimate scenario of contingent resources ("2C") indicates the probability that the quantities of contingent resources actually recovered will equal or exceed the estimated amounts is at least 50%. The high estimate scenario of contingent resources ("3C") indicates the probability that the quantities of contingent resources actually recovered will equal or exceed the estimated amounts is at least 10%. Gross amounts are presented on a total basis—i.e., the actual interest of the relevant licence holder in the relevant fields and licence areas without deduction for the economic interest of its local partners, tax or royalty interests or otherwise. See "Presentation of Information and Notices to Investors— Hydrocarbon Data".

West Africa

NSAI has estimated the contingent resources for the Okoro and Setu fields in OML 112 and for the Ogini and Isoko fields in OML 26 as at 31 December 2014. Also, AGR TRACS has estimated the contingent resources for the Aje field in OML 113 as at 25 July 2014.

The information in the following table has been extracted without material adjustment from the NSAI Report and the AGR TRACS Report. For convenience, aggregate totals of the Company's gross oil and gas contingent resources for these assets is also provided. Afren's legal interest and effective working interest in the relevant fields and licence areas are separately disclosed. See "—Description of the Company's Assets".

	Gross (100%) Volumes (mmbbl)
	OOIP(1)			Contingent(2) Oil Resources
	Low Estimate (1C)	Best Estimate (2C)	High Estimate (3C)	Low Estimate (1C)	Best Estimate (2C)	High Estimate (3C)
Area
OML 113 (Aje)	190.0	292.0	475.0	54.0	81.8	N/A
Okoro and Setu	193.1	229.2	267.2	1.1	1.5	2.0
OML 26(3)	—	—	—	42.0	68.0	99.7
Total	383.1	521.2	742.2	97.1	151.3	101.7

___________ Source: Netherland, Sewell & Associates, Inc. and AGR TRACS International Limited

(1) OOIP refers to original oil in place.

(2) Contingent resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable due to one or more contingencies.

(3) NSAI Report contains figures for contingent oil resources only.

Kurdistan Region of Iraq

RPS has estimated the contingent resources for the Barda Rash block and the Ain Sifni block in reports published 12 January 2015. The 12 January 2015 RPS Reports show a material reduction to previously published estimates of reserves and resources for Barda Rash, eliminating gross 2P reserves of 190 mmbbls and revising gross 2C resources from 1,243 mmbbls to approximately 250 mmbbls. Afren's legal interest and effective working interest in the relevant fields and licence areas are separately disclosed. See "—Description of the Company's Assets".

Prospective Resources

Prospective resources are those quantities of petroleum that are estimated, as at a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources represent exploration opportunities and quantify the development potential in the event a petroleum discovery is made. Gross amounts are presented on a total basis—i.e., the actual interest of the relevant licence holder in the relevant fields and licence areas without deduction for the economic interest of Afren's local partners, tax or royalty interests or otherwise.

West Africa and South Africa

Prospective resources have been estimated for the La Noumbi Permit, Congo Brazzaville; Keta Block, Ghana; Ebok and Okwok, OML 115 and OPL 310, Nigeria; Block Cl-523 and Block Cl-525 Côte d'Ivoire and Block 2B, South Africa. The resources are summarised in the table below. Totals of unrisked prospective resources are not reflective of volumes that can be expected to be recovered. Gross amounts are presented on a total basis—i.e., the actual interest of the relevant licence holder in the relevant fields and licence areas without deduction for the economic interest of Afren's local partners, tax or royalty interests or otherwise. Afren's legal interest and effective working interest in the relevant fields and licence areas are separately disclosed. See "—Description of the Company's Assets".

Oil

	Gross (100%) Oil Volumes (mmbbl)
		OOIP		Unrisked Resources	Prospective	Oil
	Low Estimate	Best Estimate	High Estimate	Low Estimate	Best Estimate	High Estimate
Area
Congo	244	412	631	53	102	175
Ghana(1)	2,157	4,740	9,490	324	948	2,373
Nigeria(2)	197	319	532	45	73	123
Côte d'Ivoire(3)	270	844	1,767	74	195	548
South Africa	913	2,529	5,082	216	643	1,412
Total	3,781	8,844	17,502	712	1,961	4,631

(1) ENI (Operator) in place volumes, resources estimated with 15%, 20% and 25% recovery factors.

(2) These prospective volumes include condensate associated with the OPL 310 prospective gas resources.

(3) These prospective volumes include condensate associated with the CI-523 & CI-525 prospective gas resources

Gas

____________

		Gross (100%) Gas Volumes (bcf)
				Unrisked
		Oil and Gas in Place		Resources	Prospective	Gas
	Low	Best	High	Low	Best	High
	Estimate	Estimate	Estimate	Estimate	Estimate	Estimate
Area
Nigeria	2,931	3,503	4,185	2,181	2,641	3,206
Côte d'Ivoire(4)	438	1,109	2,394	282	744	1,614
Total	3,369	4,612	6,579	2,463	3,385	4,820

(4) These include resources from the Ibex, Eland, Kudu and Assinie discoveries.

Total Oil and Gas

				Gross (100%) Oil and Gas Volumes (mmboe)
					Unrisked Prospective Oil and Gas
		Oil and Gas in Place			Resources
	Low	Best	High	Low	Best	High
	Estimate	Estimate	Estimate	Estimate	Estimate	Estimate
Area
Congo	244	412	631	53	102	175
Ghana	2,157	4,740	9,490	324	948	2,373
Nigeria	685	902	1,230	409	513	657
Côte d'Ivoire	343	1,029	2,166	121	319	817
South Africa	913	2,529	5,082	216	643	1,412
Total	4,342	9,612	18,599	1,123	2,525	5,434

East Africa

Prospective resources have been estimated for Ethiopia, Kenya, Madagascar, Seychelles and Tanzania as at 31 December 2014. The resources are summarised below. Totals of unrisked prospective resources are not reflective of volumes that can be expected to be recovered and are shown for convenience only. Gross amounts are presented on a total basis—i.e., the actual interest of the relevant licence holder in the relevant fields and licence areas without deduction for the economic interest of Afren's local partners, tax or royalty interests or otherwise. Afren's legal interest and effective working interest in the relevant fields and licence areas are separately disclosed. See "—Description of the Company's Assets".

Oil

	Gross (100%) Oil Volumes (mmbbl)
		OOIP		Unrisked Prospective Oil Resources
	Low Estimate	Best Estimate	High Estimate	Low Estimate	Best Estimate	High Estimate
Area
Ethiopia	36	171	286	7	17	57
Kenya	1,234	9,362	33,918	375	2,947	10,916
Tanzania	1,875	5,707	14,231	382	1,433	4,467
Madagascar	1,676	5,954	16,314	395	1,456	4,317
Seychelles	1,748	4,949	14,584	400	1,323	4,941
Total	6,569.0	26,143	79,333	1,559	7,176	24,698

____________

Gas

			Gross (100%) Gas Volumes (bcf)
		Oil and Gas in Place			Unrisked Prospective Gas Resources
	Low Estimate	Best Estimate	High Estimate	Low Estimate	Best Estimate	High Estimate
Area
Ethiopia	514	1,478	3,634	358	821	2,537
Total	514	1,478	3,634	358	821	2,537
______

Total Oil and Gas

	Gross (100%) Oil and Gas Volumes (mmboe)
		Oil and Gas in Place			Unrisked Prospective Oil and Gas Resources
	Low Estimate	Best Estimate	High Estimate	Low Estimate	Best Estimate	High Estimate
Area
Ethiopia	124	417	912	69	154	495
Kenya	1,234	9,362	33,918	375	2,947	10,916
Tanzania	1,875	5,707	14,231	382	1,433	4,467
Madagascar	1,676	5,954	16,314	395	1,456	4,317
Seychelles	1,748	4,949	14,584	400	1,323	4,941
Total	6,657	26,389	79,959	1,621	7,313	25,136

6. Production and Drilling

Afren has three producing assets, consisting of the Ebok field, the Okoro field and the Ogini and Isoko fields in Nigeria. Afren reported full year average net production in 2014 of approximately 31,819 bopd of oil, natural gas and natural gas liquids from the Ebok, Okoro, Isoko and Ogini fields in Nigeria (excluding production from the Barda Rash field in the Kurdistan region of Iraq, which amounted to 198 bopd of oil). For more details on production within such licence areas, please see "—Nigerian Production Assets".

Afren initiated production operations at Barda Rash in August 2012. On 12 January 2015 Afren announced that an updated CPR of Barda Rash, carried out as part of Afren's annual reserves review, was expected to show a material reduction to previously published estimates of reserves and resources, essentially eliminating gross 2P reserves of 190 mmbbls and revising gross 2C resources from 1,243 mmbbls to around 250 mmbbls.

The following table sets forth the number of production wells drilled, together with the total oil production and total condensate/LPG production, for the fields Ebok, Okoro and OML 26 operated by Afren for the periods presented.

		Year ended 31 December 2013 44
	2012		2014
Production wells	40		46
Total oil production (mmbbl)	14.7	16.7	11.6
Total condensate/LPG production (mmboe)	0.3	0.2	0

The following table sets out the number of wells drilled for the years 2012, 2013 and 2014.

		Year ended 31 December
	2012	2013	2014
Number of exploration wells drilled	6	10	3
Number of production wells drilled	6	4	9
Total wells	12	14	12

For a description of certain off-take arrangements with respect to oil production, see "—Marketing and Major Customers" and "Material Contracts—Material Agreements Relating to the Company's Assets" of Part IX (Additional Information).

7. Current Trading

An updated technical report of Barda Rash carried out as part of Afren's annual reserves review reflected a material reduction to previous estimates of reserves and resources, eliminating gross 2P reserves of 190 mmbbls and revising gross 2C resources from 1,243 mmbbls to around 250 mmbbls. Afren is considering strategic options for its interest in the Barda Rash field in light of this updated technical report, including exit from the asset (and its interests in Ain Sifni).

In light of the significant volatility in the oil industry and related financing markets resulting from the rapid decline in oil prices, in January 2015 the Board initiated a review of the Group's capital structure, liquidity and funding requirements.

Since the announcement of the review of the Group's capital structure and funding requirement in January 2015, Afren has received a number of claims for breaches of contract for non-payment of amounts due for services provided and/or the termination of services contracts. These claims have arisen in part due to the liquidity constraints facing the Group, as well as actions taken to reduce costs in line with the revised focus on the Group's core producing assets.

The Group's 2015 Business Plan has been aligned around core producing assets to operate in a lower oil price environment, with significant cost reductions expected in 2015, both in operating expenditures and capital expenditures. Pursuant to the 2015 Business Plan, the Group's capital allocation is prioritised to the highest cash yielding near-term projects with focus towards its existing Nigerian producing asset base and includes a single rig drilling campaign throughout the year on Ebok, completion of the 5 well programme on OML 26 (which includes 3 wells to be drilled in 2015, and 2 wells which were completed in 2014), and the optimisation of the forward programme at Okoro. See "Afren's Strategic Objectives" in Part II (Description of the Business).

On 3 March 2015, following the expiration of the 30 day grace period, Afren announced that it had decided not to make the payment of US\$15 million due in respect of interest under the 2016 Notes. The Group decided to utilise a 30 day grace period under its 2019 Notes with respect to approximately US\$12.8m of interest due on 8 April 2015 pending the completion of the interim funding process.

On 30 April 2015, Afren satisfied the conditions precedent to the agreement with certain holders of the Company's 2016 Notes, 2019 Notes and 2020 Notes to provide the Company US\$200 million interim cash funding by way of new private placement notes, with an additional US\$55 million committed to be provided at the closing of the restructuring. Additionally, pursuant to an agreement reached with certain noteholders under its 2016 Notes, 2019 Notes and 2020 Notes and a majority of the lenders under its existing US\$300 million Ebok credit facility, the Company intends to proceed to implement a financial and capital restructuring, which is expected to be completed by the end of July 2015 as part of the wider recapitalisation process. See "Overview of the Restructuring" in Part I (Letter from the Chairman to Shareholders).

In connection with the restructuring, the lenders of the US\$300 million Ebok debt facility have agreed to the deferral of the US\$50 million amortisation payments due on 31 January 2015 and 30 April 2015 until the completion of the implementation of the financial and capital restructuring (at which point it is expected that the amortisation payments will be further deferred until after the repayment of the New Senior Notes).

Effective 30 April 2015, Alan Linn was appointed as the Chief Executive Officer and an executive director of the Company. Effective 8 June 2015, David Thomas was appointed as the Chief Operating Officer.

8. Marketing and Major Customers

Afren currently sells its Ebok crude oil production on a monthly spot basis to a number of offtakers. The average price realisation from Ebok crude oil has been at a discount to Brent. Prior to September 2013, Afren sold its Ebok oil production to Socar Trading S.A. under an offtake agreement.

Afren sold its Okoro crude oil production to BP Oil International Limited under an agreed marketing agreement that expired on 31 March 2015, and is currently tendering for a spot cargo. Okoro crude oil production is exported and sold via the nearby Ima Terminal, owned by Amni, where the increased storage capacity (in excess of 1 mmbbl) provides a benefit through the sale of increased parcel sizes and improved shipping and sales economics. The average price realisation from Okoro crude oil has been at a premium to Brent due to the overall higher quality of Okoro crude oil.

Oil is sold to Afren's international customers free on board and is typically transported by its international customers by carrier or other shipping vessel to destinations for refinement and further production.

9. Market Overview

The oil and natural gas industry is highly competitive, and Afren competes with a substantial number of other companies that have greater resources than Afren does. Many of these companies explore for, produce and market oil and natural gas, carry on refining operations and market the resulting products on a worldwide basis. Afren's competitors include major oil and gas companies and independent oil and gas companies. The major international oil companies operating in Nigeria include Addax, Agip, Chevron, Eni, ExxonMobil, Sasol Oil (Proprietary) Limited, Shell, Statoil, Total and Tullow. The oil and gas business is highly competitive in the search for and acquisition of reserves, in the procurement of rigs and other production equipment, in the production and marketing of oil and gas and in the recruitment and employment of qualified personnel. The primary areas in which Afren encounters substantial competition are in locating and acquiring desirable acreage for its drilling and development operations, locating and acquiring attractive producing oil and natural gas properties, and obtaining equipment for drilling operations. In addition, Afren competes with oil and gas companies in the bidding for exploration and production licences that are made available by governments or are for sale by third parties. Competition for such assets is likely to come from companies already present in the region in which the exploration and production licences are located as well as new entrants. There is also competition between producers of oil and natural gas and other industries producing alternative energy and fuel.

10. Partners

The majority of Afren's assets are developed through partnerships or joint ventures with indigenous companies. Pursuant to government initiatives to develop the local oil and gas industry in the regions in which Afren operates, certain licences or agreements to exploit oil and gas are, in some cases, initially awarded to indigenous companies who then seek to partner with larger companies with advanced technical competencies and financial resources.

Some of Afren's current notable indigenous partners in Nigeria include Amni, Oriental and Optimum Petroleum Development Ltd ("Optimum"). Oriental, Afren's indigenous partner at Ebok (OML 67), Okwok (OML 67) and OML 115, was founded in 1990. Oriental is owned by Alhaji Indimi and the Indimi family who are Nigerian entrepreneurs. Amni, Afren's indigenous partner at the Okoro and Setu fields, was founded in 1993 and secured its first OPL in 1993. Amni also has operations at OML 112 and 117 through a partnership with Total and operations at the Ima Field. The principal shareholder of Amni is Chief Tunde Afolabi. Optimum, Afren's indigenous partner at OPL 310, was founded in 1992.

Afren's current partners at the CI-523 and CI-525 in Côte d'Ivoire are Petroci and Taleveras. Petroci was founded in 1975 and is the state oil company of Côte d'Ivoire. Taleveras is in the Commonwealth of Dominica and is an affiliate company of the Taleveras Group, a Nigerian oil trading group.

Afren's current partners in the Kurdistan region of Iraq are the KRG and Hunt Oil. Hunt Oil is Afren's partner at the Ain Sifni block. Hunt Oil is incorporated in the Cayman Islands and its sole shareholder is Hunt Oil Middle East Holdings Limited. The ultimate parent company of Hunt Oil is Hunt Oil Consolidated Inc.

Generally, Afren's selection process for partnerships varies. While Afren conducts thorough business and financial diligence on all of its prospective indigenous partners, the determining factor, for both Afren and the indigenous companies, is whether they can be successful business partners. Given the demands of the industry and the relatively long-term nature of the relationships, Afren tries to ensure that it selects partners with whom it believes it will be able to cultivate a fruitful partnership or joint venture. In many instances, members of Afren's Board or senior management have long-standing relationships with the board or management of the prospective indigenous partners, which provides a useful indication of the potential for the future partnership or joint venture.

One of the central goals of each partnership or joint venture is the transfer of technical knowledge and the development of indigenous competencies in the oil and gas industry. In furtherance of this goal, Afren often places its employees on secondment with indigenous partners or employees from such partners join Afren's teams for certain periods of time. In addition, both teams work in close proximity both on site and in Afren's technical offices in Houston, Texas on all aspects of operation. In some instances, Afren has also assisted its indigenous partners with the development of their corporate infrastructure to support their growth and increase their potential for future exploration and development opportunities.

During the life-cycle of the partnership or joint venture, Afren often has a very active role in the technical, financial and administrative management of operations. Afren remains actively involved with nearly every aspect of operations and provides draft compliance reports and other required government submissions. Afren works closely with its indigenous partners or joint venture partners to ensure that Afren remains in compliance with the ongoing obligations under the licences or agreements pursuant to which Afren operates. For a discussion of certain risks associated with Afren's reliance on indigenous partners or joint venture partners, see "Risk Factors—Risks Relating to Afren's Business—Afren conducts the majority of its operations through partnerships with indigenous companies and in some cases has limited ability to influence or control the operation or future development of such assets, which may increase the risk of delays, additional costs or the suspension or termination of the licences or the agreements pursuant to which it operates".

11. Environmental, Health and Safety and Social Responsibility

Like other participants in the industry, Afren is subject to various environmental and health and safety laws and regulations administered by local, national and other government entities, and similar agencies in the countries and regions in which Afren operates. Afren believes that it is currently in substantial compliance with all material governmental laws and regulations affecting its business and maintains all material permits and licences relating to its operations.

Afren is committed to performing responsibly and positively towards the people, the physical environments and the host societies that its business may affect. Afren aims to protect people in terms of safety and health, protect the environment and fulfil social commitments and has established an Environment, Health & Safety and Social ("EHSS") management system which specifies mandatory processes and requirements and gives guidance on how the EHSS management requirements should be met. The monitoring of operations and feedback on results help to ensure that Afren's EHSS policies and procedures are implemented effectively and assists in making changes necessary to improve EHSS performance.

Environmental

Afren is subject to various environmental laws and regulations in each of the jurisdictions in which Afren operates. Afren has undertaken environmental impact assessments for each of its assets, monitors its environmental performance on a monthly basis and Afren believes it has appropriate oil spill contingency plans and response capabilities in place. Afren is currently in compliance in all material respects with the environmental rules and regulations in the countries and regions in which it operates.

In addition to compliance with such legal and regulatory requirements, Afren has established certain environmental policies in order for its business to be carried out in such a way as to protect the environment. Such policies include, but are not limited to, the following:

identifying and assessing potential environmental issues, assessing associated risks and establishing operational controls that aim to eliminate acute impact and to eliminate or limit emissions to permitted emission quality thresholds;
identifying significant environmental issues where improvement targets need to be set and seeking and monitoring such improvements;
establishing and applying environmental operational standards and processes including environmental impact assessments and environmental management plans;
setting environmental related targets and measuring, appraising and reporting performance against such targets;
analysing deviations from emission thresholds to identify control failures and implement the necessary corrective action;
seeking ways to minimise energy use in operations;
reducing waste generation as far as practical and disposing of waste in a responsible manner without creating legacy issues and liabilities; and
carrying out periodic audits and assessments of environmental controls as part of a continuous improvement process.

Health and Safety

Afren is committed to complying with health and safety regulations and protecting the health, safety, welfare and security of its employees and all personnel affected by and involved in its activities. Various policies have been established in this respect such as the application of health and safety standards across Afren's operations and the performance of audits and assessments of health and safety risks as part of the Company's continuous improvement process.

Afren actively manages security risks in all its operations to ensure the safety of all personnel working in such operations. Security measures are implemented at all facilities and are subject to regular audit and review. Security of assets and information is also given careful consideration in the assessment of security risks.

Social Responsibility

Afren has a primary and continuing commitment to behaving ethically and improving the quality of life of its workforce and host communities as well as respecting the traditional rights and cultural heritage of its host communities. In order to achieve such a commitment, Afren carries out the following social policies among others:

screening, via a social impact assessment, the social risks and issues over all phases of the operation;
establishing a plan to manage social risks and issues over the lifetime of an operation;
building and maintaining relationships with host communities, key individuals and organisations in order to engage in consultation, communication and ensure mutual expectations are realistic and achievable; and
investigating and managing grievances that may be raised by host communities.

In furtherance of Afren's goals to build and maintain relationships with its host communities, Afren has participated in various community development projects to improve access to education, financial literacy, microfinance and infrastructure, among other things. During 2014 Afren invested in a number of projects across Nigeria reaching over 9,167 people. In Eastern Obolo Local Government (Okoro), Afren/Amni sponsored 7 projects which include the construction of three jetties to aid transportation in its rural communities; a Technical Skills Acquisition Programme that empowers young people with entrepreneurial skills and seed funds to start up micro enterprises. In Mbo and Effiat Communities, Afren and Oriental sponsored 7 projects which include science laboratories for secondary school students, medical health outreach programmes to meet the health needs of the rural inhabitants (over 5,000 beneficiaries) and a youth empowerment centre where young boys and girls are trained to acquire life changing skills.

12. Insurance

Afren maintains the types and amounts of insurance coverage that it believes are consistent with customary industry practices in the jurisdictions in which Afren operates and is compliant with the JOAs and considers its insurance coverage to be adequate for its business.

Afren's oil and gas properties and liabilities are insured, where necessary, by resident insurers under individual insurance policies for each relevant venture (reinsured to the international insurance markets with lead reinsurers with a minimum of an AM Best, A minus rating (or equivalent)). Coverage under the terms of these policies includes property damage, operators extra expense (well control, seepage, pollution and redrill), third party liabilities to or arising from Afren's activities, including legal and contractual liabilities from its activities. Coverage, limits and deductibles in force are in line with international oil industry insurance standards. In certain of the previous years in which Afren made claims under its insurance policies, Afren paid a one-time additional fixed amount to supplement the following year's policy (i.e., a one-off loss load). In addition, Afren obtains written approval from the Nigerian Insurance Commission that its insurance meets local requirements and believes that all of its policies comply with local insurance regulations.

Afren has procured and will continue to ensure the procurement of construction all risks insurance coverage in respect of its development projects. Such coverage is generally for works executed anywhere in the world in performance of contracts wherein Afren is at risk relating to the loss of, or damage to, all property to be installed and liabilities to third parties arising therefrom.

Afren's philosophy is to arrange such other insurance from time to time in respect of its other operations as required and in accordance with industry practice. Afren does not currently have business interruption or key man insurance in place, but Afren does have operators extra expense, cargo, directors' and officers', employer liability, public indemnity and travel insurance that Afren believes to be appropriate for its business.

See "Risk Factors—Risks Relating to Afren's Business— The Group does not insure against certain risks and its insurance coverage may not be adequate for covering losses arising from potential operational hazards and unforeseen interruptions".

13. Employees

Afren's employees are diversified geographically. As at 31 December 2014, Afren had approximately 24% of its employees located in the United Kingdom, approximately 26% located in the United States and approximately 45% located in Africa, of which approximately 38% are located in Nigeria and 7% are located in Kenya. The remaining 5% of Afren's employees are located in the Kurdistan region of Iraq. In 2014, approximately 90% of Afren's employees performed professional activities, including technical and operations activities, and 10% performed administrative activities.

Afren believes that it has satisfactory working relationships with its employees and has not experienced any significant labour disputes or work stoppages. The majority of Afren's employees are not covered by collective bargaining agreements or are members of labour unions.

Pensions and Employee Benefits

In the UK, Afren operates a defined contribution scheme and Afren contributes 10% of base salary subject to the participant contributing at least 5% of their salary. These commitments are fully covered by external funds or pension liability provisions recorded in Afren's financial statements. All of Afren's external funding complies with local minimum funding regulations.

In Nigeria, Afren operates a funded contributory pension scheme. Afren funds the scheme fully by contributing 15% of the employee's basic salary, housing and transportation allowance in accordance with the provisions of the Nigerian Pension Reform Act 2004. These funds are being managed by government-approved Pension Fund Administrators.

In the United States, Afren offers employees a 401k plan in which Afren will match an employee's contributions up to 5% of the employee's salary. In addition, Afren contributes an additional pro rata profit sharing element (as defined in the 401k plan) at the end of the year.

Approximately US\$4.0 million was set aside or accrued to provide pension, retirement or other benefits for the year ended 31 December 2014.

14. Intellectual Property

Each of the trademarks, service marks and trade names that Afren uses in conjunction with the operation of its business are registered and/or pending registration, as appropriate for the needs of its relevant business, including the "Afren" name and logo.

15. Legal and Regulatory

Like other participants in the industry, the Group is subject to various laws and regulations administered by local, national and other government entities, and similar agencies in the countries in which it operates. Oil and natural gas exploration and production is regulated under a wide range of statutes, rules orders and regulations in the jurisdiction in which the Group operates, including laws related to the location of wells, the drilling and casing of wells and well production limitations; spill prevention plans; surface use and restoration; platform, facility and equipment removal; the calculation and disbursement of royalties; the plugging and abandonment of wells; bonding; permits for drilling operations; and production, severance and ad valorem taxes. The Group's operations are subject to regulations governing operation restrictions and conservation matters, including provisions for the unitisation or pooling of oil and natural gas properties in straddling fields, the establishment of maximum rates of production from oil and natural gas wells, and prevention of flaring or venting of natural gas. The conservation laws have the effect of limiting the amount of oil and gas Afren can produce from its wells and limiting the number of wells or the locations at which the Group can drill.

Below is a summary of certain key legal and regulatory regimes that the Group operates under in Nigeria, where Afren's core producing assets are located.

Nigeria

Government Regulations

By the provisions of the Nigerian Constitution and the PA, ownership of petroleum is vested in the Nigerian Government on behalf of the people of Nigeria. Thus, the exploration and production of natural gas and crude oil is regulated by the Nigerian Government. In addition, each state in which oil and gas business is undertaken has laws on environmental standards, land ownership and land use, which may restrict or prohibit transportation and storage of oil and natural gas in certain areas.

There are various laws and regulations that directly and indirectly regulate the Nigerian oil and gas industry: these laws and regulations vary from those applying to the operational aspects, such as the PA, to the fiscal aspects, such as the PPTA and the Companies Income Tax Act (the "CITA"). Some legislation and regulations affecting the oil and gas industry carry significant penalties for failure to comply with the provisions thereof.

The Nigerian Oil and Gas Industry Content Development Act 2010 (the "Local Content Act") was enacted in April 2010 and provides a framework for increasing Nigerian participation in all sectors of the Nigerian oil and gas industry, including the upstream and support services of the Nigerian energy industry. The Local Content Act prescribes minimum thresholds for Nigerian participation in activities, generally provides for preferential treatment for Nigerian companies (i.e., companies with a minimum of 51% Nigerian equity holdings) in the award of certain oil blocks and licences and provides for exclusivity to Nigerian indigenous service companies who demonstrate their capacity to operate in land and swamp terrain. The Local Content Act also requires that Afren retains a minimum 10% of its total revenue from the Group's Nigerian operations in Nigeria. Non-compliance with the provisions of the Local Content Act in the award or execution of a project or contract can result in the cancellation of the project or a fine of up to 5% of the project sum. The Group does not expect this law to materially affect it as compared to any other similarly sized E&P Company operating in Nigeria.

There are also pending bills, such as the PIB and the Gas Flaring Bill before the Nigerian National Assembly which are likely to affect oil and gas business in Nigeria. The Company is unable to predict the future cost or impact of complying with these regulations if such bills are passed into law.

A revised draft of the PIB was presented to the National Assembly in July 2012; the draft PIB seeks to overhaul and restructure the entire Nigerian petroleum industry, unbundling the NNPC into three successor companies, providing for the incorporation into limited liability entities of existing commercial partnerships, and providing for a new legal regime for the exploitation of gas developments. In addition, the PIB seeks to effect wide reaching changes to the structure of the petroleum industry by creating new regulatory agencies, proposing the implementation of new licencing regimes for activities in both the upstream and downstream petroleum industry, as well as the introduction of a new tax regime in the upstream sector, which will supersede the current regime under the PPTA. The timing of the enactment of the PIB, if ever, as well as the content and impact of the final legislation remains uncertain. For further discussion, see "Risk Factors—Risks Relating to the Countries in which Afren Operates—Licensing and other regulatory requirements in the countries in which the Group operates may be subject to amendment or reform which could make compliance more challenging."

The Gas Flaring Bill was passed by the Nigerian Senate in 2009 with the aim to prohibit gas flaring and impose significantly increased fines on such activity. However, the Gas Flaring Bill has not yet been passed by the House of Representatives and has therefore not been enacted. For further discussion, see "Risk Factors—Risks Relating to the Countries in which Afren Operates— Licensing and other regulatory requirements in the countries in which the Group operates may be subject to amendment or reform which could make compliance more challenging."

Exploration and Production Regulations

The PA is the primary legislation governing the development of petroleum in Nigeria. The Ministry of Petroleum Resources acts for and on behalf of the Nigerian Government and has broad powers including the powers to grant OPLs which give the holder an exclusive right to explore and prospect for petroleum in respect of an area, and OMLs for the development and disposal of crude oil. The consent of the Minister of Petroleum Resources is required for assignments of interests in OPLs and OMLs, and the Minister has the authority to issue regulations further to the PA. The Minister regulates the industry through the DPR which is headed by a Director and forms part of the Ministry of Petroleum Resources.

PSCs are contracts or concessions, as applicable, whereby the NNPC alone holds the OPL or OML, as applicable, and enters into a contract with an E&P Company whereby the E&P Company takes the risk of exploration on behalf of the NNPC in exchange for a right to a portion of the revenues generated from any resulting production. The contract area of the PSC is usually equal to an OPL or OML, as applicable, in which the E&P Company has an exclusive right to work. A PSC usually has a term of 30 years with a 10-year exploration period and 20-year production period.

Marginal fields are smaller concessions, which usually consist of a capped oil field within an OML that has not been developed by the OML holder because it falls below the materiality and economic thresholds of major oil and gas producers, i.e., "fallow assets." Marginal field owners develop the field for their own account, paying taxes, royalties and dealing directly with the governmental authorities. Upon the grant of the concession, the marginal field owner enters into a farm-out agreement with the OML holder which may be an international oil company and/or the NNPC; as part of the agreement, the marginal field owner is required to pay an overriding royalty to the original OML holder in recognition of the role of the OML holder in developing the concession.

Marginal fields are typically granted for an initial period of 60 months. If production is not attained within the 60-month period, the Nigerian Government withdraws the award of the marginal field and the farm-out agreement lapses. However, if production is attained within the 60 month period, the farm-out agreement is renewed for the remaining life of the field and the farm-out agreement remains valid irrespective of any expiry, withdrawal, surrender or relinquishment of the OML. The Nigerian Government has in the past provided extensions to concessions and grants.

Fiscal Regulations

Petroleum Profit Tax Act

The PPTA governs the taxation of upstream operations with the baseline applicable tax for crude oil operations set at 85% of chargeable profits; a lower tax rate of 65.75% is payable by companies who have not yet amortised all pre-production capital expenditure for the first five years. An incentive under the PPTA is the withholding tax exemption on dividend distributions. Ebok, OML 26 and OML 115 are subject to the tax rates prescribed in the PPTA.

Investment Allowances

For oil and gas industry participants in Nigeria, capital expenditures may be deducted against petroleum profit tax, including those pertaining to the recovery, processing and transport of associated gas. Further, tangible capital expenditures are deducted over a consecutive five-year period (known as a capital allowance), save that the fifth year permits a deduction of only 19% (instead of 20%). A further incentive, known as the Petroleum Investment Allowance ("PIA"), permits 5% (for onshore), 10% (for shallow waters) and 50% (for the DIBPSA, as defined below) of qualifying capital expenditures to be deducted in the year in which the assets are first used. The PIA does not reduce the qualifying capital expenditure balance.

Deep Offshore & Inland Basin Production Sharing Contract Act

The Deep Offshore & Inland Basin Production Sharing Contract Act (the "DIBPSA") was enacted further to the PPTA and applies to PSCs for concession areas situated deep offshore and in Nigeria's inland basin. The law was enacted to provide fiscal incentives to encourage exploration in areas that were at the time underutilised. The main incentive is a lower tax rate of 50% (as opposed to the 85% set by the PPTA), lower royalty rates (as low as 0% for deep offshore areas) and an investment tax allowance (equivalent to the PIA in the PPTA) of 50% for PSCs executed after 1 July 1998. OPL 310 and OML 113 are subject to the tax rates prescribed in the DIBPSA.

Royalties

The PA which includes specific supplementary legislation (Marginal Field Operations (Fiscal Regime) Regulations 2005) for marginal fields governs the imposition of royalty on production. The computation of royalty is based on either water depth or production levels in respect of marginal fields and onshore/shallow offshore PSCs. Rates range from 0-20%.

Royalty rates for deep offshore and inland basin PSC's are contained in DIBPSA and range from 0- 12%.

CITA (Okoro)

The principal act governing the taxation of corporate bodies in Nigeria is the CITA, with the exception of companies engaged in "Petroleum Operations", to which the PPTA applies. CIT is levied on profits accruing in, derived from, brought into or received in Nigeria. The tax rate is 30%. A deemed dividend distribution is imposed in certain circumstances and unlike under the PPTA, dividend distributions are subject to withholding tax.

Capital allowances are granted on tangible non-current assets. Intangible non-current assets are generally not regarded as qualifying capital expenditures for capital allowance purposes. The applicable rates on qualifying assets range from 10-50% and 10% for investment allowances.

The Okoro operations are subject to tax at these rates.

Incentives

In order to encourage gas utilisation, the Nigerian Government introduced incentives under the PPTA that would allow companies involved in the utilisation of gas to be taxed at the corporation tax rate of 30% under the CITA in relation to the income from the gas utilisation project (as opposed to the 85% and 50% rates under the PPTA and DIBPSA, respectively). No definition is provided for utilisation of gas in the PPTA; however, the PPTA specifically provides that the incentives shall be available to companies that invest in natural gas liquids extraction facilities to supply gas in usable forms to downstream projects (for example, for an aluminium smelter or methanol) and other gas utilisation projects.

Under the CITA, other incentives are available to gas utilisation companies, including a tax free period of up to five years for gas utilisation projects (marketing and distribution of natural gas for commercial purposes and includes power plant, liquefied natural gas, gas to liquid plant, fertiliser plant, gas transmission and distribution pipelines) and attractive loan and capital allowance provisions amongst others.

The Oil and Gas Free Zone ("OGFZ") is located in the Onne/lkpokiri area of Rivers State, and is administered by the OGFZ Authority. It grants certain incentives to approved entities conducting approved activities within the zone. The exemptions and tax incentives granted include tax holiday from all government taxes, rates, customs duties and levies; duty-free import of raw materials and components for goods destined for re-export; duty-free introduction of capital goods, consumer goods, machinery, equipment and furniture; and waiver of all import/export licenses requirement.

Education Tax

Education Tax is payable by all Nigerian companies and is levied on assessable profit i.e. before capital allowances. The relevant law is the Tertiary Education Trust Fund Act 2011. The applicable tax rate is 2% which is deductible in computing PPT for petroleum companies.

Niger-Delta Development Commission Levy

The Niger-Delta Development Commission Act was enacted to formulate policies and guidelines for the development of the Niger-Delta area. The Niger-Delta Development Commission Act imposes a levy of 3% of the total annual budget of any oil producing company operating in the Niger-Delta area.

Cabotage Surcharge

The Coastal and Inland Shipping (Cabotage) Act levies a surcharge of 2% of the contract sums earned by vessels engaged in coastal trade in Nigeria. The Coastal and Inland Shipping (Cabotage) Act seeks to restrict the use of foreign vessels within the coastal, territorial, inland waters, island or any other point within Nigeria and to promote the development of Nigeria "domestic coastal trade".

Local Content Levy

The Local Content Act was enacted to provide for the development of Nigeria Content in the oil and gas industry. The Local Content Act imposes a levy of 1% on every contract awarded to any operator, contractor, subcontractor, alliance partner or any other entity involved in any project, operation, activity or transaction in the upstream sector of the Nigeria oil and gas industry.

Environmental Regulations

Afren's operations are subject to various environmental, health and safety regulations. Failure to comply with applicable laws, permits or regulations can result in project or operational delays, civil or in some cases criminal fines and penalties and remedial obligations.

Environmental Impact Assessment Act

The Environmental Impact Assessment Act ("EIAA") requires every company whose activity or project is likely to have a significant effect on the environment to carry out an impact assessment programme prior to the commencement of the project. The assessment is to be referred to the Federal Ministry of Environment, which is the regulatory body charged with the responsibility of administering the EIAA, for approval. In addition, the EIAA classifies oil and gas development and the construction of off-shore pipelines in excess of 50 km in length among projects that will require an environmental impact assessment programme.

Environmental Guidelines and Standards for the Petroleum Industry in Nigeria

The Environmental Guidelines and Standards for the Petroleum Industry in Nigeria (the "Guidelines") were issued by the DPR, which is the main regulatory arm of the petroleum industry in Nigeria. The Guidelines mandate all licence holders or operators in the petroleum industry to adopt a systematic and integrated environmental management plan. They control the quality and quantity of industrial effluents associated with oil drilling activities and operations to ensure that such discharges do not cause any hazard to human health and living organisms. The Guidelines require that a mandatory environmental permit be obtained from the DPR prior to the commencement of seismic and drilling operations in Nigeria. An application for an environmental permit must be accompanied by an EIAA report. The Directors believe the Group is currently in material compliance with the Guidelines.

PART III

OPERATING AND FINANCIAL REVIEW

You should read this Part III (Operating and Financial Review) together with Afren's audited consolidated financial statements for the year ended 31 December 2012, 2013 and 2014, including the notes thereto, as well as the other financial information incorporated by reference in this Prospectus. A summary of the critical accounting policies that have been applied to these financial statements is set out under the section entitled "Critical Accounting Policies" in this Part III (Operating and Financial Review).

The financial statement data as at and for the year ended 31 December 2012 included in this "Operating and Financial Review" was restated to reflect changes in accounting policies arising from the adoption of IFRS 10, IAS 27 Separate Financial Statements and IFRS 11. See "—Change in Reporting." The financial statement data as at and for the year ended 31 December 2013 included in this "Operating and Financial Review" was restated to reflect changes resulting from a reassessment of accounting judgements for the three transactions that were the subject of the WFG Review. See "—Change in Reporting" and Notes to the Group financial statements 1.6 and 5.15 for further details of the restatement of the financial statement data as at and for the year ended 31 December 2013, and see "Corporate Governance—Independent Review of Certain Transactions and Unauthorised Payments" in Part V (Directors, Senior Management and Corporate Governance) for further details of the WFG Review.

Unless otherwise indicated, all production figures are presented on a net to Afren's working interest basis. Where gross amounts are indicated, they are presented on a total basis—that is, the actual interest of the relevant licence holder in the relevant fields and licence areas without deduction for the economic interest of the Company's local partners, tax or royalty interests or otherwise. The Company's legal interest, where applicable, and effective working interest in the relevant fields and licence areas are separately disclosed. See "Description of the Business—Description of the Company's Assets."

Some of the information contained in this Part III (Operating and Financial Review), including information with respect to the Company's plans, strategies for its business and expected sources of financing, contain forwardlooking statements that involve risks and assumptions. You should read the section entitled "Cautionary note regarding forward-looking statements" in the part of this document entitled "Presentation of Information and Notices to Investors" for a discussion of the risks, uncertainties and assumptions related to those statements. You should also read the "Risk Factors" part of this document for a discussion of certain factors that may affect Afren's business, financial condition and results of operations.

Overview

Afren is an independent oil and gas E&P Company focused on the exploration, development and production of oil and gas assets. The Company has a portfolio of producing assets, appraisal and development opportunities, and exploration prospects, with its core producing assets in Nigeria. Afren was founded in December 2004. The Company's portfolio of 20 assets consists of oil production, development and exploration opportunities. The Company's three core producing assets – Ebok, Okoro and OML 26 – are located in Nigeria. Afren has further development or exploration interests in Nigeria, and in East, West and South Africa, including in the countries of Kenya, Tanzania, Ethiopia, Seychelles, Madagascar, Côte d'Ivoire, Ghana, Congo Brazzaville and South Africa. Afren also holds assets in the Kurdistan region of Iraq, operating the Barda Rash field and holding a minority interest in the Ain Sifni block, though Afren is considering strategic options for its interest in the Barda Rash field and Ain Sifni interest, including exiting the assets, following a downgrade in reserves and resources at Barda Rash in January 2015.

The key points in the financial statements during the periods under review are as follows:

Average net production for year ended 31 December 2014 was 31,819 bopd (excluding Barda Rash), a year on year decrease of 32% from 46,728 bopd for the year ended 31 December 2013, due to achieving cost recovery on Ebok in the first quarter of 2014, and delays in achieving production ramp-up across Afren's producing asset base in Nigeria.
The 42% decrease in revenues year on year from US\$1,644.3 million for the year ended 31 December 2013 to US\$945.8 million in the year ended 31 December 2014 reflects lower production volumes principally attributable to a reduced share of production and liftings from

the Ebok field following cost recovery and delays with the installation of the CFBx platform due to adverse weather conditions, as well as the impact of lower realised oil prices during the second half of 2014. This followed a 4.6% year on year revenue increase in revenues from the year ended 31 December 2012 and to the year ended 31 December 2013, which reflected Afren's main producing assets in Nigeria, the Ebok and Okoro fields, continuing to perform ahead of expectations.

A US\$1,651.1 million loss recorded in the year ended 31 December 2014, mainly due to a reduction in revenue described above and, given the fall in oil prices, a material impairment charge of US\$1,112.1 million in respect of the carrying value of the Company's production and development assets and the impact of the curtailment of future capital expenditure on the Company's exploration. Furthermore, an updated reserves report at the Barda Rash field in the Kurdistan region of Iraq, led to the write-off of the remaining 2P reserves at the field and an additional impairment charge recognised in 2014 of US\$932.6 million. The 2014 result followed an increase in net profit year on year from US\$186.8 million in the year ended 31 December 2012 to US\$512.9 million in the year ended 31 December 2013, principally attributable to the achievement of a tax holiday relating to the Ebok field.
Events following the dismissal of the Group's former CEO and COO, including the Company's inability to continue the planned refinancing of debt obligations in 2014, as well as the sharp decline in oil prices, have placed significant pressure on the Group's liquidity position, resulting in the Group having net current liabilities of US\$458.5 million as at 31 December 2014. The Board has therefore concluded that there was material uncertainty as to whether the Group can continue as a going concern.
In January 2015, Afren outlined its intention to review its strategic options in respect of the Barda Rash field in the Kurdistan region of Iraq after disappointing operational results at the field and a significant reserves and resources downgrade, eliminating gross 2P reserves and revising gross 2C resources from 1,243 mmbbls to around 250 mmbbls. The movement in reserves at Barda Rash has led to a material impairment charge in the year ended 31 December 2014 of US\$932.6 million, which contributed to the loss recorded in 2014 as described above.
The Company acquired an additional 10.4% of the issued share capital of FHN in May 2013 and a further 23.3% in July 2013. Following these acquisitions, the Company holds, directly and indirectly, 78% of the issued share capital of FHN. The Company consolidated FHN into its 2012 results on early adoption of IFRS 10, which led to the restatement of the 2012 results. FHN has a 45% interest in the OML 26 portfolio of assets located in onshore Nigeria.

Change in Reporting

Restatement of the financial statements for year ended 31 December 2012

The financial statements for the year ended 31 December 2012 were restated as a result of adopting IFRS 10 Consolidated Financial Statements, IAS 27 Separate Financial Statements and IFRS 11 Joint Arrangements.

IFRS 10 Consolidated Financial Statements, IAS 27 Separate Financial Statements

IFRS 10 replaces the portions of the previously existing IAS 27 that dealt with consolidated financial statements. As a result of adopting IFRS 10, the Company changed its accounting policy for determining whether Afren consolidates its investees. IFRS 10 requires consideration of whether the Company has power over an investee, exposure or rights to variable returns from its involvement with the investee and ability to use its power to affect those returns. In particular, IFRS 10 explicitly requires that the Company consolidate investees on the basis of de facto circumstances that give it power over the investee irrespective of its shareholding. Under previous accounting standards, the Company's accounting policy determined consolidation of investees primarily on the basis of its legal shareholding. As at 31 December 2012, the Company held 46.7% of the issued share capital of FHN and, as at 31 December 2013, it held, directly and indirectly, 78.0% of the issued share capital of FHN.

In accordance with the transitional provisions of IFRS 10, the Company reassessed the consolidation conclusion for its investees at 1 January 2013 utilising the new rules set out in IFRS 10. The Company changed its accounting treatment in respect of its investment in FHN, which was previously accounted for as an associate using the equity method. Although prior to May 2013, Afren owned less than half of the voting rights of the investee, the Board determined that under IFRS 10 the Company had the power to direct the relevant activities of FHN. This is because the Company held more voting rights of FHN than other vote holders and the Company had the ability to cast the majority of votes at shareholder meetings due to non-attendance by some shareholders. Accordingly, the Company has applied acquisition accounting to the Company's original investment at 31 October 2010 as if FHN had been consolidated from that date.

Following the conclusion that FHN should be consolidated from 31 October 2010, the Company applied the transitional requirements of IFRS 10, and restated the balance sheet as at 1 January 2012. The summary financial information for the year ended 31 December 2012 and as at 31 December 2012 has been restated to include the consolidation of FHN as a subsidiary. These restatements are presented in Note 5.1 and Note 5.15 to the audited consolidated financial statements as at and for the year ended 31 December 2013.

IFRS 11 Joint Arrangements

As a result of adopting IFRS 11 as of 1 January 2013, the Company has changed its accounting policy for its interests in joint ventures. Entities over which the Company exercises joint control are now accounted for using the equity method, whereas they were previously proportionately consolidated. The Company has applied IFRS 11 retrospectively, in accordance with the transitional provisions and therefore the financial statements for the year ended 31 December 2012 have been restated accordingly. These restatements are presented in Note 5.1 and Note 5.15 to the audited consolidated financial statements as at and for the year ended 31 December 2013. On transition, the Company has collapsed the proportionally consolidated net asset value into a single investment. This had an effect on the accounting for its two joint ventures held through Afren Global Energy Resources Limited (OPL 907 and OPL 917) and Dangote Energy Equity Resources Limited (JDZ Block 1). This change was not material.

Restatement of the financial statements for year ended 31 December 2013

During 2014 an independent review was performed by WFG into the potential need for disclosure to the market of three prior transactions. In light of additional information resulting from the independent review and the Company's extensive review of the accounting for these transactions, it concluded that it was appropriate to restate the financial statements at 31 December 2013 in order to reflect subsequent changes in judgements in relation to one of these transactions, as detailed below:

On 23 August 2013 Afren Resources and Oriental entered into an agreement (the "Amendment Agreement") to amend the Ebok JOA. The material terms of this Amendment Agreement were that Afren Resources agreed to pay Oriental US\$300.0 million in return for Afren Resources acquiring the benefits from certain additional tax allowances and increasing Afren Resources' share of oil revenues from Ebok via the cost recovery mechanism of the JOA. The Amendment Agreement was conditional on a five-year Pioneer status tax holiday being confirmed for Ebok, which occurred in October 2013. The US\$300.0 million was paid in two instalments. US\$180.0 million was paid in August 2013 in advance of Pioneer status being confirmed and US\$120.0 million was paid in November 2013. At 31 December 2013 the payments were reflected in the Group balance sheet as full payment for the incremental deferred tax asset of US\$298.0 million acquired under this transaction and the residual balance of US\$2.0 million as an asset within property plant and equipment (PPE). In light of the WFG Review management has reassessed certain accounting judgements and concluded that it is appropriate to restate the 2013 financial statements. The US\$300.0 million consideration paid has been allocated on a relative fair value basis as follows:

(1) US\$120.0 million of the amount paid represents the fair value of the acquisition of Oriental's 50% share of capital allowances and should remain classified within deferred tax assets in the Group balance sheet. This deferred tax asset has been subsequently remeasured at 31 December 2013 in accordance with IAS 12 Deferred Tax to US\$298.0 million and taken through the income tax credit line of the 2013 income statement.
(2) US\$180.0 million of the amount paid represents the fair value of a purchase by Afren Resources of Oriental's 2013 entitlement to net operating cash flows from the field. Oriental's 2013 entitlement under the JOA arose partially retrospectively as a consequence of the granting of Pioneer status. As this amount was assessed to have been fully recovered by the end of 2013. It has been allocated to cost of sales in 2013 in line with the Group's accounting policies.

The effect of these changes in judgements is to increase cost of sales by US\$178.0 million decrease profit before tax by US\$178.0 million and increase income tax credit by US\$178.0 million; there is no impact to net assets or profit after tax following the restatement.

Recent Developments

See "Current Trading" in Part II (Description of the Business).

Significant Factors Affecting Results of Operations

Price of crude oil

The Company's operations are significantly affected by the prevailing price of crude oil. Crude oil prices have historically been highly volatile and dependent upon the balance between supply and demand. Volatility in oil prices predominantly affects revenue and royalties due.

The Company has produced at Okoro and Ebok throughout the periods presented and commenced production at the Barda Rash field in August 2012. Barda Rash production was initially kept in storage and initial sales commenced on 8 July 2013 to the local market. FHN first recorded production from the Ogini and Isoko fields following the acquisition of OML 26 in December 2011. The Company's oil sales are based on various benchmark prices. However, the Company uses Brent crude prices, with adjustments for quality, transportation, feed and a regional price differential, as a proxy for market prices. The average Brent quotation decreased by 2.8% from US\$111.9/bbl for the year ended 31 December 2012 to US\$108.8/bbl for the year ended 31 December 2013, and thereafter further decreased by 9.1% to an average US\$98.9/bbl for the year ended 31 December 2014. As oil demand weakened in the midst of robust supply during the second half of 2014, Brent prices declined significantly to average US\$75/bbl in the fourth quarter and ultimately exit 2014 at US\$55.8/bbl. Since December 2014, oil prices fell further to US\$45.2/bbl as at 13 January 2015 and were approximately US\$61.5/bbl as at 16 June 2015, being the latest practicable date prior to the date of the Prospectus. The following table presents information on Brent crude oil prices during the periods presented.

	Year ended 31 December
	2012	2013
		(in US\$/bbl)
Average price for the period	111.9	108.8	98.9
Highest price for the period	126.7	119.3	115.0
Lowest price for the period	88.7	96.8	55.8
___

Source: Bloomberg

Volatility and continued decreases in crude oil prices could negatively impact the Company's revenue and overall profitability and, therefore materially and adversely affect business, prospects, financial condition and results of operations. See "Risk Factors—The Group may be adversely affected by a substantial or extended decline in prices for crude oil." The Company may attempt to moderate its exposure to the risk of changes in oil price through limited use of derivative financial instruments. See "—Derivative financial instruments."

Production volumes

In addition to oil prices, production volume is the Company's other primary revenue driver. The Company's production levels also affect the level of its reserves and depreciation. The volume of the Company's crude oil and gas reserves and production volumes may be lower than estimated or expected.

The following table presents information on the Company's working interest oil and gas production during the periods presented.

	Year ended 31 December
	2012	2013	2014
Average oil production (bopd)	40,291	45,655	31,819
Total oil production (mmbbl)	14.7	16.7	11.6
Average condensate/LPG production (boepd)	789	561	0
Total condensate/LPG production (mmboe)	0.3	0.2	0.0
Average gas production (mmcfd)	11,477	5,194	0
Total gas production (bcf)	4.2	1.9	0.0
Total gas production (mmboe)	0.7	0.3	0.0
Total average production (boepd)	43,059	47,112	31,819
Total production (mmboe)	15.8	17.2	11.6

Production commenced at the Ebok field in April 2011. For the year ended 31 December 2014, average gross daily production at Ebok was approximately 27,767 bopd, compared with 34,910 bopd in 2013, and 30,047 bopd in 2012. The Company's effective working interest at Ebok entitled it to 100% of field production until cost recovery was achieved in the first quarter of 2014, at which point Afren became entitled to an economic interest of 50%. Since 1 May 2015, following agreement with its partners, the Company's entitlement to production has been fixed at 50%. During 2014, three new producer wells were completed at the Ebok field.

Production commenced at the Okoro field in June 2008. Two infill wells were brought onstream during April 2011 and on 31 October 2012 an additional well accessing the Okoro FFD was brought onstream at a stabilised rate of 5,000 bopd. Two further wells were drilled in 2014 and produce at a rate of approximately 1,950 bopd each. For the year ended 31 December 2014, average gross daily production at Okoro was approximately 16,451 bopd, compared with 18,041 bopd in 2013, and 16,858 bopd in 2012. Okoro cost recovery was achieved in August 2010, and therefore Afren's effective working interest during the periods presented was 50%.

The Company acquired an interest in the production of OML 26 in December 2011 through its subsidiary, FHN. For the years ended 31 December 2012 and 31 December 2013 the field produced at an average gross daily production rate of 6,010 bopd and 3,472 bopd, respectively. For the year ended 31 December 2014, average gross daily production rate at the Ogini and Isoko fields was approximately 3,342 bopd, subject to final reconciled figures from SPDC, the terminal operator. The Company has a 45% effective working interest in OML 26.

For the year ended 31 December 2014, average gross daily production at Barda Rash was approximately 330 bopd. Afren is considering strategic options for its interest in the Barda Rash field following a downgrade in reserves and resources estimates in January 2015.

Production volumes directly impact the Company's revenue and overall profitability, therefore any interruption in production or other inability of the Company to meet targeted production levels, could materially and adversely affect the Company's business, prospects, financial condition and results of operations. See "Risk Factors—Afren's current production is concentrated in two assets and if production at such assets is delayed or interrupted, Afren's ability to generate revenue would be harmed, which would have a material adverse effect on its business, financial condition and results of operations".

Oil and gas reserves

Oil and gas reserves will affect the amounts charged to the income statement as depreciation, depletion and amortisation. The costs of developing a field are spread over the life of the field based on the total net entitlement reserves and charged to net income based on its share of the number of barrels produced out of the total net entitlement reserves (the unit of production method of accounting under IFRS). The reserves of the field are based on the latest technical estimates based on production history, pressure measurements, porosity of source rock, estimates of likely reservoir limits and other factors, and cannot be known with certainty during the life of the field. If there is a significant change in the estimated net reserves for a producing field, the total costs will be spread over a smaller or larger reserves number increasing or decreasing, respectively, the cost per barrel and therefore the total cost of sales in a period. These reserves will also underpin the total value of the field used for impairment calculations, and in very significant cases a reduction to the reserves estimate can lead to an impairment write-down.

An updated audit reserves report of Barda Rash, carried out as part of Afren's annual reserves review, reported a material reduction to previously published estimates of reserves and resources, essentially eliminating gross 2P reserves of 190 mmbbls and revising gross 2C resources from 1,243 mmbbls to around 250 mmbbls. Afren is considering strategic options for its interest in the Barda Rash field and the downgrade in reserves at Barda Rash led to a material impairment charge in the year ended 31 December 2014.

Exploration success and impairment

Afren's success or failure in its exploration and appraisal activities will affect the level of its reserves and resources. In the year ended 31 December 2014, the Company had an impairment charge of US\$1,112.1 million primarily in respect of the carrying value of our production and development assets and the impact of the curtailment of future capital expenditure on our exploration assets. Furthermore, an updated reserves report at the Barda Rash field in the Kurdistan region of Iraq, led to the write-off of the remaining 2P reserves at the field and an additional impairment charge recognised in the year of US\$932.6 million.

The Company had an impairment charge with respect to its oil and gas assets of US\$60.5 million and US\$15.0 million in the years ended 31 December 2013 and 2012, respectively. In 2013, the impairment related to the relinquishment of Block 10A in Kenya and the write-off of costs of the Kola 1 and Kola 2 wells on the La Noumbi licence in Congo Brazzaville, which were plugged and abandoned. In 2012, the impairment related to the write-off of costs of the Nunya well on the Keta Block, offshore Ghana, which was plugged and abandoned in 2012. See "—Critical Accounting Policies—Oil and gas assets."

Project success and impairment

The Company faces risks in connection with its project development and production activities. The Company's efficiency, safety, production technology and consistency in its drilling and extraction activities affect its costs as well as its level of production. The Company's capital expenditure is dependent on the number of wells that the Company drills, its efficiency in drilling such wells and its need for vehicles, drilling rigs and other facilities and equipment, which may be impacted by geological conditions and environmental and other factors. There are risks inherent in the Company's geographic areas of operation and its activities may be affected by insurgent groups or community disturbances. The value of the Company's developments and producing fields are reviewed at each reporting date for any indicators of impairment. If such indicators are found to be present, the Company compares the recoverable value of the asset (generally based on discounted cash flows) with the carried value on its balance sheet. If the recoverable value is lower than the carried value, impairment is recognised in the period. For a further description, see "—Critical Accounting Policies—Oil and gas assets."

Acquisitions and disposals

Acquisitions

In the periods under review Afren has pursued selective acquisition opportunities where the Company believed it may have strategic or competitive advantages. To the extent that the purchase price for any acquisition is paid in cash, such acquisition would affect the Company's liquidity and cash position in the relevant period.

FHN Share Capital Acquisition

FHN is an indigenous Nigerian company that the Company jointly established with two leading Nigerian financial institutions to increase its exposure in and opportunities for potential future acquisitions in Nigeria. On 29 May 2013, the Company acquired an additional 10.4% of the issued share capital of FHN in exchange for an aggregate consideration of US\$37.1 million, bringing its ownership at the time to 54.7%. In June and July of 2013, the Company acquired a further 23.3% of the outstanding share capital of FHN from a combination of Capital Alliance Energy Nigeria Limited, Earl Act Global Investments Limited ("Earl Act") and other FHN shareholders (excluding any related parties). Following these acquisitions, the Company holds, directly and indirectly, 78.0% of the issued share capital of FHN. FHN has a 45% interest in OML 26 located onshore in Nigeria. The licence holds two producing fields, Ogini and Isoko, with gross 2P oil reserves estimated at 124.1 mmboe and gross contingent resources estimated at 68 mmboe as at 31 December 2014.

To take advantage of the potential benefits of FHN remaining an indigenous company in Nigeria notwithstanding the share acquisitions in 2013, the Company's ownership in FHN is structured in order to meet the criteria generally understood under Nigerian oil and gas industry policies for FHN to be classified as an indigenous Nigerian company, with the majority of its equity interest held by Nigerian owners. The Company has split its legal and beneficial holdings in FHN such that the Company is the legal owner of 43.1% of the issued ordinary shares. The remaining portion of its legal interest in FHN is held in trust for the benefit of the Group and the Group's Nigerian employees by Adcax Investments Limited, a Nigerian-formed trust company. Accordingly, the Company does not have direct control of a majority of the votes conferred by the ordinary shares in FHN with its voting interests capped at 45%, as any change of control of FHN, including a change of voting control, would require prior consent of the Nigerian Minister of Petroleum Resources. See "Risk Factors—Risks Relating to the Countries in which Afren Operates— The Nigerian Government and third parties may cease treating Afren's subsidiary and commercial partners as indigenous companies" and "Legal and Regulatory—Nigeria—Government Regulations" in Part II (Description of the Business).

OML 113

On 17 July 2013, the Company's subsidiary FHN 113 Limited acquired a 16.9% interest in OML 113 from Chevron Nigeria Deepwater Limited. Situated offshore Lagos, Nigeria and covering an area of 1,594 km2 , OML 113 contains the Aje field which has gas and condensate resources as well as oil. Three of the four wells drilled on the field (Aje-1, Aje-2 and Aje-4) have encountered oil and gas in various intervals across the Turonian, Cenomanian and Albian sands, and two (Aje-1 and Aje-2) of the wells have comprehensively tested at commercial rates. AGR TRACS has estimated the 1P and 2P reserves related to Afren's interest in Aje field located in OML 113 as at 25 July 2014. See "Summary of Reserves and Resources" in Part II (Description of the Business). The approved field development plan for the Aje is primarily focused on the development of the Cenomanian oil reservoir and the first phase of development includes two subsea production wells, tied back to a leased floating production storage and offloading ("FPSO") unit. In a higher oil price environment, the exploration and development of the Aje and Ogo complex presents potentially considerable upside and flexibility for future in-house development, farm-out or sale alternatives with respect to these assets.

Disposals

Côte D'Ivoire

On 16 May 2013, the Company entered into a sale agreement with Petroci, the state oil company of Côte d'Ivoire, to dispose of Afren Côte d'Ivoire Limited and Lion GPL SA for a profit on disposal of US\$25.3 million, following working capital purchase price adjustments (the "Petroci Disposal"). Afren Côte d'Ivoire Limited held its interest in the CI-11 block and Lion GPL SA held its interest in the Lion Gas Plant, which assets collectively contributed working interest production of 1,665 boepd for the period from 1 January 2013 to 28 August 2013, the date on which the disposal was completed in 2013. Unless otherwise indicated, all information in this Prospectus relating to Afren's interests in licences, acreage under licence, reserves, resources and production includes these former Côte d'Ivoire operating assets.

Related to the Petroci Disposal and the requisite receipt of approvals and consents from the government of Côte d'Ivoire, the Company exchanged its 65% legal and working interest in the CI-01 exploration block for a 20% legal interest in exploration block CI-523 and a 51.75% legal interest in exploration block CI-525. For a further description of its assets in Côte d'Ivoire, see "Description of the Business—Description of the Company's Assets—Côte d'Ivoire."

The financial results from these disposed assets are presented as discontinued operations in the financial statements for the year ended 31 December 2013 and the restated financial statements for the year ended 31 December 2012.

Derivative financial instruments

Since 2011, all Afren's commodity hedges (excluding certain hedges related to FHN) have been deferred premium put options. The Company hedged 3.4 mmbbl of 2012 production such that the Company would receive a minimum sales price after costs of US\$80.28/bbl. The Company hedged 5.9 mmbbl of 2013 production hedged such that it would receive a minimum price after costs of US\$82.53/bbl. During 2014, the Company had 4.4 mmbbl of production hedged such that it would receive a minimum price after costs of US\$80.52/bbl. In December 2014, Afren sold its 2015 hedges of 2.85 mmbbls realising a cash benefit of US\$80 million. As at 31 December 2014, the Group did not have any oil price hedges in place.

All of the Company's derivative financial instruments have been classified under IFRS as cash flow hedges, with a portion of the gains and losses on the instruments that are determined to be an effective hedge taken to equity and the ineffective portion, as well as any change in time value, recognised in the income statement for each period.

Where hedge accounting is ineffective, these instruments are marked-to-market at each balance sheet date and any movements are reflected as income or expenses in the Company's income statement. With volatile oil markets, there can be significant movement year on year. The Company had derivative financial instrument losses of US\$60.2 million in 2012, including FHN, losses of US\$46.6 million in 2013, including FHN, and a loss of US\$8.9 million in 2014, including FHN, as reflected in the table below.

	Year ended 31 December
	2012 (Restated)	2014
		(in millions of US\$)
Unrealised	(20.0)	(4.2)	32.2
Realised	(40.2)	(42.4)	(41.1)
Total	(60.2)	(46.6)	(8.9)

While historically the Company's commodity hedging was tied to its borrowing base availability under its financings for Ebok and Okoro, the Company's current commodity hedging strategy is based on risk mitigation and liquidity rather than just liquidity. For further description of these arrangements, see "—Qualitative and Quantitative Disclosures about Market Risk—Commodity Price Risk Management" and "Material Agreements Relating to the Company's Assets—Hedging Arrangements and Derivatives."

In December 2012 and January 2013, the Company entered into two interest rate swaps that swap a proportion of its fixed rate debt into floating rate by linking interest payments to the performance of certain indices that look to take advantage of the theoretical bias in the forward curve. The Company's downside loss is capped by an agreed percentage up to a maximum of 2% above the fixed rate coupon. Included in losses from derivative financial instruments for the year ended 31 December 2014 is US\$1.8 million in respect to marked-to-market movements on the interest rate swaps. See "—Interest rates."

Net Profit Interest

Under the Ebok Farm-Out Agreement, ExxonMobil and NNPC are entitled to 30% of the profit oil from the Ebok project. During 2015, ExxonMobil and NNPC have chosen to take their share of profit oil in kind. This decision has had an adverse impact on Afren's revenues. There is a risk that ExxonMobil and NNPC may seek to take further liftings as the cost of funding used to determine the amount of profit oil remains to be agreed.

Interest rates

The Company's exposure to the risk of changes in market interest rates relates primarily to borrowings under (i) the Ebok Facility, (ii) the OML 26 Facility, and (iii) the Okwok/OML 113 Facility. The Company has historically managed interest rate risk using a mix of fixed and variable rates on loan notes, notes and bank borrowings. The Company also uses interest rate swaps to swap a proportion of its fixed rate debt into floating rate by linking interest payments to the performance of certain indices that look to take advantage of futures market for interest rates. These interest rate swap contracts cap its downside loss by an agreed percentage up to a maximum of 2% above the fixed rate coupon. The Company may be affected by changes in market interest rates at the time the Company needs to refinance any of its borrowings. See "—Qualitative and Quantitative Disclosures About Market Risk—Financial Risk Management."

Overall cost-effectiveness of production

The Company's profitability and cash flow are also affected by the cost-effectiveness of its production. The Company looks at its Adjusted EBITDAX as a key indicator of its success. The Company calculates EBITDAX by adding back finance costs, income tax expense/ (credit), depreciation, depletion and amortisation, and by subtracting finance income from its profit / (loss) from continuing operations after tax. Adjusted EBITDAX is defined as EBITDAX plus impairment of property, plant and equipment, impairment of exploration and evaluation assets, impairment of goodwill, unrealised (gains) / losses on derivative financial instruments and share-based payments (credit) / charge. The Company's Adjusted EBITDAX measure provides additional information that may be used to better understand its operations.

Neither EBITDAX nor Adjusted EBITDAX are measurements of performance under IFRS, Adopted IFRS, or US Generally Accepted Accounting Principles and investors should not consider EBITDAX and Adjusted EBITDAX as alternatives to (a) operating profit or profit for the year (as determined in accordance with IFRS or Adopted IFRS) as a measure of the Company's operating performance, (b) cash flows from operating, investing and financing activities as a measure of the Company's ability to meet its cash needs or (c) any other measures of performance under generally accepted accounting principles. The following table reconciles profit/(loss) from continuing activities after tax to EBITDAX and Adjusted EBITDAX for the years ended 31 December 2012, 2013 and 2014.

	Year ended 31 December
	2012 (restated)	2013 (restated)	2014
		(in millions of US\$)
Profit/(loss) from continuing activities after tax	188.9	474.8	(1,651.1)
Finance costs	90.8	157.3	66.9
Income tax expense / (credit)	380.0	(334.7)	(303.9)
Depreciation, depletion and amortisation	380.1	408.7	370.4
Finance income	(1.6)	(3.9)	(2.3)
EBITDAX	1,038.2	702.2	(1,520.0)
Impairment of property, plant and equipment	-	-	1,205.6
Impairment of exploration and evaluation assets	15.0	60.5	839.1
Impairment of goodwill	-	-	115.2
Unrealised (gains) / losses on derivative financial instruments	20.0	4.2	(32.2)
Share-based payments (credit) / charge	29.4	25.6	(2.3)
Adjusted EBITDAX	1,102.6	792.5	605.4

Explanation of Income Statement Items

Revenue

Revenue consists of sales value of the Company's share of oil liftings in the period, net of VAT, net profit interest obligations and governmental royalties paid in kind or, where the financial obligation for the royalty does not fall directly to the Company. Oil and gas revenue is recognised when goods are delivered and title has passed. Following the Group's reclassification of its interest in the CI-11 block and Lion Gas Plant as a discontinued operation, and its subsequent disposal in August 2013, the Group revenue no longer includes gas revenue.

Revenue excludes liftings of Ebok production by the holders of a net profit interest in the Ebok field which commenced in late 2014, however, barrels to satisfy this interest are included within production.

Cost of Sales

The Company's cost of sales consists primarily of operating expenses, depreciation, depletion and amortisation, royalties paid by it in cash, oil stock provisions related to the Company's producing assets, and overlift or underlift adjustments relating to production from OML 26.

Cost of Sales—operating expenses

The Company's operating expenses consist primarily of running costs or lease costs of production facilities, such as MOPU platform or FPSO, logistics costs, direct lifting costs, net profit interest, fuel and general and administrative costs.

Cost of Sales—depreciation, depletion and amortisation

The Company's depreciation, depletion and amortisation costs consist primarily of allocations of acquisition, exploration, development, financing and expected future capital and abandonment costs These are allocated on a unit-of-production basis, except for the Lion Gas Plant where the costs were spread on a straight line basis over the expected life of the plant prior to disposal.

Cost of Sales—royalties

The Company's royalty cost consists of the liability for royalties due on its production to the relevant governments in the countries and regions in which the Company operates.

Cost of Sales—oil stock adjustments

The Company's oil stock adjustments consist primarily of the value of the oil produced but not yet sold, valued at the lower of cost and realisable value.

Cost of Sales—Underlift and overlift

Lifting or offtake arrangements for oil produced from OML 26 provide that each participant in OML 26 may not receive and sell its precise share of the overall production in each period. The resulting imbalance between cumulative entitlement and cumulative production for each participant in OML 26 is 'underlift' or 'overlift'. Underlift and overlift are valued at market value and included within debtors and creditors respectively. Movements during an accounting period are adjusted through cost of sales such that gross profit is recognised on an entitlements basis. The unwinding of Afren's overlift position relating to amendments made to the Ebok JOA of US\$178.0 million is also reflected in 2013.

Administrative expenses

The Company's administrative expenses consist primarily of employee expenses related to staff in its corporate office in London, England, its technical office in Houston, USA and its main operating offices in Lagos, Nigeria; Erbil, the Kurdistan region of Iraq; and Nairobi, Kenya.

Other operating income/expenses

Other operating income and expenses include mark-to-market movements of the Company's oil price hedging instruments, other mark-to-market derivatives, impairment of property, plant and equipment, impairment of goodwill, and unsuccessful exploration costs that are written off. See "—Critical Accounting Policies."

Finance costs

Finance costs include borrowing costs not directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to develop for their intended use or sale. The directly attributable financing costs are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale and expensed on a unit of production basis.

Other financial costs of debt are allocated over the term of the related debt at a constant rate on the carrying amount. Arrangement fees and issue costs are deducted from the debt proceeds on initial recognition of the liability and are amortised and charged to the income statement as finance costs over the term of the debt.

Other gains and losses

Other gains and losses include foreign currency gains, changes in the fair value of financial assets and liabilities, and gain or losses on derivative financial instruments, such as options over shares in an associate company. From 1 January 2012, the date on which FHN was consolidated pursuant to the adoption of IFRS 10, options over FHN shares are no longer accounted for at fair value, but are required to be treated as options over own equity. A liability is recorded for the expected obligation, with a corresponding entry in equity, therefore no further gains or losses in the income statement arise.

Share of profit/loss of an associate or joint ventures

Share of associate or joint venture profit or loss represents the Company's share of profits or losses generated by entities in which the Company holds a significant interest in but does not control, or hold through a joint venture. Prior to the adoption of IFRS 10, FHN was accounted for as an associate. Following the adoption of IFRS 11, the Company's interest in DEER and AGER is treated as a joint venture.

Income Taxes

Income tax represents the sum of tax currently payable and deferred tax. The tax rates applicable are dependent on the tax regime relevant for the individual asset. The Okoro arrangement is subject to income tax under the Nigerian CITA at 30% and is also subject to an additional Education Tax of 2%. With effect from 1 June 2011, Ebok was granted the Pioneer tax status incentive by the Nigerian Investment Promotion Commission for a fiveyear period. For the period the incentive applies, Ebok is exempt from petroleum profits tax on crude oil profits, which would be otherwise taxed at 65.75%, to increase to 85% after five years. The benefit of this is recognised in the Company's year end results for 2013 and 2014. OML 26 is subject to income tax under the PPTA. For a further description of the tax regimes applicable to the Company's Nigerian assets, see "Legal and Regulatory" in Part II (Description of Business) and for risks and other information related to such tax regimes see "Risk Factors— Afren operates in multiple jurisdictions and its profits, royalties on production and sales revenues are taxed according to the tax laws of such jurisdictions. Afren's effective tax rate may be affected by changes in tax laws or interpretations of tax laws in any given jurisdiction" and Note to the Group financial statements 5.16: Post balance sheet events – Company and Group.

Results of Operations

The following table sets out certain of the Company's historical revenue and expense items for the years ended 31 December 2012, 2013 and 2014.

	Years ended 31 December
	2012 (Restated)	2013 (Restated)	2014

Revenue	1,571.4	1,644.3	945.8
Cost of sales	(780.9)	(1,179.4)	(626.2)
Gross profit	790.5	464.9	319.6
Administrative expenses	(55.1)	(44.8)	(48.9)
Other operating income/(expenses)
—derivative financial instruments	(60.2)	(46.6)	(8.9)
—impairment of property, plant and equipment	—	—	(1,205.6)
—impairment of exploration and evaluation assets	(15.0)	(60.5)	(839.1)
—impairment of goodwill	—	—	(115.2)
Operating profit/(loss)	660.2	313.0	(1,898.1)
Finance income	1.6	3.9	2.3
Finance costs	(90.8)	(157.3)	(66.9)
Other gains/(losses)
—foreign currency gains	0.1	3.6	8.7
—fair value gain/(loss) on financial liabilities and financial assets	(2.5)	3.5	0.7
Share joint venture profit/(loss)	0.3	(26.6)	(1.7)
Profit/(loss) before tax from continuing activities	568.9	140.1	(1,955.0)
Income tax credit/(expense)	(380.0)	334.7	303.9
Profit/(loss) from continuing activities after tax	188.9	474.8	(1,651.1)
Profit/(loss) for the period from discontinued operations
attributable to equity holders of Afren plc	(2.1)	38.1	—
Profit/(loss) for the period	186.8	512.9	(1,651.1)

Comparison of Results of Operations for the Years Ended 31 December 2013 and 2014

The following table sets out certain of the Company's historical revenue and expense items for the years ended 31 December 2013 and 2014 and the percent change between the two periods.

	Years ended 31 December
	2013
	(Restated)	2014	% Change
		(in millions of US\$)
Revenue	1,644.3	945.8	(42.5)%
Cost of sales	(1,179.4)	(626.2)	(46.9)%
Gross profit	464.9	319.6	(31.3)%
Administrative expenses	(44.8)	(48.9)	9.2%
Other operating losses
—derivative financial instruments	(46.6)	(8.9)	(80.9)%
—impairment of property, plant and equipment	—	(1,205.6)	1205.6%
—impairment of exploration and evaluation assets	(60.5)	(839.1)	1286.9%
—impairment of goodwill	—	(115.2)	115.2%
Operating profit/(loss)	313.0	(1,898.1)	(706.4)%
Finance income	3.9	2.3	(41.0)%
Finance costs	(157.3)	(66.9)	(57.5)%
Other gains
—foreign currency gains	3.6	8.7	141.7%
—fair value gain on financial liabilities and financial assets	3.5	0.7	(80.0)%
Share of joint venture loss	(26.6)	(1.7)	(93.6)%
Profit/(loss) from continuing activities before tax	140.1	(1,955.0)	(1495.4)%
Income tax credit	334.7	303.9	(9.2)%
Profit/(loss) from continuing activities after tax	474.8	(1,651.1)	(447.7)%
Profit for the period from discontinued operations
Attributable to equity holders of Afren plc	38.1	—	38.1%
Profit/(loss) for the period	512.9	(1,651.1)	(421.9)%

Revenue

Revenues decreased by US\$698.5 million, or 42.5%, to US\$945.8 million for the year ended 31 December 2014 from US\$1,644.3 million for the year ended 31 December 2013, reflecting lower production volumes principally attributable to a reduced share of production and liftings from the Ebok field following cost recovery and delays with the installation of the CFBx platform due to adverse weather conditions, as well as the impact of lower realised oil prices during the second half of 2014.

For the year ended 31 December 2014, the Company realised an average oil price of US\$97/bbl, down from US\$106/bbl for the year ended 31 December 2013. The average Brent price decreased to US\$98.9/bbl for the year ended 31 December 2014 as compared to US\$108.8/bbl for the year ended 31 December 2013.

Cost of Sales

Total cost of sales decreased by US\$553.2 million, or 46.9%, to US\$626.2 million for the year ended 31 December 2014 from US\$1,179.4 million for the year ended 31 December 2013. Cost of sales constituted 66.2% and 71.7% of total revenues for the years ended 31 December 2014 and 2013, respectively. As well as reduced costs arising from a lower net working interest, costs of sales were lower in 2014 due to lower net profit interest and the inclusion in 2013 of \$178.0m relating to the agreement to amend the Ebok JOA.

Cost of sales—operating expenses

Total operating expenses constituted 17.0% and 35.0% as a percentage of revenue for 2014 and 2013, respectively.

Total operating expenses excluding stock adjustments and provisions decreased by US\$250.2 million, or 59.3%, to US\$171.6 million for the year ended 31 December 2014 from US\$421.8million for the year ended 31 December 2013. Total operating expenses for Okoro remained relatively stable at US\$81.4 million in 2014 as compared with US\$78.1 million in 2013. Total operating expenses at Ebok decreased to US\$78.2 million in 2014 from US\$305.6 million in 2013, primarily reflecting a US\$146.8 difference in the net NPI movement. Total operating expenses for the OML 26 field decreased to US\$11.7 million in 2014 as compared with US\$41.8 million in 2013, principally due to lower maintenance costs in 2014.

Cost of sales—depreciation, depletion and amortisation

The Company's depreciation, depletion and amortisation costs consist primarily of allocations of acquisition, exploration, development, financing and expected future capital and abandonment costs. These are allocated on a unit-of-production basis, except for the Lion Gas Plant where the costs were spread on a straight line basis over the expected life of the plant prior to disposal.

Depreciation, depletion and amortisation decreased by US\$37.1 million, or 9.3%, to US\$363.4 million for the year ended 31 December 2014 from US\$400.5 million for the year ended 31 December 2013. The decrease reflects the Company's lower production in 2014 compared to 2013.

Cost of sales—royalties

The Company's royalty cost decreased by US\$102.0 million, or 50.1% to US\$101.5 million for the year ended 31 December 2014 from US\$203.5 million for the year ended 31 December 2013. This decrease reflects cost recovery on the Ebok asset which commenced in early 2014.

Cost of sales—oil stock adjustments

During 2014, the timing of liftings led to an increase in crude oil stock, as less oil was lifted than produced in the period, which resulted in a stock adjustment credit of US\$22.5 million for the year ended 31 December 2014 as compared with a stock adjustment charge of US\$8.7 million for the year ended 31 December 2013. At 31 December 2014 and 31 December 2013, FHN was in an underlift position relating to production from the OML 26 field.

Administrative Expenses

Total administrative expenses increased by US\$4.1 million, or 9.2%, to US\$48.9 million for the year ended 31 December 2014 from US\$44.8 million for the year ended 31 December 2013. The year over year increase was primarily in connection with increased doubtful debts.

The Company's total staff numbers increased to an average of 315 people in 2014 from an average of 294 people in 2013. At the end of 2014, the Company had its corporate office in London, England, its technical office in Houston, USA and its main operating offices in Lagos, Nigeria; Erbil, the Kurdistan region of Iraq; and Nairobi, Kenya.

Other Operating Losses—Derivative Financial Instruments

The unrealised loss from derivative financial instruments decreased by US\$37.7 million, or 80.9%, to US\$8.9 million in 2014 from a loss of US\$46.6 million in 2013, a favourable change which largely arose because of the fall in oil prices during the last quarter of 2014.

Other Operating Losses—Impairment of Property, Plant and Equipment

The impairment of property, plant and equipment in 2014 includes US\$933 million related to the downgrade in reserves at Barda Rash and an impairment of US\$273 million recognised in relation to Ebok in Nigeria as a result of the sharp decline in oil price towards the end of 2014.

Other Operating Losses—Impairment of Exploration and Evaluation Assets

In 2014, impairments to intangible exploration and evaluation assets included full impairments of assets in the Kurdistan region of Iraq in the amount of US\$265 million, following receipt of a revised reserve reports and in Ghana in the amount of US\$39 million, following an economic evaluation. In addition, in line with the requirements of IFRS 6 'Exploration for and evaluation of mineral resources', following a review of licence requirements in conjunction with funding availability, full impairments totalling US\$492 million have been recorded against a number of assets in Cote d'Ivoire, East Africa and South Africa. A partial impairment was also recognised against OML 115 (Ameena-2) in the amount of US\$43 million, relating to unsuccessful well costs. With the sharp fall in the market oil price in the last quarter of 2014 and the continued low price environment, market prices for E&E assets are very difficult to determine hence, in order to comply with accounting standards, it was necessary for full impairments to be recognised.

In 2013, a total of US\$60.5 million of impairments were booked primarily related to the costs of Block 10A in Kenya, following the decision to relinquish the block, and the Company's costs on the La Noumbi licence in Congo Brazzaville. Kola 1 and Kola 2 on the La Noumbi licence in Congo Brazzaville were drilled in the year and, following the conclusion that the wells were unsuccessful, they were plugged and abandoned.

Other Operating Losses—Impairment of Goodwill

In 2014, the goodwill balance of US\$115.2 million relating to OML 26 in Nigeria was fully written off following an impairment review as a result of the sharp decline in oil prices towards the end of 2014.

Finance Costs

The following table sets out the Company's finance costs for the years ended 31 December 2013 and 2014.

	Years ended 31 December
	2013
	(Restated)	2014
	(in millions of US\$)
Bank interest payable	18.8	17.8
Borrowing costs, amortisation and facility fees	28.2	12.8
Interest on finance lease	6.5	5.3
Interest on loan notes	89.1	79.8
Cost of extinguishment of loan notes	49.1	—
Corporate facility interest payable	1.3	—
Unwinding of discount on decommissioning and deferred consideration	6.7	17.4
Less: Capitalised interest	(42.4)	(66.2)
Total	157.3	66.9

Finance costs decreased by US\$90.4 million, or 57.5%, to US\$66.9 million in 2014 as compared with US\$157.3 million in 2013, primarily attributable to lower interest costs following refinancing in December 2013. The cost of extinguishment of loan notes in 2013 includes US\$49.1 million of costs to redeem US\$246.6 million and US\$50 million of the 2016 Notes and the 2019 Notes, respectively.

The Group capitalised US\$66 million of finance charges in 2014, compared to US\$42 million in 2013, largely relating to the development of the Barda Rash field which was financed using part of the proceeds of the Group's notes. The subsequent write off of these capitalised finance costs is included in the Barda Rash impairment charge.

Other Gains and Losses

The Company recognised a gain of US\$8.7 million in 2014 which comprised foreign currency gains, and a gain of US\$0.7 million relating to recognition of changes in the fair value of financial liabilities and financial assets. The Company also recognised a loss of US\$1.7 million in relation to the Company's share of joint venture profits.

The Company recognised a gain of US\$3.6 million in 2013 which comprised foreign currency gains, and a gain of US\$3.5 million relating to recognition of changes in the fair value of financial liabilities and financial assets. The Company also recognised a loss of US\$26.6 million in relation to the Company's share of joint venture profits primarily related to the impairment of exploration and evaluation assets in respect of JDZ Block 1 in offshore Nigeria São Tomé & Príncipe JDZ.

Taxation

The Company received a tax credit of US\$303.9 million for the year ended 31 December 2014 as compared to a tax credit of US\$334.7 million for the year ended 31 December 2013. Afren Resources, the subsidiary which holds its interest in the Ebok asset, benefits from the award of a five-year tax holiday which is effective from 1 June 2011 until May 2016. As noted in the section entitled "Licensing and other regulatory requirements in the countries in which the Group operates may be subject to amendment or reform which could make compliance more challenging" in the "Risk Factors" part of this document, Afren received a letter on 26 January 2015 from the Nigerian Investment Promotion Commission informing that the initial tax holiday period had been reduced from five to three years. The Company's income tax credit includes a deferred tax credit in relation to the Group's Ebok asset of US\$250.7 million, compared to US\$625 million in 2013, reflecting the five-year tax holiday and the impact of the impairment review. The 2013 tax credit also includes a gain of US\$178 million arising from Ebok capital allowances acquired in 2013. There are uncertainties surrounding the taxation treatment of marginal fields (see Note to the Group financial statements 4.8: Contingent liabilities) and Pioneer tax status (see Note to the Group financial statements 5.16: Post balance sheet events – Company and Group).

Profit/(Losses)

The Company recorded a loss after tax of US\$1,651.1 million for the year ended 31 December 2014 compared to a profit of US\$512.9 million for the year ended 31 December 2013. This primarily reflects the Company's lower production volumes principally attributable to a reduced share of production and liftings from the Ebok field following cost recovery and delays with the installation of the CFBx platform due to adverse weather conditions, as well as the impact of lower realised oil prices during the second half of 2014, and a higher impairment charge on exploration and evaluation assets, which is partially offset by the gain on the exit of the hedging arrangements for the year ended 31 December 2014.

Comparison of Results of Operations for the Years Ended 31 December 2012 and 2013

The following table sets out certain of the Company's historical revenue and expense items for the years ended 31 December 2012 and 2013 and the percent change between the two periods.

	Years ended 31 December
	2012	2013
	(Restated)	(Restated)	% Change
		(in millions of US\$)
Revenue	1,571.4	1,644.3	4.6%
Cost of sales	(780.9)	(1,179.4)	51.03%
Gross profit	790.5	464.9	(41.18)%
Administrative expenses	(55.1)	(44.8)	(18.7)%
Other operating income/(expenses)
—derivative financial instruments	(60.2)	(46.6)	(22.6)%
—impairment reversal/(charge) on oil and gas assets	(15.0)	(60.5)	303.3%
Operating profit	660.2	313.0	52.6%
Finance costs	(90.8)	(157.3)	73.2%
Finance income	1.6	3.9	143.8%
Other gains/(losses)
—fair value loss/gain on financial liabilities and financial assets	(2.5)	3.5	240%
—foreign currency gains	0.1	3.6	3,500%
Share of gain/(loss) of associate and joint ventures	0.3	(26.6)	(8,966.7)
Profit from continuing activities before tax	568.9	140.1	75.37%
Income tax (expense)/credit	(380.0)	334.7	188.1%
Profit from continuing activities after tax	188.9	474.8	151.3%
(Loss)/profit for the period from discontinued operations	(2.1)	38.1	1.914.3%
Profit for the period	186.8	512.9	174.6%

Revenue

Revenues increased by US\$72.9 million, or 4.6%, to US\$1,644.3 million for the year ended 31 December 2013 from US\$1,571.4 million for the year ended 31 December 2012, driven primarily by a 7.5% year on year increase in net working interest production volumes principally due to Ebok which had its first full fiscal year of production in 2012.

For the year ended 31 December 2013, the Company realised an average oil price of US\$106/bbl and an average gas price of US\$6.7/mcf, down slightly from US\$108/bbl and US\$8.8/mcf for the year ended 31 December 2012. The average Brent price decreased slightly to US\$108.8/bbl for the year ended 31 December 2013 as compared to US\$111.9/bbl for the year ended 31 December 2012.

Cost of Sales

Total cost of sales increased by US\$398.5 million, or 51.03%, to US\$1,179.4 million for the year ended 31 December 2013 from US\$780.9 million for the year ended 31 December 2012. This increase was driven primarily by higher royalty costs, increased operating expenses and increased depreciation, depletion and amortisation. Cost of sales constituted 71.7% and 49.7% of total revenues for the years ended 31 December 2013 and 2012, respectively, reflecting the onset of the net profit interest cost on the Ebok field.

Cost of sales—operating expenses

Total operating expenses constituted 39.0% and 15.9% as a percentage of revenue for 2013 and 2012, respectively.

Total operating expenses excluding stock adjustments and provisions increased by US\$204.6 million, or 94.2%, to US\$421.8 million for the year ended 31 December 2013 from US\$217.2 million for the year ended 31 December 2012. Total operating expenses for Okoro remained relatively stable at US\$78.1 million in 2013 as compared with US\$69.5 million in 2012. Total operating expenses at Ebok increased to US\$305.6 million in 2013 from US\$130.3 million in 2012 primarily reflecting the net profit interest and increased costs associated with the production wells. Total operating expenses for the OML 26 field increased to US\$41.8 million in 2013 as compared with US\$31.1 million in 2012 primarily reflecting lower plant repair and maintenance.

Cost of Sales—royalties

The Company's royalty cost increased by US\$35.5 million, or 21.1% to US\$203.5 million for the year ended 31 December 2013 from US\$168.0 million for the year ended 31 December 2012. The increase reflects higher production at Ebok and OML 26.

Cost of sales—depreciation, depletion and amortisation

Depreciation, depletion and amortisation increased by US\$42.3 million, or 11.8%, to US\$400.5 million for the year ended 31 December 2013 from US\$358.2 million for the year ended 31 December 2012. The increase reflects the Company's higher production in 2013 as compared to 2012.

Cost of sales—oil stock adjustments

During 2013, the timing of oil liftings led to a decrease in crude oil stock, as less oil was lifted than produced in the period, which resulted in a stock adjustment charge of US\$8.7 million for the year ended 31 December 2013 as compared with a stock adjustment charge of US\$6.8 million for the year ended 31 December 2012. At 31 December 2013, FHN was in an underlift position relating to production from the OML 26 field, as compared with an overlift position at the beginning of 2013, resulting in an overlift credit of US\$33.2 million in the year ended 31 December 2013.

Administrative Expenses

Total administrative expenses decreased by US\$10.3 million, or 18.7%, to US\$44.8 million for the year ended 31 December 2013 from US\$55.1 million for the year ended 31 December 2012. The decrease in 2013 was primarily in connection with lower charitable donations.

The Company's total staff numbers increased to an average of 294 people in 2013 from an average of 281 people in 2012. At the end of 2013, the Company had its corporate office in London, England, its technical office in Houston, USA and its main operating offices in Lagos, Nigeria; Erbil, the Kurdistan region of Iraq; and Nairobi, Kenya.

Other Operating Income/Expenses—Derivative Financial Instruments

The mark-to-market loss from derivative financial instruments decreased by US\$13.6 million, or 22.6%, to US\$46.6 million in 2013 from a loss of US\$60.2 million in 2012, of which US\$30.8 million was attributable to commodity hedges in place in 2013 compared with a loss of US\$49.1 million in 2012.

Other Operating Income/Expenses—Impairment of Oil and Gas Assets

In 2013, a total of US\$60.5 million of impairments were booked primarily related to the costs of Block 10A in Kenya, following the decision to relinquish the block, and the Company's costs on the La Noumbi licence in Congo Brazzaville. Kola 1 and Kola 2 were drilled in the year and, following conclusion that the wells were unsuccessful, they were plugged and abandoned.

In 2012, a total of US\$15.0 million of impairments were booked primarily related to the write-off of costs of the Nunya well on the Keta Block of offshore Ghana. In April 2012, the Company announced that the Nunya-1x well intersected 502 feet of very good quality sandstone reservoirs, however they were interpreted as water bearing. The well was plugged and abandoned during the year and therefore the associated exploration costs, which had been capitalised as an intangible asset, were written off.

Finance Costs

The following table sets out the Company's finance costs for the years ended 31 December 2012 and 2013.

	Years ended 31 December
	2012	2013
	(Restated)	(Restated)
		(in millions of US\$)
Bank interest payable	23.9	18.8
Borrowing costs, amortisation and facility fees	22.7	28.2
Interest on finance lease	8.5	6.5
Interest on loan notes	83.9	89.1
Cost of extinguishment of loan notes	—	49.1
Corporate facility interest payable	2.5	1.3
Unwinding of discount on decommissioning and deferred consideration	8.1	6.7
Less: Capitalised interest	(58.8)	(42.4)
Total	90.8	157.3

Finance costs increased by US\$66.5 million, or 73.2%, to US\$157.3 million in 2013 as compared with US\$90.8 million in 2012. The cost of extinguishment of loan notes in 2013 included the premium paid to redeem US\$246.6 million and US\$50 million of the 2016 Notes and the 2019 Notes, respectively.

Other Gains and Losses

The Company recognised a gain of US\$0.1 million in 2012 which comprised foreign currency gains, and a loss of US\$2.5 million relating to recognition of changes in the fair value of financial liabilities and financial assets. The Company also recognised a gain of US\$0.3 million in relation to the Company's share of joint venture profits.

Taxation

The Company received a tax credit of US\$334.7 million for the year ended 31 December 2013 as compared to a tax charge of US\$380 million for the year ended 31 December 2012. The tax credit for the year ended 31 December 2013 included US\$178 million relating to the agreement to amend the Ebok JOA. Afren Resources, the subsidiary which holds its interest in the Ebok asset, will benefit from the award of a five-year tax holiday which is effective from 1 June 2011 until May 2016.

Profit/(Losses)

The Company's profit after tax increased by US\$326.1 million, or 174.6%, to US\$512.9 million for the year ended 31 December 2013 from US\$186.8 million for the year ended 31 December 2012. Profit after tax significantly increased due to clarification of the Company's tax position in respect of its Ebok asset and increased production and continued strength in oil prices.

Liquidity

The Company's liquidity requirements arise principally from its capital expenditure, debt service and working capital requirements. For the periods presented, the Company met its working capital requirements primarily from the proceeds of debt financings and oil and gas sales. Historically, the Company has utilised a combination of short and long-term financial instruments to supplement cash flow from operations to finance its cash needs. Events following the dismissal of the Group's former CEO and COO, including the Company's inability to continue the planned refinancing of debt obligations in 2014, as well as the sharp decline in oil prices, have placed significant pressure on the Group's liquidity position, resulting in the Group having net current liabilities of US\$458.5 million as at 31 December 2014. As at 31 March 2015, Group had net current liabilities of US\$1,068 million and cash and cash equivalents of US\$100.5 million. Since that date, the Group received US\$200 million in interim funding provided by certain Existing Noteholders by way of new private placement notes in April 2015. As at 31 May 2015, the Company had US\$70.2 million in available cash and, while the company had drawn down US\$104.8 million in funds from the escrow related to the interim funding, there remained US\$95.2 million available for draw down. The Company has approached the Ad Hoc Committee with a view to increasing the amount borrowed under the Bridge Securities by an additional US\$30 million in net cash proceeds to provide additional working capital. Any additional borrowing under the Bridge Securities will be repaid out of the proceeds of the New Senior Notes. The Ad Hoc Committee is currently considering such request and there can be no assurance that such funding will be made available. In light of significant dislocation in the industry and related financing markets resulting from the rapid decline in oil prices, the Company has reviewed its 2015 Business Plan with the aim of minimising its funding requirements in the current oil price environment and focus near term future capital expenditures on targeted improvements to further develop and upgrade its core producing assets. The Company's actual financing requirements will depend on a number of factors, many of which are beyond its control. See "Risk Factors—Risks Relating to Afren's Business— Afren has a significant amount of indebtedness which limits its financial and operational flexibility."

Cash Flow

The following table sets forth consolidated cash flow information for the years ended 31 December 2012, 2013 and 2014.

	Year ended 31 December
	2012 (Restated)	2013 (Restated)	2014
		(in millions of US\$)
Operating (loss)/profit for the year from continuing operations	660.2	313.0	(1,898.1)
Operating profit for the year from discontinuing operations	3.1	14.7	—
Depreciation, depletion and amortisation	380.1	408.7	370.4
Unrealised (gains)/losses on derivative financial instruments	20.0	4.2	(32.2)
Impairment charge on property, plant and equipment		—	1,205.6
Impairment charge on exploration and evaluation assets	15.0	60.5	839.1
Impairment charge on goodwill		—	115.2
Share-based payments (credit)/charge	29.4	25.6	(2.3)
Operating cash flows before movements in working capital	1,107.8	826.7	597.7
Decrease/(increase) in trade and other operating receivables	(251.9)	91.7	36.4
(Decrease)/increase in trade and other operating payables	124.2	163.8	(84.4)
Decrease/(increase) in inventory of crude oil	6.0	14.4	(37.3)
Current tax paid	(11.7)	(58.4)	(53.6)
Sale of derivative financial instruments	—	—	79.9
Net cash provided by operating activities	974.4	1,038.2	538.7
Purchases of property, plant and equipment	(394.5)	(468.0)	(561.3)
Exploration and evaluation expenditure	(138.0)	(307.1)	(89.3)
Acquisition of additional licence rights and tax benefits	—	(120.0)	—
Acquisition of participating interest in licences	(190.2)	—	—
Cash received on disposal of discontinued operations	1.3	17.5	—
Increase in inventories—drilling spare parts and materials	(18.7)	(5.5)	(61.4)
Investment inflow	0.5	3.9	0.5
Net cash used in investing activities	(739.6)	(879.2)	(712.1)
Issue of ordinary share capital—share-based plan exercises	2.2	6.7	2.6
Purchase of own shares	—	—	(3.1)
Issue of ordinary share capital—non-controlling interest	1.8	—	—
Investment in subsidiary—additional shares purchased from third parties	—	(109.3)	—
Proceeds from borrowings—net of issue costs	397.4	450.6	245.6
Repayment of borrowings and finance leases	(271.0)	(541.3)	(102.1)
Deferred consideration paid	(9.7)	—	(22.0)
Interest and financing fees paid	(111.0)	(174.7)	(101.0)
Net cash (used in)/provided by financing activities	9.7	(368.0)	20.0
Net (decrease)/increase in cash and cash equivalents	244.5	(209.0)	(153.4)
Cash and cash equivalents at beginning of period	353.9	598.7	389.9
Effect of foreign exchange rates	0.4	0.2	—
Cash and cash equivalents at end of period	598.7	389.9	236.5

Net Cash Provided by Operating Activities

Net cash provided by operating activities was US\$538.7 million the in the year ended 31 December 2014, compared with net cash inflows of US\$1,038.2 million and US\$974.4 million in the year ended 31 December 2013 and 2012, respectively. The 48% year on year decrease from the years ended 31 December 2013 to 2014 was the result of reduced operating profit due to Afren's lower production volumes, attributable to a reduced share of production and liftings from the Ebok field following cost recovery and delays with the installation of the CFBx platform, and lower realised oil price, and the year on year increase from the years ended 31 December 2012 to 2013 in net cash provided by operating activities was primarily the result of an increase in annual production from Ebok and Okoro.

Net Cash Used In Investing Activities

Net cash used in investing activities amounted to US\$712.1 million, US\$879.2 million, and US\$739.6 million in the years ended 31 December 2014, 2013, and 2012, respectively, primarily related to investments in the Okoro, Ebok and Barda Rash fields. In the year ended 31 December 2014, the net cash used in investing activities primarily related to development of the Company's oil and gas assets as well as further work conducted on its exploration and evaluation programs. Expenditure on oil and gas assets in the years ended 31 December 2014 and 2013 largely related to the continued development of producing wells and facilities upgrades at Ebok and further drilling at Okoro and Barda Rash. Exploration and appraisal activities in the year ended 31 December 2014 focused on OML 115, OPL 310 and various assets in East Africa, while in the year ended 31 December 2013 such activities focused on drilling at Okwok and OPL 310 in Nigeria, drilling at Ain Sifni in the Kurdistan region of Iraq and pre-drilling activities and seismic surveys in East Africa. In the year ended 31 December 2013, US\$120.0 million was used for the acquisition of additional licence rights and tax benefits relating to the agreement to amend the Ebok JOA. In 2012, the Company made the final payment of US\$190.5 million on its interest in the Barda Rash field and a payment of US\$107.5 million in connection with its interest in the Ain Sifni block, with the remaining expenditure mainly relating to the investments in Ebok. For a more detailed description of the Company's recent expenditure capitalised within non-current assets, see "—Capital Expenditures."

Net Cash Provided By/(Used In) Financing Activities

Net cash provided by financing activities was US\$20.0 million for the year ended 31 December 2014, net cash used in financing activities was US\$368 million for the year ended 31 December 2013, and net cash provided by financing activities was US\$9.7 million for the year ended 31 December 2012. The cash inflow in the year ended 31 December 2014 related to net proceeds from borrowing. During 2014, the Company drew down an aggregate of US\$250 million on the Ebok, OML 26 and Okwok/OML 113 facilities. Deferred consideration of US\$22 million was paid in relation to the 2013 acquisition of FHN.

The cash outflow of US\$368.0 million in the year ended 31 December 2013 related to a payment of US\$109.3 million for the acquisition of an additional 33.7% interest in FHN and repayment of borrowings and finance leases of US\$541.3 million. The cash outflow was partly offset by proceeds from borrowings including a US\$80.0 million facility drawn down by FHN for the acquisition of OML 113 and US\$360.0 million (before issue costs) from 2020 Notes issued in December 2013 of which part was used to redeem US\$246.6 million and US\$50.0 million of the 2016 Notes and the 2019 Notes, respectively.

In March 2012, the Company completed the issuance of the 2019 Notes, the proceeds of which were US\$300 million before issue costs. The Company used a portion of the proceeds to repay a US\$200 million corporate facility dated 31 October 2011 arranged by BNP Paribas and VTB Capital that the Company had used to partially fund the Kurdistan acquisitions in December 2011 and January 2012, of which US\$200 million in total had been drawn down. The Company also repaid a portion of the Ebok Facility and additional cash outflows related to higher interest costs associated with the issuance and financing fees of the 2019 Notes.

Net Cash and Cash Equivalents

The Company held cash and cash equivalents of US\$236.5 million at 31 December 2014, US\$389.9 million at 31 December 2013, and US\$598.7 million at 31 December 2012. Cash and cash equivalents comprise cash held by the Group in the form of short-term bank deposits with an original maturity of three months or less and earn interest at respective short-term deposit rates.

The Company's cash and cash equivalents balance at 31 December 2014 included US\$52.9 million to which the Company had restricted access as a result of cash deposits for certain letters of credit and cash deposits restricted in respect of debt service obligations. At 31 December 2013, the Company's cash and cash equivalents balance included US\$128.4 million to which the Company had restricted access as a result of cash deposits for certain letters of credit and cash deposits restricted in respect of debt service obligations, as compared to US\$28.5 million to which the Company had restricted access at 31 December 2012.

Capital Expenditures

For the years ended 31 December 2014, 2013 and 2012, the Company incurred US\$769 million, US\$716 million, and US\$521 million, respectively, on capital expenditure to support its development plans and to meet investment and capital expenditure requirements under the licences and related agreements pursuant to which the Company operates. These totals also include acquisition costs, financing costs and abandonment estimates. Capital expenditures have historically comprised the costs of development and exploratory drilling, including testing of wells in the fields in which the Company operates, seismic data acquisition, as well as the purchase of other facilities and equipment. The following table sets forth a breakdown of its movements relating to property, plant and equipment by period.

	Year end 31 December
	2012 (Restated)	2014
	(in millions of US\$)
At year beginning 1 January restated	2,274.8	2,681.5	3,215.0
Additions	335.5	619.8	698.6
Transfer from intangible exploration and evaluation assets	68.0	-	-
Effect of changes to decommissioning estimates	3.5	(2.4)	174.9
Disposal	(0.3)	(83.9)	30.2
Total	2,681.5	3,215.0	4,118.7

During 2014, capital expenditure of US\$345.6 million related to the Ebok field, US\$89.9 million to Okoro, US\$30.1 million to OML 26, US\$67.8 million to Okwok, US\$14.4 million to OML 113 and US\$145.9 million to Barda Rash.

During 2013, capital expenditure of US\$274.1 million related to Ebok, US\$104.1 million related to Okoro, US\$7.9 million related to OML 26 and US\$224.1 million related to Barda Rash. Exploration and appraisal activities (US\$299.4 million) focused on drilling at Okwok and OPL 310 in Nigeria, drilling at Ain Sifni in the Kurdistan region of Iraq and pre-drilling activities and seismic surveys in East Africa. Acquisition costs represent the cost of acquiring a 9% interest in the OML 113 licence.

During 2012 capital expenditure of US\$204.4 million related to Ebok and US\$121.1 million related to the Barda Rash field.

Future Capital Expenditures

The Company's capital expenditures are driven largely by the Company's development of oil and gas projects through to production, and therefore, will fluctuate in accordance with the Company's level of success in exploration and acquisition activities and funds available for such purposes. The Company estimates its capital expenditures for 2015 to be approximately US\$500 million. The amount of capital expenditure under the Restructuring and the Alternative Restructuring will be the same amount.

The Company continually evaluates its capital needs and compares them with its estimated funds available and its actual future capital expenditures may be higher or lower than its budgeted amounts. It is important to note that the dynamic nature of its business limits its ability to precisely predict the need for future capital expenditures. The Company has some degree of flexibility to adjust the size and timing of its expenditures in response to changes in its projects, availability of capital resources or the needs of its business. The final determination with respect to the drilling of any well, including those currently budgeted, will depend on multiple factors, including the results of its development and exploration efforts, the availability of sufficient capital resources for drilling prospects, economic and industry conditions at the time of drilling, including prevailing and anticipated prices that the Company can receive for its oil and gas, the availability of drilling rigs and crews, and the Company's financial condition.

Okoro

The forward work programme for the Okoro FFD has been re-engineered and the Company anticipates no further associated capital expenditure until 2016. The re-engineered programme includes 16 horizontal producer wells, 6 water injector wells and both water and gas injection wells in 2016 and 2018, which Afren anticipates will be developed over two phases. Production will remain within the throughput constraints of current facilities.

OML 26

Afren has completed three of the five new wells in connection with the current drilling programme with the remaining two to be completed in the first half of 2015. Results and data obtained from these wells will be incorporated into field wide data to facilitate an update of the existing filed development plan. Submission of the OML 26 field development plan to Nigerian authorities for Isoko is expected in the second quarter of 2015.

Okwok (OML 67)

In light of current oil prices, Afren and its partner are reviewing the optimal field development plan for Okwok and currently have no planned expenditures beyond the well head jacket installation, which was completed in 2014, and the completion of a development well in April 2015.

Other Assets

Afren has further development or exploration interests in Nigeria and in other parts of Africa. In accordance with its 2015 Business Plan and focus on the Company's core producing assets, Afren does not currently intend to make capital expenditure on its exploration assets beyond 2015 commitments or except as necessary to retain the Company's optionality in certain of these assets.

Other Intangible Oil and Gas Assets

Other intangible oil and gas assets with significant carrying balances as at 31 December 2014 relate to OPL 310 (US\$133.6million), OML 115 (US\$82.4million) and OML 113 (US\$2.9 million).

Contractual Obligations and Contingent Liabilities

The following table sets out the Company's outstanding contractual obligations as at 31 December 2014.

	Payments due by period
Contractual Obligations(1)	Total	Less than 1 year	1-5 years	More than 5 years
	(in millions of US\$)
Variable and fixed rate borrowings	1,664.4	379.5	898.6	386.3
Finance lease obligations(2)	85.9	25.8	60.1	—
Operating lease obligations (FPSO)(3)	10.2	6.8	3.4	—
Other operating lease obligations(4)	304.9	184.9	115.3	4.7
Total	2,065.4	597.0	1,077.4	391.0

(1) Contractual obligations include estimated future (based on agreements in place) interest costs and do not include accounting estimates of decommissioning obligations or derivatives, which are subject to fluctuations in commodity prices. Refer to the audited consolidated financial statements as at and for the year ended 31 December 2014 for decommissioning obligations and derivatives balances as at 31 December 2014. Capital commitments are presented separately below.

(2) Finance lease obligations represent the lease of a MOPU and FSO from Mercator in respect of operations at Ebok.

(3) Operating lease obligations related for the FPSO used on Okoro. See "Material Contracts—Material Agreements Relating to the Company's Assets—Okoro and Setu" of Part VIII (Additional Information).

(4) Other operating lease commitments represent rentals payable by Afren for certain of the Company's office properties, which are negotiated for an average term of three years and rentals are fixed for an average term of three years. Other operating leases also includes Okoro terminal, security boats, and field transport rentals, and Ebok field and rig rentals. See "Material Contracts—Material Agreements Relating to the Company's Assets" of Part VIII (Additional Information).

The Company entered into a services contract for the provision of a FPSO unit with Mercator on or about 13 January 2010 in connection with Ebok. The contract is characterised as a finance lease under IFRS, and its contractual obligation during the seven year term of the contract is US\$180 million, of which US\$150 million was recognised as a liability on acceptance of the FSO from Mercator in May 2011. The majority of the lease costs are capitalised and depreciated over the life of the field.

As is common within the Company's industry, the Company has entered into various commitments and operating agreements related to the exploration and evaluation of and production from proved oil and gas properties. The following table sets out its future capital commitments for oil and gas asset development and oil and gas asset exploration and evaluation as at 31 December 2012, 2013 and 2014. These amounts represent the Company's obligations during the course of the following year to fulfil its contractual commitments.

	As at 31 December
	2012 (Restated)	2013 (Restated)	2014
	(in millions of US\$)
Capital commitments
Property, plant and equipment: oil and gas assets	68.4	42.2	120.8
Intangible exploration and evaluation assets	447.1	431.8	208.2
Total	515.5	474.0	329.0

As at 31 December 2014, US\$103.5 million of the outstanding US\$120.8 million of capital commitments for property, plant and equipment related to installation of the Okoro ratchet and pipeline. The Company's exploration and development commitments as at 31 December 2014 primarily related to Kenya Block 1, Tanga Block in Tanzania, Côte d'Ivoire, Madagascar, OML 115 and Kenya Block L17/L18.

Financing

As noted above, the Company's liquidity requirements arise principally from the Company's capital expenditure and working capital requirements. For the periods presented, the Company met its working capital requirements primarily from oil and gas sales and the proceeds of debt financings. Historically, the Company has utilised a combination of short and long-term financial instruments to supplement cash flow from operations to finance the Company's cash needs and the growth of its business. The Company has significant debt service obligations. The Group initiated a refinancing project during the middle of 2014 which had to be postponed following the suspension of the Company's former CEO and COO and two Associate Directors in connection with the unauthorized payments announced in July 2014. When the Group was in a position to recommence the refinancing project it was severely impeded by a significantly higher risk premium and a declining oil price environment and was unable to complete the refinancing. The Company's actual financing requirements will depend on a number of factors, many of which are beyond the Company's control. See "Risk Factors—Afren's level of indebtedness and the terms of its indebtedness could adversely affect its business and liquidity position."

Debt Financing

Total gross debt as at 31 December 2014 amounted to US\$1,304 million, reflecting a US\$175 million increase over total gross debt as at 31 December 2013. The following table presents information on the Company's borrowings as at 31 December 2014.

	As at
	31 December 2014
	(in millions of US\$)
2020 Notes	353.8
2019 Notes	245.9
2016 Notes	251.0
Bank borrowings	453.3
Total	1,304.0

2020 Notes

On 9 December 2013, the Company issued US\$360.0 million aggregate principal amount of 6⅝% senior secured notes due 9 December 2020 (the "2020 Notes"). A portion of the proceeds of the 2020 Notes offering was used to redeem US\$246.6 million and US\$50.0 million of the 2016 Notes and the 2019 Notes, respectively.

2019 Notes

On 8 March 2012, the Company issued US\$300.0 million aggregate principal amount of 10¹ /4% senior secured notes due 8 April 2019 (the "2019 Notes"). A portion of the proceeds of the 2019 Notes offering was used to repay borrowings. In December 2013, the Company repurchased US\$50.0 million of the 2019 Notes, funded by the issue of 2020 Notes. The principal amount outstanding on the 2019 Notes as at 31 December 2014 was US\$250.0 million.

2016 Notes

On 3 February 2011, the Company issued US\$450.0 million aggregate principal amount of 111 /2% senior secured notes due 1 February 2016 (the "Original 2016 Notes). The Original 2016 Notes were issued pursuant to an indenture dated 3 February 2011. Pursuant to this indenture, the Company issued an additional US\$50 million aggregate principal amount of 111 /2% senior secured notes due 1 February 2016 (the "Additional 2016 Notes," and together with the Original 2016 Notes, the "2016 Notes"). A portion of the proceeds of the 2016 Notes offering was used to repay borrowings amounting to US\$175.6 million. In December 2013, the Company repurchased US\$246.6 million of the 2016 Notes, funded by the issue of 2020 Notes. The principal amount outstanding on the 2016 Notes as at 31 December 2014 was US\$235 million.

Ebok Facility

In March 2010, the Company entered into the Ebok Facility with a maturity of up to five years. The facility was available for development of the Ebok, Okwok and OML 115 areas, offshore Southeast Nigeria.

On 22 March 2013, the Company amended and restated the Ebok Facility to provide for a facility of up to US\$300 million until April 2016. The Ebok Facility bears interest at LIBOR plus a margin of 400 to 480 basis points. The amended and restated Ebok Facility was used to refinance the existing Ebok Facility of which US\$185.7 million was drawn, as well as to fund ongoing capital expenditure and general corporate purposes. US\$90 million of the Ebok Facility was drawn by the Company in December 2014. The Ebok Facility will be further amended with effect upon completion of the Restructuring. See "Material Contracts —Ebok Facility."

OML 26 Facility

On 27 February 2014, FHN 26 as borrower entered into a US\$100 million term loan facility with Zenith Bank Plc as lender, for the purpose of the financing of capital and operational expenditure as well as general corporate purposes with respect to OML 26. This replaced the OML 26 loan facility of US\$80.0 million that existed as at 31 December 2013, which was repaid on 28 February 2014. The facility has a term of four years inclusive of a fifteen month moratorium and bears interest at LIBOR plus 6.5%. This has increased to LIBOR plus 9.5% from 1 December 2014.

Okwok/OML 113 Facility

On 30 September 2014, AEPNA as borrower, and Afren and FHN 113 Limited, as guarantors, entered into a US\$100 million bridge loan facility with Access Bank as lender for the purpose of the financing of capital and operating expenditure for the development plans and work programmes in relation to the Okwok and Aje fields. The facility has a term of one year from drawdown and bears interest at LIBOR plus 9.50%. During 2014, the Company drew down US\$60 million on the Okwok/OML 113 Facility of which US\$10 million has been repaid. The Okwok/OML 113 Facility will be amended with effect upon completion of the Restructuring. See "Material Contracts —Okwok/OML 113 Facility."

The following table presents information on the Company's debt maturity profile for all third party financing as at 31 December 2012, 2013 and 2014.

		As at 31 December
	2012 (Restated)	2013	2014
		(in millions of US\$)
Due within one year	216.4	77.3	268.4

Due within two to five years	650.8	445.5	676.5
Due after five years	292.8	606.2	359.1
Total	1,160.0	1,129.0	1,304.0

	As of
	31 December 2014
	(in millions of US\$)
Shareholders' equity(1)
Share capital	19.2
Share premium	929.3
Other reserves	118.0
Accumulated (loss)/profit	(800.1)
	266.4

	As at
Gross financial indebtedness	31 March 2015
	(in millions of US\$)
Total current debt
Guaranteed	(253.4)
Secured	(327.3)
Unguaranteed/unsecured	-
	(580.7)
Total non-current debt (excluding current portion of long-term debt)
Guaranteed	(610.0)
Secured	(122.7)
Unguaranteed/unsecured	-
	(732.7)

	As at
Net financial indebtedness	31 March 2015
	(in millions of US\$)
Cash and Cash equivalents	100.5
Trading securities	-
Total liquidity	100.5
Current financial receivable	-
Current bank debt	(327.3)
Current portion of non-current debt	-
Other current financial debt	(253.4)
Total current financial debt	(580.7)
Net current financial indebtedness	(480.2)
Non-current bank loans	(122.7)
Bonds issued	(610.0)
Other non-current loans	-
Non-current financial indebtedness	(732.7)
Net financial indebtedness	(1,212.9)

The Group has no indirect or contingent indebtedness as at 31 December 2014 other than as disclosed in the section entitled "Capitalisation and Indebtedness" of this Part III (Operating and Financial Review).

Qualitative and Quantitative Disclosures About Market Risk

Financial Risk Management

The Company monitors and manages the financial risks relating to its operations through internal risk reports, which analyse exposure by type and magnitude of risks. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities.

The Company's principal financial instruments are cash and cash equivalents, trade and other receivables and the Company's derivative instruments. The Company manages liquidity risk by ensuring that sufficient funds are available to meet its commitments as they fall due. The Company uses projected cash flows to monitor funding requirements for its activities. The Company's exposure to the risk of changes in market interest rates is mitigated by regular reviews of available fixed and variable rate debts.

Credit Risk Management

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in a financial loss to Afren. The Company reviews the credit risk of the entities that the Company sells its products to or that it enters into contractual arrangements with and will obtain guarantees and commercial letters of credit as may be considered necessary where risks are significant to us. The Company sales are diversified in terms of the number of counterparties and, other than transactions with major oil companies with high credit rating and balances due from its partners, the Company does not have significant exposure to any single counterparty or group of counterparties with similar characteristics. The credit risk on cash is limited because the majority is deposited with banks with good credit ratings assigned by international credit rating agencies or with governmental guarantee. The Company's total maximum exposure to credit risk as at 31 December 2014 was \$495.6 million, made up of cash and bank balances and trade and other receivables (excluding prepayments).

Liquidity Risk Management

Liquidity and refinancing risks refer to the risk that the Company will not be able to obtain sufficient financing from lenders and the capital markets to meet its working capital and project financing and refinancing requirements. Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built a liquidity risk management framework for the management of the Group's short, medium and long-term funding and liquidity management requirements.

The Group closely monitors and manages its liquidity risk. Cash forecasts are regularly produced and sensitivities run for different scenarios including, but not limited to, changes in commodity prices, different production rates from the Group's portfolio of producing fields and delays in development projects.

Commodity Price Risk Management

The following table presents information on the Company's current and non-current derivative assets and liabilities as at 31 December 2012, 2013 and 2014.

				As at 31 December
	2012 (Restated)		2013 (Restated)		2014
	Current	Non-current	Current	Non-current	Current	Non-current
	(in millions of US\$)
Derivative assets	—	—	0.1	—	—	—
Derivative liabilities	(31.3)	(9.8)	(28.2)	(17.1)	(4.8)	(8.4)
Total	(31.3)	(9.8)	(28.1)	(17.1)	(4.8)	(8.4)

Afren has purchased deferred premium put options. During 2012, the Company had 3.4 mmbbl of production hedged such that it would receive a minimum price after costs of US\$80.28/bbl. During 2013, the Company had 5.9 mmbbl of production hedged such that it would receive a minimum price after costs of US\$82.53/bbl. During 2014, the Company had 4.4 mmbbl of production hedged such that it would receive a minimum price after costs of US\$80.52/bbl.

In November 2011, FHN entered into a number of deferred premium put options in respect of production from OML 26, required as part of the financing that was put in place to acquire and develop OML 26. These hedges relate to a three year period from 1 January 2012 to 31 December 2014. The minimum price after costs protected ranges from US\$88.16/bbl in 2012 to US\$79.41/bbl in 2014. These hedges were required as part of the financing to ensure that repayments on the acquisition and development loan facility could be met.

In the year ended 31 December 2014, the Company recognised a gain of US\$98.8 million on derivative contracts. In December 2014, Afren sold its remaining 2.85 mmbbls of put options, realising a cash benefit of US\$80 million and has no open hedges. For further description of these arrangements, see "Material Agreements Relating to the Company's Assets —Hedging Arrangements and Derivatives."

Critical Accounting Policies

For a more detailed description on the preparation of the Company's financial statements, please refer to the Company's audited consolidated financial statements and related notes included elsewhere in this Prospectus.

Intangible exploration and evaluation assets

The Company follows a successful efforts based method of accounting for exploration and evaluation costs rather than the full cost method, also allowed under IFRS. All licence acquisition, exploration and evaluation costs including geophysical and geological expenses, are initially capitalised as intangible fixed assets in cost centres by field or exploration area, as appropriate, pending determination of commerciality of the relevant property.

Directly attributable administration costs are capitalised insofar as they relate to specific exploration activities. Pre-licence costs and general exploration costs not specific to any particular licence or prospect are expensed as incurred.

If prospects are deemed to be impaired ("unsuccessful efforts") on completion of the evaluation as to whether commercial reserves exist or as a result of other factors such as a lack of planned future expenditure, the associated costs are charged to the income statement. If the field is determined to be commercially viable, the attributable costs are transferred to property, plant and equipment in single field cost centres. These costs are then depreciated on a unit of production basis.

All field development costs are capitalised as property, plant and equipment. Property, plant and equipment related to production activities are amortised in accordance with its depletion and amortisation accounting policy.

Management assesses impairment in respect of intangible exploration and evaluation assets with reference to indicators in IFRS 6 and the specific facts and circumstances of each asset. In making the assessment, management is required to make judgments on the status of each project and the future plans, including availability of financing, towards finding commercial reserves. In 2014, these judgements were made in light of the Group's funding position and the impact of low oil prices. The nature of exploration and evaluation activity is such that only a proportion of projects are ultimately successful and some assets are likely to become impaired in future periods.

Carrying value of oil and gas assets

Development assets are costs incurred to obtain access to oil and gas reserves and to provide facilities for extracting, treating, gathering, and storing oil and gas. Examples of these costs are costs incurred to (i) gain access to and prepare well locations for drilling; (ii) drill development wells, including cost of platforms and well equipment; (iii) acquire, construct, and install production facilities such as ease flow lines, separators, treaters and heaters; and (iv) other items as appropriate. Intangible exploration and evaluation assets are generally transferred into development assets once the property has commercial reserves and a development plan approved by all relevant parties including, where applicable, the government. Production assets are those properties which have begun producing. These assets are typically development properties which are transferred into the production portfolio or through acquisition of a subsidiary. Once commercial production starts on a development asset, the property is reclassified as a production asset and depletion of the property commences.

Oil and gas assets are amortised from the commencement of production on a unit of production basis, which is the ratio of oil and gas production on working interest basis in the period to the estimated quantities of commercial reserves, generally on a field by field basis. Reserves estimates used for this calculation are based on 2P numbers derived from a third party reserves report. Currently, the Company utilises the services of NSAI, RPS and AGR TRACS to produce these reports and ensure independent evidence of the likely reserves base. Production used for this calculation includes any amounts provided to partners to settle residual net profit interest liabilities, on which no revenue is generated. Costs used in the unit of production calculation comprise the net book value of capitalised costs plus the estimated future field development costs. Changes in the estimates of commercial reserves or future field development costs are dealt with prospectively.

Non-current assets are assessed for impairment when facts and circumstances suggest that the carrying amount may exceed its recoverable amount. Where there has been an indication of a possible impairment, management assesses the recoverability of the carrying value of the asset by comparison with the estimated discounted future net cash flows based on management's expectation of future production, oil prices and costs.

Any impairment identified is charged to the income statement as additional depletion and amortisation. Where conditions giving rise to impairment subsequently reverse, the effect of the impairment charge is also reversed as a credit to the income statement, net of any depreciation that would have been charged since the impairment.

Management assesses the Company's oil and gas assets for indicators of impairment at least annually, with reference to indicators in IAS 36. Key assumptions used in management's assessment of impairment indicators include a production profile based on management's best estimate of proven and probable reserves of the assets, an internal oil price profile benchmarked to mean analysts' consensus and an asset specific tailored post-tax discount rate which, taking into account other assumptions used in the calculation, management considers to be reflective of the risks.

Amounts due to participants in fields

Included within Trade and other payables described in note 5.5 to the financial statements is a balance as at 31 December 2014 of US\$329.6 million and as at 31 December 2013 of US\$366.0 million of 'Other creditors and operating partners' due under the contractual agreements through which the Group participates in its fields. In calculating certain amounts included within this balance, aspects of these agreements can be unclear and potentially open to interpretation and negotiation, for example, the level of costs which will be agreed as recoverable capital expenditure, levels of allowable overhead, applicable tax rate or financing charges allocable to individual assets. Management has recorded such amounts at its best estimate, having considered a range of reasonably possible outcomes. However, this estimation uncertainty could potentially lead to a material gain or loss in future periods, as and when the interpretation of the underlying agreements in confirmed with the relevant counterparties.

Decommissioning

A provision for decommissioning the Company's oil and gas assets is recognised in full when the related facilities are installed. The extent to which a provision is required depends on the legal requirements for decommissioning, the costs and timing of work and the discount rate to be applied. A corresponding amount equivalent to the provision is recognised as part of the cost of the related property, plant and equipment (within additions). The amount recognised is the estimated cost of decommissioning, discounted to its net present value, and is reassessed each year in accordance with local conditions and requirements, reflecting management's best estimates, and external reports were relevant. Changes in the estimated timing of decommissioning or decommissioning cost estimates are dealt with prospectively by recording an adjustment to the provision and a corresponding adjustment to property, plant and equipment. The unwinding of the discount on decommissioning is included as a finance cost.

Taxation and royalties

The income tax credit expense represents the sum of tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

The income tax credit represents the sum of tax currently payable and deferred tax. The 2013 amount includes a credit in respect of the reversal of prior period taxes no longer expected to be payable, and recognition of deferred tax assets described further below.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the rates of tax expected to apply in the period when the liability is settled or the asset realised.

The application of tax legislation in jurisdictions in which the Company operates can be uncertain and subject to interpretation. In particular in Nigeria there is uncertainty in respect of the calculation of the tax holiday for the Ebok asset, the calculation of the royalties in respect of Ebok production and in a number of other less significant areas. The Company calculates the tax charge for the period using the latest information available, taking external advice where necessary, in order to arrive at the Company's best estimate of the final tax position. Revisions to its tax liabilities (either upward or downward) may occur as the Company's tax filings and royalties are agreed with the relevant authorities in future periods.

Share-based payments

The Company makes equity-settled share-based payments to certain employees and the Board. Equity-settled share-based schemes are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant, measured by use of an appropriate valuation model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the period to exercise, based on the Company's estimate of shares that will eventually vest. The Company is liable for Employer's National Insurance on the difference between the market value at the date of exercise and the exercise price. This expense is accrued by reference to the share price of the Company at the balance sheet date.

Management is required to make assumptions in respect of the inputs used to calculate the fair values of these contracts.

Adoption of IFRS 10

The Group adopted IFRS 10 during 2013. The most significant test in determining whether a control relationship exists under the Group's previous accounting policy (under IAS 27), was whether the Group had a shareholding of over 50%. One key change in IFRS 10 is a new requirement for an investor to consider whether it has de facto power over an investee; this is relevant for the decision regarding the treatment of FHN. Although Afren had a minority shareholding of FHN, the other shareholders were relatively widely dispersed and there was no evidence of them organising their interests in such a way that they could exercise more votes than Afren as minority shareholder. Therefore under IFRS 10 this was one of the indicators, when forming a consolidation conclusion, that Afren controlled FHN when the shareholding was below 50%. Under IAS 27 a holding of over 50% was a more significant test.

Accounting judgements related to restatement of 2013 financial statements

As described in "—Changes in Reporting—Restatement of the financial statements for year ended 31 December 2013", Management undertook an extensive review of the accounting for three transactions following additional information brought to light by the WFG Review. A description of the three transactions and related management accounting judgements with regard to these transactions is as follows:

(1) In July 2012, Afren agreed to advance US\$100 million to Oriental (the "First Oriental Agreement"). The contractual documentation was drawn up on the basis that the payment was in effect an advance purchase of Oriental's oil from Ebok. As a result of this transaction a loan of US\$100.0 million to Oriental was included in Afren's balance sheet for 31 December 2012 under the line "Prepayments and advances to partners".

Although the WFG Review highlighted that the disclosure around this financial instrument was insufficient, with additional disclosure required in the trade and other receivables and fair values note, in the 31 December 2012 and 2013 financial statements the accounting review did not highlight any material change in either the Group balance sheet or the Group statement of comprehensive income as at 31 December 2012 or 2013. As at 31 December 2014 Afren has fully recovered this loan.

As such management determined that no restatement was necessary as a result of this transaction although additional disclosure has been provided within the Notes to the Group's financial statements 5.4, via the inclusion of narrative that the US\$100.0 million loan is included within the advance to partners line, and 5.6 by including the amortised cost of the US\$100.0 million loan within the financial assets section.

(2) See"—Changes in Reporting—Restatement of the financial statements for year ended 31 December 2013" for a detailed description of the Amendment Agreement. Management judgement was required in the assessment of whether there were sufficient grounds to re-open the prior year judgement as to the allocation of the US\$300.0 million consideration related to the Amendment Agreement. Further judgement was required in selecting the best accounting treatment as some aspects of the accounting interpretation of this transaction by the investigating accountants was at variance with that adopted by the Company in its 2013 financial statements. Therefore, the Board commissioned independent accounting advice from another major accounting firm before a final determination was made. The Board believes the restated accounting is appropriate having taken into account all of the views and advice received, and all the information available and better reflects the substance of the transaction.
(3) In December 2013, Amni, AERL, Afren and Okoro Limited entered into a number of agreements to resolve a dispute regarding whether the Okoro East development would go ahead due to the differing economic benefits each was receiving from Okoro. The dispute arose as a result of a difference in tax rates in Nigeria paid by Afren and Amni. Pursuant to a resolution agreement (the "Amni Resolution Agreement") AERL agreed to pay US\$100.0 million (together with interest of US\$9.0 million due under Amni's facility with the United Bank for Africa plc ("UBA") as referred to below). As part of the resolution of the dispute, an amended and restated production and technical services agreement (the "Amended PSTSA") was entered into by the parties. AERL agreed to pay the US\$100.0 million in instalments. However in order to access the full US\$100.0 million immediately, Amni entered into a loan agreement with UBA and Afren issued a bank guarantee to the value of US\$70.0 million to UBA in respect of Amni's financial obligations to UBA (the "Amni Guarantee"). At 31 December 2013, US\$31.6 million of the agreed payment had been paid to Amni.

The accounting review confirmed Afren received value from the Amended PSTSA and no material change resulted in either the Group balance sheet or the Group statement of comprehensive income as at 31 December 2012 or 2013. As at 31 December 2014, US\$65.8 million of the balance is outstanding. As such management determined that no adjustment was required in relation to the financial guarantee provided to UBA (previously disclosed as a contingent liability) and no restatement was necessary as a result of this transaction.

Going concern

The 2014 financial statements have been prepared on a going concern basis and no break up adjustments have been made, although it was acknowledged that certain material uncertainties existed as to the application of the going concern basis of accounting. Information regarding the assumptions related to the Group's going concern analysis is described in "Working Capital" in Part IX (Additional Information).

PART IV UNAUDITED INTERIM MANAGEMENT STATEMENT

On 29 May 2015, the Company has announced its unaudited interim management statement dated 29 May 2015 as set out below:

"US\$200 million interim funding provided by existing Noteholders by way of new private placement notes in April 2015; proceeds to be used for general corporate purposes and capex; wider recapitalisation programme to be completed by the end of July 2015
Nigeria projects progressing: Completion of top-side Ebok CFB extension; options for Okoro FFD with a low oil price under discussion; completion of first Okwok development well; fifth production well completed on OML 26
2015 capex guidance US\$0.4 billion expected to focus on existing producing assets in Nigeria; average production guidance expected to be 23,000 – 32,000 bopd, reflecting lower share of production from Ebok following end of cost recovery
Q1 2015 net production at 36,035 bopd, above FY guidance range but in line with expectations; Q1 2015 Revenue of US\$130 million; Operating cash flow before movements in working capital of US\$59 million; Capex US\$212 million; Net Debt US\$1,196 million

London, 29 May 2015 - Afren plc ("Afren" or the "Group"), (LSE: AFR), announces its Interim Management Statement ("IMS") and financial results for the three months ended 31 March 2015 and an update on its operations year-to-date 2015. Information contained within this release is unaudited and is subject to further review.

Operational Update

Afren delivered revenue of US\$130.3 million (Q1 2014: US\$269.0 million) and operating cash flows before movements in working capital of US\$59.1 million (Q1 2014: US\$169.1 million) in Q1 2015, driven by average net production at 36,035 bopd in line with expectations to meet our guidance range for 2015, averaging 23,000 – 32,000 bopd. The fall in revenue was due to lower realised oil prices and production liftings from Ebok utilised to settle a net profit interest (NPI) liability. NPI represents a contractual profit share payable to previous owners of the Ebok field for which liftings made in settlement are offset against cost of sales (NPI liftings commenced in Q4 2014).

Our 2015 production guidance range reflects a lower share of production following end of all cost recovery at Ebok. At Ebok, following completion of the installation of the CFB extension wellhead jacket in late Q4 2014, the Partners completed the top-side installation of the bridge and decks in March 2015 and are targeting hook-up and commissioning of the facilities by Q4 2015. Gross production at the Ebok field was 30,954 bopd. As previously announced, Afren and Oriental have reached an agreement to end cost recovery. Oriental will fund its share of expenditure from May 1 2015. As a result of the agreement, Afren will receive a lower share of production to reflect its share of working interest in Ebok.

At Okoro, gross production at the field was circa 15,073 bopd in the period, incorporating planned downtime. The Partners are currently in discussions on how to manage the Okoro FFD in line with the current low oil price environment with a view to re-engineering the forward work programme. At Okwok, Afren and its JV Partners Oriental and Addax, have completed and flow tested a first development well, which was completed in April 2015 from the Okwok jacket having been drilled to a total measured depth of 9,202 ft and flow tested successfully at a maximum rate of 5,400 bopd (24.5 deg API oil).

At OML 26, following the receipt of Field Development Plan ("FDP") approval by the Nigerian regulatory authorities in H1 2014, the Partners successfully drilled two producers in H2 2014. A third producer was spudded in December 2014 and completed in February 2015, a fourth producer was completed in March 2015 and a fifth producer has just been completed in May 2015. All five new wells have been drilled with the same rig and from the same location cluster. Two of the wells tested at over 2,000 bopd and a third around 1,000 bopd during post completion well tests without any gaslift. The new wells will undergo the statutory well tests and gaslifted to realise their full production potential in the coming months. Submission of the OML 26 FDP to the Nigerian authorities for Isoko is expected in Q2 2015.

At the Barda Rash field in Kurdistan, following a material reduction to previously published estimates of reserves and resources resulting from the reprocessing 3D seismic shot in 2012 and results from the Company's drilling campaign as well as the publication of an updated Competent Person's Report (CPR) on 12 January 2015, Afren is in discussions with the MNR regarding potential divestment opportunity options for the field.

Following the play-opening Ogo discovery, offshore Nigeria, Afren completed the fast track 2,716 km2 marine 3D seismic programme across OPL 310 and OML 113 to complement existing coverage on the two licences. Processing of 3D seismic data has been completed. The fast track post-stack time migration was delivered in August 2014 and the final production pre-stack time migration was delivered in late Q4 2014. The pre-stack depth migration was delivered in April 2015. The interpretation of these data sets will be used to finalise a well location. Afren has instructed NSAI to commence the preparation of a CPR for OPL 310 incorporating the new block wide seismic data.

Capex guidance for 2015 remains at US\$0.4 billion, focussed on high margin Nigerian cash generating producing assets.

Commenting today, Alan Linn, Chief Executive Officer of Afren plc, said:

"Afren has delivered a solid first quarter result despite the continuing low oil price and additional NPI liftings from Ebok. We have already significantly curtailed immediate capital expenditure and are now working with our Partners to optimise forward investment in development projects in Nigeria. Business and process streamlining has commenced and we expect to begin seeing improved bottom line results from these efficiencies across the business as 2015 unfolds. Whilst interim funding is now in place, it will take time to work through historical issues and funding remains extremely tight. We will be working with shareholders in the coming weeks to explain the benefits of our proposed new funding structure and encourage them to support us in resolving our financing issues in order for Afren to deliver the long-term value and attractive future I see for the Company."

Production

Production Q1 2015 (bopd)	Working interest	Average gross production	Average net production
Okoro	50%	15,073	7,537
Ebok	50%(1)	30,954	26,887
OML 26	45%	3,580	1,611
Total		49,607	36,035

(1 ) Afren's net production in 2015 includes its 50% working interest plus additional barrels to recover costs of capital investment funded by Afren. It includes any volumes provided to Partners to settle net profit interest liabilities.

Financial Position

Revenue for the three months ended 31 March 2015 was US\$130.3 million (Q1 2014: US\$269.0 million). The 52% decrease in revenue is attributable to a significantly lower realised oil price of US\$48.0/bbl (Q1 2014: US\$ 106.5/bbl) and liftings of Ebok production being provided in settlement of the net profit interest liability (such amounts are therefore excluded from revenue and offset against cost of sales).

This fall in revenue, together with higher administrative costs incurred in relation to the Group's recapitalisation and the write-off of Q1 2015 expenditure on certain exploration and evaluation assets, resulted in a loss before tax for the period of US\$48.1 million (Q1 2014: profit before tax of US\$55.8 million). Although the Group continues to reflect the benefit of a five-year tax holiday at the Ebok field, a tax charge of US\$5.0 million was recorded for Q1 2015 (Q1 2014: US\$16.7 million credit). The tax charge for Q1 2015 principally relates to the current tax charge at Okoro. This resulted in a loss after tax of US\$53.1 million (Q1 2014: US\$72.5 million profit after tax).

Operating cash flow before movements in working capital for the three months to 31 March 2015 was US\$59.1 million (Q1 2014: US\$169.1 million). This decrease was primarily attributable to lower revenue. Net cash generated by operating activities was US\$84.0 million (Q1 2014: US\$114.2 million). The narrowing of the decrease compared to operating cash flow before movements in working capital reflects a reduction in the inventory of crude oil compared to the respective year-ends.

During the three months to 31 March 2015 the Group spent US\$212.0 million developing its assets (US\$209.7 million investment in producing and development assets and US\$2.3 million on exploration and evaluation projects). The investment in producing and development assets included US\$128.9 million in respect of various drilling and enhancement activities at Ebok.

Gross debt at 31 March 2015 was US\$1,296.1 million, excluding finance leases. Cash at bank at 31 March 2015 was US\$100.5 million, resulting in net debt (excluding finance leases) of US\$1,195.6 million (31 December 2014: gross debt of US\$1,304.0 million; cash of US\$236.5 million; and net debt of US\$1,068 million).

On 30 April 2015, the Group announced that, as part of its recapitalisation plan, it will be provided with US\$200 million of net interim funding. For further details of this and the overall recapitalisation, please refer to our announcement on 30 April 2015 entitled "Completion of interim funding, appointment of new CEO and update of reserves".

There are no material changes to either the contingent liabilities or post balance sheet events, from those previously disclosed within the 2014 annual report and accounts.

Unaudited condensed consolidated statement of comprehensive income

Three months ended 31 March 2015

	31 March 2015	31 March 2014
	Unaudited	Unaudited
	US\$m	US\$m
Revenue	130.3	269.0
Cost of sales	(87.0)	(186.0)
Gross profit	43.3	83.0
Administrative expenses	(32.2)	(6.4)
Other operating expenses
– derivative financial instruments	(1.8)	(3.6)
– impairment of exploration and evaluation assets	(26.5)	(0.6)
Operating (loss)/profit	(17.2)	72.4
Finance income	0.2	0.6
Finance costs	(34.2)	(19.9)
Other gains
– foreign currency gains	3.1	2.3
– fair value gains on financial liabilities and financial assets	-	0.4
(Loss)/profit before tax	(48.1)	55.8
Income tax (charge)/credit	(5.0)	16.7
(Loss)/profit after tax	(53.1)	72.5
Attributable to:
Equity holders of Afren plc	(52.0)	74.3
Non-controlling interests	(1.1)	(1.8)
	(53.1)	72.5
Other comprehensive income
Loss on revaluation of available-for-sale investment	-	(0.1)
Reclassification adjustment for gains recycled to profit and loss	(32.2)	-

Other comprehensive expense for the period	(32.2)	(0.1)
Total comprehensive (expense)/income for the period	(85.3)	72.4
Attributable to:
Equity holders of Afren plc	(84.2)	74.2
Non-controlling interests	(1.1)	(1.8)
	(85.3)	72.4
(Loss)/earnings per share from all activities
Basic	(0.6)c	6.8c
Diluted	(0.6)c	6.5c
Unaudited condensed consolidated balance sheet

As at 31 March 2015

	31 March 2015	31 December 2014
	Unaudited	Audited
	US\$m	US\$m
Assets
Non-current assets
Intangible oil and gas assets	221.0	219.6
Property, plant and equipment	1,580.1	1,379.9
Deferred tax assets	340.4	348.2
	2,141.5	1,947.7
Current assets
Inventories	125.3	164.7
Trade and other receivables	195.6	221.8
Prepayments and advances to Partners	64.0	64.0
Cash and cash equivalents	100.5	236.5
	485.4	687.0
Total assets	2,626.9	2,634.7
Liabilities
Current liabilities
Trade and other payables	(837.0)	(735.3)
Provisions	(13.6)	(21.0)
Borrowings	(574.8)	(268.4)
Current tax liabilities	(23.8)	(15.7)
Deferred consideration on acquisitions	(21.5)	(21.0)
Obligations under finance lease	(23.8)	(21.8)
Derivatives over own equity	(58.9)	(57.5)
Derivative financial instruments	-	(4.8)
	(1,553.4)	(1,145.5)
Net current liabilities	(1,068.0)	(458.5)
Non-current liabilities
Deferred tax liabilities	(85.1)	(96.0)
Provision for decommissioning	(37.9)	(44.0)
Borrowings	(721.3)	(1,035.6)
Obligations under finance leases	(50.3)	(56.0)
Derivative financial instruments	(11.8)	(8.4)
	(906.4)	(1,240.0)
Total liabilities	(2,459.8)	(2,385.5)
Net assets	167.1	249.2
Equity
Share capital	19.2	19.2
Share premium	929.3	929.3
Other reserves	89.0	118.0

Accumulated loss	(852.1)	(800.1)
Total equity attributable to parent company	185.4	266.4
Non-controlling interest	(18.3)	(17.2)
Total equity	167.1	249.2

Unaudited condensed consolidated cash flow statement Three months ended 31 March 2015

	3 months to	3 months to
	31 March 2015	31 March 2014
	Unaudited	Unaudited
	US\$m	US\$m
Operating (loss)/profit for the period	(17.2)	72.4
Depreciation, depletion and amortisation	81.8	100.2
Unrealised gains on derivative financial instruments	(33.5)	(6.4)
Impairment charge on exploration and evaluation assets	26.5	0.6
Share-based payments charge	1.5	2.3
Operating cash-flows before movements in working capital	59.1	169.1
Decrease in trade and other operating receivables	30.7	26.1
Decrease in trade and other operating payables	(37.0)	(47.8)
Decrease/(increase) in inventory of crude oil	31.2	(29.8)
Current tax paid	-	(3.4)
Net cash generated by operating activities	84.0	114.2
Purchases of property, plant and equipment	(209.7)	(94.4)
Exploration and evaluation expenditure	(2.3)	(31.7)
Decrease/(increase) in inventories - drilling spare parts and materials	8.8	(13.4)
Investment inflow	-	0.2
Net cash used in investing activities	(203.2)	(139.3)
Issue of ordinary share capital – share-based plan exercises	-	1.4
Purchase of own shares	-	(3.1)
Proceeds from borrowings - net of issue costs	-	98.5
Repayment of borrowings and finance leases	(13.5)	(86.6)
Interest and financing fees paid	(3.3)	(16.9)
Net cash used in financing activities	(16.8)	(6.7)
Net decrease in cash and cash equivalents	(136.0)	(31.8)
Cash and cash equivalents at beginning of the period	236.5	389.9
Effect of foreign exchange rate changes	-	2.6
Cash and cash equivalents at end of period	100.5	360.7

Unaudited condensed consolidated statement of changes in equity Three months ended 31 March 2015

		Share				Attributable to	Non
	Share capital	premium account	Merger reserve	Other reserves	Accumulated losses	equity holders of parent	controlling Interest	Total equity
	US\$m	US\$m	US\$m	US\$m	US\$m	US\$m	US\$m	US\$m

At 1 January 2014	19.1	926.8	179.4	27.5	642.0	1,794.8	10.7	1,805.5
Issue of share capital	-	1.4	-	-	-	1.4	-	1.4
Share based payments for services	-	-	-	4.0	-	4.0	-	4.0
Exercise and lapse of warrants designated as financial liabilities	-	-	-	0.1	(0.1)	-	-	-
Purchase of own shares	-	-	-	(3.1)	-	(3.1)	-	(3.1)
Profit/(loss) after tax for the period	-	-	-	-	74.3	74.3	(1.8)	72.5
Other comprehensive loss for the period	-	-	-	(0.1)	-	(0.1)	-	(0.1)
Balance at 31 March 2014	19.1	928.2	179.4	28.4	716.2	1,871.3	8.9	1,880.2

At 1 January 2015	19.2	929.3	-	118.0	(800.1)	266.4	(17.2)	249.2
Share based payments for services	-	-	-	3.2	-	3.2	-	3.2
Loss after tax for the period	-	-	-	-	(52.0)	(52.0)	(1.1)	(53.1)
Other comprehensive loss for the period	-	-	-	(32.2)	-	(32.2)	-	(32.2)
Balance at 31 March 2015	19.2	929.3	-	89.0	(852.1)	185.4	(18.3)	167.1

Notes to the condensed consolidated financial statements

Three months ended 31 March 2015

1. Basis of accounting and presentation of financial information

The condensed Group interim financial statements, comprised of Afren plc (''Afren'') and its subsidiaries (together, ''the Group''), have been prepared in accordance with the same accounting policies, presentation and methods of computation as applied in the audited financial statements for the year ended 31 December 2014, with the exception of taxes, which have been calculated using the estimated full year effective tax rate. The Group policies are in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. Certain information and note disclosures normally included in annual financial statements prepared in accordance with IFRS, as adopted by the EU, have been omitted or condensed as is normal practice for interim reporting periods. The condensed Group interim financial statements are unaudited, and do not constitute statutory accounts as defined in sections 435(1) and (2) of the Companies Act 2006. Statutory accounts for the year ended 31 December 2014 are published on the Group's website, www.Afren.com. The report of the auditor on those accounts was unqualified, however it included an emphasis of matter regarding a material uncertainty in respect of going concern. The report of the auditor did not contain any statement under sections 498(2) or (3) of the Companies Act 2006.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Operations review of the Annual Report for the year ended 31 December 2014, which is available at www.Afren.com. The financial position of the Group at the period end, its cash flows, liquidity position and net debt are described in the Financial review.

Events following the dismissal of the Group's former CEO and COO have placed significant pressure on the Group's liquidity position, resulting in the Group having net current liabilities of US\$1,068 million as at 31 March 2015.

The Company's inability to execute the planned refinancing in the middle of 2014, followed by the sharp decline in market oil prices, led the Directors to initiate an urgent review of the Group's capital structure, liquidity and funding requirements as announced on 20 January 2015. On 30 January 2015, the Group announced it had obtained from the lenders of the US\$300 million Ebok debt facility a deferral of the US\$50 million amortisation payment due on 31 January 2015. On 4 March 2015, the Group announced that the Board had decided at the expiration of a 30 day grace period not to pay US\$15 million of interest which was due on 1 February 2015 under its 2016 Senior Notes.

On 13 March 2015, the Group announced a preliminary agreement for the receipt of Interim Funding and the Recapitalisation of the business. The agreement entered into by Afren together with certain noteholders under its 2016 Notes, 2019 Notes and 2020 Notes (Noteholders) and a majority of the lenders under the Group's existing US\$300 million Ebok credit facility, was intended to result in the provision of US\$255-US\$305 million of net total funding before the end of July 2015. On 30 April 2015, the Company entered into definitive agreements with certain Noteholders and issued US\$212 million of private placement notes (PPN), providing US\$200 million in net cash to the Group. In conjunction with such agreement, the lenders under the Group's existing US\$300 million Ebok credit facility agreed to the deferral of the US\$50 million amortisation payments due on 31 January 2015 and 30 April 2015 until the completion of the implementation of the Recapitalisation (at which point it is expected that the amortisation payments will be further deferred until after the repayment of the New High Yield Notes – see below).

In connection with the Recapitalisation, on 30 April 2015 the Group also entered into a conditional agreement to raise US\$55 million in additional net proceeds (after the repayment of the PPN) from the issuance of new High Yield Notes due in 2017 (New HY Notes). On 29 May 2015 the Group announced that the Noteholders have agreed to subscribe for further New HY Notes up to the maximum level permitted of US\$369 million increasing the additional net cash proceeds by a further \$93 million. In addition, as part of the Recapitalisation (i) 25% of the 2016 Notes, 2019 Notes and 2020 Notes (Existing Notes) will be converted to new equity in the Company; (ii) the remaining 75% of the Existing Notes will be extended to mature as to US\$350 million in each of December 2019 and December 2020; (iii) the existing Ebok credit facility will be extended to 2019; (iv) new shares will be issued to subscribers to the New HY Notes and the PPN; and (v) the Company will undertake an equity offering of up to US\$75 million to shareholders. The Group has also reached agreement with the lender of its Okwok/OML 113 facility to restructure and defer this facility until 2018.

The US\$200 million net cash proceeds from the issuance of the PPN has been deposited in escrow, to be drawn down by the Group over the coming months. Withdrawals from escrow are required to be applied broadly in accordance with agreed financial forecasts, and are subject to an agreed drawdown schedule and the Group's continuing compliance with certain default conditions. The PPN would be repayable by April 2016 if not refinanced through the Recapitalisation.

In order for the Recapitalisation to be implemented there are other conditions that need to be fulfilled, including obtaining (i) the approval of requisite majorities of holders of the Existing Notes in connection with a scheme of arrangement of such Existing Notes; (ii) approval from the relevant courts in the UK and the US as to such scheme of arrangement; and (iii) agreement from the Group's remaining lenders. The Company will also seek the approval of shareholders in general meeting to the terms of the Recapitalisation, which is required in order to issue the new ordinary shares in connection with the Recapitalisation. If shareholder approval is not received, the Recapitalisation will still proceed, but on amended terms for the New HY Notes (see below).

As at 29 May 2015 Afren is in default under the terms of its 2016 Notes due to the non-payment of interest. The Company has received assurances from the ad hoc committee of Noteholders (which members hold in aggregate approximately 63% of the principal face amount of the 2016 Notes and approximately 50% of the total principal face amount of the Existing Notes) (Ad Hoc Committee) that the Ad Hoc Committee has no current intention to take enforcement action with respect to the 2016 Notes held by its members as a result of the failure to make payment of interest due under the 2016 Notes, on the basis that agreement has been reached with the Company and its key stakeholders on the terms of a consensual (but conditional) restructuring.

As at 29 May 2015 Afren is in default under the terms of its 2019 Notes due to the non-payment of interest. The Company has received assurances from the Ad Hoc Committee (which members hold in aggregate approximately 35% of the principal face amount of the 2019 Notes) that it has no current intention to take enforcement action with respect to the 2019 Notes held by its members as a result of the failure to make payment of interest due under the 2019 Notes.

There is a risk that one or more of these Recapitalisation steps outlined above, may not be completed or satisfied and the Recapitalisation may not occur. If additional funds are not available to be drawn under the New HY Notes, and the Recapitalisation does not proceed, the Directors are of the opinion that the Group would become insolvent, absent an alternative proposal being received by the Company that is capable of being implemented.

If shareholder approval of the Recapitalisation is not received, the Ad Hoc Committee and the lenders under the Group's existing US\$300 million Ebok credit facility have agreed to an alternative restructuring plan, whereby the economic terms of the New HY Notes will be amended, and the amendment and restatement of the Existing Notes will be revised (so that no new shares are issued). In addition, the New HY Notes will include a requirement for the Company to initiate a sale of the Group's business by the end of 2016, which together will mean that existing shareholders would be unlikely to see any return of their current investment.

On the basis that the Recapitalisation is successfully achieved as outlined above, the Group's financial footing and ability to continue in operation would be significantly strengthened. The Group's financial forecasts and projections for the next twelve months indicate that the Group would then be able to meet its obligations as they fall due, however, this assessment is sensitive to a number of downside risks such as any further significant deterioration in the outlook for oil prices, any significant disruption to the Group's production revenue stream due to operational or other factors, and the crystallisation of other risks such as those described in notes 10 and 13 to the financial statements for the year ended 31 December 2014 (which are available at www.Afren.com), particularly if such downside risks were to materialise in combination. Therefore, the Group expects that it will still need to seek industry partnerships, strategic divestments and other fundraising transactions as necessary to build resilience against, or respond to, downside risks, capture the opportunity in the Group's portfolio and secure the Group's future.

The Directors recognise that the combination of the circumstances described above represents a material uncertainty that may cast significant doubt as to the Group's ability to continue as a going concern and that it may be unable to realise its assets in the normal course of business. Nevertheless, the Directors expect that the Recapitalisation will obtain all of the necessary approvals and consents as set out above and the Directors therefore have a reasonable expectation that the Group will be able to successfully navigate the present uncertainties and continue in operation. Accordingly the condensed interim financial statements have been prepared on a going concern basis and no break up adjustments have been made.

2. Operating segments

The Group currently operates in three geographical markets which form the basis of the information evaluated by the Group: Nigeria and other West Africa, East Africa and Kurdistan region of Iraq. Unallocated operating expenses, assets and liabilities relate to the general management, financing and administration of the Group.

	Nigeria and other
	West Africa US\$m	East Africa US\$m	of Iraq US\$m	Unallocated US\$m	Consolidated US\$m
Three months to 31 March 2015
Revenue by origin	130.3	-	-	-	130.3
Operating gain/(loss) before derivative financial instruments	19.1	(5.5)	(4.3)	(24.7)	(15.4)
Derivative financial instruments losses	-	-	-	(1.8)	(1.8)
Segment result	19.1	(5.5)	(4.3)	(26.5)	(17.2)
Finance costs					(34.2)
Other gains and losses - forex and finance income					3.3
Loss before tax					(48.1)
Income tax charge					(5.0)
Loss after tax					(53.1)
Loss for the period					(53.1)
Segment assets – non-current	2,139.4	0.5	0.2	1.4	2,141.5
Segment assets – current	422.3	-	-	63.1	485.4
Segment liabilities	(1,370.7)	(9.5)	(36.0)	(1,043.6)	(2,459.8)
Capital additions – oil and gas assets	290.7	-	3.1	-	293.8
Capital additions – exploration and evaluation	19.7	4.9	4.1	0.1	28.8
Capital additions – other	0.2	-	(0.6)	0.1	(0.3)
Depletion, depreciation and amortisation	(80.8)	-	(0.2)	(0.8)	(81.8)
Impairment of exploration and evaluation assets	(17.5)	(4.9)	(4.0)	(0.1)	(26.5)

	Nigeria and
	other West		Kurdistan
	Africa US\$m	East Africa US\$m	region of Iraq US\$m	Unallocated US\$m	Consolidated US\$m
Year to 31 December 2014
Revenue by origin	945.8	-	-	-	945.8

Operating gain/(loss) before derivative financial instruments	(329.5)	(327.0)	(1,218.0)	(14.7)	(1,889.2)
Derivative financial instruments gains/(losses)	1.9	-	-	(10.8)	(8.9)
Segment result	(327.6)	(327.0)	(1,218.0)	(25.5)	(1,898.1)
Finance costs					(66.9)
Other gains and losses:
- fair value of financial assets and liabilities					0.7
- share of joint venture loss	(1.7)				(1.7)
- forex and finance income					11.0
Loss before tax					(1,955.0)
Income tax credit					303.9
Loss after tax					(1,651.1)
Loss for the year					(1,651.1)

Segment assets – non-current	1,944.5	0.7	0.5	2.0	1,947.7
Segment assets – current	529.0	0.3	6.1	151.6	687.0
Segment liabilities	(1,365.6)	(8.2)	(45.8)	(965.9)	(2,385.5)
Capital additions – oil and gas assets	547.8	-	145.9	-	693.7
Capital additions – exploration and evaluation	83.4	32.1	27.9	-	143.4
Capital additions – other	2.1	-	-	2.8	4.9
Depletion, depreciation and amortisation	(365.4)	(0.2)	(0.6)	(4.2)	(370.4)
Impairment of property, plant and equipment	(273.0)	-	(932.6)	-	(1,205.6)
Impairment of exploration and evaluation assets	(198.9)	(360.7)	(265.2)	(14.3)	(839.1)
Impairment of goodwill	(115.2)	-	-	-	(115.2)
Share of joint venture loss	(1.7)	-	-	-	(1.7)

	Nigeria and other		Kurdistan region
	West Africa US\$m	East Africa US\$m	of Iraq US\$m	Unallocated US\$m	Consolidated US\$m
Three months to 31 March 2014

Revenue by origin	269.0	-	-	-	269.0
Operating gain/(loss) before derivative financial instruments	81.7	(0.1)	(2.5)	(3.1)	76.0
Derivative financial instruments losses	(2.9)	-	-	(0.7)	(3.6)
Segment result	78.8	(0.1)	(2.5)	(3.8)	72.4
Finance costs					(19.9)
Other gains and losses:
- fair value of financial assets & liabilities					0.4
- forex and finance income					2.9
Profit before tax					55.8
Income tax credit					16.7
Profit after tax					72.5
Profit for the period					72.5
Segment assets – non-current	2,023.6	304.6	1,052.8	21.0	3,402.0
Segment assets – current	615.2	3.4	15.8	133.5	767.9
Segment liabilities	(1,254.7)	(38.2)	(24.2)	(972.6)	(2,289.7)
Capital additions – oil and gas assets	52.8	-	42.6	-	95.4
Capital additions – exploration and evaluation	8.7	8.7	6.5	(0.5)	23.4
Capital additions – other	0.6	0.1	0.1	1.9	2.7
Depletion, depreciation and amortisation	(99.4)	(0.1)	(0.1)	(0.6)	(100.2)
Impairment of exploration and evaluation assets	(0.3)	(0.3)	-	-	(0.6)

PART V DIRECTORS, SENIOR MANAGEMENT AND CORPORATE GOVERNANCE

1. Board of Directors

The persons set forth below are the current members of Afren's Board of Directors. The address for each of Afren's Directors and executive officers is Kinnaird House, 1 Pall Mall East, London, SW1Y 5AU.

Name	Age	Position	Type of Director
Mr. Egbert Imomoh	70	Executive Chairman	Executive Director
Mr. Alan Linn	57	Chief Executive Officer	Executive Director
Mr. Darra Comyn	53	Group Finance Director	Executive Director
Mr. Toby Hayward	56	Non-Executive Director	Independent Non-Executive Director
Mr. Peter Bingham	79	Non-Executive Director	Independent Non-Executive Director
Mr. John St. John	51	Non-Executive Director	Independent Non-Executive Director
Mr. Patrick Obath	60	Non-Executive Director	Independent Non-Executive Director
Ms. Sheree Bryant	57	Non-Executive Director	Independent Non-Executive Director
Mr. Iain McLaren	64	Non-Executive Director	Independent Non-Executive Director

On 15 March 2015, the Company announced that Mr. Peter Bingham and Mr. John St. John would not stand for re-election at the Company's 2015 annual general meeting due to be held on 25 June 2015. Additionally, on 12 June 2015 the Company announced that Mr. Darra Comyn was resigning as a Director, to take effect from the close of the Company's 2015 annual general meeting, and would not be standing for re-election at the Company's 2015 annual general meeting. Accordingly, each of these Directors will cease to be Directors from the close of the annual general meeting which is due to be held on 25 June 2015.

Executive Directors

Mr. Egbert Imomoh was appointed as a Director of the Company on 16 February 2005 and became Chairman of the Board on 18 December 2008, subsequently becoming Afren's Executive Chairman on 30 July 2014. He has been a member of the Board of Directors since 16 February 2005. Prior to assuming his current position, Mr. Imomoh, one of Afren's founders, was Managing Director and Executive Chairman of AERL. He successfully led the growth of Afren's Nigerian asset base, established partnerships with indigenous companies and realised the first oil milestone at Okoro. Mr. Imomoh has over 38 years' experience with the Shell group of companies in Nigeria, the U.K. and the Netherlands. Prior to his retirement, he served as Deputy Managing Director of SPDC, one of the Shell Group's largest operating companies, which is responsible for operating a joint venture that produces approximately 1,000,000 bopd. Trained in Mechanical and Petroleum Engineering, in addition to serving as Deputy Managing Director of SPDC, Mr. Imomoh held a wide variety of senior positions throughout the Shell Group, including Chief Petroleum Engineer at SPDC. He was President of the Society of Petroleum Engineers in 2013 and previously served on its board as Regional Director for Africa.

Mr. Alan Linn was appointed as Afren's Chief Executive Officer on 30 April 2015. Prior to that, he was Chief Executive Officer and executive director at ROC Oil, based in Australia and Malaysia, from 2008 to February 2015. Mr. Linn has held senior roles in operational, commercial and general management previously with African Arabian Petroleum, Tullow Oil; Cairn Energy, LASMO/ENI and ExxonMobil. He has direct experience of successfully managing complex partner and government relationships as well as leading operational and EHS excellence from boardroom to drill bit. Mr. Linn has 35 years' international experience in the oil and gas industry developing and restructuring businesses in challenging and diverse environments. He has been successful in implementing strategic change within established businesses and has over 12 years' experience working with executive teams and boards in companies listed in the UK and Australia. He has a track record of delivering sound commercial and operational results within both large and small oil and gas companies. Mr. Linn is a discipline engineer with a BSc in Chemical Engineering from Strathclyde University in Glasgow and a fellow of the Institute of Chemical Engineers.

Mr. Darra Comyn joined Afren as Group Finance Director in December 2009 and was appointed to Afren's Board of Directors on 23 March 2010. Prior to joining Afren, Mr. Comyn was Finance Director for ITE Group plc and Expomedia Group plc (both of which are international groups focused on emerging markets), and in the oil industry with Chevron Oil UK and Dragon Oil where he was Group Financial Controller and Company Secretary. He is a chartered accountant with a degree in Economics from Trinity College, University of Dublin.

Non-Executive Directors

Mr. Peter Bingham was appointed as an independent Non-Executive Director to Afren's Board of Directors on 10 May 2005. He is a senior financial executive with over 40 years' experience in international financial markets, primarily at the Barclays Bank Group. Mr. Bingham successively held directorships at the London branch level and the merchant banking division at the Barclays Bank Group, and at BZW (now Barclays Capital). Mr. Bingham has served as Head of Banking at BZW where he set up the credit risk management team and served as a member of the central Barclays Group Credit Committee. Mr. Bingham is also a director of Capital & Corporate Holdings SAS.

Mr. Toby Hayward was appointed as an independent Non-Executive Director to Afren's Board of Directors on 26 June 2009 and subsequently appointed as Afren's Interim Chief Executive Officer on 30 July 2014. Mr. Hayward stepped down as Interim CEO on 30 April 2015 and remains as a Non-Executive Director. He qualified as a chartered accountant with Touche Ross & Co in 1984 and subsequently held a number of senior equity capital market positions in London. Mr. Hayward was formerly Managing Director and Head of Corporate Broking at Jefferies International Limited, where he was responsible for all international equity and equity linked capital markets transactions together with corporate broking and Nomad responsibilities. Prior to that, Mr. Hayward was Head of Oil and Gas Equity Capital Markets at Canaccord Adams where he led a number of initial public offerings, including Afren's public offering in March 2005. Mr. Hayward's other current directorships include THC Consulting Limited.

Mr. John St. John was appointed as an independent Non-Executive Director to Afren's Board of Directors on 18 June 2007. Prior to that, Mr. St. John was a Strategic Financial Advisor to Afren's Board of Directors. He was formerly Global Head of Equity Capital Markets at Dresdner Kleinwort, Commerzbank and Lehman Brothers, and European Head of Equity Capital Markets at Citigroup (formerly Salomon Brothers). Mr. St. John previously served as the Chairman of Equity Capital Markets at Nomura International plc. Mr. St. John is a founding Partner of STJ Advisors and along with his colleagues has acted as an advisor on over US\$100 billion of equity and equity-linked issuances in all major markets worldwide. Mr. St. John also serves on the boards of St. John Advisors Ltd, St. John Estates Limited and Online Public Offerings Limited.

Mr. Patrick Obath was appointed as an independent Non-Executive Director to Afren's Board of Directors on 2 February 2012. Mr. Obath is a senior energy industry practitioner, having held a number of senior management positions in his 38 year career, including over 20 years with the Shell Group across their African operations (namely Shell International, Shell Kenya, Shell Tanzania and Shell Oil Products Africa). Mr. Obath's positions across the Shell Group included roles within Engineering Management, Corporate Health, Safety and Environmental Management and Executive Management where he served as Chief Executive of Kenya Shell and Shell Tanzania. Mr. Obath has a B.Sc. (Hons) in Mechanical Engineering from the University of Nottingham. He is Chairman of the Kenya Private Sector Alliance and has received a number of East African honorary recognitions, including the Order of the Grand Warrior (OGW) by the President of the Republic of Kenya, the National Peace Award, Kenya and the Order of the Moran of the Burning Spear (MBS) by the President of the Republic of Kenya. Mr. Obath is currently Chairman of PZ Cussons EA Limited and a non-executive director at Standard Chartered Bank Kenya Limited and Kenya Power and Lighting Company Limited. Mr. Obath also serves on the board of New Forests Company Holdings Limited.

Ms. Sheree Bryant was appointed as an independent Non-Executive Director to Afren's Board of Directors on 31 October 2013. Ms. Bryant is a social entrepreneur with extensive experience in government and NGO sectors in the US and the UK. In addition to consulting and pro bono work for several US and UK charities, Ms. Bryant is a Trustee of award winning Impetus Private Equity Foundation portfolio partner Teens and Toddlers. Educated at King's College London and the Harvard University Graduate School of Arts and Sciences, Ms Bryant earned a BA summa cum laude from The University of Texas at Austin. Her other current directorships include The Social Policy Group and Teens and Toddlers Ltd.

Mr. Iain McLaren was appointed as an independent Non-Executive Director to Afren's Board of Directors on 2 April 2014 and subsequently was appointed Senior Independent Director in July 2014. Mr. McLaren is a chartered accountant with over forty years' experience working in international financial markets, accounting and auditing as well as the oil and gas industry. He currently serves as a non-executive director of St. Columba's Hospice, Cairn Energy Plc, Baillie Gifford Shin Nippon Plc, Investors Capital Trust Plc, Edinburgh Dragon Trust Plc, Ecofin Water & Power Opportunities Plc and EW&PO Finance Plc. Mr. McLaren is a past President of the Institute of Chartered Accountants of Scotland and has a BA in Accountancy & Finance from Heriot-Watt University. He also serves as Governor of St Columba's Hospice and Deputy Chair of Court of Heriot-Watt University. Mr. McLaren's other current directorships include St Columba's Hospice Limited, St Columba's Hospice (2007) Limited, Cairn Energy Plc, Baillie Gifford Shin Nippon Plc, Investors Capital Trust plc, Edinburgh Dragon Trust plc, Ecofin Water & Power Opportunities plc, EW&PO Finance plc and Mitra Energy LLP.

2. Senior Management

The following table sets forth Afren's senior management other than those individuals who are also members of the Board of Directors.

Name	Position
Mr. Adebayo Ayorinde	Managing Director, Afren Nigeria
Mr. John Beaird	Managing Director, Afren USA
Ms. Jane Barker	Human Resources Director
Mr. Patrick Cherlet	Commercial Director
Mr. David Thomas	Chief Operating Officer

Mr. Adebayo Ayorinde is Managing Director of Afren's Nigerian office. He has over 20 years' experience in the oil and gas industry including production and maintenance operations, oil and gas project economics, facilities engineering, drilling and completions engineering and general management. Prior to joining Afren he held senior positions with Allied Energy Resources, Moni Pulo and Ashland Oil. Mr. Ayorinde holds a BSc (Hons) in Chemical Engineering from Obafemi Awolowo University in Nigeria and is a member of the Society of Petroleum Engineers.

Mr. John Beaird is Managing Director of Afren's US office. Mr. Beaird has over 30 years' of international experience in management, reservoir engineering and economic evaluation roles including 25 years with Anadarko Petroleum Corporation and, more recently, with Legado Resources. Mr. Beaird has a BS in Petroleum Engineering from Louisiana Tech University.

Ms. Jane Barker is Afren's Human Resources Director. She joined Afren in April 2008 and she holds responsibility for all Human Resources activities within Afren. She holds an MBA from the University of Otago and has over 30 years of human resources experience in the oil and gas industry with Chevron, Gulf, LASMO and African Arabian.

Mr. Patrick Cherlet is Afren's Commercial Director. He has held various management positions at Western Geophysical, Western Atlas, Baker Hughes, Randall & Dewey and Jefferies International. Mr. Cherlet has a strong academic background, having received an MS from Stanford University and an MS from Ghent University in Belgium.

Mr. David Thomas is Afren's Chief Operating Officer. Mr. Thomas has over 35 years' executive and operational experience in the international oil and gas industry covering operations, exploration, business development and corporate transactions with both large and small companies. Prior to joining Afren, Mr. Thomas was Chief Operating Officer with Petroceltic International from 2012 to

2015 and CEO for Melrose Resources from 2007 to 2012. He has held various management positions at Centurion Energy, Eni SpA, LASMO plc and Conoco UK. Mr. Thomas has a BSc in Mining Engineering from Nottingham University.

3. Board Committees

Audit and Risk Committee

The Audit and Risk Committee meets at least three times a year at appropriate times in the reporting and audit cycle of Afren and more frequently if required. Deloitte also attend meetings in part, as well as meeting privately with the Audit and Risk Committee at least once a year.

The purpose of the Audit and Risk Committee is to assist the Board of Directors in fulfilling its responsibilities of oversight and supervision of, among other things:

the accounting and financial reporting of the Company;
the assessment of business risks, risk management and risk mitigation strategies of the Company;
the integrity of the financial statements of Afren including annual and interim reports, financial returns to regulators and announcements of a price sensitive nature;
the adequacy of Afren's internal controls and accountancy standards; assessing consistency and clarity of disclosure as well as the operating and financial review and corporate governance statement; and
the relationship with Afren's external auditor including appointment, remuneration, terms of engagement, assessing independence and objectivity and ultimately reviewing the findings and assessing the standard and effectiveness of the external audit.

The Audit and Risk Committee considers annually how Afren's internal audit requirements shall be satisfied and makes recommendations to the Board of Directors accordingly, as well as on any area it deems needs improvement or action.

The following table sets forth the current members of the Audit and Risk Committee:

Name	Position	Type
Mr. Iain McLaren	Chairman	Independent Non-Executive Director
Mr. Peter Bingham	Member	Independent Non-Executive Director
Mr. Patrick Obath	Member	Independent Non-Executive Director

The composition of this committee is expected to be revised following Mr Bingham's retirement as a Director at the Company's 2015 annual general meeting.

Remuneration Committee

The Remuneration Committee is responsible for:

making recommendations to the Board of Directors on Afren's overall framework for remuneration and its costs and, in consultation with the Chairman and Chief Executive Officer, determining remuneration packages of each Executive Director;
reviewing the scale and structure of Executive Directors' remuneration and the terms of their service or employment contracts, including share-based schemes, other employee incentive schemes adopted by Afren from time to time and pension contributions. Executive directors of Afren are not permitted to participate in discussions or decisions of the Remuneration Committee regarding their own remuneration; and
ensuring that payments made on termination are fair to the individual and Afren.

The remuneration of Afren's Non-Executive Directors is determined by the Chairman and the other Executive Directors outside the framework of the Remuneration Committee.

The following table sets forth the current members of the Remuneration Committee:

Name	Position	Type
Mr. Iain McLaren	Chairman	Independent Non-Executive Director
Mr. Peter Bingham	Member	Independent Non-Executive Director
Mr. Patrick Obath	Member	Independent Non-Executive Director

The composition of this committee is expected to be revised following Mr Bingham's retirement as a Director at the Company's 2015 annual general meeting.

Nomination Committee

The Nomination Committee meets at least once a year and more frequently if required and is responsible for reviewing and recommending to the Board of Directors suitable candidates for appointment as Directors of Afren. It regularly reviews the structure, size and composition (including the skills, knowledge and experience) required on the Board of Directors. It follows a formal, rigorous and open procedure for appointing new Directors, based on merit and objective criteria.

The following table sets forth the current members of the Nomination Committee:

Name	Position	Type
Mr. Egbert Imomoh	Chairman	Executive Chairman
Ms. Sheree Bryant	Member	Independent Non-Executive Director
Mr. Toby Hayward	Member	Independent Non-Executive Director

Disclosure Committee

The Disclosure Committee was established in June 2011 to draw up and maintain procedures, systems and controls for the identification, treatment and disclosure of inside information and for complying with other disclosure obligations falling on the Company under the UKLA's Listing Rules and Disclosure Rules (the "Disclosure Procedures"). The Disclosure Committee is also responsible for implementing the Disclosure Procedures, including where appropriate arranging for the dissemination of guidelines and training, monitoring compliance with the Company's disclosure controls and procedures and ensuring that all regulatory announcements, shareholder circulars, prospectuses and other documents issued by the Company under any legal or regulatory requirement are scrutinised in order to ensure that they comply with applicable requirements.

The Disclosure Committee meets as and when required. The members of the Disclosure Committee comprise the CEO, the Group Finance Director, the Group's technical director, the Company Secretary and Group General Counsel.

4. Corporate Governance

Code of Business Conduct

Afren has implemented a Code of Business Conduct (the "Conduct Code") to articulate and formalise its commitment to high ethical standards and to reinforce its prompt and consistent action in the maintenance of those standards. Through the Conduct Code Afren strives to uphold these standards for the conduct of its business activities. Afren operates with integrity and honesty throughout its organisation and with all its external stakeholders, namely governments, business partners, shareholders, contractors and local communities.

An updated Conduct Code was approved by the Board in December 2014, the Conduct Code contains 15 commitments which govern the activities of staff members and contractors. They embrace all aspects of the organisation's business. They address bribery, gifts and entertainment, conflicts of interest, sanctions, use of Company information technology, use of Company physical assets, personal information, business information, environment and climate change, health and safety, communities, human rights, inclusive workplace behaviour, working with others and dealing in Company securities. In particular:

Afren prohibits political donations and will not directly or indirectly participate in political activities;
Everyone will seek advice in advance about any issue where there may be a conflict of interest between personal issues and those of the Company;
Afren is resolutely opposed to bribery and corruption and prohibits the use of facilitation payments;
Company purchases of goods and services are made solely on the basis of price, quality, value and benefit to the Company; and
The Company will ensure that its relationships with its customers and suppliers are conducted in a fair and proper manner at all times.

Each commitments section contains guidance on the Company's approach. The Conduct Code also explains how the Company addresses corporate responsibility matters and contains advice on what personnel should do if they are aware of Code breaches. This information also highlights the Company's confidential whistle-blowing hotline which is run by Safecall, a specialist provider, together with information on when and how to use it.

A training exercise was undertaken in December 2014 which required all staff and contractors to complete an online module by the end of the year. This involved reading the entire text of the new Conduct Code. It also tested everyone's understanding of the commitments by requiring each person to answer three questions about possible business scenarios relating to each one (45 in total). Three possible answers were supplied with the respondent being asked to select the one that they believed to be the most appropriate. The preferred Company approach was then highlighted together with an explanation as to why this was the case. The Company is pleased with the results of this exercise with 69% of all responses being correct and with consistent scoring across all locations and job grades. The Company has identified a number of common areas where scoring was lower than the average and intends to address these through the conduct of further training exercises in due course. Refresher training on the Conduct Code will be carried out annually and all new starters will receive the training as part of the induction process.

The Conduct Code highlights the commitment Afren has made to perform positively and responsibly towards the people, the physical environments and the host communities that its business may affect. Afren communicates and monitors its environmental, health, safety and social issues through its EHSS management system. Similarly, Afren has a structured approach to the management of security issues through a documented security management system.

In addition, Afren ensures that all members of staff are treated fairly and Afren encourages diversity within its team. Afren's people are offered equal opportunities, training and career progression. Afren also assigns responsibility to all individuals working for it to challenge or stop any activity that conflicts with its business ethics. Afren has documented these commitments in its human resources policies and procedures.

Furthermore, Afren has provided guidelines for responsible hospitality and the importance of respecting local laws and customs. Pursuant to this policy, all payments and revenues are processed and recorded in a transparent manner. As noted above, Afren has established an Audit and Risk Committee which reviews such systems and works with external auditors relating to its accounts and internal control matters.

Governance Matters

The Directors support high standards of corporate governance. As a company with a premium listing on the London Stock Exchange, Afren is required to state whether it has complied with the provisions of the UK Corporate Governance Code 2012 (the "Code") published by the Financial Reporting Council throughout the year, and where provisions have not been complied with, to provide an explanation. The Company is also required to explain how it has applied the principles in the Code.

Throughout 2014 and up to the date of this Prospectus, the Company has complied with the provisions of the Code, except for the matters noted below:

Code provision A.2.1 states that the roles of Chairman and Chief Executive should not be exercised by the same individual. The division of responsibilities between the Chairman and Chief Executive should be clearly established, set out in writing and agreed by the Board. Following the suspension of the Company's Chief Executive Officer and Chief Operating Officer in July 2014, the role of Chief Executive Officer was shared by the Chairman and the Interim Chief Executive Officer. This decision was taken as the Board considered that this arrangement was in the best interests of the Company's shareholders and to ensure continuity and stability. Since 30 April 2015, Alan Linn has been Chief Executive Officer of Afren, while Egbert Imomoh remains as Executive Chairman.
Code provision B.2.1 states that a majority of members of the Nomination Committee should be independent Non-Executive Directors. Following the changes to the Board in July 2014, the majority of committee members held executive directorships. This decision was taken as an interim measure as it was also considered to be in the best interests of the Company's shareholders and to ensure continuity and stability. The Company intends to review and refresh its Board Committees in the first half of 2015 and to return the Nomination Committee's membership structure to one which reflects the best practice requirements of this Code provision.

The Board of Directors comprises an Executive Chairman, two Executive Directors and six Non-Executive Directors. Annually, the Board of Directors reviews whether each Non-Executive Director is independent of management and any business or other relationship that could materially interfere with their exercise of objective, unfettered and independent judgment or their ability to act in the best interests of the shareholders. Where a Director is considered by the Board of Directors to be independent, but is affected by circumstances that may give rise to a perception that they are not, the Board of Directors will explain the reasons it has reached its conclusion. In making a determination, the Board of Directors considers a Director's relationships with management, major shareholders, associated companies and other parties with whom Afren transacts business against predetermined materiality thresholds, all of which are set out in Afren's relevant policy. Tested against this policy, the Board of Directors considers all of the Non-Executive Directors to be independent within the meaning of "independent" as defined in the Code.

The Board of Directors gave particular consideration to the independence of Mr. Peter Bingham and Mr. John St. John. Mr. Bingham has been a Director of Afren for almost ten years; however, given he continues to display appropriate independence from the Executive Directors by exercising objective, unfettered and independent judgements, he is determined to be independent. In July 2014, Mr. Bingham stepped down as Chairman of the Audit and Risk Committee and was replaced by Mr. Iain McLaren. Mr. St. John is the only independent Non-Executive Director who has unexercised options. The Share Option Scheme Rules were amended in November 2009 to prohibit the award of share options to Non-Executive Directors. Since the Company was admitted to the Official List, no share options have been granted to any Non-Executive Director. The Board of Directors has taken the view that this does not affect the independence of Mr. St. John.

Further, in relation to Mr. St. John, the Board of Directors has considered the fact that Mr. St. John is a shareholder of St. John Advisors Ltd and a partner in STJ Advisors LLP, which are two companies in the financial advisory sector with which Afren has had commercial dealings. Between 1 January 2012 and 31 December 2012, 1 January 2013 and 31 December 2013, and 1 January 2014 and 31 December 2014, Mr. St. John, through these consultancy companies, received payments from Afren totalling approximately US\$0.8 million, US\$0.5 million and US\$0.2 million respectively, for providing consultancy services. St. John Advisors Ltd and STJ Advisors LLP also receive monthly retainers of £15,000 and £30,000 under contracts which started from 27 June 2008 and 15 December 2011, respectively. The contract with St. John Advisors Ltd was terminated in May 2014. The Directors are satisfied that Mr. St. John is able to act in the best interests of Afren and apply objective, unfettered and independent judgment, regardless of the aforementioned relationships.

Mr. Toby Hayward stepped down as Interim CEO on 30 April 2015 and remains as a Non-Executive Director. The Board of Directors considers that he is also independent.

Following the resignation of Mr. Darra Comyn as a Director, to take effect from the close of the Company's 2015 annual general meeting which is due to be held on 25 June 2015, and the retirement of Mr. Peter Bingham and Mr. John St. John, with effect from the close of the annual general meeting, the Board will (pending any further appointments to the Board) comprise an Executive Chairman, one Executive Director and four Non-Executive Directors, each of whom the Board of Directors considers to be independent within the meaning of "independent" as defined in the Code. Accordingly, the Company will still be in compliance with the provisions of the Code that at least half of the Board shall comprise independent non-executive directors.

The Board of Directors meets on at least six occasions during the course of the year. The Board is responsible for providing leadership, setting Afren's strategic objectives and key policies and examining acquisition opportunities. It monitors Company performance, budgets and funding, supplies guidance, arranges succession planning and ensures that the Company's obligations to its shareholders and key stakeholders are met. It is responsible for appointing key advisors, professional service providers and assessing their performance. It is tasked with ensuring that appropriate resources are in place to enable Afren to meet its objectives. The Board also oversees Afren's internal control systems and is responsible to shareholders for the proper management of the Group.

The Board of Directors has a formal schedule of matters specifically reserved to it for decisions. The roles of Chairman and Chief Executive Officer are separate and the responsibilities of Chairman and Chief Executive Officer are independently defined. It is the Chairman's responsibility to ensure that the Board of Directors is provided with accurate, timely and clear information in relation to Afren's business. This will mean that the Chairman's role will be Non-Executive, responsible for Board leadership, setting the agenda for the Board and ensuring its effectiveness.

The Code recommends that the Board of Directors should appoint one of its independent Non-Executive Directors to be the Senior Independent Director. The senior independent director acts as a 'sounding board' for the Chairman when required. The senior independent director should also be available to shareholders and should chair meetings with the other Non-Executive Directors (without the Chairman being present) to encourage open dialogue if they have concerns that contact through the normal channels of Chairman or Chief Executive Officer has failed to resolve or where such contact is inappropriate. Iain McLaren has been the Board of Director's Senior Independent Director since July 2014.

The Board has appointed an Audit and Risk Committee, a Remuneration Committee and a Nomination Committee, each of which have defined terms of reference which are summarised above. Each committee and each Director has the authority to seek independent professional advice where necessary to discharge their respective duties in each case at Afren's expense. In addition, each Director and committee has access to the advice of Afren's Secretary, Elekwachi Ukwu.

The composition of the Audit and Risk Committee and Remuneration Committee will be reviewed in light of Mr Bingham's retirement as a Director at the Company's 2015 annual general meeting.

Independent Review of Certain Transactions and Unauthorised Payments.

Following receipt of an allegation in the first half of 2014, Afren's Board of Directors appointed outside counsel, WFG, to review certain transactions undertaken by Afren and whether such transactions should have been announced at the time they were entered into in accordance with the requirements of the Listing Rules. In the course of this review, evidence was identified of the receipt of unauthorised payments by Osman Shahenshah and Shahid Ullah, then-CEO and then-COO of Afren, respectively, in connection with the transactions under review. The Board of Directors was also made aware by Iain Wright and Galib Virani, two Associate Directors at the Afren, that they had received unauthorised payments.

On 31 July 2014, Afren announced the temporary suspension of the then-CEO and then-CFO, and temporarily suspended the two Associate Directors on 28 August 2014.

On 13 October 2014, WFG completed the independent review and concluded that Afren failed to comply with its reporting obligations under the Listing Rules in relation to two transactions under review when it failed to disclose the transaction at the time it was completed.

First agreement with Oriental – July 2012

In July 2012, Afren agreed to advance US\$100 million to Oriental under the First Oriental Agreement. The contractual documentation was drawn up on the basis that the payment was, in effect, an advance purchase of Oriental's oil from Ebok. The First Oriental Agreement was structured by Mr Shahenshah to avoid disclosure under the Listing Rules, and therefore the payment was made in two tranches. It was intended that the second tranche when aggregated with the first tranche would not exceed 5% of Afren's market capitalisation and in any event that the transaction would be treated as being of a revenue nature in the ordinary course of Afren's business and therefore would not be announceable.

However, when the second payment of US\$7 million was made an incorrect aggregation test was applied by Mr Shahenshah. If correctly aggregated, the combined advance represented approximately 5.3% of the Company's then market capitalisation. Based on Mr Shahenshah's assertions, the Company concluded that the transaction was in the ordinary course of business, namely the practice of making advances to Oriental recoverable from Oriental's share of production from the relevant block was within the ordinary course of business (as regards arrangements between Afren and Oriental) and the practice of funding Oriental in this way constituted matters of a revenue nature. As a consequence of Mr Shahenshah's determination on the nature of the First Oriental Agreement, no announcement was made by the Company in July 2012 in respect of the First Oriental Agreement.

WFG's review concluded that the determination of the First Oriental Agreement as being a transaction of a revenue nature in the ordinary course of business was incorrect. The true nature of the First Oriental Agreement was not, in reality, an agreement for the prepayment of oil, nor was it a way of funding Oriental's costs in developing Ebok in a manner which might be considered to be in the ordinary course of business. It was a loan of US\$100 million to Oriental and was included in Afren's balance sheet for 31 December 2012 under the line "loans and advances to partners". Accordingly it was neither in the ordinary course nor of a revenue nature and should have been announced as a class 2 transaction in July 2012 once the second tranche of US\$7 million was paid.

Second agreement with Oriental – August 2013

On 23 August 2013, Afren Resources and Oriental entered into an agreement (the "Amendment Agreement") to amend the Ebok Joint Operating Agreement (the "Ebok JOA"). The material terms of this Amendment Agreement were that Afren Resources agreed to pay Oriental US\$300 million in return for Afren Resources acquiring the rights to certain tax allowances and increasing Afren Resources' share of oil revenues from Ebok. The US\$300 million was paid in two instalments; US\$180 million was paid in August 2013 in advance of Pioneer status for Ebok being confirmed and US\$120 million was paid in November 2013.

On the instructions of Mr Shahenshah, the focus of the Company's commercial discussions was on ensuring that the terms of the Amendment Agreement were deemed to be in the ordinary course of business, such that the amendments and the underlying transaction would not be announceable. In making this determination, the Company also placed reliance upon the determination by Mr Shahenshah that the First Oriental Agreement had been a transaction of a revenue nature in the ordinary course of business. As such, it was considered that similar amendments to the Ebok JOA (such as those contemplated in the Amendment Agreement) would equally be treated as being in the ordinary course of business and therefore not subject to any announcement.

However, the Listing Rules provide that the FCA may determine that a transaction is not in the ordinary course of business because of its size or incidence. While the Company was relying upon the nature of the Amendment Agreement as being similar to the First Oriental Agreement, no separate consideration was given to the size and incidence of such transaction. The value of the Amendment Agreement represented approximately 12.1% of the Company's market capitalisation at the time of entry.

WFG's review concluded that the determination of the Amendment Agreement as being in the ordinary course of business was incorrect. The true nature of the Amendment Agreement was in part a further loan to Oriental of US\$180 million to be repaid out of oil revenues from Ebok and US\$120 million to acquire certain tax allowances. WFG concluded that the US\$180 million loan was not in the ordinary course of Afren Resources' business and exceeded 5% of Afren's then market capitalisation.

Furthermore, whilst the payment of US\$120 million to amend the Ebok JOA to clarify that the treatment of certain tax allowances was in the ordinary course of Afren's business, WFG concluded that such payment had to be aggregated with the US\$180 million payment under the Listing Rules, bringing the transaction to approximately 12.1% of Afren's then market capitalisation. Therefore, the US\$180 million and US\$120 million payments and the Amendment Agreement should have been announced as Class 2 transactions.

Amendment of Production Sharing and Technical Services Agreement with Amni – December 2013

In December 2013 Amni, AERL, Afren and Okoro Limited entered into a number of agreements to resolve a dispute regarding the economic benefits each was receiving from Okoro. The dispute arose as a result of a difference in tax rates in Nigeria paid by Afren and Amni. Pursuant to the Amni Resolution Agreement AERL agreed to pay US\$100 million (together with interest of US\$9 million due under Amni's facility with the UBA as referred to below). As part of the resolution of the dispute, an amended and restated production and technical services agreement (the "Amended PSTSA") was entered into. AERL agreed to pay the US\$100 million in instalments. However, in order to access the full US\$100 million immediately, Amni entered into a loan agreement with the UBA and Afren issued the Amni Guarantee.

WFG concluded that the Amni Resolution Agreement and the Amended PSTSA could be argued to be in the ordinary course of Afren's business and therefore did not need to be announced. WFG also concluded that whilst the Amni Guarantee was not entered into in the ordinary course of Afren's business, it was below the thresholds which required announcement as a Class 2 transaction or otherwise.

Accounting review

As part of the review, WFG engaged KPMG at the Company's request to undertake an independent review of the accounting for the three transactions outlined above. The Company reviewed the reports from WFG and KPMG into the transactions that were undertaken and assessed whether there was any impact on the Company's stated financial position. This was discussed and comprehensively considered with Deloitte, the Company's auditors, and additionally with an independent accounting advice team from PwC. The Company concluded it would reassess certain accounting judgements made in the prior year and restate the financial statements at 31 December 2013. These have not had any impact to the net assets or profit after tax. See "Accounting judgements related to restatement of 2013 financial statements" in Part III (Operating and Financial Review).

Unauthorised payments

WFG concluded that in October 2013 Mr Shahenshah and Mr Ullah entered into an agreement with Oriental by which Oriental agreed to pay 15% of the agreed net cash flows that Oriental was due to receive from Ebok for the period 2013 to 2017 to a British Virgin Islands special purpose vehicle, Ntiti Limited ("Ntiti BVI"), in exchange for facilitating US\$400 million in funding by Afren to Oriental. Ntiti BVI was owned and/or controlled by Mr Shahenshah and Mr Ullah. For 2013, Oriental paid US\$45 million, or 15% of the US\$300 million provided to it under the Amendment Agreement to another Ntiti entity incorporated in Bermuda ("Ntiti Bermuda") by arrangement with Ntiti BVI. Mr Shahenshah and Mr Ullah, with assistance from Afren's former Nigeria Business Development Manager, Mr Faiz Imam, used the funds in part to pay extraordinary bonuses to themselves (US\$17.1 million in total was paid to Mr Shahenshah and Mr Ullah), and to other selected employees of Afren. The bonuses were ostensibly to ensure the retention of key employees of Afren for Oriental projects. In total eleven current and former Afren employees, including Mr Shahenshah and Mr Ullah, benefited from these extraordinary payments from Ntiti Bermuda.

Outcome

In response to these findings, Afren notified the FCA and Serious Fraud Office and made the full reports available to these agencies. On 13 October 2014, Afren terminated the employment and directorships of the then-CEO and then-COO for gross misconduct and commenced legal proceedings to recover sums in respect of unauthorised payments and the costs to Afren associated with the independent review. Afren also terminated the employment of its two Associate Directors with immediate effect and commenced disciplinary actions against the additional employees involved in the receipt of unauthorised payments.

Afren has subsequently settled its claims against the former CEO and former COO and secured a cash payment from them of US\$17.1 million in relation to the payments made to them that were not authorised by the Board and a further US\$3 million in respect of the costs to Afren of the independent review conducted by WFG and KPMG and certain legal costs. Afren has agreed that all amounts received by the executives and repaid to the Company will be repaid to Oriental, but only following actual receipt by the Company.

Recommendations

The WFG review report includes certain recommendations to the Company and the Board to improve the effectiveness of Afren's corporate governance arrangements. While the Company had and has in place appropriate controls and procedures, WFG considered that it would be prudent for Afren to implement certain corporate governance and compliance changes to its business, including the following:

The policies in place in relation to, inter alia, share dealing in close periods, anti-bribery, whistleblowing and PDMRs should be actively implemented and maintained by all employees. The executive management team in particular needs to demonstrate that they comply with such policies and are cognisant of their importance and the directors should attend a continuing training programme on their responsibilities and obligations under the Listing Rules and Disclosure and Transparency Rules.
Systems should be put in place to ensure regular review of the Company's procedures, including, but not limited to, the role and effectiveness of the Disclosure Committee and monitoring compliance with, its obligations under the Listing Rules and Disclosure and Transparency Rules. Afren should rely on designated internal and external Listing Rules legal advisers for advice in relation to Listing Rules and Disclosure and Transparency Rules issues.
All matters that have the potential to trigger the requirements of the Listing Rules or chapter 2 of the Disclosure and Transparency Rules should be referred to the Disclosure Committee, which should meet on an urgent basis whenever such an issue arises, and the Disclosure Committee should consult with the Company's sponsor as required. A member of the internal legal team and/or the company secretary should always be in attendance at meetings of the Disclosure Committee and file notes should be taken to record discussions taken.

WFG also recommended that Afren should consider the adoption of certain additional corporate governance measures as follows:

Afren should consider adopting a set of governance principles, which should be communicated and implemented at all levels of the business. The governance principles should outline how Afren expects its Board to interact with Afren's shareholders and management team. They should also encompass how the Board should conduct its affairs and how it intends to promote the best interests of the Company.
The Board should consider the establishment of a governance, ethics and compliance committee (the "GEC"), whose role would be to oversee and enforce Afren's compliance with corporate governance policy. The GEC should be chaired by the senior independent director and its membership should also be composed of the general counsel and the head of internal audit.
The Board and, to the extent established, the GEC should ensure that Afren's Conduct Code is adhered to by all members of the Board and employees.
Afren should seek to appoint additional non-executive directors who should be subject to a formal and transparent appointment procedure.
Afren should seek to establish a formal compliance function headed by the general counsel that reports to the GEC. The role of the compliance department should be to ensure that compliance risks are appropriately identified and mitigated against.

In 2014 (and prior to the results of the WFG Review) Afren had reviewed and updated its corporate governance policies and business code of conduct. In connection with the findings of, and as recommended by, the WFG Review, Afren has committed to implementing Group-wide training on these policies and to taking additional action to enhance the effectiveness of the Company's internal reporting and controls.

Afren has adopted its Conduct Code and consolidated its anti-bribery policies in light of the guidance provided by the UK authorities following the introduction of the UK Bribery Act. The Board has implemented, or is in the process of implementing, the recommendations in the WFG Review. The Board is continuing to review its internal policies against such recommendations and best practice and will consider constituting the GEC if there are sufficient independent non-executive directors on the Board. At present, the Audit and Risk Committee is responsible for overseeing compliance with the Group's internal controls and procedures.

Afren is committed to the highest standards of corporate governance. There can be no assurance, however, that Afren's policies and procedures will be followed at all times or effectively detect and prevent violations of the applicable laws by one or more of Afren's employees, consultants, agents or partners and, as a result, Afren could be subject to penalties and material adverse consequences on its business, financial condition or results of operations if it fails to prevent any such violations. See "Risk Factors— Risk Factors Relating to Afren's Business— Violation or circumvention of Afren's corporate governance policies and code of conduct, or the Company's internal controls and procedures, could have a material adverse effect on Afren's business, financial condition and results of operations."

5. Compensation

Compensation Paid to the Directors

The Non-Executive Directors each received £53,000 in 2014, aside from Peter Bingham, John St. John and Toby Hayward who each received £59,000, £55,000 and £43,000, respectively in 2014. In addition, the Chairman, in his capacity as Chairman, receives compensation in the amount of £210,300 per year. Alan Linn's base salary is £530,000 per annum. The Executive Directors' salaries for the financial year ending 31 December 2015 remained the same as 2014:

Toby Hayward £567,000 (noting that Mr Hayward ceased to act as interim CEO with effect from 30 April 2015)
Darra Comyn £395,000

The new CEO, Mr Alan Linn, will receive an annual salary of £530,000.

Compensation Paid to Senior Management

The aggregate compensation paid to Afren's executive officers and senior management holding positions comparable to those identified in the "Senior Management" table above for the year ended 31 December 2014, including the long term incentive plan described below, pension, retirement and similar benefits, was £10.5 million.

6. Incentive Plans

Share Option Scheme

Afren's share option scheme was adopted on 28 June 2005 and amended by the Board on 30 November 2009 and approved by Afren's Shareholders on 6 June 2011 (the "Share Option Scheme"). The Remuneration Committee has responsibility for supervising the Share Option Scheme. A summary of the rules of the Share Option Scheme is set out below.

Eligibility

Any of Afren's employees or Executive Directors is eligible to receive options under the Share Option Scheme. Prior to the 2009 Admission, Non-Executive Directors were also granted options, but the Share Option Scheme has been amended so that no further options may be granted to Non-Executive Directors, although their rights to exercise options already granted are unaffected. All options granted to Non-Executive Directors have been exercised, save in respect of 400,000 options held by John St. John.

Grant of Options

An option may be granted at any time. Options are awarded at Afren's absolute discretion, although Afren's policy is to use the Share Option Scheme as part of its recruitment strategy and to award options to participants on appointment or completion of their probationary period. Options are not pensionable. Options are personal and may not be transferred, assigned or charged, except on death. The exercise price per ordinary share is the market value of an ordinary share at the time of grant.

Vesting, Performance Conditions and Exercise of Options

Options may vest on a specific date, the occurrence of a specific event or be conditional upon achievement of a given performance condition as determined at the time of grant. The vesting date for options already granted typically is 20% on the first anniversary of grant of the option; a further 20% on the second anniversary; and the remaining 60% on the third anniversary although some options have been granted on other terms. Where options have been granted with performance conditions, the condition has related to the achievement of an increase in the ordinary share price above the exercise price.

It is currently intended that future options will be granted with the 20/20/60 vesting described above and with a performance condition requiring an increase in the price of an ordinary share so that it has remained more than 40% above the price on the day the option was granted for at least three months.

Options may be exercised in whole or part. To the extent that an option has not already been exercised or lapsed, an option will lapse on the tenth anniversary of the date of grant.

In the case of an option holder's death, the relevant option may be exercised (to the extent it has vested) by a personal representative of the deceased in the twelve months following his death. The option will lapse at the end of that period if it has not been exercised. If an option holder ceases to be employed by reason of, inter alia, ill health, injury, disability, redundancy, pregnancy or as a result of a sale out of Afren of the option holder's employer or business in which he is employed, that option holder may exercise his option (to the extent it has vested) during the twelve months following termination of employment. The option will lapse at the end of that period if it has not been exercised.

Where a participant holding options ceases to be employed for a reason not specified above, the Remuneration Committee may in certain circumstances allow an option to be exercised during a period of 40 days following the date of termination and the options will lapse at the end of this period, although there is discretion to allow a longer period for exercise. In other cases, an option will lapse on termination of employment.

Issue of Shares

Shares issued on the exercise of options will be ordinary shares and will rank pari passu with other ordinary shares except in respect of rights arising prior to the date of issue.

Change of Control and Exchange of Options

In the event of a change of control or other similar event, options will vest in full and may be exercised upon such change of control or within 6 months thereafter. To the extent options are not exercised within the six month period, they will lapse. The Board may, in its discretion, determine that options may vest in full prior to an expected change of control and permit the exercise of options conditionally upon such change of control occurring. In certain circumstances, and with the agreement of the acquiring company, a participant holding options may exchange his option for an equivalent option over shares in the acquiring company.

Variation of Share Capital

To preserve the value of an option, options may be varied in the event of any capitalisation, rights issue, consolidation, subdivision, reduction or other variation of Afren's share capital.

Scheme Limit

On any date, the maximum number of ordinary shares which can be placed under an option to be satisfied by the issue of ordinary shares under the Share Option Scheme, when added to the number of ordinary shares issuable or issued (i.e., excluding lapsed awards) in the preceding 10 years under the Share Option Scheme or any other adopted employee share scheme, must not exceed 12% of Afren's issued ordinary share capital immediately prior to that date.

Amendments

The Share Option Scheme may be amended by the Board at any time it sees fit, provided that any amendments (other than minor amendments to facilitate the administration of the Share Option Scheme or to obtain or maintain favourable tax treatment) relating to specified matters, including: (i) existing option holders; (ii) scheme share limits and individual limits; and (iii) provisions relating to adjustment and amendments, cannot be made to the material advantage of option holders without approval of Afren's Shareholders.

Termination

The Share Option Scheme will terminate on 28 June 2015, but may be terminated earlier. Termination will not prejudice existing option holder's rights.

Approved Options

Pursuant to the terms of a schedule to the Share Option Scheme, options which satisfy the conditions set out in Schedule 4 to the Income Tax (Earnings and Pensions Act 2003) may be granted to eligible employees.

Performance Share Plan

The performance share plan was adopted by the Board on 15 January 2008 and revised and approved by Shareholders on 6 June 2011 (the "Performance Share Plan"). The Remuneration Committee has responsibility for supervising the Performance Share Plan. A summary of the rules of the Performance Share Plan is set out below.

Eligibility

Any of Afren's employees or Executive Directors is eligible to participate in the Performance Share Plan.

Making of Awards

The "Grantor", being the Board or the Trustees of an employee benefit trust established for the benefit of Afren's employees and Executive Directors (acting on each occasion on the recommendation of or with the consent of the Board) may, during a "Grant Period", grant awards to such eligible employees as it may in its absolute discretion determine upon the terms set out in the rules of the Performance Share Plan and upon such additional terms as it may determine.

For these purposes, the "Grant Period" is the period of 42 days commencing on:

(i) the day on which the plan is adopted by the Company;
(ii) the dealing day after the day on which the Company makes an announcement of its results for any period;
(iii) any day on which the Grantor resolves that exceptional circumstances exist which justify the grant of awards;
(iv) any day on which any change to any relevant legislation, regulation or government directive affecting employees' share schemes is proposed or made; or
(v) in respect of an employee, the date on which that eligible employee first becomes employed by a company in the Group or the end of such eligible employee's initial probationary period,

or such other period during which the Board determines that an Award should be granted.

Awards are not pensionable.

Awards are personal and may not be transferred, assigned or charged except with Afren's consent or on death.

Awards may be granted in the form of a conditional award, or a nominal value option or in such other form as has a similar purpose or effect so that substantially free ordinary shares are received. The Performance Share Plan further permits that, at the date of grant, a conditional award or an option shall be expressed as a right of the participant to acquire a cash sum at Afren's discretion. The cash sum is calculated by reference to the number of ordinary shares in respect of which the relevant award has vested or, in the case of an option, has been exercised.

Vesting of Awards and Performance Conditions

Awards may contain a performance target and/or such other conditions on the vesting of the awards. Awards will ordinarily vest on the third anniversary of the date of grant, subject to the achievement of performance targets set at the date of grant.

The performance criteria which have been set and which are currently intended to apply to future grants require Afren to:

outperform a comparator group of similarly focused oil and gas exploration and production companies in terms of shareholder return over a three year period (70% of award);
1. outperform the constituents of the FTSE 250 (excluding investment trusts) in terms of shareholder return over a three year period (30% of the award); and
1. satisfy an underlying reserves replacement ration target over three years.

The full number of ordinary shares is received in relation to 70% of the shares awarded only if we have performed in the top quartile when compared against a selected peer group of upstream oil and gas companies focused on Africa. In the past, these companies have included among others, Anadarko Petroleum Corporation, Apache Corporation, Cairn Energy, Canadian Natural Resources (CNR), DNO, Dragon Oil, Enquest, Genel Energy, Gulfsands, Hess Corporation, Heritage Oil, JKX Oil and Gas, Lundin Petroleum, Marathon Oil Corporation, Maurel et Prom, Melrose Resources, Nexen, Niko Resources, Noble Energy, PA Resources, Pioneer Natural Resources, Premier Oil, Salamander Energy, SOCO International, Talisman Energy, Tullow Oil, Vaalco Energy and Woodside Petroleum. If we do not achieve at least median performance in the peer group, no ordinary shares will be received. At the median level, 25% of the ordinary shares in this part of the award will vest and there is a sliding scale between median and top quartile performance where only a percentage of the total award will vest.

Similarly, the full number of ordinary shares is received in relation to 2% of the award only if we have performed in the top quartile when compared against the constituents of the FTSE 250 (excluding investment trusts). If we do not achieve at least median performance in the FTSE 250, no ordinary shares will be received. At the median level, 25% of the ordinary shares in this part of the award will vest and there is a sliding scale between median and top quartile performance where only a percentage of the total award will vest.

No shares at all will be awarded unless the 3 year reserves replacement ratio target is met.

Where awards vest, a payment may be made of an amount equal to the dividends paid on the relevant number of ordinary shares between the grant of the award and the receipt of ordinary shares subject to that vested award.

Exercise of Options

If the award is in the form of an option, once vested it may be exercised in whole or in part.

Lapse of Awards

Awards in the form of options will, to the extent not exercised, lapse on the tenth anniversary of the date of grant or such earlier date as is specified on grant. Other awards lapse on the vesting date to the extent they have not then vested.

If a participant ceases to be an employee because of death, illness, injury or disability, redundancy, or the sale of the business in which he works or another reason decided by the Remuneration Committee, a proportion of his award which has not otherwise vested shall vest, the proportion being calculated by reference to the extent to which the performance condition has been satisfied at the date of cessation (as determined by the Remuneration Committee), and such other factors, including (without limitation) the performance of the Company and the conduct of the participant, as it may deem relevant, and such proportion shall (unless determined otherwise by the Remuneration Committee in its absolute discretion) then be reduced pro rata to reflect the reduced period from the date of grant to the date of cessation rather than to the date on which the award would ordinarily have vested. Options already vested may be exercised during the twelve month period following the date of cessation.

If a participant leaves for other reasons, his award will usually lapse, although options which have already vested may be exercised for up to 40 days following the termination of his employment.

Issue of Shares

Shares issued on the exercise of options will be ordinary shares and will rank pari passu with other ordinary shares except in respect of rights arising prior to the date of issue.

Change of Control and Exchange of Awards

In the event of a change of control or other similar event occurring before an award has vested, unless the Remuneration Committee (in its absolute discretion) determines otherwise, the proportion of the award that vests shall be calculated by reference to the extent to which the performance target has been satisfied at the date of the relevant corporate event (as determined by the Remuneration Committee) and such other factors, including (without limitation) the performance of the Company and the conduct of the participant, as it may deem relevant and such proportion shall (unless determined otherwise by the Remuneration Committee in its absolute discretion) be reduced pro rata to the period from the date of grant to the date of the relevant corporate event as a proportion of the period from the date of grant to the date when the Award would have ordinarily vested. Options (to the extent vested) may be exercised within a period of four weeks (or such other period as may be determined by the Grantor) following the change of control.

In certain circumstances, and with the agreement of the acquiring company, a participant may instead exchange his award for an equivalent award over shares in the acquiring company.

Variation of Share Capital

To preserve the value of an award, awards may be adjusted in the event of any capitalisation issue, demerger, any offer or invitation made by way of rights issue, subdivision, consolidation, reduction, other variation in Afren's share capital, or any other exceptional event which in the reasonable opinion of the Board justifies an adjustment.

Plan Limits

No participant may be granted awards which would, at the time of grant, cause the market value of ordinary shares which the participant may acquire as a result of the award to exceed 200% of his base salary (except that the Remuneration Committee may decide to increase this limit to 300% in exceptional circumstances).

Further, an award may not be made if it would result in the number of ordinary shares issued or issuable during a period of ten years (i.e. excluding lapsed awards), under the Performance Share Plan or any other adopted employee share scheme, to exceed 12% of Afren's issued ordinary share capital at that time.

Amendments

The Board may amend the rules of the Performance Share Plan as it sees fit at any time, except that:

a. no amendments (other than minor amendments to facilitate the administration of the Performance Share Plan or to obtain or maintain favourable tax treatment) relating to specified matters, including: (i) existing participants; (ii) plan share limit and individual limits; (iii) the principal terms governing the Vesting of Awards (and the exercise of Options); and (iv) the rights of participants relating to adjustments, can be made to the material advantage of participants without approval of Afren's Shareholders; and
b. no amendments can be made to the disadvantage of participants can be imposed without the agreement of participants holding at least 75% of the ordinary shares under outstanding awards.

Termination

The Performance Share Plan will terminate on 15 January 2018, but may be terminated earlier. Termination will not prejudice existing participant rights.

Approved Options

Pursuant to the terms of a schedule to the Performance Share Plan, options which satisfy the conditions set out in Schedule 4 to the Income Tax (Earnings and Pensions Act 2003) may be granted to eligible employees.

7. Deferred Bonus Plan

The Board adopted the Afren PLC Deferred Bonus Plan (the "Deferred Bonus Plan") on 11 June 2013. The Remuneration Committee has responsibility for supervising the Deferred Bonus Plan. A summary of the rules of the Deferred Bonus Plan is set out below.

Eligibility

Any director (any other than a non-executive director) or other bona fide employee of the Group is eligible to receive an award under the terms of the Deferred Bonus Plan.

Grant of Awards

The Remuneration Committee may determine that part of the bonus in respect of service and/or performance of an eligible employee in a period not exceeding the length of a Financial Year shall be deferred and delivered to the eligible employee in the form of an award under the Deferred Bonus Plan.

The Remuneration Committee shall determine in its absolute discretion when awards shall be granted, the eligible employees to whom such awards are to be granted and the terms governing such awards in accordance with the provisions of the rules of the Deferred Bonus Plan.

Right to Renounce

An eligible employee to whom an award is granted under the Deferred Bonus Plan may, by notice in writing to Afren within 30 days after grant, renounce in whole or in part any rights or benefits conferred by the award.

Awards non-transferrable

An award is personal to the eligible employee to whom it is granted and, except in the event of a participant's death, shall not be capable of being transferred, charged or otherwise alienated and shall lapse immediately if the participant purports to transfer, charge or otherwise alienate the award.

Awards are not pensionable.

Participants Rights

For the avoidance of doubt a participant shall not become the beneficial owner of any shares in Afren until the shares have been transferred to him following the vesting of the award or the valid exercise of the option.

Source of Shares

No new shares shall be issued and no treasury shares shall be delivered for the purposes of satisfying awards under the Deferred Bonus Plan.

Individual Limits

An award may not be granted to an eligible employee if, as a result, the aggregate market value of the shares subject to all awards granted to that eligible employee under the Deferred Bonus Plan in any Financial Year would exceed 200% of his annual rate of basic salary as at the date of grant in respect of his employment with members of the Group.

Form of Award

An award granted under the Deferred Bonus Plan may take the form of (i) a conditional right to become absolutely entitled to shares; (ii) an option with an option price of zero (a nil cost option); (iii) an option with an option price which is the same as the nominal value of an Afren share; or (iv) a phantom award comprising a conditional right to be paid a cash amount based on the market value of a specified number of Afren shares.

Performance Conditions, Vesting and Exercise

The vesting of an award is not dependant of the achievement of any performance condition. An award will vest on the normal vesting date specified at the time of grant or on such earlier date as is determined by the Remuneration Committee in the event that the participant ceases to hold office or employment with any member of the Group in certain specified circumstances, including his death. Where the award has been granted in the form of an option, the participant may exercise his option at any time following the date of vesting specified at the date of grant until the option lapses ordinarily on the expiry date (which will not be later than 6 months after the normal vesting date).

Delivery of Shares

Subject to any necessary consent and to compliance by the participant with the rules of the Deferred Bonus Plan, the Company shall, as soon as reasonably practicable and in any event not later than 30 days after the vesting of the conditional share award the valid exercise of an option, procure the transfer to the participant of the number of shares in respect of which the award has vested or been exercised.

Cash Alternative

Following the vesting of a conditional share award or the exercise of an option, on the recommendation of the Remuneration Committee in exceptional circumstances only, the Company may decide not to procure the transfer of shares to the participant but instead to arrange for a cash payment to be made to the participant of an amount equivalent to the value of the shares which would otherwise have been transferred (less the option price in respect of such shares unless this has already been paid).

Cash Payment

Under phantom awards subject to any necessary consents and to compliance by the participant with the rules of the Deferred Bonus Plan, the company shall, as soon as reasonably practicable and in any event not later than 30 days after the vesting of a phantom award, arrange for the payment to the participant of a cash amount equivalent to the market value on the vesting date of the number of shares in respect of which the award has vested.

Dividend Equivalent

Following the vesting of a conditional share award or a phantom award or the exercise of an option, the company shall arrange for the payment to the participant of cash or shares with a value equivalent to the sum of all the dividends declared for the number of shares in respect of which the award has vested or been exercised with payment dates between the grant date and the date of delivery of shares or cash.

Tax Liability

The vesting of conditional share awards or phantom awards and the exercise of options shall be conditional upon the participant complying with any arrangements specified by the company (or the trustee of an employee benefit trust), for the payment of such tax and any social security contributions.

Clawback

The Remuneration Committee may, at its discretion, decide that:

(i) if it is discovered that any award has been granted on the basis of incorrect information including without limitation, material misstatement in any published results of the Group; or
(ii) in the event of misconduct on the part of a participant including, without limitation, where the participant has been dismissed for cause,

the number of shares subject to the award shall be reduced or eliminated. In the case of an award which has already vested, the Remuneration Committee may decide that the participant should repay an amount equal to some or all of the benefit received, whether by transfer of shares or payment of a cash amount.

Corporate Events

If a person obtains control of the Company, each unvested award under the Deferred Bonus Plan shall vest in full immediately. In the case of options, the participant shall be entitled to exercise the option during the period of 30 days starting on a date in which control was obtained (or for such longer period as the remuneration committee may specify). In certain circumstances, and with the agreement of the acquiring company, the Remuneration Committee may determine that each participant may be offered a replacement award relating to shares in the acquiring company.

Amendments

The Board, acting on the recommendations of the Remuneration Committee, may from time to time amend the rules of the Deferred Bonus Plan except that an amendment may not adversely affect the subsisting interests of a participant except the prior consent or sanction of that participant.

Termination

The Deferred Bonus Plan shall terminate on such date as the Board shall determine. Following termination of the Deferred Bonus Plan, no further awards shall be granted but the subsisting rights and obligations of participants will not thereby be affected.

8. Directors' and Senior Managers' confirmations

Except as disclosed in this section entitled "Directors' and Senior Managers' confirmations", within the period of five years preceding the date of this document, none of the Directors nor Senior Managers:

(a) has had any convictions in relation to fraudulent offences;
(b) has been a director or senior manager of any company at the time of bankruptcy, receivership or liquidation of such company; or
(c) has received any official public incrimination and/or sanction by any statutory or regulatory authorities or has been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of a company.

None of the Directors nor Senior Managers has any potential conflicts of interest between their duties to Afren and their private interests or other duties.

None of the Directors nor Senior Managers was selected to act as a member of the administrative, management or supervisory bodies or member of senior management pursuant to any arrangement or understanding with any major shareholder, customer, supplier or other person having a business connection with the Group.

As at the date of this document, no restrictions have been agreed by any Director or Senior Manager on the disposal within a certain time period of their holding of their Existing Shares.

No Director has or has had any interest in any transactions which were unusual in nature or conditions or were significant to the business of Afren and which were effected during the current or previous financial year or during an earlier financial year and which remain outstanding or unperformed in any aspect.

PART VI

QUESTIONS AND ANSWERS ABOUT THE OPEN OFFER

The questions and answers set out in this Part VI (Questions and Answers about the Open Offer) are intended to be in general terms only and, as such, you should read Part VII (Terms and Conditions of the Open Offer) of this document for full details of what action you should take. If you are in any doubt as to what action you should take, you are recommended to seek immediately your own financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser, duly authorised under the FSMA, if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

This Part VI (Questions and Answers about the Open Offer) deals with general questions relating to the Open Offer and more specific questions relating to Existing Shares held by persons resident in the United Kingdom who hold their Shares in certificated form only. If you are an Overseas Shareholder, you should read paragraph 6 "Overseas Shareholders" of Part VII (Terms and Conditions of the Open Offer) of this document and you should take professional advice as to whether you are eligible and/or you need to observe any formalities to enable you to take up your rights. If you hold your Shares in uncertificated form (that is, through CREST), you should read Part VII (Terms and Conditions of the Open Offer) of this document for full details of what action you should take. If you are a CREST sponsored member, you should also consult your CREST sponsor. If you do not know whether your Shares are in certificated or uncertificated form, please call the Shareholder Helpline between 9.00 a.m. and 5.30 p.m. on any Business Day on 0870 889 3176 (from inside the UK) or +44 (0)870 889 3176 (from outside the UK). Calls from landline providers typically cost up to 12 pence per minute. From mobile networks calls cost between 5 pence and 40 pence per minute. Calls from outside the UK are chargeable at applicable international rates. Calls may be recorded and randomly monitored for security and training purposes.

Please note that the Shareholder Helpline cannot provide comments on the merits of the Open Offer, or legal, financial or taxation advice.

Timetable dates in this Part VI (Questions and Answers about the Open Offer) have been included on the basis of the expected timetable set out on page 61.

1. What is an open offer?

An open offer is a way for companies to raise money. Companies usually do this by giving their existing shareholders a pre-emptive right to acquire further shares at a fixed price in proportion to their existing shareholdings.

The Open Offer is an invitation by Afren to Qualifying Shareholders to apply to acquire 4 Open Offer Shares for every 9 Existing Shares at a price of 1 pence per Open Offer Share. In this document, this is referred to as your "Open Offer Entitlement". If you hold Shares on the Record Date or have a bona fide market claim, other than, subject to certain exceptions, where you are a Shareholder either located, or with a registered address in, an Excluded Territory, you will be entitled to buy Open Offer Shares under the Open Offer.

The Open Offer is being made on the basis of 4 Open Offer Shares for every 9 Existing Shares held by Qualifying Shareholders on the Record Date. If your Open Offer Entitlement is not a whole number, you will not be entitled to buy an Open Offer Share in respect of any fraction of an Open Offer Share and your entitlement will be rounded down to the nearest whole number. If you hold fewer than three Existing Shares, you will not receive an Open Offer Entitlement.

Applications by Qualifying Shareholders will be satisfied in full up to the amount of their Open Offer Entitlement.

Qualifying Shareholders should be aware that the Open Offer is not a rights issue. Qualifying non-CREST Shareholders should also note that their Application Forms are not negotiable documents and cannot be traded. Qualifying CREST Shareholders should note that, although the Open Offer Entitlements and Excess Open Offer Entitlements will be credited to CREST and be enabled for settlement, applications in respect of Open Offer Entitlements and Excess Open Offer Entitlements may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear's Claims Processing Unit. Open Offer Shares not applied for under the Open Offer will not be sold in the market for the benefit of those who do not apply to take up their Open Offer Entitlements and Excess Open Offer Entitlements. Qualifying Shareholders who do not apply to take up Open Offer Shares will have no rights under the Open Offer.

2. I hold my Existing Shares in certificated form. How do I know whether I am eligible to participate in the Open Offer?

If you receive an Application Form and, subject to certain exceptions, are not a shareholder either located in, or with a registered address, in an Excluded Territory, then you should be eligible to participate in the Open Offer as long as you have not sold all of your Existing Shares before 8.00 a.m. on 6 August 2015 (the time when the Existing Shares were marked "ex-entitlement" by the London Stock Exchange).

3. I hold my Existing Shares in certificated form. How do I know how many Open Offer Shares and Excess Shares I am entitled to take up?

If you hold your Existing Shares in certificated form and, subject to certain exceptions, do not have a registered address and are not located in any Excluded Territory, you will be sent a Non-CREST Application Form that shows:

how many Existing Shares you held at the close of business on the Record Date (Box 6 of your Application Form);
how many Open Offer Shares are comprised in your Open Offer Entitlement (Box 7 of your Application Form); and
how much you need to pay if you want to take up your right to buy the maximum number of Open Offer Shares under your Open Offer Entitlement (Box 8 of your Application Form).

If you would like to apply for any of or all of the Open Offer Shares comprised in your Open Offer Entitlement, you should complete the Application Form in accordance with the instructions printed on it and the information provided in this document. Completed Application Forms should be posted, along with a cheque or banker's draft drawn in the appropriate form, in the accompanying pre-paid envelope or returned by post or by hand (during normal office hours only), to Computershare Investor Services PLC, Corporate Actions Projects, The Pavilions, Bridgwater Road, Bristol BS99 6AH, United Kingdom (who will act as Receiving Agent in relation to the Open Offer) so as to be received by the Receiving Agent by no later than 11.00 a.m. on 21 August 2015, after which time Application Forms will not be valid.

4. I hold my Existing Shares in certificated form and am eligible to receive a Non-CREST Application Form. What are my choices in relation to the Open Offer?

(a) If you do not want to take up your Open Offer Entitlement

If you do not want to take up your Open Offer Entitlement, you do not need to do anything. In these circumstances, you will not receive any Open Offer Shares. You will also not receive any money when the Open Offer Shares you could have taken up are sold, as would happen under a rights issue. You cannot sell your Non-CREST Application Form or your Open Offer Entitlement to anyone else.

If you do not take up your Open Offer Entitlement then following the issue of the Ordinary Shares pursuant to the Open Offer, the Debt for Equity Swap, the New Senior Notes Issue, the Early Subscriber Issue and the Bridge Securities Share Issue, your interest in the Company will be diluted by up to 94% (depending on the level of take up by other Shareholders in the Open Offer).

(b) If you want to take up some but not all of the Open Offer Shares under your Open Offer Entitlement

If you want to take up some but not all of the Open Offer Shares under your Open Offer Entitlement, you should write the number of Open Offer Shares you want to take up in Box 2 of your Application Form; for example, if you are entitled to take up 50 shares but you only want to take up 25 shares, then you should write "25" in Box 2. To work out how much you need to pay for the Open Offer Shares, you need to multiply the number of Open Offer Shares you want (in this example, "25") by 1 pence, which is the price in pounds sterling of each Open Offer Share (giving you an amount of £0.25 in this example). You should write this total sum in Box 5, rounding down to the nearest whole pence and this should be the amount your cheque or banker's draft is made out for. You should then return the completed Application Form, together with a cheque or banker's draft for that amount, in the accompanying pre-paid envelope or return by post to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6AH, or by hand only (during normal business hours), to Computershare, The Pavilions, Bridgwater Road, Bristol, BS13 8AE United Kingdom (who will act as Receiving Agent in relation to the Open Offer) so as to be received by the Receiving Agent by no later than 11.00 a.m. on 21 August 2015, after which time Application Forms will not be valid.

All payments must be in pounds sterling and made by cheque or banker's draft made payable to "Computershare Investor Services PLC re: Afren PLC Open Offer A/C" and crossed "A/C Payee Only". Cheques or banker's drafts must be drawn on a bank or building society or branch of a bank or building society in the United Kingdom or Channel Islands which is either a settlement member of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limited or which has arranged for its cheques and banker's drafts to be cleared through the facilities provided by any of those companies or committees and must bear the appropriate sort code in the top right-hand corner and must be for the full amount payable on application. Third-party cheques will not be accepted with the exception of building society cheques or banker's drafts where the building society or bank has confirmed the name of the account holder and the number of an account held in the applicant name at the building society or bank by stamping or endorsing the back of the cheque or draft to such effect. The account name should be the same as that shown on the application. Postdated cheques will not be accepted.

Cheques or banker's drafts will be presented for payment upon receipt. The Company reserves the right to instruct Computershare Investor Services to seek special clearance of cheques and banker's drafts to allow the Company to obtain value for remittances at the earliest opportunity. No interest will be paid on payments. It is a term of the Open Offer that cheques shall be honoured on first presentation and the Company may elect to treat as invalid acceptances in respect of which cheques are not so honoured. All documents, cheques and banker's drafts sent through the post will be sent at the risk of the sender. Payments via CHAPS, BACS or electronic transfer will not be accepted.

A definitive share certificate will then be sent to you for the Open Offer Shares that you take up. Your definitive share certificate for Open Offer Shares is expected to be despatched to you by no later than 7 September 2015.

(c) If you want to take up all of the Open Offer Shares under your Open Offer Entitlement

If you want to take up all of the Open Offer Shares under your Open Offer Entitlement you need to send the Application Form, together with your cheque or banker's draft for the full amount (as indicated in Box 8 of your Application Form), payable to "Computershare Investor Services PLC re: Afren plc Open Offer A/C" and crossed "A/C payee only", in the accompanying pre-paid envelope or return by post or by hand (during normal office hours only), to Computershare Investor Services PLC, Corporate Actions Projects, The Pavilions, Bridgwater Road, Bristol BS99 6AH, United Kingdom (who will act as Receiving Agent in relation to the Open Offer) so as to be received by the Receiving Agent by no later than 11.00 a.m. on 21 August 2015, after which time Non-CREST Application Forms will not be valid. If you post your Non-CREST Application Form by first-class post, you should allow at least four Business Days for delivery.

All payments must be in pounds sterling and made by cheque or banker's draft made payable to "Computershare Investor Services PLC re: Afren PLC Open Offer A/C" and crossed "A/C Payee Only". Cheques or banker's drafts must be drawn on a bank or building society or branch of a bank or building society in the United Kingdom or Channel Islands which is either a settlement member of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limited or which has arranged for its cheques and banker's drafts to be cleared through the facilities provided by any of those companies or committees and must bear the appropriate sort code in the top right-hand corner. Third-party cheques will not be accepted, with the exception of building society cheques or banker's drafts where the building society or bank has confirmed the name of the account holder and the number of an account held in the applicant name at the building society or bank by stamping or endorsing the back of the cheque or draft to such effect. The account name should be the same as that shown on the application. Post-dated cheques will not be accepted.

Qualifying Shareholders who take up their full entitlements and do not make an excess application or receive Excess Shares under the Open Offer will still suffer a dilution of approximately 91% to their interests in the Company, due to the issue of Ordinary Shares pursuant to the Restructuring.

5. I hold my Existing Shares in uncertificated form in CREST. What do I need to do in relation to the Open Offer?

CREST members should follow the instructions set out in Part VII (Terms and Conditions of the Open Offer) of this document. Persons who hold Existing Shares through a CREST member should be informed by the CREST member through which they hold their Existing Shares of the number of Open Offer Shares that they are entitled to acquire under the Open Offer and should contact them should they not receive this information.

6. I acquired my Existing Shares prior to the Record Date and hold my Existing Shares in certificated form. What if I do not receive an Application Form or I have lost my Application Form?

If you do not receive an Application Form, this probably means that you are not eligible to participate in the Open Offer. Some non-CREST Shareholders, however, will not receive an Application Form but may still be eligible to participate in the Open Offer, namely:

Qualifying CREST Shareholders who held their Existing Shares in uncertificated form on 6 August 2015 and who have converted them to certificated form;
Qualifying non-CREST Shareholders who bought Existing Shares before 8.00 a.m. on 7 August 2015 but were not registered as the holders of those shares at the close of business on 6 August 2015; and
certain Overseas Shareholders.

If you do not receive an Application Form but think that you should have received one or you have lost your Application Form, please contact the Shareholder Helpline operated by the Receiving Agent on 0870 889 3176 (from inside the United Kingdom) or +44 (0)870 889 3176 (from outside the United Kingdom) between 9.00 a.m. and 5.30 p.m. on any Business Day. If you have any questions relating to this document, and the completion and return of the Application Form, please telephone Computershare Investor Services between 9.00 a.m. and 5.30 p.m. (London time) Monday to Friday on 0870 889 3176 from within the UK or +44 (0)870 889 3176 if calling from outside the UK. Calls from landline providers typically cost up to 12 pence per minute. From mobile networks calls cost between 5 pence and 40 pence per minute. Calls from outside the UK are chargeable at applicable international rates. Calls may be recorded and randomly monitored for security and training purposes. Lines are open from 8.30 a.m. until 5.30 p.m. (London time) Monday to Friday (excluding UK public holidays).

Please note that the Shareholder Helpline cannot provide comments on the merits of the Open Offer, or legal, financial or taxation advice.

7. I am a Qualifying Shareholder, do I have to apply for all the Open Offer Shares I am entitled to apply for? Can I apply for more?

You can take up any number of the Open Offer Shares allocated to you under your Open Offer Entitlement and Excess Offer Entitlement. Your maximum Open Offer Entitlement and Excess Offer Entitlement is shown on your Application Form. Any applications by a Qualifying Shareholder for a number of Open Offer Shares which is equal to or less than that person's Open Offer Entitlement will be satisfied, subject to the Open Offer becoming unconditional. If you decide not to take up all of the Open Offer Shares comprised in your Open Offer Entitlement then your proportion of the ownership and voting interest in Afren will be diluted (and thereby reduced).

The maximum number of Shares available under the Excess Offer Entitlements will be up to the full number of Open Offer Shares, but applications from Existing Shareholders will be limited so that the maximum number of Open Offer Shares issued in total under the Open Offer to Existing Shareholders is capped at 984,498,244 Open Offer Shares. Excess applications will be satisfied only to the extent that corresponding applications by other Qualifying Shareholders are not made or are made for less than their pro rata entitlements. If there is an oversubscription resulting from excess applications, allocations in respect of such excess applications will be scaled down at the discretion of the Company. The Company intends to allocate on a priority basis applications received from Shareholders who hold shares prior to the implementation of the Scheme.

8. What if I change my mind?

If you are a Qualifying Shareholder, once you have sent your Application Form and payment to the Receiving Agent, you cannot withdraw your application or change the number of Open Offer Shares for which you have applied, except in very limited circumstances, entirely at the Company's discretion.

9. What if the number of Open Offer Shares to which I am entitled is not a whole number: am I entitled to fractions of Open Offer Shares?

If the number is not a whole number, you will not receive a fraction of an Open Offer Share and your entitlement will be rounded down to the nearest whole number.

10. Why does my Application Form refer to New Ordinary Shares of 0.0001 pence each?

In connection with the Restructuring and the implementation of the Open Offer, the Company needs to ensure that it does not issue new shares at a discount to the nominal value (currently 1p per Ordinary Share). In order to do this, the Company proposes to reduce the nominal value of each Ordinary Share to 0.00001p per share by way of a share split. This share split will also include the issue of 99,999 new deferred shares of 0.00001p each (with each Deferred Share in practice having no economic or voting rights attached).

In addition, the Restructuring and the implementation of the Open Offer will result in the Company issuing new shares representing up to approximately 1,600% of the current issued share capital (that is, approximately a 17-fold increase), depending upon the level of subscriptions under the Open Offer, which will result in a very substantial reduction in the market price per share (based on the anticipated market capitalisation of the Company following the Restructuring). In order to ensure a more appropriate price per share (given the expected market capitalisation), the Company will then consolidate the number of Ordinary Shares in issue and cancel the Deferred Shares, resulting in a nominal value of 0.0001 pence per Ordinary Share.

11. I hold my Existing Shares in certificated form. What should I do if I want to spend more or less than the amount set out in Box 8 of the Application Form?

If you want to spend less than the amount set out in Box 8, you should divide the amount you want to spend by £0.01 (being the price, in pounds, of each Open Offer Share under the Open Offer). This will give you the number of Open Offer Shares you should apply for. You can only apply for a whole number of Open Offer Shares. For example, if you want to spend £100, you should divide £100 by £0.01. You should round that down to the nearest whole number, to give you the number of shares you want to take up. Write that number (in this example, 10,000) in Box 2. To then get an accurate amount to put on your cheque or banker's draft, you should multiply the whole number of Open Offer Shares you want to apply for (in this example, 10,000) by £0.01 and then fill in that amount rounded down to the nearest whole pence (in this example, being to the nearest whole pence, £100.00) in Box 5 and on your cheque or banker's draft accordingly.

12. What if I hold options and awards under the Afren incentive plans?

In accordance with the rules of each plan and if applicable, the number or exercise prices of options and awards under the Afren incentive plans may be adjusted to take account of the Open Offer. If this is the case, participants will be contacted separately.

13. I hold my Existing Shares in certificated form. What should I do if I have sold some or all of my Existing Shares?

If you hold shares in Afren directly and you have sold some or all of your Existing Shares before 7 August 2015, you should contact the buyer or the person/company through whom you sell your shares. The buyer may be entitled to apply for Open Offer Shares under the Open Offer. If you sell any of your Existing Shares on or after 7 August 2015, you may still take up and apply for the Open Offer Shares as set out on your Application Form.

14. I hold my Existing Shares in certificated form. How do I pay?

Completed Application Forms should be returned with a cheque or banker's draft drawn in the appropriate form. All payments must be in pounds sterling and made by cheque or banker's draft made payable to "Computershare Investor Services PLC re: Afren plc Open Offer A/C" and crossed "A/C Payee Only". Cheques or banker's drafts must be drawn on a bank or building society or branch of a bank or building society in the United Kingdom or Channel Islands which is either a settlement member of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limited or which has arranged for its cheques and banker's drafts to be cleared through the facilities provided by any of those companies or committees and must bear the appropriate sort code in the top right-band corner. Third-party cheques will not be accepted with the exception of building society cheques or banker's drafts where the building society or bank has confirmed the name of the account holder and the number of an account held in the applicant name at the building society or bank by stamping or endorsing the back of the cheque or draft to such effect. The account name should be the same as that shown on the application. Post-dated cheques will not be accepted.

15. Will the Existing Shares that I hold now be affected by the Open Offer?

If you decide not to apply for any Open Offer Shares under your Open Offer Entitlement or Excess Offer Entitlement, or only apply for a proportion of the Open Offer Shares under your Open Offer Entitlement or Excess Offer Entitlement, your proportionate ownership and voting interest in Afren will be diluted (and thereby reduced). Furthermore, Qualifying Shareholders who take up their full entitlements under the Open Offer will still suffer a dilution of between approximately 91% to 94% to their interests in the Company (depending upon the level of take up in the Open Offer), due to the issue of Ordinary Shares pursuant to the Restructuring.

16. I hold my Existing Shares in certificated form. Where do I send my Application Form?

You should send your completed Application Form in the accompanying pre-paid envelope or returned by post, together with the monies in the appropriate form, to Computershare Investor Services PLC, Corporate Actions Projects, The Pavilions, Bridgwater Road, Bristol BS99 6AH, United Kingdom, or by hand only (during normal business hours), to Computershare, The Pavilions, Bridgwater Road, Bristol, BS13 8AE, (who will act as Receiving Agent in relation to the Open Offer). If you post your Application Form by first-class post, you should allow at least four Business Days for delivery.

If you do not want to take up or apply for any Open Offer Shares, then you need take no further action.

17. I hold my Existing Shares in certificated form. When do I have to decide if I want to apply for Open Offer Shares?

The Receiving Agent must receive the Application Form by no later than 11.00 a.m. on 21 August 2015, after which time Application Forms will not be valid. If an Application Form is being sent by first-class post in the United Kingdom, Qualifying Shareholders are recommended to allow at least four working days for delivery.

18. I hold my Existing Shares in certificated form. When will I receive my new share certificate?

It is expected that Computershare Investor Services will post all new share certificates by 7 September 2015.

19. What should I do if I live outside the United Kingdom?

Your ability to apply to acquire Open Offer Shares may be affected by the laws of the country in which you live and you should take professional advice as to whether you require any governmental or other consents or need to observe any other formalities to enable you to take up Open Offer Shares under your Open Offer Entitlement or Excess Offer Entitlement. For further information, see paragraph 6 "Overseas Shareholders" of Part VII (Terms and Conditions of the Open Offer) of this document.

20. Further assistance

Should you require further assistance, please call the Shareholder Helpline on 0870 889 3176 (from inside the United Kingdom) or +44 (0)870 889 3176 (from outside the United Kingdom), which is available between the hours of 9.00 a.m. and 5.30 p.m. on any Business Day. Please note that, for legal reasons, the Shareholder Helpline is only able to provide information contained in this document and information relating to Afren's register of members and is unable to give advice on the merits of the Open Offer or to provide legal, business, accounting, tax, investment or other professional advice.

PART VII

TERMS AND CONDITIONS OF THE OPEN OFFER

1. Introduction

As explained in Part I (Letter from the Chairman to Shareholders) of this document, the Company proposes to raise up to £49.2 million (US\$75 million) by way of the Open Offer subject to, inter alia, the passing by Shareholders of the Resolution at the General Meeting, by the issue of up to 4,922,491,218 Ordinary Shares at 1 pence per share.

The Open Offer is conditional on the Resolution being approved and the Conditional Subscription Agreement, the Scheme and Sponsor's Agreement becoming unconditional in all respects and not having been terminated in accordance with their terms. If the Resolution is not approved and/or the conditions to (inter alia) the Conditional Subscription Agreement, the Scheme or the Sponsor's Agreement are not satisfied, the Open Offer will not proceed and application monies in relation to the Open Offer will be returned to applicants (without interest) as soon as possible thereafter. A summary of the principal terms of the Sponsor's Agreement and the Conditional Subscription Agreement are set out in paragraph 15.1 "Material contracts" of Part IX (Additional Information) of this document.

A Qualifying non-CREST Shareholder who has sold or transferred all or part of his holding of Existing Shares prior to 7 August 2015, being the last date upon which the Existing Shares were marked "ex" the entitlement to the Open Offer by the London Stock Exchange, should consult his broker or other professional adviser as soon as possible, as the invitation to acquire Ordinary Shares under the Open Offer may be a benefit which may be claimed by the transferee from his counterparty pursuant to the rules of the London Stock Exchange.

A summary of the arrangements relating to the Open Offer is set out below. This document and, for Qualifying non-CREST Shareholders only, the accompanying Application Form contain the formal terms and conditions of the Open Offer.

2. The Open Offer

Subject to the terms and conditions set out below and, in the case of Qualifying non-CREST Shareholders, in the Application Form, the Company hereby invites Qualifying Shareholders to apply for Open Offer Shares at the Offer Price, payable in full on application, free of all expenses, up to a maximum of their pro rata entitlement, which shall be calculated on the basis of:

4 Open Offer Shares for every 9 Existing Shares

held by them and registered in their names at 5.00 p.m. on the Record Date and so in proportion for any other number of Existing Shares then held. Fractions of Ordinary Shares will not be allocated to Qualifying Shareholders and entitlements to apply for Ordinary Shares will be rounded down to the nearest whole number of Ordinary Shares. Accordingly, Shareholders holding fewer than three Existing Shares will have no entitlement to subscribe under the Open Offer. The aggregate number of Ordinary Shares available for subscription pursuant to the Open Offer is up to 4,922,491,218 Ordinary Shares.

Holdings of Existing Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating Qualifying Shareholders' entitlements under the Open Offer, as will holdings under different designations and in different accounts.

Qualifying Shareholders may apply for any whole number of Open Offer Shares up to and including their maximum entitlement which, in the case of Qualifying non-CREST Shareholders, is equal to the number of Open Offer Entitlements and Excess Open Offer Entitlements as shown on their Application Form or, in the case of Qualifying CREST Shareholders, is equal to the number of Open Offer Entitlements and Excess Open Offer Entitlements standing to the credit of their stock account in CREST. The maximum number of Shares available under the excess application facility will be up to the full number of Open Offer Shares, but applications from Existing Shareholders will be limited so that the maximum number of Open Offer Shares issued in total under the Open Offer to Existing Shareholders is capped at 984,498,244 Open Offer Shares. Excess applications will be satisfied only to the extent that corresponding applications by other Qualifying Shareholders are not made or are made for less than their pro rata entitlements. If there is an oversubscription resulting from excess applications, allocations in respect of such excess applications will be scaled down at the discretion of the Company. The Company intends to allocate on a priority basis applications received from Shareholders who hold shares prior to the implementation of the Scheme.

If a Qualifying Shareholder does not take up any of his entitlement under the Open Offer, his shareholding will be diluted by up to 94% by the issue of the Ordinary Shares in the Restructuring. Qualifying Shareholders who take up their full entitlements under the Open Offer will still suffer a dilution of approximately 91% to their interests in the Company, due to the issue of Ordinary Shares pursuant to the Restructuring.

The action to be taken in relation to the Open Offer depends on whether, at the time at which application and payment is made, a Qualifying Shareholder has an Application Form in respect of his entitlement under the Open Offer or has Open Offer Entitlements credited to his stock account in CREST in respect of such entitlement:

(a) A Qualifying Shareholder who has received an Application Form with this document should refer to paragraph 4(a) "Procedure for Application and Payment" and paragraphs 5 "Money Laundering Regulations" to 10 "Times and Dates" of this Part VII (Terms and Conditions of the Open Offer).
(b) A Qualifying Shareholder who holds his Existing Shares in CREST and has received a credit of Open Offer Entitlements to his CREST stock account should refer to paragraph 4(b) "Procedure for Application and Payment" and paragraphs 5 "Money Laundering Regulations" to 10 "Times and Dates" of this Part VII (Terms and Conditions of the Open Offer) and also to the CREST Manual for further information on the CREST procedures referred to below.

Qualifying Shareholders should be aware that the Open Offer is not a rights issue. Qualifying CREST Shareholders should note that, although the Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear's Claims Processing Unit. Qualifying non-CREST Shareholders should note that the Application Form is not a negotiable document and cannot be traded. Qualifying Shareholders should be aware that in the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for will not be sold in the market or placed for the benefit of Qualifying Shareholders who do not apply under the Open Offer, and Qualifying Shareholders who do not apply to take up Open Offer Shares will have no rights under the Open Offer.

Before making any decision to acquire Open Offer Shares, a Qualifying Shareholder should read and carefully consider all the information in this document, including, in particular, the important information set out in Part I (Letter from the Chairman to Shareholders) of this document, as well as this paragraph 2 "The Open Offer" of Part VII (Terms and Conditions of the Open Offer) and "Risk Factors" set out on pages 25 to 60 (inclusive) of this document. Shareholders who do not participate in the Open Offer will experience dilution of their shareholdings. The material terms of the Open Offer are contained in this document.

The Existing Shares are already admitted to CREST. No further application for admission to CREST is accordingly required for the Ordinary Shares; all such shares, when issued and fully paid, may be held and transferred by means of CREST.

Application will be made for the Open Offer Entitlements and Excess Open Offer Entitlements to be admitted to CREST. The Open Offer Entitlements are expected to be admitted to CREST with effect from 10 August 2015.

General

The Ordinary Shares will, when issued and fully paid, be identical to and rank in full for all dividends or other distributions declared, made or paid after Admission and in all other respects will rank pari passu with the Existing Shares in issue. No temporary documents of title will be issued. Further details of the rights attaching to the Ordinary Shares are set out in paragraph 3 "Share capital" of Part IX (Additional Information) of this document.

The Existing Shares are listed on the premium listing segment of the Official List and traded on the London Stock Exchange's main market for listed securities. Application has been made to the FCA and to the London Stock Exchange for the Ordinary Shares to be issued in the Open Offer to be admitted to the premium listing segment of the Official List and to trading on the London Stock Exchange's main market for listed securities, respectively. It is expected that Admission will become effective on 24 August 2015 and that dealings for normal settlement in the Ordinary Shares will commence at 8.00 a.m. on the same day. The Ordinary Shares and the Existing Shares are in registered form and can be held in certificated and uncertificated form.

The ISIN for the Ordinary Shares will be the same as that of the Existing Shares being GB00B0672758.

If, for any reason, it becomes necessary to adjust the expected timetable as set out in this document, the Company will make an appropriate announcement to a Regulatory Information Service giving details of the revised dates.

3. Conditions and Further Terms of the Open Offer

The Open Offer is conditional upon the Resolution being approved and the Conditional Subscription Agreement, the Scheme and the Sponsor's Agreement becoming unconditional in all respects by 8.00 a.m. on 24 August 2015 (or such later time and/or date as the Company, the Sponsor and other relevant parties to the Conditional Subscription Agreement may agree, being not later than 8.00 a.m. on 7 September 2015) and none of the Conditional Subscription Agreement, the Scheme or the Sponsor's Agreement being terminated in accordance with their terms. The Conditional Subscription Agreement and the Sponsor's Agreement are conditional, inter alia, upon:

(a) the passing of the Resolution set out in the Notice of General Meeting; and
(b) Admission becoming effective by not later than 8.00 a.m. on 24 August 2015 (or such later time and/or date as the Company, the Sponsor and other relevant parties to the Conditional Subscription Agreement may agree, being not later than 8.00 a.m. on 7 September 2015).

It is expected that all these conditions will be satisfied by 8.00 a.m. on 24 August 2015, that Admission will become effective at 8.00 a.m. on 24 August 2015, and that dealings in the Ordinary Shares in respect of the Open Offer will commence at 8.00 a.m. on 24 August 2015. Definitive certificates in respect of Ordinary Shares will be prepared and are expected to be posted to those allottees who have validly elected to hold their shares in certificated form by 7 September 2015. In respect of those allottees who have validly elected to hold their shares in uncertificated form, the Ordinary Shares are expected to be credited to their accounts maintained in the CREST system as soon as practicable after 8.00 a.m. on 24 August 2015.

Further details of the Sponsor's Agreement and the Conditional Subscription Agreement are set out in paragraph 15.1 "Material contracts" of Part IX (Additional Information) of this document. If the Conditional Subscription Agreement or the Sponsor's Agreement are not declared or do not become unconditional in all respects by 8.00 a.m. on 24 August 2015 (or such later date as the Company may agree with the Sponsor), or any of the Conditional Subscription Agreement or the Sponsor's Agreement is terminated in accordance with its terms, the Open Offer will be revoked and will not proceed. In such event, no Ordinary Shares will be issued, and all monies received by Computershare Investor Services in connection with the Open Offer will be returned to applicants without interest and at their risk as soon as practicable and any Open Offer Entitlements admitted to CREST will thereafter be disabled.

No temporary documents of title will be issued in respect of Ordinary Shares held in uncertificated form. Definitive certificates in respect of Ordinary Shares taken up under the Open Offer are expected to be posted to those Qualifying Shareholders who have validly elected to hold their Ordinary Shares in certificated form by 7 September 2015. In respect of those Qualifying Shareholders who have validly elected to hold their Ordinary Shares in uncertificated form, the Ordinary Shares are expected to be credited to their stock accounts maintained in CREST as soon as practicable after 8.00 a.m. on 24 August 2015.

4. Procedure for Application and Payment

The action to be taken by Qualifying Shareholders in respect of the Open Offer depends on whether, at the relevant time, the Qualifying Shareholder is a Qualifying non-CREST Shareholder who has an Application Form in respect of his entitlement under the Open Offer or, in the case of a Qualifying CREST Shareholder, if he has Open Offer Entitlements credited to his CREST stock account in respect of such entitlement.

Subject to the provisions of paragraph 9 "Listing, settlement, dealings and publication" of this Part VII (Terms and Conditions of the Open Offer), Qualifying Shareholders who hold their Existing Shares in certificated form will be allotted Ordinary Shares in certificated form to the extent that their entitlement to the Ordinary Shares arises as a result of holding Existing Shares in certificated form. Qualifying Shareholders who hold their Existing Shares in uncertificated form will be allotted Ordinary Shares in uncertificated form to the extent that their entitlement to the Ordinary Shares arises as a result of holding Existing Shares in uncertificated from. However, it will be possible to deposit Open Offer Entitlements into, and withdraw them from, CREST. Further information on deposit and withdrawal is set out in paragraph 4(b)(v) "Procedure for Application and Payment" of this Part VII (Terms and Conditions of the Open Offer).

CREST-sponsored members should refer to their CREST sponsor, as only their CREST sponsor will be able to take the necessary action specified below to apply under the Open Offer in respect of the Open Offer Entitlements of such members held in CREST. CREST members who wish to apply under the Open Offer in respect of their Open Offer Entitlements in CREST should refer to the CREST Manual for further information on the CREST procedures referred to below.

If a Qualifying Shareholder does not wish to apply to acquire Ordinary Shares, he should not complete or return the Application Form or submit an unmatched stock event ("USE") instruction (as applicable). Qualifying Shareholders are, however, encouraged to vote at the General Meeting by attending in person or by completing and returning the Form of Proxy or the CREST Proxy Instruction.

(a) If a Qualifying Shareholder has an Application Form in respect of his entitlement under the Open Offer

(i) General

Subject as provided in paragraph 6 "Overseas Shareholders" of this Part VII (Terms and Conditions of the Open Offer) in relation to certain Overseas Shareholders, Qualifying non-CREST Shareholders will have received an Application Form enclosed with this document. The Application Form shows the number of Existing Shares registered in the name of the corresponding Qualifying Shareholder at 5.00 p.m. on the Record Date. It also shows the maximum number of Ordinary Shares for which such Qualifying Shareholder is entitled to apply under the Open Offer on the basis set out in paragraph 2 "The Open Offer" of this Part VII (Terms and Conditions of the Open Offer), as shown by the total number of Open Offer Entitlements and Excess Open Offer Entitlements allocated therein. Fractions of Ordinary Shares will not be allocated to Qualifying Shareholders and entitlements to apply for Ordinary Shares will be rounded down to the nearest whole number of Ordinary Shares. Accordingly, Shareholders holding fewer than three Existing Shares will have no entitlement to subscribe under the Open Offer. The aggregate number of Ordinary Shares available for subscription pursuant to the Open Offer is up to 4,922,491,218 Ordinary Shares in aggregate for all Qualifying Shareholders and 984,498,244 Open Offer Shares in aggregate for all Qualifying Shareholders who are Existing Shareholders. A Qualifying Shareholder may apply for less, but not more, than his maximum entitlement should he wish to do so. A Qualifying Shareholder may also hold such an Application Form by virtue of a bona fide market claim.

The instructions and other terms set out in the Application Form form part of the terms of the Open Offer. Subject to certain exceptions, the Application Form has not been, and will not be, sent to Overseas Shareholders in, or with registered addresses in, the United States or any of the Excluded Territories and brokers, banks and other agents may not send an Application Form to, or submit Application Forms on behalf of, Overseas Shareholders in, or with addresses in any of these countries or a person (including, without limitation, stockbrokers, banks or other agents) who has a contractual or other legal obligation to forward this document into a jurisdiction other than the United Kingdom.

(ii) Market claims

Applications to acquire Ordinary Shares may only be made on the Application Form and may only be made by the Qualifying non-CREST Shareholder named in it or by a person entitled by virtue of a bona fide market claim in relation to a purchase of Existing Shares through the market prior to the date upon which the Existing Shares were marked "ex" the entitlement to the Open Offer by the London Stock Exchange, which is expected to be 6 August 2015. Application Forms may be split up to 3.00 p.m. on 19 August 2015. The Application Form is not a negotiable document and cannot be separately traded. A Qualifying non-CREST Shareholder who has sold or transferred all or part of his holding of Existing Shares prior to 6 August 2015, being the last date upon which the Existing Shares are expected to be marked "ex" the entitlement to the Open Offer by the London Stock Exchange, should consult his broker or other professional adviser as soon as possible, as the invitation to acquire Ordinary Shares under the Open Offer may be a benefit which may be claimed by the transferee from his counterparty pursuant to the rules of the London Stock Exchange. Qualifying non-CREST Shareholders who have sold all or part of their registered holdings should, if the market claim is to be settled outside CREST, complete Box 11 on the Application Form and immediately send it to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. The Application Form should not, however, be forwarded to or transmitted in or into the United States (subject to certain exceptions) or any of the Excluded Territories.

If the market claim is to be settled outside CREST, the beneficiary of the claim should follow the procedures set out in the accompanying Application Form. If the market claim is to be settled in CREST, the beneficiary of the claim should follow the procedures set out in paragraph 4(b) "Procedure for Application and Payment" of this Part VII (Terms and Conditions of the Open Offer).

The Open Offer Entitlements and Excess Open Offer Entitlements will constitute a separate security for the purposes of CREST. Although Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of Open Offer Entitlements and Excess Open Offer Entitlements may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim transaction. Transactions identified by the CREST Claims Processing Unit as "cum" the Open Offer Entitlements and Excess Open Offer Entitlements will generate an appropriate market claim transaction and the relevant Open Offer Entitlement(s) and Excess Open Offer Entitlements will thereafter be transferred accordingly.

(iii) Excess Application Facility

Qualifying non-CREST Shareholders who have taken up their Open Offer Entitlements in full may apply to acquire Excess Shares using the Excess Application Facility, should they wish. The Excess Application Facility enables Qualifying non-CREST Shareholders to apply for Excess Shares in excess of their Open Offer Entitlement up to a maximum aggregate number of Excess Shares not exceeding (a) 4,922,491,218 Open Offer Shares in aggregate for all Qualifying Shareholders and (b) 984,498,244 Open Offer Shares in aggregate for all Qualifying Shareholders who are Existing Shareholders, in which case applications made under the Excess Application Facility will be scaled down at the discretion of the Company, with the intention that the Company will prioritise applications from Existing Shareholders. A Excess applications will be satisfied only to the extent that corresponding applications by other Qualifying Shareholders are not made or are made for less than their pro rata entitlements. Qualifying non-CREST Shareholder should not make an application under the Excess Application Facility unless such Qualifying non-CREST Shareholder has applied for his Open Offer Entitlements in full.

An Excess Open Offer Entitlement may not be sold or otherwise transferred. Neither the Open Offer Entitlements nor the Excess Open Offer Entitlements will be tradeable or listed and applications in respect of the Open Offer may only be made by the Qualifying Shareholders originally entitled or by a person entitled by virtue of a bona fide market claim.

To apply for Excess Shares pursuant to the Open Offer, Qualifying non-CREST Shareholders should follow the instructions on the Application Form.

Fractions of Excess Shares will be rounded down to the nearest whole number. The total number of Open Offer Shares is fixed and will not be increased in response to any applications under the Excess Application Facility. Applications under the Excess Application Facility will therefore only be satisfied to the extent that other Qualifying Shareholders do not apply for their Open Offer Entitlements in full. Applications under the Excess Application Facility shall be allocated in such manner as the Company may determine, in its absolute discretion, and no assurance can be given that the applications by Qualifying Shareholders will be met in full or in part or at all. Excess monies in respect of applications which are not met in full will be returned to the applicant (at the applicant's risk) without interest within 14 days thereafter, by way of cheque.

All enquiries in relation to the procedure for application and completion of applications for Excess Open Offer Entitlements should be addressed to Computershare Investor Services PLC, Corporate Actions Projects, The Pavilions, Bridgwater Road, Bristol BS99 6AH, United Kingdom. (Telephone Computershare on 0870 889 3176 from within the UK or on +44 (0)870 889 3176 if calling from outside the UK). Calls from landline providers typically cost up to 12 pence per minute. From mobile networks calls cost between 5 pence and 40 pence per minute. Calls from outside the UK are chargeable at applicable international rates. Calls may be recorded and randomly monitored for security and training purposes. Lines are open from 8.30 a.m. until 5.30 p.m. (London time) Monday to Friday (excluding UK public holidays).

Please note that the Shareholder Helpline cannot provide comments on the merits of the Open Offer, or legal, financial or taxation advice.

(iv) Application procedures

If a Qualifying non-CREST Shareholder wishes to apply for all or some of his entitlement to Ordinary Shares under the Open Offer he should complete and sign the Application Form in accordance with the instructions printed on it and send it, together with the appropriate remittance and in accordance with the instructions in paragraph 4 "Procedure for Application and Payment" of this Part VII (Terms and Conditions of the Open Offer) by post to Computershare Investor Services PLC, Corporate Actions Projects, The Pavilions, Bridgwater Road, Bristol BS99 6AH, United Kingdom. Or by hand only (during normal business hours), to Computershare, The Pavilions, Bridgwater Road, Bristol, BS13 8AE, so as to be received no later than 11.00 a.m. on 21 August 2015. A reply-paid envelope is enclosed for use by Qualifying non-CREST Shareholders in connection with the Open Offer.

Qualifying non-CREST Shareholders should note that Computershare Investor Services cannot provide financial advice on the merits of the Open Offer or as to whether or not a Qualifying non-CREST Shareholder should take up his entitlement to Ordinary Shares under the Open Offer. If any Application Form is sent by firstclass post within the United Kingdom, Qualifying non-CREST Shareholders are recommended to allow at least four Business Days for delivery.

(v) Payments

All payments must be in pounds sterling and cheques or banker's drafts should be made payable to "Computershare Investor Services PLC Re: Afren plc Open Offer A/C" and crossed "A/C payee only". Cheques or banker's drafts must be drawn on an account at a branch of a bank or building society in the United Kingdom, the Channel Islands or the Isle of Man which is either a settlement member of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limited or which is a member of either of the Committees of Scottish or Belfast clearing houses or which has arranged for its cheques and banker's drafts to be cleared through the facilities provided by any of those companies or committees. Such cheques or banker's drafts must bear the appropriate sort code in the top right-hand corner and must be for the full amount payable on application.

Cheques must be drawn on the personal account of the individual investor where they have sole or joint title to the funds. Third-party cheques will not be accepted with the exception of building society cheques or banker's drafts where the building society or bank has confirmed the name of the account holder by stamping or endorsing the back of the building society cheque or banker's draft to such effect. The account name should be the same as that shown on the application.

Cheques or banker's drafts will be presented for payment upon receipt. Post-dated cheques will not be accepted. The Company reserves the right to instruct Computershare Investor Services to seek special clearance of cheques and banker's drafts to allow the Company to obtain value for remittances at the earliest opportunity. No interest will be payable on payments. It is a term of the Open Offer that cheques shall be honoured on first presentation, and the Company may elect, in its absolute discretion, to treat cheques not so honoured as invalid acceptances.

Application monies will be paid into a separate bank account pending the Open Offer becoming unconditional. In the event that it does not become unconditional by 8.00 a.m. on 24 August 2015 or such later time and date as the Sponsor and the Company shall agree (being not later than 8.00 a.m. on 7 September 2015), the Open Offer will lapse and application monies will be returned by post to applicants, at the applicants' risk and without interest, to the address set out on the Application Form, within 14 days thereafter.

(vi) Effect of application

All documents and remittances sent by post by or to an applicant (or as the applicant may direct) will be sent at the applicant's own risk. By completing and delivering an Application Form, the applicant:

(A) represents and warrants that he has the right, power and authority, and has taken all action necessary, to make the application under the Open Offer and to execute, deliver and exercise his rights, and perform his obligations, under any contracts resulting therefrom and that he is not a person otherwise prevented by legal or regulatory restrictions from applying for Open Offer Shares or acting on behalf of any such person on a non-discretionary basis;
(B) agrees that all applications, and contracts resulting therefrom, under the Open Offer shall be governed by, and construed in accordance with, the laws of England and Wales;
(C) confirms that in making the application he is not relying on any information or representation in relation to the Group other than that contained in this document, and he accordingly agrees that no person responsible solely or jointly for this document or any part thereof, or involved in the preparation thereof, shall have any liability for any such information or representation not so contained and further agrees that, having had the opportunity to read this document, he will be deemed to have had notice of all information contained in this document (including information incorporated by reference);
(D) represents and warrants that he is the Qualifying Shareholder originally entitled to the Open Offer Entitlement or, if he has received any Open Offer Entitlements from a person other than the Company, he is entitled to apply under the Open Offer in relation to such Open Offer Entitlements by virtue of a bona fide market claim;
(E) requests that the Ordinary Shares to which he will become entitled be issued to him on the terms set out in this document and the Application Form and subject to the Articles;
(F) represents and warrants that he is not a person, and is not applying on behalf of any such person, who by virtue of being resident in or a citizen of any country outside the United Kingdom, or a corporation, partnership or other entity created or organised outside the United Kingdom is prevented by the law of any relevant jurisdiction from lawfully applying for Ordinary Shares;
(G) represents and warrants that, (I) he is not located in the United States (including delivery of an investor letter pursuant to paragraph 6 below) or any of the Excluded Territories or any other territory in which it is unlawful to make or accept an offer to apply for Ordinary Shares or to use the Application Form in any manner in which he has used or will use it; (II) he is not acting for the account or benefit of a person located within any of the Excluded Territories or any other territory in which it is unlawful to make or accept an offer to apply for Ordinary Shares and was not acting for the account or benefit of such a person at the time the instruction to apply for the Ordinary Shares was given; and (III) he is not acquiring Ordinary Shares with a view to the offer, sale, resale, delivery or transfer, directly or indirectly, of any such Ordinary Shares into the United States or any of the Excluded Territories or any other territory in which it is unlawful to make or accept an offer to apply for Ordinary Shares, in each case, except where the requirement to make such representation and warranty has been waived by

the Company and proof satisfactory to the Company has been given that he is entitled to take up his entitlement without any breach of applicable law; and

(H) represents and warrants that he is not, and nor is he applying as nominee or agent for, a person who is or may be liable to notify and account for tax under the Stamp Duty Reserve Tax Regulations 1986 at any of the increased rates referred to in section 93 (depositary receipts) or section 96 (clearance services) of the Finance Act 1986.

Further representations and warranties are included in the Application Form.

If a Qualifying non-CREST Shareholder is in doubt as to whether or not he should apply for any of the Ordinary Shares under the Open Offer, he should consult his independent financial adviser immediately. All enquiries in relation to the procedure for application for Qualifying non-CREST Shareholders under the Open Offer should be addressed to Computershare Investor Services PLC, Corporate Actions Projects, The Pavilions, Bridgwater Road, Bristol BS99 6AH, United Kingdom or by telephone on 0870 889 3176 or, if telephoning from outside the UK, on +44 (0)870 703 889 3176. Calls from landline providers typically cost up to 12 pence per minute. From mobile networks calls cost between 5 pence and 40 pence per minute. Calls from outside the UK are chargeable at applicable international rates. Calls may be recorded and randomly monitored for security and training purposes. Lines are open from 8.30 a.m. until 5.30 p.m. (London time) Monday to Friday (excluding UK public holidays).

Please note that the Shareholder Helpline cannot provide comments on the merits of the Open Offer, or legal, financial or taxation advice.

If a Qualifying non-CREST Shareholder does not wish to apply for any of the Ordinary Shares to which he is entitled under the Open Offer, he should not complete or return the Application Form but is encouraged, in any case, to vote at the General Meeting by attending in person or by completing and returning the Form of Proxy enclosed with this document.

(b) If a Qualifying Shareholder has Open Offer Entitlements credited to his stock account in CREST in respect of his entitlement under the Open Offer

(i) General

Subject as provided in paragraph 6 "Overseas Shareholders" of this Part VII (Terms and Conditions of the Open Offer) in relation to certain Overseas Shareholders, each Qualifying CREST Shareholder will receive a credit to his stock account in CREST of his Open Offer Entitlements equal to the maximum number of Ordinary Shares for which he is entitled to apply to acquire under the Open Offer.

The CREST stock account to be credited will be an account under the CREST participant ID and CREST member account ID that apply to the Existing Shares held on the Record Date by the Qualifying CREST Shareholder in respect of which the Open Offer Entitlements have been allocated.

If, for any reason, the Open Offer Entitlements cannot be admitted to CREST by, or the stock accounts of Qualifying CREST Shareholders cannot be credited by, 4.30 p.m. on 17 August 2015 or such later time as the Company may decide, an Application Form will be sent out to each Qualifying CREST Shareholder in substitution for the Open Offer Entitlements which should have been credited to his stock account in CREST. In these circumstances the expected timetable as set out in this document will be adjusted as appropriate and the provisions of this document applicable to Qualifying non-CREST Shareholders with Application Forms will apply to Qualifying CREST Shareholders who receive Application Forms.

CREST members who wish to apply for some or all of their entitlements to Ordinary Shares should refer to the CREST Manual for further information on the CREST procedures referred to below. Should a Qualifying CREST Shareholder need advice with regard to these procedures, he should contact Computershare, or telephone Computershare on 0870 889 3176 or, if telephoning from outside the UK, on +44 (0)870 889 3176. Calls from landline providers typically cost up to 12 pence per minute. From mobile networks calls cost between 5 pence and 40 pence per minute. Calls from outside the UK are chargeable at applicable international rates. Calls may be recorded and randomly monitored for security and training purposes. Lines are open from 8.30 a.m. until 5.30 p.m. (London time) Monday to Friday (excluding UK public holidays).

Please note that the Shareholder Helpline cannot provide comments on the merits of the Open Offer, or legal, financial or taxation advice.

If a Qualifying CREST Shareholder is a CREST-sponsored member he should consult his CREST sponsor if he wishes to apply for Ordinary Shares as only that CREST sponsor will be able to take the necessary action to make this application in CREST.

(ii) Market claims

The Open Offer Entitlements will constitute a separate security for the purposes of CREST. Although Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of Open Offer Entitlements may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim transaction. Transactions identified by the CREST Claims Processing Unit as "cum" the Open Offer Entitlements will generate an appropriate market claim transaction and the relevant Open Offer Entitlement(s) will thereafter be transferred accordingly.

(iii) Excess Application Facility

Qualifying CREST Shareholders who have taken up their Open Offer Entitlements in full may apply to acquire Excess Shares using the Excess Application Facility, should they wish. The Excess Application Facility enables Qualifying CREST Shareholders to apply for Excess Shares in excess of their Open Offer Entitlement up to a maximum aggregate number of Excess Shares not exceeding (a) 4,922,491,218 Open Offer Shares in aggregate for all Qualifying Shareholders and (b) 984,498,244 Open Offer Shares in aggregate for all Qualifying Shareholders who are Existing Shareholders, in which case applications made under the Excess Application Facility will be scaled down at the discretion of the Company, with the intention that the Company will prioritise applications from Existing Shareholders. A Excess applications will be satisfied only to the extent that corresponding applications by other Qualifying Shareholders are not made or are made for less than their pro rata entitlements. Qualifying CREST Shareholder should not make an application under the Excess Application Facility unless such Qualifying CREST Shareholder has applied for his Open Offer Entitlements in full.

An Excess Open Offer Entitlement may not be sold or otherwise transferred. Subject as provided in paragraph 6 of this Part VII in relation to Overseas Shareholders, the CREST accounts of Qualifying CREST Shareholders will be credited with an Excess Open Offer Entitlement in order for any applications for Excess Shares to be settled through CREST.

Qualifying CREST Shareholders should note that, although the Open Offer Entitlements and the Excess Open Offer Entitlements will be admitted to CREST, they will have limited settlement capabilities (for the purposes of bona fide market claims only). Neither the Open Offer Entitlements nor the Excess Open Offer Entitlements will be tradeable or listed and applications in respect of the Open Offer may only be made by the Qualifying Shareholders originally entitled or by a person entitled by virtue of a bona fide market claim.

To apply for Excess Shares pursuant to the Open Offer, Qualifying CREST Shareholders should follow the instructions in paragraph (vi) below and must not return a paper form and cheque. Should a transaction be identified by the CREST Claims Processing Unit as "cum" the Open Offer Entitlement and the relevant Open Offer Entitlement is transferred, the Excess Open Offer Entitlements will not transfer with the Open Offer Entitlement claim, but will be transferred as a separate claim. Should a Qualifying CREST Shareholder cease to hold all of his Existing Shares as a result of one or more bona fide market claims, the Excess Open Offer Entitlement credited to CREST and allocated to the relevant Qualifying Shareholder will be transferred to the purchaser. Please note that a separate USE Instruction must be sent in respect of any application under the Excess Open Offer Entitlement.

Please note that the Shareholder Helpline cannot provide comments on the merits of the Open Offer, or legal, financial or taxation advice.

(iv) USE instructions

CREST members who wish to apply for Ordinary Shares in respect of all or some of their Open Offer Entitlements and their Excess Open Offer Entitlements in CREST must send (or, if they are a CREST-sponsored member, procure that their CREST sponsor sends) a USE instruction to Euroclear which, on its settlement, will have the following effect:

(A) the crediting of a stock account of Computershare under the CREST participant ID and CREST member account ID specified below, with a number of Open Offer Entitlements or Excess Open Offer Entitlements corresponding to the number of Ordinary Shares applied for; and

(B) the creation of a CREST payment, in accordance with the CREST payment arrangements, in favour of the payment bank of Computershare in respect of the amount specified in the USE instruction which must be the full amount payable on application for the number of Ordinary Shares referred to in subparagraph (a) above.

(v) Content of USE instructions

The USE instruction must be properly authenticated in accordance with Euroclear's specifications and must contain, in addition to the other information that is required for settlement in CREST, the following details:

(A) the number of Ordinary Shares for which application is being made (and hence the number of the Open Offer Entitlement(s) being delivered to the Receiving Agent – Computershare);
(B) the ISIN of the Open Offer Entitlements and, if applicable, the ISIN of the Excess Open Offer Entitlements. This is GB00BZ0Y9320 for the Open Offer Entitlements and GB00BZ0Y9437 for the Excess Open Offer Entitlements;
(C) the CREST member account ID of the accepting CREST member from which the Open Offer Entitlements are to be debited;
(D) the CREST participant ID of the accepting CREST Member;
(E) the CREST participant ID of Computershare, in its capacity as a CREST receiving agent. This is 8RA30;
(F) the CREST member account ID of Computershare, in its capacity as a CREST receiving agent. This is AFREN;
(G) the amount payable by means of a CREST payment on settlement of the USE instruction. This must be the full amount payable on application for the number of Ordinary Shares referred to in sub-paragraph (A) above;
(H) the intended settlement date. This must be on or before 11.00 a.m. on 21 August 2015; and
(I) the Corporate Action Number for the Open Offer. This will be available by viewing the relevant corporate action details in CREST.

In order for an application under the Open Offer to be valid, the USE instruction must comply with the requirements as to authentication and contents set out above and must settle on or before 11.00 a.m. on 21 August 2015.

In order to assist prompt settlement of the USE instruction, CREST members (or their sponsors, where applicable) may consider adding the following non-mandatory fields to the USE instruction:

(A) a contact name and telephone number (in the free-format shared note field); and
(B) a priority of at least 80.

CREST members and, in the case of CREST-sponsored members, their CREST sponsors should note that the last time at which a USE instruction may settle on 21 August 2015 in order to be valid is 11.00 a.m. on that day.

In the event that the Open Offer does not become unconditional by 8.00 a.m. on 24 August 2015 or such later time and date as the Related Party Shareholders, the Sponsor and the Company shall agree (being no later than 8.00 a.m. on 7 September 2015), the Open Offer will lapse, the Open Offer Entitlements admitted to CREST will be disabled and Computershare will refund the amount paid by a Qualifying CREST Shareholder by way of a CREST payment, without interest, within 14 days thereafter.

(vi) Content of USE Instruction in respect of Excess Open Offer Entitlements

The USE Instruction must be properly authenticated in accordance with Euroclear's specifications and must contain, in addition to the other information that is required for settlement in CREST, the following details:

(A) the number of Open Offer Shares for which the application is being made (and hence the number of the Excess Open Offer Entitlement(s) being delivered to the Receiving Agent);
(B) the ISIN of the Excess Open Offer Entitlement. This is GB00BZ0Y9437;
(C) the Member Account ID of the accepting CREST member from which the Excess Open Offer Entitlements are to be debited;
(D) the participant ID of the accepting CREST member;
(E) the CREST participant ID of Computershare, in its capacity as CREST receiving agent. This is 8RA30;
(F) the Member Account ID of Computershare, in its capacity as CREST receiving agent. This is AFREN;
(G) the amount payable by means of a CREST payment on settlement of the USE instruction. This must be the full amount payable on application for the number of Open Offer Shares referred to in paragraph (A) above;
(H) the intended settlement date. This must be on or before 11.00 a.m. on 21 August 2015; and
(I) the Corporate Action Number for the Open Offer. This will be available by viewing the relevant corporate action details in CREST.

In order for the application in respect of an Excess Open Offer Entitlement under the Open Offer to be valid, the USE instruction must comply with the requirements as to authentication and contents set out above and must settle on or before 11.00 a.m. on 21 August 2015. In order to assist prompt settlement of the USE instruction, CREST members (or their sponsors, where applicable) should add the following nonmandatory fields to the USE instruction:

(cc) a contact name and telephone number (in the free format shared note field); and

(dd) a priority of at least 80.

CREST members and, in the case of CREST sponsored members, their CREST sponsors, should note that the last time at which a USE instruction may settle on 21 August 2015 in order to be valid is 11.00 a.m. on that day.

In the event that the Restructuring does not become unconditional by 8.00 a.m. on 24 August 2015 or such later time and date as the Sponsor and the Company shall agree (being no later than 8.00 a.m. on 7 September 2015), the Restructuring will lapse, the Open Offer Entitlements and the Excess Open Offer Entitlements admitted to CREST will be disabled and Computershare will refund the amount paid by a Qualifying CREST Shareholder by way of a CREST payment, without interest, within 14 days thereafter.

(vii) Deposit of Open Offer Entitlements and Excess Open Offer Entitlements into, and withdrawal from, CREST

A Qualifying non-CREST Shareholder's entitlement under the Open Offer as shown by the number of Open Offer Entitlements set out in his Application Form may be deposited into CREST (either into the account of the Qualifying Shareholder named in the Application Form or into the name of a person entitled by virtue of a bona fide market claim). Similarly, Open Offer Entitlements and Excess Open Offer Entitlements held in CREST may be withdrawn from CREST so that the entitlement under the Open Offer is reflected in an Application Form. Normal CREST procedures (including timings) apply in relation to any such deposit or withdrawal, subject (in the case of a deposit into CREST) as set out in the Application Form.

A holder of an Application Form who is proposing to deposit the entitlement set out in such form is recommended to ensure that the deposit procedures are implemented in sufficient time to enable the person holding or acquiring the Open Offer Entitlements and Excess Open Offer Entitlements following their deposit into CREST to take all necessary steps in connection with taking up the entitlement prior to 11.00 a.m. on 21 August 2015.

In particular, having regard to normal processing times in CREST and on the part of Computershare, the recommended latest time for depositing an Application Form with the CCSS, where the person entitled wishes to hold the entitlement under the Open Offer set out in such Application Form as Open Offer Entitlements and Excess Open Offer Entitlements in CREST, is 3.00 p.m. on 19 August 2015, and the recommended latest time for receipt by Euroclear of a dematerialised instruction requesting withdrawal of Open Offer Entitlements and Excess Open Offer Entitlements from CREST is 4.30 p.m. on 17 August 2015, in either case, so as to enable the person acquiring or (as appropriate) holding the Open Offer Entitlements and Excess Open Offer Entitlements following the deposit or withdrawal (whether as shown in an Application Form or held in CREST) to take all necessary steps in connection with applying in respect of the Open Offer Entitlements and Excess Open Offer Entitlements prior to 11.00 a.m. on 21 August 2015.

Delivery of an Application Form with the CREST Deposit Form duly completed, whether in respect of a deposit into the account of the Qualifying Shareholder named in the Application Form or into the name of another person, shall constitute a representation and warranty to the Company and Computershare by the relevant CREST members that (A) he is not located in, the United States, any of the Excluded Territories or any other territory in which it is unlawful to make or accept an offer to apply for Ordinary Shares; (B) he is not acting for the account or benefit of a person who is located within the United States, any of the Excluded Territories or any other territory in which it is unlawful to make or accept an offer to apply for Ordinary Shares and was not acting for the account or benefit of such a person at the time the instruction to apply for the Ordinary Shares was given; and (C) he is not acquiring the Ordinary Shares with a view to the offer, sale, resale, delivery or transfer, directly or indirectly, of any such Ordinary Shares into the United States, any of the Excluded Territories or any other territory in which it is unlawful to make or accept an offer to apply for Ordinary Shares, in each case, except where the requirement to make such representation and warranty has been waived by the Company and proof satisfactory to the Company has been given that he is entitled to take up his entitlement without breach of applicable law; and, where such deposit is made by a beneficiary of a market claim, a representation and warranty that the relevant CREST member(s) is/are entitled to apply under the Open Offer by virtue of a bona fide market claim.

(viii) Validity of application

A USE instruction complying with the requirements as to authentication and contents set out above which settles by no later than 11.00 a.m. on 21 August 2015 will constitute a valid application under the Open Offer.

(ix) CREST procedures and timings

CREST members and (where applicable) their CREST sponsors should note that Euroclear does not make available special procedures in CREST for any particular corporate action. Normal system timings and limitations will therefore apply in relation to the input of a USE instruction and its settlement in connection with the Open Offer. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST-sponsored member, to procure that his CREST sponsor takes) such action as shall be necessary to ensure that a valid application is made as stated above by 11.00 a.m. on 21 August 2015. In this connection, CREST members and (where applicable) their CREST sponsors are referred in particular to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

(x) Incorrect or incomplete applications

If a USE instruction includes a CREST payment for an incorrect sum, the Company through Computershare reserves the right:

(A) to reject the application in full and refund the payment to the CREST member in question;
(B) in the case that an insufficient sum is paid, to treat the application as a valid application for such lesser whole number of Ordinary Shares as would be able to be applied for with that payment at the Offer Price, refunding any unutilised sum to the CREST member in question; or
(C) in the case that an excess sum is paid, to treat the application as a valid application for all the Ordinary Shares referred to in the USE instruction refunding any unutilised sum to the CREST member in question.

(xi) Effect of valid application

A CREST member who makes or is treated as making a valid application in accordance with the above procedures thereby:

(A) represents and warrants that he has the right, power and authority, and has taken all action necessary, to make the application under the Open Offer and to execute, deliver and exercise his rights, and perform his obligations, under any contracts resulting therefrom and that he is not a person otherwise prevented by legal or regulatory restrictions from applying for Open Offer Shares or acting on behalf of any person on a non-discretionary basis;
(B) agrees to pay the amount payable on application in accordance with the above procedures by means of a CREST payment in accordance with the CREST payment arrangements (it being acknowledged that the payment to Computershare's payment bank in accordance with the CREST payment arrangements shall, to the extent of the payment, discharge in full the obligation of the CREST member to pay to the Company the amount payable on application);
(C) requests that the Ordinary Shares to which he will become entitled be issued to him on the terms set out in this document and subject to the Articles;
(D) agrees that all applications and contracts resulting therefrom under the Open Offer shall be governed by, and construed in accordance with, the laws of England and Wales;
(E) represents and warrants that he is not a person, and is not applying on behalf of any such person, who by virtue of being resident in or a citizen of any country outside the United Kingdom, or a corporation, partnership or other entity created or organised outside the United Kingdom is prevented by the law of any relevant jurisdiction from lawfully applying for Ordinary Shares;
(F) represents and warrants that (I) he is not in the United States, any of the Excluded Territories or any other territory in which it is unlawful to make or accept an offer to apply for Ordinary Shares; (II) he is not acting for the account or benefit of a person located within any of the Excluded Territories or any other territory in which it is unlawful to make or accept an offer to apply for Ordinary Shares and he was not acting for the account or benefit of such a person at the time the instruction to apply for the Ordinary Shares was given; and (III) he is not acquiring Ordinary Shares with a view to the offer, sale, resale, delivery or transfer, directly or indirectly, of any such Ordinary Shares into the United States, any of the Excluded Territories or any other territory in which it is unlawful to make or accept an offer to apply for Ordinary Shares, in each case, except where the requirement to make such representation and warranty has been waived by the Company and proof satisfactory to the Company has been given that he is entitled to take up his entitlement without breach of applicable law;
(G) represents and warrants that he is not, and nor is he applying as nominee or agent for, a person who is or may be liable to notify and account for tax under the Stamp Duty Reserve Tax Regulations 1986 at any of the increased rates referred to in section 93 (Depository receipts) or section 96 (Clearance services) of the Finance Act 1986;
(H) confirms that, in making such application, he is not relying on any information or representation in relation to the Company other than that contained in this document and he accordingly agrees that no person responsible solely or jointly for this document or any part thereof or involved in the preparation thereof shall have any liability for any such information or representation not so contained and further agrees that, having had the opportunity to read this document, he will be deemed to have had notice of all the information contained in this document (including information incorporated by reference); and
(I) represents and warrants that he is the Qualifying Shareholder originally entitled to the Open Offer Entitlements and the Excess Open Offer Entitlements or that he has received such Open Offer Entitlements by virtue of a bona fide market claim.
(xii) The Company's discretion as to rejection and validity of applications

The Company may, in its sole discretion:

(A) treat as valid (and binding on the CREST member concerned) an application which does not comply in all respects with the requirements as to validity set out or referred to in this Part VII (Terms and Conditions of the Open Offer);
(B) accept an alternative properly authenticated dematerialised instruction from a CREST member or (where applicable) a CREST sponsor as constituting a

valid application in substitution for or in addition to a USE instruction and subject to such further terms and conditions as the Company may determine;

(C) treat a properly authenticated dematerialised instruction (in this subparagraph, the "first instruction") as not constituting a valid application if, at the time at which Computershare receives a properly authenticated dematerialised instruction giving details of the first instruction or thereafter, either the Company or Computershare has received actual notice from Euroclear of any of the matters specified in Regulation 35(5)(a) of the CREST Regulations in relation to the first instruction. These matters include notice that any information contained in the first instruction was incorrect or notice of lack of authority to send the first instruction; and
(D) accept an alternative instruction or notification from a CREST member or CREST-sponsored member or (where applicable) a CREST sponsor, or extend the time for settlement of a USE instruction or any alternative instruction or notification, in the event that, for reasons or due to circumstances outside the control of any CREST member or CRESTsponsored member or (where applicable) CREST sponsor, the CREST member or CREST-sponsored member is unable validly to apply for Ordinary Shares by means of the above procedures. In normal circumstances, this discretion is only likely to be exercised in the event of any interruption, failure or breakdown of CREST (or any part of CREST) or on the part of the facilities and/or systems operated by Computershare in connection with CREST.

5. Money Laundering Regulations

(a) Holders of Application Forms

It is a term of the Open Offer that, to ensure compliance with the Money Laundering Regulations, Computershare may require, in its absolute discretion, verification of the identity of the person by whom or on whose behalf an Application Form is lodged with payment (which requirements are referred to below as the "verification of identity requirements").

The person(s) (the "applicant") who, by lodging an Application Form with payment, and in accordance with the other terms as described above, accept(s) the Open Offer in respect of the Ordinary Shares (the "relevant shares") comprised in such Application Form shall thereby be deemed to agree to provide Computershare with such information and other evidence as it may require to satisfy the verification of identity requirements.

Computershare may therefore undertake electronic searches for the purposes of verifying identity. To do so, Computershare may verify the details against the applicant's identity, but also may request further proof of identity.

If Computershare determines that the verification of identity requirements apply to any applicant or application, the relevant shares (notwithstanding any other term of the Open Offer) will not be issued to the applicant unless and until the verification of identity requirements have been satisfied in respect of that application. Computershare is entitled, in its absolute discretion, to determine whether the verification of identity requirements apply to any applicant or application and whether such requirements have been satisfied, and neither Computershare nor the Company will be liable to any person for any loss or damage suffered or incurred (or alleged), directly or indirectly, as a result of the exercise of such discretion.

If the verification of identity requirements apply, failure to provide the necessary evidence of identity within a reasonable time may result in delays in the despatch of share certificates or in crediting CREST accounts. If, within a reasonable period of time and in any event by not later than 21 August 2015, following a request for verification of identity, Computershare has not received evidence satisfactory to it as aforesaid, the Company may, in its absolute discretion, terminate the contract of allotment in which event the monies payable on acceptance of the Open Offer will be returned at the applicant's risk and without interest to the account of the bank from which such monies were originally debited (without prejudice to the right of the Company to take proceedings to recover the amount by which the net proceeds of sale of the relevant Ordinary Shares fall short of the amount payable thereon).

Submission of an Application Form with the appropriate remittance will constitute a warranty from the applicant that the Money Laundering Regulations will not be breached by application of such remittance.

The verification of identity requirements will not usually apply:

(i) if the applicant is an organisation required to comply with the Money Laundering Directive (the Council Directive on the prevention of the use of the financial system for the purpose of money laundering (no. 911308/EEQ); or
(ii) if the applicant is a regulated United Kingdom broker or intermediary acting as agent and is itself subject to the Money Laundering Regulations; or
(iii) if the applicant (not being an applicant who delivers his application in person) makes payment by way of a cheque drawn on an account in the name of such applicant; or
(iv) if the aggregate subscription price for the relevant shares is less than the sterling equivalent of €15,000 (currently approximately £12,500).

In other cases, the verification of identity requirements may apply. The following guidance is provided in order to assist in satisfying the verification of identity requirements and to reduce the likelihood of difficulties or delays and potential rejection of an application (but does not limit the right of Computershare to require verification of identity as stated above). Satisfaction of the verification of identity requirements may be facilitated in the following ways:

(i) if payment is made by building society cheque (not being a cheque drawn on an account of the applicant) or banker's draft, by the building society or bank endorsing on the cheque or draft the applicant's name and the number of an account held in the applicant's name at such building society or bank, such endorsement being validated by a stamp and an authorised signature by the building society or bank on the reverse of the cheque or banker's draft;
(ii) if the Application Form is lodged with payment by an agent which is an organisation of the kind referred to above or which is subject to anti-money laundering regulation in a country which is a member of the Financial Action Task Force (the current non-EU members of which are Argentina, Australia, Brazil, Canada, Hong Kong, Iceland, India, Japan, Mexico, New Zealand, Norway, People's Republic of China, Republic of Korea, Russia, Singapore, South Africa, Switzerland, Turkey, the United States of America and, by virtue of their membership of the Gulf Co-operation Council, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), the agent should provide written confirmation that it has that status with the Application Form and written assurance that it has obtained and recorded evidence of the identity of the persons for whom it acts and that it will, on demand, make such evidence available to Computershare or the relevant authority. In order to confirm the acceptability of any written assurance referred to in sub-paragraph (B) above or any other case, the applicant should contact Computershare; or
(iii) if (an) Application Form(s) is/are in respect of relevant shares with an aggregate subscription price of the sterling equivalent of €15,000 (currently approximately £12,500) or more and is/are lodged by hand by the applicant in person, he should

ensure that he has with him evidence of identity bearing his photograph (for example, his passport) and evidence of his address.

Third-party cheques will not be accepted with the exception of building society cheques or banker's drafts where the building society or bank has confirmed the name of the account holder by stamping or endorsing the back of the building society cheque or banker's draft to such effect. The account name should be the same as that shown on the application.

If a Qualifying Shareholder delivers an Application Form by hand, he should ensure that he has with him evidence of identity bearing his photograph (for example, a passport). If, within a reasonable period of time following a request for verification of identity, and in any case by no later than 11.00 a.m. on 21 August 2015, Computershare has not received evidence satisfactory to it as aforesaid, Computershare may, at its discretion, as agent of the Company, reject the relevant application, in which event the monies submitted in respect of that application will be returned without interest to the account at the drawee bank from which such monies were originally debited (without prejudice to the rights of the Company to undertake proceedings to receive monies in respect of the loss suffered by it as a result of the failure to produce satisfactory evidence as aforesaid).

(b) Open Offer Entitlements and Excess Open Offer Entitlements in CREST

If a Qualifying Shareholder holds his Open Offer Entitlements and Excess Open Offer Entitlements in CREST and applies for Ordinary Shares in respect of all or some of his Open Offer Entitlements and Excess Open Offer Entitlements as agent for one or more persons and he is not a UK or EU regulated person or institution (for example, a UK financial institution), irrespective of the value of the application, Computershare is obliged to take reasonable measures to establish the identity of the person or persons on whose behalf the application is being made. Such Qualifying Shareholder must therefore contact Computershare before sending any USE instruction or other instruction so that appropriate measures may be taken.

Submission of a USE instruction which, on its settlement, constitutes a valid application as described above constitutes a warranty and undertaking by the applicant to provide promptly to Computershare such information as may be specified by Computershare as being required for the purposes of the Money Laundering Regulations. Pending the provision of evidence satisfactory to Computershare as to identity, Computershare may, in its absolute discretion, take, or omit to take, such action as it may determine to prevent or delay issue of the Ordinary Shares concerned. If satisfactory evidence of identity has not been provided within a reasonable time, then the application for the Ordinary Shares represented by the USE instruction will not be valid. This is without prejudice to the right of the Company to take proceedings to recover any loss suffered by it as a result of failure to provide satisfactory evidence.

6. Overseas Shareholders

(a) General

The making of the Open Offer to Overseas Shareholders may be affected by the laws or regulatory requirements of the relevant jurisdiction. Overseas Shareholders who are in any doubt in this respect should consult their professional advisers without delay.

Whilst Qualifying Shareholders who have registered addresses outside the United Kingdom, or who are resident in, or citizens of, countries other than the United Kingdom are entitled to participate in the Open Offer, the ability of those persons to take up their allocations may be affected by the laws of the relevant jurisdiction. Those persons should consult their professional advisers as to all legal, regulatory or other formalities required to enable them to take up their allocations, including whether they require any governmental or other consents or need to observe any other formalities in such territory including paying any issue, transfer or other

taxes. The comments set out in paragraph 6 "Overseas Shareholders" of this Part VII (Terms and Conditions of the Open Offer) are intended as a general guide only and any Overseas Shareholder should seek professional advice without delay.

No action has been or will be taken by the Company or any other person to permit a public offering or distribution of this document or the Application Form in any jurisdiction where action for that purpose may be required, other than in the United Kingdom.

No person receiving a copy of this document and/or an Application Form and/or receiving a credit of Open Offer Entitlements and/or Excess Open Offer Entitlements to a stock account in CREST in any territory other than the United Kingdom may treat the same as constituting an invitation or offer to him, nor should he in any event use such Application Form or credit of Open Offer Entitlements and/or Excess Open Offer Entitlements to a stock account in CREST, unless, in the relevant territory, such an invitation or offer could lawfully be made to him or such Application Form or credit of Open Offer Entitlements and/or Excess Open Offer Entitlements to a stock account in CREST could lawfully be used without contravention of any legislation or other local regulatory requirements. Receipt of this document and/or an Application Form or the crediting of Open Offer Entitlements and/or Excess Open Offer Entitlements to a stock account in CREST does not constitute an invitation or offer to Overseas Shareholders in the territories in which it would be unlawful to make an invitation or offer and, in such circumstances, this document and/or any Application Forms are sent for information only. It is the responsibility of any Qualifying Shareholder receiving a copy of this document and/or an Application Form and/or receiving a credit of Open Offer Entitlements Excess and/or Open Offer Entitlements to a stock account in CREST outside the United Kingdom and wishing to make an application for any Ordinary Shares to satisfy himself as to the full observance of the laws and regulatory requirements of the relevant territory in connection therewith, including obtaining any governmental or other consents which may be required or observing any other formalities required to be observed in such territory and paying any issue, transfer or other taxes due in such other territory.

Due to restrictions under the securities laws of the Excluded Territories and certain commercial considerations, Application Forms will not be sent to, and Open Offer Entitlements and/or Excess Open Offer Entitlements will not be credited to stock accounts in CREST of, Shareholders in Excluded Territories or their agents or intermediaries, except where the Company is satisfied, at its sole and absolute discretion, that such action would not result in the contravention of any registration or other legal requirement in the relevant jurisdiction.

Persons (including, without limitation, stockbrokers, banks and other agents) receiving an Application Form and/or receiving a credit of Open Offer Entitlements and/or Excess Open Offer Entitlements to a stock account in CREST should not, in connection with the Open Offer, distribute or send the Application Form or transfer the Open Offer Entitlements and/or Excess Open Offer Entitlements into any jurisdiction where to do so would or might contravene local securities laws or regulations.

If an Application Form or a credit of Open Offer Entitlements and/or Excess Open Offer Entitlements to a stock account in CREST is received by any person in any such jurisdiction or by the stockbrokers, banks and other agents or nominees of such person, he must not seek to take up the Ordinary Shares except pursuant to an express agreement with the Company. Any person who does forward an Application Form or transfer the Open Offer Entitlements and/or Excess Open Offer Entitlements into any such jurisdiction, whether pursuant to a contractual or legal obligation or otherwise, should draw the attention of the recipient to the contents of this paragraph. The Company reserves the right to reject an Application Form or transfer of Open Offer Entitlements and/or Excess Open Offer Entitlements from or in favour of Shareholders in any such jurisdiction or persons who are acquiring Ordinary Shares for resale in any such jurisdiction.

The Company reserves the right, in its absolute discretion, to treat as invalid any application for Ordinary Shares under the Open Offer, and the Company will not be bound to allot or issue any Ordinary Shares in respect of any acceptance or purported acceptance of the offer of Ordinary Shares, if it appears to the Company or its agents that such application or acceptance thereof may involve a breach of the laws or regulations of any jurisdiction or if in respect of such application the Company has not been given the relevant warranty concerning overseas jurisdictions set out in the Application Form or in this document, as appropriate. All payments under the Open Offer must be made in pounds sterling.

The Company is not making any representation to any offeree or purchaser of Open Offer Shares regarding the legality of an investment in the Open Offer Shares by such offeree or purchaser under the laws applicable to such offeree or purchaser.

(b) United States and other Excluded Territories

(i) United States

The New Shares have not been and will not be registered under the Securities Act or under securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, transferred or delivered, directly or indirectly, within the United States except pursuant to an applicable exemption from the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States.

Accordingly, no action has been or will be taken by the Company or any other person to permit a public offering or distribution of this document or the Application Form in the United States. Subject to certain exceptions, neither this Prospectus nor an Application Form will be sent to, and no Open Offer Entitlements will be credited to, a stock account in CREST with a bank or financial institution of any person with a registered address in the United States will be deemed to be invalid and all persons acquiring Open Offer Shares and wishing to hold such Open Offer Shares in registered form must provide an address for registration for the Open Offer Shares outside the United States.

Subject to certain exceptions, any person who acquires Open Offer Shares will be deemed to have declared, warranted and agreed, by accepting delivery of this Prospectus or the Application form or by applying for Open Offer Shares in respect of Open Offer Entitlements credited to a stock account in CREST, and delivery of the Open Offer Shares, to the effect set out in paragraphs 4(b)(xi)(F) and 4(a)(v)(G) above, as applicable.

The Company reserves the right to reject any Application Form or USE Instruction if it has reason to believe such representation and warranties cannot be given. The Company also reserves the right to treat as invalid any Application Form that appears to the Company or its agents to have been executed in or despatched from the United States, or that provides an address in the United States for the acceptance of the Open Offer Shares, or where the Company believes acceptance of such Application Form may infringe applicable legal or regulatory requirements.

In addition, any person applying for Global Open Offer Shares must make the representations and warranties set out in paragraphs 4(b)(xi)(F) and 4(a)(v)(G) above, as appropriate. Accordingly the Company reserves the right to treat as invalid (i) any USE instruction that does make representations and warranties set out in paragraph 4(b)(xi)(F) above and (ii) any Application Form that does not make representations and warranties set out in paragraph 4(a)(v)(G) above. The attention of persons holding for account of persons located in the United States or located or resident in any of the Excluded Territories is directed to such paragraphs.

No representation has been, or will be, made by the Company as to the availability of Rule 144 or any other exemption under the Securities Act or any state securities laws for the re-offer, sale, pledge or transfer of the Ordinary Shares by any investor.

In addition, until 40 days after the commencement of the Open Offer, an offer, sale or transfer of the Ordinary Shares within the United States by a dealer (whether or not participating in the Global Secondary Issue or Canadian Secondary Issue) may violate the registration requirements of the Securities Act.

(ii) Other Excluded Territories

Due to the restrictions under the securities laws of the Excluded Territories, Shareholders who have registered addresses in or who are resident or ordinarily resident in, or citizens of, any Excluded Territories will not qualify to participate in the Open Offer and will not be sent an Application Form and no Open Offer Entitlements and/or Excess Open Offer Entitlements will be credited to their CREST stock accounts.

The Ordinary Shares have not been and will not be registered under the relevant laws of any of the Excluded Territories or any state, province or territory thereof and may not be offered, sold, resold, delivered or distributed, directly or indirectly, in or into any of the Excluded Territories or to, or for the account or benefit of, any person with a registered address in, or who is resident or ordinarily resident in, or a citizen of, any Excluded Territories except pursuant to an applicable exemption.

(c) Representation and warranties relating to Overseas Shareholders

(i) Qualifying non-CREST Shareholders

Any person completing and returning an Application Form or requesting registration of the Open Offer Shares comprised therein represents and warrants to the Company and the Registrar that, except where proof has been provided to the Company's satisfaction that such person's use of the Application Form will not result in the contravention of any applicable legal requirements in any jurisdiction: (A) such person is not requesting registration of the relevant Open Offer Shares from within any Excluded Territory; (B) such person is not in any territory in which it is unlawful to make or accept an offer to acquire Open Offer Shares or to use the Application Form in any manner in which such person has used or will use it; (C) such person is not acting on a non-discretionary basis for a person located within any Excluded Territory or any territory referred to in (B) above at the time the instruction to accept was given; and (D) such person is not acquiring Open Offer Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Open Offer Shares into any of the above territories. The Company and/or the Registrar may treat as invalid any acceptance or purported acceptance of the allotment of Open Offer Shares comprised in an Application Form if it: (I) appears to the Company or its agents to have been executed, effected or dispatched from an Excluded Territory or in a manner that may involve a breach of the laws or regulations of any jurisdiction or if the Company or its agents believe that the same may violate applicable legal or regulatory requirements; (II) provides an address in an Excluded Territory for delivery of the share certificates of Open Offer Shares (or any other jurisdiction outside the UK in which it would be unlawful to deliver such share certificates); or (III) purports to exclude the representation and warranty required by this sub-paragraph (i).

(ii) Qualifying CREST Shareholders

A CREST member or CREST-sponsored member who makes a valid acceptance in accordance with the procedures set out in this Part VII (Terms and Conditions of the Open Offer) represents and warrants to the Company that, except where proof has been provided to the Company's satisfaction that such person's acceptance will not result in the contravention of any applicable legal requirement in any jurisdiction: (A) neither it nor its client is within any Excluded Territory; (B) neither it nor its client is in any territory in which it is unlawful to make or accept an offer to acquire Open Offer Shares; (C) it is not accepting on a non-discretionary basis for a person located within any Excluded Territory or any territory referred to in (B) above at the time the instruction to accept was given; and (D) neither it nor its client is acquiring any Open Offer Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Open Offer Shares into any of the above territories. A CREST member or CREST-sponsored member who makes a valid acceptance in accordance with the procedures set out in this Part VII (Terms and Conditions of the Open Offer) also represents and warrants that it is making an application for Ordinary Shares for its own long-term investment and will not sell, dispose of or transfer the Ordinary Shares allocated to it as part of the Open Offer within a period of six months from the date of allotment of such Ordinary Shares.

(d) Waiver

The provisions of paragraph 6 "Overseas Shareholders" of this Part VII (Terms and Conditions of the Open Offer) and of any other terms of the Open Offer relating to Overseas Shareholders may be waived, varied or modified as regards specific Shareholders or on a general basis by the Company, in its absolute discretion. Subject to this, the provisions of paragraph 6 "Overseas Shareholders" of this Part VII (Terms and Conditions of the Open Offer) supersede any terms of the Open Offer inconsistent herewith. References in paragraph 6 "Overseas Shareholders" of this Part VII (Terms and Conditions of the Open Offer) to Shareholders shall include references to the person or persons executing an Application Form and, in the event of more than one person executing an Application Form, the provisions of paragraph 6 "Overseas Shareholders" of this Part VII (Terms and Conditions of the Open Offer) shall apply to them jointly and to each of them.

7. Withdrawal Rights

Qualifying Shareholders wishing to exercise or direct the exercise of statutory withdrawal rights pursuant to section 87Q(4) of the FSMA after the issue by the Company of a prospectus supplementing this document must do so by lodging a written notice of withdrawal, which must include the full name and address of the person wishing to exercise statutory withdrawal rights and, if such person is a CREST member, the CREST participant ID and the CREST member account ID of such CREST member with Computershare Investor Services PLC, Corporate Actions Projects, The Pavilions, Bridgwater Road, Bristol BS99 6AH, United Kingdom or email to [email protected] so as to be received by no later than two Business Days after the date on which the supplementary prospectus is published, withdrawal being effective as at posting of the written notice of withdrawal. Notice of withdrawal given by any other means or which is deposited with or received by Computershare after expiry of such period will not constitute a valid withdrawal, provided that the Company will not permit the exercise of withdrawal rights after payment by the relevant Qualifying Shareholder of its subscription in full and the allotment of Ordinary Shares to such Qualifying Shareholder becoming unconditional, save to the extent required by statute. In such event, Shareholders are advised to seek independent legal advice.

8. Taxation

Information regarding the United Kingdom in respect of the Ordinary Shares and the Open Offer is set out in Part VIII (Taxation) of this document. If a Qualifying Shareholder is in any doubt about his tax position or is subject to tax in a jurisdiction other than the United Kingdom, he should consult his professional advisers without delay.

9. Listing, settlement, dealings and publication

Applications will be made to the FCA for the Ordinary Shares to be admitted to the premium listing segment of the Official List and to the London Stock Exchange for them to be admitted to trading on its main market for listed securities, subject to the fulfilment of the Conditions of the Open Offer. Subject to the Open Offer becoming unconditional in all respects (save only as to Admission), it is expected that admission of the Ordinary Shares to the premium listing segment of the Official List and to trading on the London Stock Exchange will become effective and that dealings therein for normal settlement will commence at 8.00 a.m. on 24 August 2015.

Open Offer Entitlements and Excess Open Offer Entitlements held in CREST are expected to be disabled in all respects after 11.00 a.m. on 21 August 2015 (the latest date for applications under the Open Offer). If the conditions to the Open Offer described above are satisfied, Ordinary Shares will be issued in uncertificated form to those persons who submitted a valid application for Ordinary Shares by utilising the CREST application procedures and whose applications have been accepted by the Company on the day on which such conditions are satisfied (expected to be 24 August 2015). On this day, Computershare will instruct Euroclear to credit the appropriate stock accounts of such persons with such persons' entitlement to Ordinary Shares with effect from Admission (expected to be 24 August 2015). The stock accounts to be credited will be the accounts under the same participant IDs and member account IDs in respect of which the USE instruction was given.

Notwithstanding any other provision of this document, the Company reserves the right to send Qualifying CREST Shareholders an Application Form instead of crediting the relevant stock account with Open Offer Entitlements and Excess Open Offer Entitlements, and to allot and/or issue any Ordinary Shares in certificated form. In normal circumstances, this right is only likely to be exercised in the event of any interruption, failure or breakdown of CREST (or of any part of CREST), or on the part of the facilities and/or systems operated by Computershare in connection with CREST.

For Qualifying non-CREST Shareholders who have applied by using an Application Form, definitive share certificates in respect of the Ordinary Shares validly applied for are expected to be despatched by post on approximately 7 September 2015. No temporary documents of title will be issued and, pending the issue of definitive certificates, transfers of the Ordinary Shares by Qualifying non-CREST Shareholders will be certified against the Share Register. All documents or remittances sent by or to applicants, or as they may direct, will be sent through the post at their own risk. For further information as to the procedure for application, Qualifying non-CREST Shareholders are referred to the Application Form.

Qualifying CREST Shareholders should note that they will be sent no confirmation of the credit of the Ordinary Shares to their CREST stock account or any other written communication by the Company in respect of the issue of the Ordinary Shares.

The completion and results of the Open Offer will be announced and made public through an announcement on a Regulatory Information Service as soon as possible after the results are known on 24 August 2015.

10. Times and Dates

The Company shall be entitled to amend the dates on which Application Forms are despatched or amend or extend the latest date for acceptance under the Open Offer and all related dates set out in this document and in such circumstances shall notify the FCA, and make an announcement on a Regulatory Information Service and, if appropriate, to Shareholders, but Qualifying Shareholders may not receive any further written communication.

If a supplementary prospectus is published by the Company two or fewer Business Days prior to the latest time and date for acceptance and payment in full under the Open Offer specified in this document, the latest date for acceptance under the Open Offer shall be extended to the date that is at least three Business Days after the date of publication of the supplementary prospectus (and the dates and times of principal events due to take place following such date shall be extended accordingly).

11. Governing law and jurisdiction

The terms and Conditions of the Open Offer as set out in this document, the Application Form and any non-contractual obligation related thereto shall be governed by, and construed in accordance with, the laws of England and Wales. The courts of England and Wales are to have exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Open Offer, this document or the Application Form including, without limitation, disputes relating to any non-contractual obligations arising out of or in connection with the Open Offer, this document or the Application Form. By taking up Open Offer Shares under the Open Offer in accordance with the instructions set out in this document and, where applicable, the Application Form, Qualifying Shareholders irrevocably submit to the jurisdiction of the courts of England and Wales and waive any objection to proceedings in any such court on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum.

12. Further Information

The attention of Qualifying Shareholders is drawn to Part I (Letter from the Chairman to Shareholders) of this document and to the further information set out in the Section headed "Risk Factors" and Part IX (Additional Information) of this document and also, where relevant, to the terms, conditions and other information printed on the accompanying Application Form.

PART VIII

TAXATION

1. United Kingdom Taxation

Overview

The comments set out below are based on current United Kingdom tax law and HM Revenue & Customs practice (which is not generally binding on HM Revenue & Customs) as at the date of this document, both of which are subject to change, possibly with retrospective effect. They are intended as a general guide, do not constitute tax advice and apply only to Qualifying Shareholders resident and, in the case of an individual, domiciled, for tax purposes in the United Kingdom and to whom "split year" treatment does not apply (except insofar as express reference is made to the treatment of non-United Kingdom residents), who hold Shares as an investment (and the shares are not held through a New Individual Savings Account or a Self-Invested Personal Pension) and who are the absolute beneficial owners thereof. The discussion does not address all possible tax consequences relating to an investment in the Shares. Certain categories of Qualifying Shareholders, such as traders, brokers, dealers, banks, financial institutions, insurance companies, collective investment schemes, tax-exempt organisations, persons connected with the Company or Group, persons holding their Shares as part of hedging or conversion transactions, Qualifying Shareholders who have (or are deemed to have) acquired their Shares by virtue of an office or employment and Shareholders who are, are to become or have been officers or employees of the Company or a company forming part of the Group, may be subject to special rules and this summary does not apply to such Qualifying Shareholders.

Shareholders and prospective Shareholders who are in any doubt about their tax position, or who are resident or otherwise subject to taxation in a jurisdiction outside the United Kingdom, should consult their own professional advisers immediately.

Taxation on Chargeable Gains

As a matter of United Kingdom tax law, the Open Offer may not, strictly speaking, constitute a reorganisation of the share capital of the Company for the purposes of United Kingdom taxation of chargeable gains. The published practice of HM Revenue & Customs to date has been to treat any subscription of shares by an existing shareholder which is equal to or less than the shareholder's minimum entitlement pursuant to the terms of an open offer as a reorganisation notwithstanding the strict legal analysis. However, the Company understands that HM Revenue & Customs may not apply this practice in circumstances where an open offer is not made to all shareholders. Consequently, as the Open Offer is not made to all Shareholders, the Open Offer may not be treated as a reorganisation.

If, or to the extent that, the issue of Ordinary Shares by the Company to Qualifying Shareholders under the terms of the Open Offer is not treated as a reorganisation of the Company's share capital for the purposes of United Kingdom taxation of chargeable gains, this may be a taxable part disposal of a Qualifying Shareholder's existing shares. The Ordinary Shares will be treated as acquired as part of a separate acquisition and, in these circumstances, the price paid for those Ordinary Shares by each Qualifying Shareholder will constitute that Qualifying Shareholder's base cost in those Ordinary Shares.

If the Open Offer is treated as a reorganisation, to the extent that a Qualifying Shareholder takes up all or part of his entitlement under the Open Offer, for the purposes of United Kingdom taxation of chargeable gains he would not be treated as making a disposal of all or part of his holding of Existing Shares. Instead, his Existing Shares and his Ordinary Shares issued pursuant to the Open Offer would generally be treated as a single asset (a "new holding"), acquired at the time he acquired his Existing Shares. The issue of Ordinary Shares will not result in United Kingdom taxation of chargeable gains; however, under this analysis, for the purpose of computing any capital gain or loss for the purposes of United Kingdom taxation on a subsequent disposal by a Qualifying Shareholder of any Shares comprised in his new holding, the subscription amount paid for the Ordinary Shares issued pursuant to the Open Offer will be added to the base cost of his Existing Shares. For the purposes of calculating the indexation allowance (only in the case of corporate shareholders) on a subsequent disposal of Shares, the amount paid will generally be taken into account only from the time that the payment was made. In the case of non-corporate Shareholders, indexation allowance is not available.

Shareholders who are resident in the United Kingdom, or, in the case of individuals, who cease to be resident in the United Kingdom for a period of five years or less, may depending on their circumstances (including the availability of exemptions or reliefs) be liable to United Kingdom taxation on chargeable gains in respect of gains arising from a sale or other disposal (including a deemed disposal) of Shares.

Taxation of Dividends

The Company will not be required to withhold amounts on account of United Kingdom tax at source when paying a dividend.

United Kingdom resident individuals

A United Kingdom resident individual Qualifying Shareholder who receives a dividend from the Company will be entitled to a tax credit which may be set off against the Qualifying Shareholder's total income tax liability. The tax credit will be equal to 10% of the aggregate of the dividend and the tax credit (the "gross dividend"). Such an individual Qualifying Shareholder who is liable to income tax at the basic rate will be subject to tax on the dividend at the rate of 10% (2015/16) of the gross dividend, so that the tax credit will satisfy in full such Qualifying Shareholder's liability to income tax on the dividend. In the case of such an individual Qualifying Shareholder who is liable to income tax at the higher rate, the tax credit will be set against but not fully match the Qualifying Shareholder's tax liability on the gross dividend and such Qualifying Shareholder will have to account for further income tax equal to 22.5% (2015/16) of the gross dividend (which is also equal to 25% of the cash dividend) to the extent that the gross dividend when treated as the top slice of the Qualifying Shareholder's income falls above the threshold for higher rate income tax. In the case of such an individual Qualifying Shareholder who is subject to income tax at the additional rate, the tax credit will also be set against but not fully match the Qualifying Shareholder's liability on the gross dividend and such Qualifying Shareholder will have to account for further income tax equal to 27.5% (2015/16) of the gross dividend (which is also equal to approximately 30.6% of the cash dividend) to the extent that the gross dividend when treated as the top slice of the Qualifying Shareholder's income falls above the threshold for additional rate income tax.

A United Kingdom resident individual Qualifying Shareholder who is not liable to income tax in respect of the gross dividend and other United Kingdom resident taxpayers who are not liable to United Kingdom tax on dividends, including pension funds and charities, will not be entitled to claim repayment of the tax credit attaching to dividends paid by the Company. Where the tax credit exceeds the holder's tax liability, the holder cannot claim repayment of the tax credit from HM Revenue & Customs.

United Kingdom resident corporate Qualifying Shareholders

Qualifying Shareholders who are within the charge to United Kingdom corporation tax will be subject to United Kingdom corporation tax on the gross amount of any dividends paid by the Company, unless (subject to special rules for such Shareholders that are small companies) the dividends fall within an exempt class and certain other conditions are met. Each Qualifying Shareholder's position will depend on its own individual circumstances, although it would normally be expected that the dividends paid by the Company would fall within an exempt class.

Non-United Kingdom resident Qualifying Shareholders

Subject to further comments below about individual taxpayers or trustees with income tax liabilities in excess of the basic rate, non-United Kingdom resident Qualifying Shareholders will not be liable to income or corporation tax in the United Kingdom on dividends paid unless, in the case of income tax, the Qualifying Shareholder carries on a trade (or profession or vocation) in the United Kingdom and the dividends are a receipt of that trade or, in the case of United Kingdom corporation tax, the Qualifying Shares are held by or for a United Kingdom permanent establishment of the non-resident company through which a trade is carried on.

A non-resident individual taxpayer or trustee otherwise liable to United Kingdom income tax at more than the basic rate has no additional tax to pay if their United Kingdom source investment income, including dividends received from the Company, is treated as "excluded income" in which case their liability to United Kingdom tax is fully satisfied by the dividend tax credit or tax deducted at source. Alternatively, if such a taxpayer is able to benefit from a double tax treaty, the liability to United Kingdom tax may be limited by the treaty to a proportion of the gross dividend with the dividend tax credit counting towards this liability. Non-United Kingdom resident Qualifying Shareholders will not generally be able to claim repayment from HM Revenue & Customs of any part of the tax credit attaching to dividends paid by the Company. A Qualifying Shareholder resident outside the United Kingdom may also be subject to foreign tax on dividend income under local law. Shareholders who are not resident for tax purposes in the United Kingdom should obtain their own tax advice concerning tax liabilities on dividends received from the Company.

Stamp Duty and Stamp Duty Reserve Tax ("SDRT")

The following statements are intended as a general and non-exhaustive guide to the current United Kingdom stamp duty and SDRT position and apply regardless of whether or not a Qualifying Shareholder is resident in the United Kingdom for United Kingdom tax purposes.

Issue of Ordinary Shares

No stamp duty or SDRT will generally be payable on the issue of Ordinary Shares. Where Ordinary Shares are credited in uncertificated form to an account in CREST, no liability to stamp duty or SDRT will generally arise.

Subsequent dealings in Ordinary Shares

Any subsequent dealings in Ordinary Shares will be subject to stamp duty or SDRT in the normal way. Subject to an exemption for certain low value transactions, the transfer on sale of Ordinary Shares effected outside CREST will generally be liable to stamp duty at the rate of 0.5% of the amount or value of the consideration payable (rounded up to the nearest multiple of £5) or, if an unconditional agreement to transfer Ordinary Shares is not completed by a duly stamped transfer, or where the transfer is effected in CREST, SDRT at the rate of 0.5% of the amount or value of the consideration will be payable.

PART IX

ADDITIONAL INFORMATION

1. Responsibility

Afren and the Directors, whose names are set out in the section entitled "Directors" in this Part IX (Additional Information), accept responsibility for the information contained in this document. To the best of the knowledge and belief of Afren and the Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.

2. Incorporation and Registered Office

2.1 Afren is a public company limited by shares with its registered office at Kinnaird House, 1 Pall Mall East, London, SW1Y 5AU with telephone number +44 (0)20 7864 3700. Afren was incorporated in England and Wales under the Companies Act 1985 on 3 December 2004 with company number 05304498. The principal laws and legislation under which Afren operates are the laws of England and Wales, including the Companies Act and regulations made thereunder.
2.2 Afren's auditors are Deloitte, whose address is at 2 New Street Square, London EC4A 3BZ. Deloitte is regulated by the Institute of Chartered Accountants in England and Wales.

3. Share Capital

3.1 As at the date of this document, the issued, called up and fully paid share capital of Afren was 1,107,560,524 ordinary shares of 1 pence each.
3.2 The issued, called up and fully paid share capital of Afren immediately after Admission is expected to be up to a maximum of 1,882,128,995 Ordinary Shares, depending upon the level of take up in the Open Offer and having given effect to the Consolidation.
3.3 The number of ordinary shares in issue at the beginning and end of the 2014 financial year is as follows:

Balance at	Existing Shares
1 January 2014	1,097,911,906
31 December 2014	1,107,560,524

3.4 There have been the following changes to Afren's authorised and issued share capital since 1 January 2012:
during the period from 1 January 2012 until 31 December 2012 a total of 13,667,609 Shares were issued, fully paid, increasing the number of issued Shares to 1,087,107,697;
during the period from 1 January 2013 until 31 December 2013 a total of 10,804,209 Shares were issued, fully paid, increasing the number of issued Shares to 1,097,911,906;
during the period from 1 January 2014 until 31 December 2014 a total of 9,648,618 Shares were issued, fully paid, increasing the number of issued Shares to 1,107,560,524; and
since 1 January 2015 until the date of this document, no Shares have been issued.
3.5 Save as disclosed in this Part IX (Additional Information):
no share or loan capital of Afren has, since 1 January 2012, been issued or agreed to be issued, or is now proposed to be issued, fully or partly paid, either for cash or for consideration other than cash, to any person;
no commissions, discounts, brokerages, or other special terms have been granted by Afren in connection with the issue or sale of any such share or loan capital; and
no share or loan capital of Afren is under option or agreed conditionally or unconditionally to be put under option.
3.6 The Existing Shares currently in issue are, and the new Ordinary Shares will be, in registered form and capable of being held in uncertificated form in CREST. Where Ordinary Shares are held in certificated form, share certificates will be sent to the registered member by first-class post.
3.7 When admitted to trading, the Ordinary Shares will be registered with ISIN number GB00B0672758, the same as the current ISIN number for Existing Shares, and SEDOL number B067275.
3.8 The provisions of section 561 of the Companies Act and the Listing Rules confer on Shareholders rights of pre-emption in respect of the allotment of equity securities (as defined in section 560 of the Companies Act) which are to be paid up in cash, except to the extent disapplied by resolutions of the Company.
3.9 The price of the Shares is quoted on the London Stock Exchange in pounds sterling.
3.10 As far as the Company is aware, as of 16 June 2015 (being the latest practicable date prior to the publication of this Prospectus) there are no arrangements the operation of which may at a later date result in a change of control of the Company save for the arrangements described in this document.
3.11 The Company is not aware of any person who either as of the date of this document exercises, or could exercise, directly or indirectly, control over the Company.

4. Memorandum of association

In accordance with Section 8 of the Companies Act, the memorandum of association of Afren consists of a simple statement that the subscribers wish to form a company and subscribe for at least one share each. Pursuant to the Companies Act, unless a company's articles provide otherwise, a company's objects are unrestricted.

Accordingly, the Company removed its objects clause together with all other provisions of its memorandum of association, pursuant to a special resolution of Shareholders on 30 November 2009, which, by virtue of the Companies Act, were to be treated as forming part of the Company's Articles as of 1 October 2009.

5. Articles of association

The Articles include provisions to the following effect:

(a) Share rights

Without prejudice to any special rights previously conferred on the holders of any shares or class of shares for the time being issued and subject to the provisions of the Companies Acts (as defined in section 2 of the Companies Act), in so far as they apply to the Company, the Uncertificated Securities Regulations 2001 including any modifications thereof or any regulations in substitution therefor (the "Regulations") and every other statute or enactment for the time being in force concerning companies and affecting the Company (together, the "Statutes"), any shares in the Company may be issued with such preferred, deferred or other special rights, or such restrictions, whether in regard to dividend, capital, transfer, voting or otherwise, as the Company may determine by ordinary resolution or failing any such determination, as the Directors may determine.

The Company may issue any shares which are to be redeemed or are liable to be redeemed at the option of the Company or the shareholder, and the Directors may determine the terms, conditions and manner of redemption of any such share. All shares of the Company shall be at the disposal of the Directors and they may allot (with or without conferring a right of renunciation), grant options over, offer or otherwise deal with or dispose of such shares to such persons, at such times and generally on such terms and conditions as the Directors think proper but so that no share shall be issued at a discount.

(b) Voting rights and general meetings

Subject to the provisions of the Statutes, the annual general meeting shall be held at such time and place as may be determined by the Directors. The Directors may whenever they think fit, and shall on requisition in accordance with the Statutes, convene a general meeting to be held at such time and place as the Directors may determine.

Subject to any special rights or restrictions as to voting attached by or by virtue of the Articles to any shares or any class of shares, on a show of hands:

(i) every member who is present in person shall have one vote, and every proxy present who has been duly appointed by a member entitled to vote shall have one vote;
(ii) every proxy present who has been duly appointed by one or more members entitled to vote on the resolution has one vote, except that if the proxy has been duly appointed by more than one member entitled to vote on the resolution and is instructed by one or more of those members to vote for the resolution and by one or more others to vote against it, or is instructed by one or more of those members to vote in one way and is given discretion as to how to vote by one or more others (and wishes to use that discretion to vote in the other way) he has one vote for and one vote against the resolution; and
(iii) every corporate representative present who has been duly authorised by a corporation has the same voting rights as the corporation would be entitled to; and

on a poll every member present in person or by duly appointed proxy or corporate representative has one vote for every share of which he is the holder or in respect of which his appointment of proxy or corporate representative has been made.

A member, proxy or corporate representative entitled to more than one vote need not use all his votes or cast all his votes in the same way.

If any member, or any other person appearing to be interested in shares held by such member, has been duly served with a notice under section 793 of the Companies Act and is in default for a period of 14 days after service of the notice in supplying to the Company the information thereby required, then (unless the Directors otherwise determine) in respect of:

(i) the shares comprising the shareholding account in the register which comprises or includes the shares in relation to which the default occurred (all or the relevant number as appropriate of such shares being the "default shares", which expression shall include any further shares which are issued after the date of service of the notice under section 793 of the Companies Act in respect of such shares); and
(ii) any other shares held by the member,

the member (for so long as the default continues) shall not be entitled to attend or vote either personally or by proxy at a shareholders' meeting.

Where the default shares represent 0.25% or more of the issued shares of the class in question (excluding any shares in the Company held as treasury shares), the Directors may in their absolute discretion by notice to such member, and provided that the 14 day period referred to above has elapsed, direct that:

(i) any dividend or part thereof or other money which would otherwise be payable in respect of the default shares shall be retained by the Company, without any liability to pay interest thereon when such money is finally paid to the member, including shares to be issued in lieu of dividend; and
(ii) no transfer of any of the default shares held by such member shall be registered unless the transfer is an approved transfer,

provided that, in the case of shares in uncertificated form, the Directors may only exercise their discretion not to register a transfer if permitted to do so by the Regulations. Any such notice may treat shares of a member in certified and uncertified form as separate holdings and either apply only to the former or to the latter or make different provision for the former and the latter.

No member shall, unless the Directors otherwise determine, be entitled to be present or to vote at any general meeting either in person or by proxy or upon any poll or to exercise any other right conferred by membership in relation to meetings of the Company in respect of any shares held by him if any call or other sum presently payable by him to the Company in respect of such shares remains unpaid.

(c) Alteration of share capital

The Company may by ordinary resolution increase its capital by such sum to be divided into shares of such amounts as the resolution shall prescribe, consolidate and divide all or any of its share capital into shares of a larger amount than its existing shares, and sub divide its shares into shares of smaller amounts.

The Company may by special resolution reduce its share capital or any capital redemption reserve fund or share premium account in any manner and with and subject to any incident authorised and consent required by law.

(d) Variation of rights

Whenever the share capital of the Company is divided into different classes of shares, the special rights attached to any class may, subject to the provisions of the Statutes, be varied or abrogated either with the consent in writing of the holders of three-fourths in nominal amount of the issued shares of the class (excluding any shares of that class held as treasury shares) or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of the class (but not otherwise) and may be so varied or abrogated either whilst the Company is a going concern or during or in contemplation of a winding up.

The necessary quorum (other than at an adjourned meeting) shall be two persons holding or representing by proxy at least one third in nominal amount of the issued shares of the class (excluding any shares of that class held as treasury shares), and at an adjourned meeting shall be one person holding shares of the class in question or his proxy. Any holder of shares of the class present in person or by proxy may demand a poll. Any holder of shares of the class present in person or by proxy shall, on a poll, have one vote in respect of every share of the class held by him. The special rights attached to any class of shares having preferential rights shall not unless otherwise expressly provided by the terms of issue thereof be deemed to be varied or abrogated by the creation or issue of further shares ranking as regards participation in the profits or assets of the Company or voting in some or all respects pari passu therewith but in no respect in priority thereto, or by any reduction of the capital paid up thereon, or by any purchase by the Company of its own shares.

(e) Issue of share warrants

The Directors may issue warrants in respect of fully paid up shares stating that the bearer is entitled to the shares therein specified and may provide by coupons or otherwise for the payment of future dividends on the shares included in such warrants. The Directors may determine and from time to time vary the conditions upon which share warrants shall be issued and upon which a new share warrant or coupon shall be issued in the place of one worn out defaced or destroyed but no new share warrant or coupon shall be issued to replace one that is that has been lost unless it is proved to the satisfaction of the Company beyond reasonable doubt to have been destroyed. The Directors may also determine and from time to time vary the conditions upon which the bearer of a share warrant shall be entitled to receive notices of and attend and vote at general meetings or to join in requisitioning general meetings and upon which a share warrant may be surrendered and the name of the bearer entered in the register in respect of the shares therein specified.

(f) Transfer of Shares

All transfers of shares which are in uncertificated form may be effected by means of a relevant system.

Transfers of shares in certificated form may be effected by transfers in writing in any usual or common form or in any other form acceptable to the Directors and may be under hand only. The instrument of transfer shall be signed by or on behalf of the transferor and (except in the case of fully paid shares) by or on behalf of the transferee. The transferor shall remain the holder of the shares concerned until the name of the transferee is entered in the register in respect thereof.

The Directors may, in their absolute discretion, decline to register any transfer of shares which are not fully paid provided that where any such shares are admitted to trading on the Official List or AIM, such discretion may not be exercised in such a way as to prevent dealings in the shares of that class from taking place on an open and proper basis. The Directors may also in their absolute discretion decline to register any transfer of shares in favour of more than four persons jointly.

The Directors may decline to recognise any instrument of transfer relating to shares in certificated form unless the instrument of transfer is deposited at the place where the register of members of the Company is situated (or such other place as the Directors may appoint), is in respect of one class of shares, duly stamped, accompanied by the relevant share certificate(s) (except where no certificate shall have been issued thereof) and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer and, if the instrument of transfer is executed by some other person on his behalf, the authority of that person to do so. The Directors may also decline to recognise any instrument of transfer relating to shares in uncertificated form in the circumstances set out in the Regulations.

If the Directors refuse to register a transfer they must, within two months, send to the transferee notice of the refusal together with reasons for the refusal and the instrument of transfer. The Directors shall send to the transferee such further information about the reasons for the refusal as the transferee may reasonably request.

No fee will be charged by the Company in respect of the registration of any instrument of transfer or document relating to or affecting the title to any shares or otherwise for making any entry in the register affecting the title to any shares.

The Directors may determine that any class of shares may be held in uncertificated form and that title to such shares may be transferred by means of a relevant system or that shares of any class should cease to be held and transferred as described in the Articles.

(g) Dividends

The Company may by ordinary resolution declare dividends and fix the time for payment thereof, but no dividend shall be payable except out of profits of the Company available for distribution in accordance with the Statutes or in excess of the amount, or at any earlier date than, recommended by the Directors.

Unless and to the extent that the rights attached to any shares or the terms of issue thereof or the Statutes otherwise provide, all dividends shall (as regards any shares not fully paid throughout the period in respect of which the dividend is paid) be apportioned and paid pro rata according to the amounts paid on the shares during any portion or portions of the period in respect of which the dividend is paid.

Subject to the provisions of the Statutes, if and so far as in the opinion of the Directors the profits of the Company justify such payments, the Directors may pay the fixed dividend on any class of shares carrying a fixed dividend expressed to be payable on fixed dates (half yearly or other dates prescribed for the payment thereof) and may also from time to time pay interim dividends of such amounts and on such dates and in respect of such periods as they think fit. A resolution of the Directors declaring any such dividend shall (once published with their authority) be irrevocable and have the same effect as if such dividend had been declared upon the recommendation of the Directors by an ordinary resolution of the Company. Provided the Directors act bona fide they shall not incur any responsibility to the holders of shares conferring a preference for any damage they may suffer by reason of the payment of any interim dividend on any shares having deferred or non-preferred rights.

No dividend or other moneys payable on or in respect of a share shall bear interest as against the Company.

All unclaimed dividends or other moneys payable on or in respect of a share may be invested or otherwise made use of by the Directors for the benefit of the Company until claimed. Any dividend unclaimed after a period of 12 years from the date of declaration of such dividend or the date on which such dividend became due for payment shall be forfeited and shall revert to the Company, but the Directors may at their discretion pay any such dividend or such other moneys or some part thereof to a person who would have been entitled thereto had the same not reverted to the Company.

The Company may upon the recommendation of the Directors by ordinary resolution direct payment of a dividend in whole or in part by the distribution of specific assets (and in particular of paid up shares or debentures of any other company) and the Directors shall give effect to such resolution, and where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient and in particular may issue fractional certificates and fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any members upon the footing of the value so fixed in order to adjust the rights of all parties and may vest any such specific assets in trustees as may seem expedient to the Directors, and generally may make such arrangements for the allotment, acceptance and sale of such specific assets or fractional certificates or any part thereof and otherwise as they think fit.

(h) Winding up

The Directors shall have the power in the name and on behalf of the Company to present a petition to the Court for the Company to be wound up.

If the Company shall be wound up the liquidator may, with the authority of a special resolution, divide amongst the members in specie the whole or any part of the assets of the Company and may for such purpose set such value as he deems fair upon any one or more class or classes of property and may subject to any special rights attached to any shares or the terms of issue thereof determine how such division shall be carried out as between the members or different classes of members. The liquidator may, with the like authority, vest any part of the assets in trustees upon such trusts for the benefit of members as the liquidator with the like authority shall think fit, and the liquidation of the Company may be closed and the Company dissolved, but so that no contributory shall be compelled to accept any shares or other property in respect of which there is a liability.

(i) Forfeiture and Lien

If a member fails to pay in full any call or instalment of a call on the day appointed for payment thereof, the Directors may at any time thereafter serve a notice on him requiring payment of so much of the call or instalment as is unpaid together with any interest which may have accrued thereon and any expenses incurred by the Company by reason of such nonpayment.

The notice shall name a further day (not being less than 7 days from the date of service of the notice) on or before which and the place where the payment required by the notice is to be made, and shall state that in the event of non-payment in accordance therewith the shares on which the call was made will be liable to be forfeited.

If the requirements of any such notice as aforesaid are not complied with, any share in respect of which such notice has been given may at any time thereafter, before payment of all calls and interest and expenses due in respect thereof has been made, be forfeited by a resolution of the Directors to that effect. Such forfeiture shall include all dividends declared and other moneys payable in respect of the forfeited share and not actually paid before forfeiture. The Directors may accept a surrender of any share liable to be forfeited.

When any share has been forfeited, notice of the forfeiture shall be served upon the person who was before forfeiture the holder of the share but no forfeiture shall be invalidated by omission or neglect to give such notice.

Subject to the provisions of the Statutes, a share so forfeited or surrendered shall be deemed to be the property of the Company and may be sold, re-allotted or otherwise disposed of either to the person who was before such forfeiture or surrender the holder thereof or entitled thereto or to any other person upon such terms and in such manner as the Directors think fit, and at any time before a sale, re-allotment or disposal the forfeiture or surrender may be cancelled on such terms as the Directors think fit. The Directors may, if necessary, authorise some person to transfer a forfeited or surrendered share to any such other person as aforesaid. Any share not disposed of in accordance with the Articles within a period of 3 years from the date of its forfeiture or surrender shall, at the expiry of that period, be cancelled in accordance with the Statutes.

A member whose shares have been forfeited or surrendered shall cease to be a member in respect of the shares but shall notwithstanding the forfeiture or surrender remain liable to pay to the Company all moneys which at the date of forfeiture or surrender were presently payable by him to the Company in respect of the shares with interest thereon at 15% per annum (or such lower rate as the Directors may approve) from the date of forfeiture or surrender until payment, but the Directors may waive payment of such interest either wholly or in part.

The Company shall have a first and paramount lien on every share (not being a fully paid share) for all moneys payable (whether presently or not) in respect of such share. The Company's lien on a share shall extend to all dividends or other moneys payable thereon or in respect thereof. The Directors may waive any lien which has arisen and may resolve that any share shall for some limited period be exempt wholly or partially from the provisions of the Articles.

Subject to the provisions of the Statutes, the Company may sell in such manner as the Directors think fit any share on which the Company has a lien, but no sale shall be made unless the period for the payment or discharge of some part at least of the debt or liability in respect of which the lien exists shall have actually arrived nor until the expiration of 14 days after a notice stating and demanding payment or discharge thereof and giving notice of intention to sell in default shall have been given to the holder for the time being of the share or the person entitled thereto by reason of his death or bankruptcy.

The net proceeds of such sale after payment of the cost of such sale shall be applied in or towards payment or satisfaction of the debts or liabilities in respect whereof the lien exists so far as the same are presently payable and any residue shall upon surrender (in the case of shares held in certificated form) to the Company for cancellation of the certificate for the shares sold and (in any case) subject to a like lien for debts or liabilities the period for the payment or discharge of which has not actually arrived as existed upon the shares prior to the sale be paid to the person entitled to the shares at the time of the sale. For giving effect to any such sale the Directors may authorise some person to transfer the shares sold to the purchaser.

(j) Purchase of own shares

Subject to the provisions of the Statutes, the Company may purchase, or may enter into a contract under which it will or may purchase, any of its own shares of any class (including any redeemable shares) but so that if there shall be in issue any shares which are admitted to trading on the Official List or AIM and which are convertible into equity share capital of the Company of the class proposed to be purchased, then the Company shall not purchase, or enter into a contract under which it will or may purchase, such equity shares unless either:

(i) the terms of the issue of such convertible shares include provisions permitting the Company to purchase its own equity shares or providing for adjustment to the conversion terms upon such a purchase; or
(ii) the purchase, or the contract, has first been approved by a special resolution passed at a separate meeting of the holders of such convertible shares.

(k) Directors

(i) Appointment of Directors

The minimum number of Directors is two and the maximum is 12. The Company may by ordinary resolution from time to time vary the minimum or maximum number of Directors.

No person other than a Director retiring at the meeting shall, unless recommended by the Directors for election, be eligible for appointment as a Director at any general meeting unless not less than 7 nor more than 42 clear days before the day appointed for the meeting there shall have been left at the registered office of the Company notice signed by some member (other than the person to be proposed) duly qualified to attend and vote at the meeting for which such notice is given of his intention to propose such person for election and also notice in writing signed by the person to be proposed of his willingness to be elected.

The Company may by ordinary resolution and the Directors shall have power at any time and from time to time to appoint any person to be a Director either to fill a casual vacancy or as an additional Director, but so that the total number of Directors shall not at any time exceed the maximum number (if any) fixed by or in accordance with these Articles. Any Director so appointed by the Directors shall hold office only until the next annual general meeting and shall then be eligible for re-election.

(ii) Retirement of Directors by rotation

At each annual general meeting, all Directors shall retire. A retiring Director shall be eligible for re-election.

(iii) Proceedings of Directors

The Directors may meet together for the despatch of business, adjourn and otherwise regulate their meetings as they think fit. Questions arising at any meeting shall be determined by a majority of votes. In the case of an equality of votes the chairman of the meeting shall have a second or casting vote. No business shall be transacted at any meeting of the Directors unless a quorum is present. The quorum necessary for the transaction of the business of the Directors may be fixed by the Directors and unless so fixed at any other number shall be 2. A Director shall not be counted in the quorum present in relation to a matter or resolution on which he is not entitled to vote but shall be counted in the quorum present in relation to all other matters or resolutions considered or voted on at the meeting.

(iv) Remuneration of Directors

The Directors (other than alternate directors) shall be entitled to receive by way of fees for their services as directors such sums as the Directors may from time to time determine (not exceeding £1,250,000 per annum or such other sum as the Company in general meeting shall from time to time determine). Such sum (unless otherwise directed by the resolution of the Company by which it is voted) shall be divided among the Directors in such proportions and in such manner as the Directors may determine or in default of such determination, equally (except that in such event any Director holding office for less than the whole of the relevant period in respect of which the fees are paid shall only rank in such division in proportion to the time during such period for which he holds office). Any fees payable pursuant to the Articles shall be distinct from any salary, remuneration or other amounts payable to a Director pursuant to any other provisions of the Articles and shall accrue from day to day.

Each Director shall be entitled to be repaid all reasonable travelling, hotel and other expenses properly incurred by him in or about the performance of his duties as Director, including any expenses incurred in attending meetings of the Board or any committee of the Board of Directors or general meetings or separate meetings of the holders of any class of shares or of debentures of the Company.

Any Director who is appointed to any executive office (including for this purpose the office of the chairman or deputy chairman whether or not such office is held in an executive capacity) or who serves on any committee or who otherwise performs services which in the opinion of the Directors are outside the scope of the ordinary duties of a Director may be paid extra remuneration by way of salary, commission, bonus or otherwise (whether exclusive or inclusive of his remuneration (if any) under the Articles) as the Directors may determine.

Subject to the provisions of the Statutes, a Director may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with his office of Director, and may act in a professional capacity to the Company, on such terms as to tenure of office, remuneration and otherwise as the Directors may determine.

(v) Permitted interests of Directors

Subject to the provisions of the Statutes and provided that he has disclosed to the Directors the nature and extent of any material interest of his, a Director, notwithstanding his office, may be a party to or otherwise interested in any transaction or arrangement with the Company or in which the Company is otherwise interested, and he may be a director or other officer of, or employed by, or a party to any transaction or arrangement with, or otherwise interested in, any body corporate promoted by the Company or in which the Company is otherwise interested. Such a Director (i) shall not, by reason of his office, be accountable to the Company for any benefit which he derives from any such office or employment or from any such transaction or arrangement or from any interest in any body corporate; (ii) shall not infringe his duty to avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the Company as a result of any such office or employment or any such transaction or arrangement or any interest in any such body corporate; and (iii) no such transaction or arrangement shall be liable to be avoided on the ground of any such interest or benefit.

(vi) Restrictions on voting

A Director shall not vote in respect of any contract or arrangement or any other proposal whatsoever in which he has an interest which is a material interest otherwise than by virtue of his interests in shares or debentures or other securities of or otherwise in or through the Company.

A Director shall (in the absence of some other material interest than is indicated below) be entitled to vote (and be counted in the quorum) in respect of any resolution concerning any of the following matters, namely:

(a) the giving of any security, guarantee or indemnity in respect of money lent or obligations incurred by him or by any other person at the request of or for the benefit of the Company or any of its subsidiary undertakings;
(b) the giving of any security, guarantee or indemnity in respect of a debt or obligation of the Company or any of its subsidiary undertakings for which he himself has assumed responsibility in whole or in part under a guarantee or indemnity or by the giving of security;
(c) any proposal concerning an offer of shares or debentures or other securities of or by the Company or any of its subsidiary undertakings for subscription or purchase or in exchange in which offer he is or is to be interested as an existing holder of securities of the Company or the subsidiary undertaking concerned or as a participant in the underwriting or sub underwriting thereof;
(d) any proposal concerning any other company in which he is interested, directly or indirectly and whether as an officer or a shareholder or otherwise howsoever, provided that he is not the holder of or beneficially interested in 1% or more of the issued shares of any class of such company (or of any third company through which his interest is derived) or of the voting rights available to members of the relevant company (any such interest being deemed for the purposes of this section to be a material interest in all circumstances) and for the purpose of calculating the said percentage there shall be disregarded (i) any shares held by the Director as a bare custodian trustee and in which he has no beneficial interest (ii) any shares comprised in any authorised unit trust scheme in which the Director is interested only as a unit holder; and (iii) any shares of that class held as treasury shares;
(e) any arrangement for the benefit of employees and/or former employees of the Company or any of its subsidiary undertakings and/or the members of their families (including a spouse or civil partner and a former spouse and former civil partner) or any person who is or was dependent on such persons, including but without being limited to a retirement benefits scheme and employees' share scheme; or
(f) insurance which the Company proposes to maintain or purchase for the benefit of the Directors or for the benefit of persons including Directors.

The Company may by ordinary resolution suspend or relax to any extent, in respect of any particular matter, any provision of the Articles prohibiting a Director from voting at a meeting of the Directors or of a committee of the Directors.

(l) Borrowing powers

The Directors may exercise all the powers of the Company to borrow money, and to mortgage or charge its undertaking, property and uncalled capital or any part thereof and, subject to the provisions of section 551 of the Companies Act, to issue debentures and other securities whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.

(m) Indemnity of officers

Subject to the provisions of the Statutes, the Company may indemnify any person who is or was a director, secretary or other officer of any Relevant Company directly or indirectly (including by funding any expenditure incurred or to be incurred by him) against any loss or liability, whether in connection with any proven or alleged negligence, default, breach of duty or breach of trust by him or otherwise, in relation to the Company or any Relevant Company. Subject to the provisions of the Statutes the Company may indemnify to any extent any person who is or was a director of a Relevant Company that is a trustee of an occupational pension scheme, directly or indirectly (including by funding any expenditure incurred or to be incurred by him) against any liability incurred by him in connection with the Company's activities as trustee of an occupational pension scheme.

For the purpose of Articles "Relevant Company" shall mean the Company, any holding company of the Company or any other body, whether or not incorporated, in which the Company or such holding company or any of the predecessors of the Company or of such holding company has or had any interest whether direct or indirect or which is in any way allied to or associated with the Company, or any subsidiary undertaking of the Company or of such other body.

6. Directors

Name	Current or Prospective
Mr. Egbert Imomoh	Current
Mr. Alan Linn	Current
Mr. Darra Comyn	Current
Mr. Peter Bingham	Current
Mr. John St. John	Current
Mr. Patrick Obath	Current
Ms. Sheree Bryant	Current
Mr. Toby Hayward	Current
Mr. Iain McLaren	Current

On 15 March 2015, the Company announced that Mr. Peter Bingham and Mr. John St. John would not stand for re-election at the Company's 2015 annual general meeting and therefore will cease to be directors from the close of the annual general meeting which is due to be held 25 June 2015. Additionally, on 12 June 2015 the Company announced that Mr. Darra Comyn was resigning as a Director and would not be standing for re-election at the Company's 2015 annual general meeting. Accordingly, each of these Directors will cease to be Directors from the close of the annual general meeting which is due to be held on 25 June 2015.

7. Directors' service contracts/letters of appointment

7.1 Directors' service contracts

Mr. Egbert Imomoh

Mr. Imomoh was appointed as a Non-Executive Director and as Non-Executive chairman of Afren under a Non-Executive Director and Non-Executive Chairman agreement dated 1 January 2009. His period of appointment is deemed to have commenced on 16 February 2005. On 30 July 2014, Mr. Imomoh was appointed Afren's Executive Chairman. Mr. Imomoh is entitled to an annual fee of £210,300, variable by agreement from time to time. His appointment may be terminated by either party giving the other not less than three months' written notice. The agreement also contains provisions relating to confidentiality, share dealings and conflicts of interest.

Mr. Alan Linn

Mr. Linn was appointed as an Executive Director and as Chief Executive Officer of Afren under an agreement dated 30 April 2015. His period of appointment is deemed to have commenced on 30 April 2015. Mr. Linn is entitled to an annual fee of £530,000, variable as determined by the Board from time to time. His appointment may be terminated by either party giving the other not less than twelve months' written notice. The agreement also contains provisions relating to confidentiality, share dealings and conflicts of interest.

Mr. Darra Comyn

Mr. Comyn was appointed as Group Finance Director under an agreement dated 26 March 2010. His period of appointment is deemed to have commenced on 23 March 2010 for an initial period of two years, contingent on re-election to the Board. Mr. Comyn's employment also terminates automatically at the end of February 2027 when he reaches his 65th birthday. Mr. Comyn is currently entitled to an annual fee of £395,000 variable by agreement from time to time. His salary may also be supplemented by an annual discretionary bonus, the terms of such payment being set by Afren's Remuneration Committee. His employment may be terminated by either party giving the other not less than six months' written notice. The agreement also contains provisions relating to share dealings, conflicts of interests, the ownership of intellectual property created by Mr. Comyn during his employment and confidentiality.

The Company entered into a settlement agreement on 12 June 2015 with Mr. Comyn in respect of his resignation as a Director and other matters relating to his continued employment as Group finance director during his notice period.

Mr. Peter Bingham

Mr. Bingham was appointed as a Non-Executive Director under a contract for services dated 10 May 2005. His period of appointment is deemed to have commenced on 10 May 2005 for an initial term of three years, contingent on re-election to the Board. Mr. Bingham is entitled to an annual fee of £59,000, which is reviewed by the Board from time to time. His appointment may be terminated by either party giving the other not less than three months' written notice. The contract also contains provisions relating to confidentiality and conflicts of interest.

Mr. John St. John

(a) Letter of appointment

Mr. St. John was appointed as a Non-Executive Director under a letter agreement dated 6 June 2007. His period of appointment is deemed to have commenced on 18 June 2007 for an initial term of three years, contingent on re-election to the Board. He is entitled to an annual fee of £55,000, which is reviewed by the Board from time to time. He was also granted options on up to 400,000 Shares. Mr. St John's appointment may be terminated by either party giving the other not less than three months' written notice. The letter agreement also contains provisions relating to confidentiality and conflicts of interest.

(b) Consultancy contract

St. John Advisors Ltd and Afren entered into a letter agreement effective 27 June 2008 whereby St. John Advisors Ltd provided Afren with financial consulting services. Mr. St. John is a shareholder of St. John Advisors Ltd and received payments from Afren pursuant to this contract. See "Directors, Senior Management and Corporate Governance – Governance Matters". This contract was terminated in May 2014.

Mr. Patrick Obath

Mr. Obath was appointed as a Non-Executive Director under a contract for services dated 2 February 2012. His period of appointment is deemed to have commenced on 2 February 2012 for an initial term of three years, contingent on re-election to the Board. Mr. Obath is entitled to an annual fee of £53,000, which is reviewed by the Board from time to time. His appointment may be terminated by either party giving the other not less than three months' written notice. The contract also contains provisions relating to confidentiality and conflicts of interest.

Ms. Sheree Bryant

Ms. Bryant was appointed as a Non-Executive Director under a contract for services dated 31 October 2013. Her period of appointment is deemed to have commenced on 31 October 2013 for an initial term of three years, contingent on re-election to the Board. Ms. Bryant is entitled to an annual fee of £53,000, which is reviewed by the Board from time to time. Her appointment may be terminated by either party giving the other not less than three months' written notice. The contract also contains provisions relating to confidentiality and conflicts of interest.

Mr. Toby Hayward

Mr. Hayward was appointed as a Non-Executive Director under a non-executive director agreement on 26 June 2009 for an initial period of three years, and was subsequently appointed Afren's Interim Chief Executive Officer on 30 July 2014. Mr. Hayward was entitled to an annual fee of £567,000 in his role as interim CEO, variable by agreement from time to time. On 30 April 2015, Mr. Hayward relinquished his role as Interim Chief Executive Officer and resumed his role as a Non-Executive Director. Mr. Hayward is entitled to an annual fee of £43,000, which is reviewed by the Board from time to time. His appointment may be terminated by either party giving the other not less than three months' written notice. The agreement also contains provisions relating to confidentiality, share dealings and conflicts of interest.

Mr. Iain McLaren

Mr. McLaren was appointed as a Non-Executive Director under a contract for services dated 2 April 2014. His period of appointment is deemed to have commenced on 2 April 2014 for an initial term of three years, contingent on re-election to the Board. Mr. McLaren is entitled to an annual fee of £53,000, which is reviewed by the Board from time to time. His appointment may be terminated by either party giving the other not less than three months' written notice. The contract also contains provisions relating to confidentiality and conflicts of interest.

7.2 Annual report on remuneration

Name of Director		Fees/ basic salary £'000	Benefits in kind1 £'000	Allowance £'000	Annual bonus £'000	Total emolumen ts££'000	Pension Contribut ion or subsidy £'000	LTI awards vesting in year 1 , £'000	Single total figure of remunera tion £'000
Executive
Egbert Imomoh2	2014	88	14	47	0	149	0	0	149
Toby Hayward3	2014	236	1	0	0	237	0	0	237
Osman Shahenshah (Jan –
Jul 14)	2014	384	27	0	0	411	88	1,118	1,617
Osman Shahenshah
(suspension)4	2014	137	8	0	0	145	31	0	176
Shahid Ullah (Jan – Jul
14)	2014	244	10	0	0	254	8	751	1,013
Shahid Ullah (suspension)	2014	87	3	0	0	90	0	0	90
Darra Comyn	2014	395	18	0	0	413	61	671	1,145
Total	2014	1,434	73	47	0	1,554	157	2,540	4,251
Non-Executive
Egbert Imomoh2	2014	122	11	23	0	156	0	0	156
Peter Bingham	2014	59	0	0	0	59	0	0	59
Sheree Bryant	2014	53	0	0	0	53	0	0	53
John St. John	2014	55	0	0	0	55	0	0	55
Toby Hayward3	2014	43	0	0	0	43	0	0	43
Ennio Sganzerla	2014	44	0	0	0	44	0	0	44
Patrick Obath	2014	53	0	0	0	53	0	0	53
Iain McLaren	2014	53	0	0	0	53	0	0	53
Total	2014	482	11	23	0	516	0	0	516

Notes:

_____________

1 PSP award which vested in March 2014 at the market value on the date of vesting

2 Mr. Imomoh's salary has been pro-rated between Executive and Non-Executive based on time. His allowances include Nigerian allowances pertaining to ambassadorial role.

3 Mr. Hayward's salary has been pro-rated between Executive and Non-Executive based on time.

4 There was an overlap between Mr. Shahenshah and Mr. Hayward between 29 July 2014 and 13 October 2014 during which time both salaries were paid. For Single Total Figure purposes the Company has used Mr. Shahenshah's salary to July and Mr. Hayward's salary from August to give a single figure.

8. Directors' loans and guarantees

There are no outstanding loans granted by Afren of any member of the Group to any of the Directors, nor has any guarantee been provided by Afren or any member of the Group for their benefit.

9. Major interests in shares

As at the close of business on 16 June 2015 (being the latest practicable date prior to the publication of this Prospectus), the share ownership and any options over such shares held by the Directors and Senior Managers in respect of the share capital of Afren are as follows:

	Number of Existing Shares	Options to acquire Shares	Shares held pursuant to Performance Share Plan	Total
Egbert Imomoh	5,404,411	3,300,000	-	8,704,411
Alan Linn	-	-	-	-
Darra Comyn	823,605	1,850,000	1,051,160	3,724,765
Peter Bingham	-	-	-	-
John St John	177,823	400,000	-	577,823
Patrick Obath	-	-	-	-
Toby Hayward	205,000	-	-	205,000
Iain McLaren	30,000	-	-	30,000
Sheree Bryant	-	-	-	-

None of the major Shareholders of Afren has different voting rights from any other holder of Shares in respect of any Shares held by them.

10. Subsidiaries

Afren's significant subsidiaries as at the date of this document are:

			Country of
Company name	Principal Activity	Country of Operation	Registration	%
Directly held
Afren Nigeria Holdings Limited	Holding company	UK	England and Wales	100
Afren USA Inc.	Service company	USA	USA, Delaware	100
Black Marlin Energy Holdings			British Virgin
Limited	Holding company	Dubai	Islands	100
	Oil and gas exploration,
Afren MENA Limited	development and production	Kurdistan region of Iraq	England and Wales	100
Afren Finance Plc	Holding company	UK	England and Wales	100
Afren International Limited	Holding company	UK	England and Wales	100
Indirectly held
	Oil and gas exploration,
Afren Energy Resources Limited	development and production	Nigeria	Nigeria	100
Afren Investments Oil & Gas	Oil and gas exploration,
(Nigeria) Limited	development and production	Nigeria	Nigeria	100
Afren Energy Services Limited	Service Company	Nigeria	Nigeria	100
Afren Exploration and Production	Oil and gas exploration,
Nigeria Alpha Limited	development and production	Nigeria	Nigeria	100
Afren Exploration and Production	Oil and gas exploration,
Nigeria Beta Limited	development and production	Nigeria	Nigeria	100
Afren Nigeria Holdings (Nigeria)
Limited	Holding company	Nigeria	Nigeria	100
	Oil and gas exploration,
Afren CI One Corporation	development and production	Côte d'lvoire	Cayman	100
First Hydrocarbon Nigeria Company	Oil and gas exploration,
Limited	development and production	Nigeria	Nigeria	78
	Oil and gas exploration,
Afren Tanzania Limited	development and production	Tanzania	Tanzania	100
East African Exploration (Kenya)	Oil and gas exploration,
Limited	development and production	Kenya	Kenya	100
East African Exploration (Seychelles)	Oil and gas exploration,		British Virgin
Limited	development and production	Seychelles	Islands	100
East African Exploration	Oil and gas exploration,		British Virgin
(Madagascar) Limited	development and production	Madagascar	Islands	100
East African Exploration (Ethiopia)	Oil and gas exploration,		British Virgin
Limited	development and production	Ethiopia	Islands	100
	Oil and gas exploration,
Afren Energy Ghana Limited	development and production	Ghana	Bahamas	100
	Oil and gas exploration,
Afren Resources Limited	development and production	Nigeria	Nigeria	100

11. Employees, Employee Share Schemes and Pensions

As at 31 December 2014, the Group employed 319 people (including contractors). The table below sets out the number of full time employees, including Executive Directors, employed by the Group and their location of employment.

	Year ended
	31 December 2014	31 December 2013	31 December 2012
United Kingdom	78	81	85
Nigeria	122	100	92
East Africa	25	20	14
Kurdistan	13	17	11
USA	81	78	51
Total	319	296	253

12. Share Option Scheme

Please see the section entitled "Incentive Plans" in Part V (Directors, Senior Management and Corporate Governance) of this document for details of the share option schemes.

13. Pension scheme

Afren operates a defined contribution scheme and the Company contributes up to 15% of base salary and up to 20% of the CEO's salary. Details of the Group's contributions to pension accounts for its employees are set out in "Employees—Pensions and Employee Benefits" Part II (Description of the Business).

14. Property

The following are the principal premises owned or leased or used by the Group:

Property Address	Use	Tenure	Term Expires	Yearly Rent(1)
Ground and Mezzanine, The Octagon, Victoria Island Annexe, Lagos, Nigeria	Offices	Lease	31/12/2015	US\$727,756.80 plus service charge
3rd Floor, The Octagon, Victoria Island Annexe, Lagos, Nigeria	Offices	Lease	30/11/2015	US\$188,039.38 plus service charge
Part of 2nd Floor, The Octagon, Victoria Island Annexe, Lagos, Nigeria	Offices	Lease	May 2016	US\$182,562.50 plus service charge
8th Floor, The Octagon, Victoria Island Annexe, Lagos, Nigeria	Offices	Lease	30/06/2015	US\$132,841.10 plus service charge
3rd Floor, Kinnaird House, 1-4 Pall Mall East, London SW1, United Kingdom	Offices	Lease	21/03/2018	GBP 664,695 plus service charge
Waterway Plaza Two, 10001	Office	Lease	31/01/2023	US\$ 1,435,627.61plu
Woodloch Forest Dr., The Woodlands, TX 77380, USA			Tenant may terminate on 31/10/2021, provided 12 months written notice is given.	s service charge

(1) Excluding value added tax and local equivalents in overseas jurisdictions.

(2) Premises is subleased and not occupied by the business.

15. Material contracts

Below is the description of (i) material contracts to be entered into by the Group in connection with the Restructuring or to be entered into by the Group upon completion of the Alternative Restructuring (as applicable); (ii) material contracts entered into by the Group in the two years prior to the publication of this document (including any amendments as a result of the Restructuring); (iii) material contracts related to the Company's assets; and (iv) contracts relating to hedging arrangements and derivatives.

15.1 Material contracts to be entered into by the Group upon completion of the Restructuring or to be entered into by the Group upon completion of the Alternative Restructuring (as applicable):

(A) Restructuring Agreement

The Group commenced negotiations regarding the terms of the Restructuring with certain large holders of the Existing Notes in January 2015, with the aim of addressing the unsustainable debt service obligations in relation to the Existing Notes and ensuring that the Group could operate as a going concern into the future. As part of the process, holders of approximately 42% of the aggregate principal amount of the Existing Notes and holders of approximately 97% of the aggregate principal amount of the Ebok Facility entered into the Restructuring Agreement on 12 March 2015. Pursuant to the terms of the Restructuring Agreement, the creditors agreed, among other things:

(a) to the extent reasonably required or requested by Afren to do so, to enter into negotiations in good faith in order to agree the terms of any restructuring documentation including but not limited to the documentation that is required for the purposes of any Scheme, in form and substance consistent with the terms of the Restructuring or the terms of the Alternative Restructuring, in order to implement and consummate the Restructuring or the Alternative Restructuring;

(b) to support any application to the courts of any jurisdiction for the recognition and sanction of the Scheme or any other restructuring procedure that is consistent with, or required to implement, the Restructuring or the Alternative Restructuring; and
(c) not to take, encourage, or support (or procure that any person takes, encourages, or supports) any action or proceedings or litigation which is inconsistent with the Restructuring Agreement and/or could reasonably be expected to delay, impede, or frustrate the implementation of the Restructuring or the Alternative Restructuring.

In connection with the Restructuring Agreement and as an inducement for the Consenting Creditor to enter into the Restructuring Agreement and fulfil their respective obligations thereunder, the Group agreed to certain covenants and undertaking including, but not limited to:

(a) negotiate, in good faith, the documentation related to the Bridge Securities with the prospective purchasers of the Bridge Securities with a view to agreeing the Bridge Securities documents in a form consistent with the Bridge Securities terms (such undertaking having been fulfilled in connection with the closing of the Interim Funding);
(b) negotiate, in good faith, the documentation related to the Restructuring with the Consenting Creditors, with a view to agreeing the Restructuring documents in a form consistent with the terms of the Restructuring;
(c) propose the Scheme and use all reasonable endeavours to seek approval of the Scheme Creditors and sanction of the Scheme by the Court and sanction of the US Court of the Chapter 15 application;
(d) refrain from (i) issuing additional shares of any class, securities convertible into or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible securities (other than in connection with the Restructuring), (ii) purchase or redeem shares or other securities reducing the share capital; and (iii) enter into any agreement or arrangement to do (i) or (ii); and
(e) cooperate with all reasonable requests for information from Consenting Creditors and deliver certain information to the Consenting Creditors in accordance with the Restructuring Agreement information covenants, agree with the Consenting Creditors any public announcements to be made regarding the restructuring, and keep the Consenting Creditors informed in relation to material business and financial performance of the Group and progress of implementing the Restructuring.

The obligations of the parties to the Restructuring Agreement terminate automatically on the occurrence of certain events, including:

(a) the occurrence of the Restructuring Effective Date;
(b) the date falling six months following the date of the Restructuring Agreement (which date can be extended for a period of ten business days on four consecutive occasions, by the mutual written consent of Afren, the Majority Consenting Note Creditors and the Majority Consenting Ebok Lenders (as defined in the Restructuring Agreement); and
(c) the Court granting a final order declining to sanction the Scheme (following any appeal process).

The Restructuring Agreement has a long stop date of 12 September 2015 (subject to such date being extended to a date no later than 6 November 2015).

On 30 April 2015, in connection with the provision of Interim Funding, the Restructuring

Agreement was amended and restated by the parties thereto to provide for, among other things, the final negotiated position between Afren and the Consenting Creditors in respect of the terms of the Interim Funding and the Restructuring.

(B) Conditional Subscription Agreement

On 30 April 2015, the Company and certain members of the ad hoc committee of Existing Noteholders (representing at least 35.93% in aggregate principal amount of the Existing Notes as at 28 April 2015, the "Initial Purchasers") entered into a conditional subscription agreement in respect of the issue of the New Senior Notes (the "Conditional Subscription Agreement"). Following the execution of the Conditional Subscription Agreement, by 15 May 2015 holders of at least a further 10.28% of the aggregate principal amount of the Existing Notes had entered into or acceded to the Conditional Subscription Agreement (together with the Initial Purchasers, the "Consenting Noteholders"). Pursuant to the terms of the Conditional Subscription Agreement, the Consenting Noteholders have agreed, amongst other things, as follows:

(a) that the Consenting Noteholders committed to subscribe for all of the New Senior Notes to be issued that are not subscribed for by Existing Noteholders exercising their right to subscribe for up to their pro rata share of the New Senior Notes based on their holding of Existing Notes ("Scheme Entitlement");
(b) other holders of Existing Notes may agree to subscribe for New Senior Notes up to their Scheme Entitlement;
(c) that the Initial Purchasers shall subscribe for the Ordinary Shares comprised in the New Senior Notes Share Issue and the Early Subscriber Issue at nominal value and the Company shall allot such Shares to the subscribing Existing Noteholders (or their nominees) pro rata to their holdings of New Senior Notes and entitlements under the Early Subscriber Issue, respectively;
(d) to permit the Company to issue such additional New Senior Notes (up to a maximum principal amount of US\$369 million) such as would result in net cash proceeds to the Company of US\$148 million; and
(e) certain transfer restrictions on their commitments to subscribe for New Senior Notes.

The Company has agreed, conditional upon the Scheme becoming effective and subject to the terms of the Scheme, to issue

(i) the New Senior Notes to the Consenting Noteholders (and any other holder of Existing Notes that agrees to subscribe for New Senior Notes in accordance with the terms of the Conditional Subscription Agreement);
(ii) Ordinary Shares in respect of the New Senior Notes Share Issue to any subscribers of New Senior Notes pro rata to their subscriptions for New Senior Notes; and
(iii) Ordinary Shares in respect of the Early Subscriber Issue to the Consenting Noteholders and subsequent subscribers on the following basis: (a) 20% of the Early Subscriber Issue shall be allocated to the Initial Purchasers pro rata to their subscriptions for Bridge Notes and (b) 80% of the Early Subscriber Issue shall be allocated to the Consenting Noteholders and subsequent subscribers pro rata to their subscriptions for New Senior Notes and adjusted for the date on which they agreed to subscribe for New Senior Notes and the amount of Existing Notes held at such time.

The obligations of the parties to the Conditional Subscription Agreement will automatically terminate on termination of the Restructuring Agreement prior to the Restructuring Effective Date.

(C) Note Purchase Agreement

On 30 April 2015, the Company, the Bridge Noteholders and Wilmington Trust (London) Limited entered into a note purchase agreement in respect of the issue of the Bridge Securities (the "Note Purchase Agreement"). Pursuant to the Note Purchase Agreement, the Company agreed to issue and the Bridge Noteholders agreed to subscribe for US\$211,640,211.64 of private placement notes comprising the Bridge Securities (which were issued at an original issue discount of 5.5%). The Bridge Securities have a maturity of 360 days from 1 May 2015 (although they may be repaid earlier out of the proceeds of the issue of the New Senior Notes) and carry interest at 15% per annum (payable in kind). The Obligors (as defined under the Note Purchase Agreement) have granted certain security to the Bridge Noteholders in respect of their respective obligations under the Bridge Securities, including a first lien over the Group's interests in Ebok and Okoro. The Bridge Securities also rank in seniority ahead of the Ebok Facility. Sale of the Okwok licence is an event of default under the Note Purchase Agreement, and any default under the Okwok/OML 113 Facility which permits the lender thereunder to accelerate a principal amount of financial indebtedness which is in excess of US\$5,000,000 is a cross-default under the Note Purchase Agreement.

The Note Purchase Agreement provides that the Bridge Securities shall be repaid in full pursuant to the Restructuring as follows:

(a) US\$5 million of Bridge Securities to be redeemed by the issue of Ordinary Shares pursuant to the Bridge Securities Share Issue; and
(b) the balance of the Bridge Securities to be repaid in cash (expected to be from the proceeds of the issue of the New Senior Notes).

(D) Sponsor's Agreement

The Company and Morgan Stanley have entered into an agreement dated 19 June 2015, under which the Company has appointed Morgan Stanley as Sponsor in connection with the Open Offer and Admission (the "Sponsor's Agreement").

The Company shall pay (whether or not the Sponsor's Agreement becomes unconditional) all costs and expenses incurred in connection with the Open Offer, the General Meeting, the allotment and issue of the Ordinary Shares and the Sponsor's Agreement. This will include listing and trading fees, other regulatory fees and expenses, printing and advertising costs, postage, all accountancy and other professional fees and public relations costs and expenses.

The Company has also given certain warranties, undertakings and indemnities to the Sponsor under the Sponsor's Agreement. If the Resolution is not approved, and in certain other circumstances, the Sponsor may terminate the Sponsor's Agreement.

(E) New Senior Notes

As part of the Scheme, the Issuer will issue approximately US\$369 million of new high yield notes due 2 years from their date of issue ("New Senior Notes") to refinance and repay the Bridge Securities and provide an additional US\$148 million in net cash proceeds to the Group. The New Senior Notes will be guaranteed by the Company and certain of its operating subsidiaries. The purchase of New Senior Notes will be made by certain of the Bridge Noteholders and/or respective affiliates, while all Existing Noteholders will be eligible to participate in the subscription for the New Senior Notes pro rata to their existing holdings. The New Senior Notes will carry an annual interest rate of 15% (7.5% payable in cash and 7.5% payable in kind), payable quarterly. An event of default under the Okwok/OML 113 Facility is likely to give rise to a cross-default under the New Senior Notes.

Covenants

The New Senior Notes contain high-yield style covenants, subject to certain agreed exceptions and qualifications, including, without limitation, exceptions that expressly permit the transactions required in connection with the Restructuring, and covenants restricting the ability of the Issuer and the guarantors of the New Senior Notes to, among other things:

incur or guarantee additional indebtedness, or issue disqualified stock or preferred stock;
pay dividends or make distributions;
repurchase or redeem capital stock of the Issuer or any parent of the Issuer or subordinated indebtedness of the Issuer or any restricted subsidiary of the Issuer;
make investments or acquisitions;
incur restrictions on the ability of certain of the Company's subsidiaries to pay dividends or to make other payments to the Issuer;
enter into transactions with affiliates;
create liens;
merge or consolidate with other companies or transfer all or substantially all of the assets of the Company or certain of its subsidiaries;
transfer or sell assets, including capital stock of subsidiaries; and
prepay, redeem or repurchase debt that is junior in right of payment to the New Senior Notes.

In addition, the Issuer of the New Senior Notes is required to redeem the New Senior Notes at a premium in certain circumstances, including when the Company's cash flow exceeds a certain threshold.

Events of Default

Events of default under the New Senior Notes include, without limitation, subject in certain cases to grace periods, thresholds and other qualifications:

non-payment of amounts due under the New Senior Notes or certain other debt instruments by the Issuer and the guarantors of the New Senior Notes;
breach of certain covenants by the Issuer or the guarantors of the New Senior Notes;
certain final non-appealable judgments, including judgments related to insolvency, against the Company or certain of its subsidiaries entered by a court or courts of competent jurisdiction;
commencement of or consent to certain insolvency proceedings or actions by the Company or certain of its subsidiaries;
unenforceability or invalidity of certain obligations of the Issuer or any guarantors of the New Senior Notes under the New Senior Notes;
it is or becomes unlawful for any party to perform any of its obligations under certain sales contracts or material contracts, subject to certain exceptions;
certain sales contracts or material contracts are not or cease to be valid, binding or enforceable in whole or in part, subject to certain exceptions;
certain sales contracts or material contracts are terminated, subject to certain exceptions;
any seizure or expropriation or other action by or on behalf of any government or other authority in relation to certain of the Group's Nigerian assets; and
any guarantor of the New Senior Notes ceases to be a wholly owned subsidiary of the Company, subject to certain exceptions.

Security

The New Senior Notes are secured by a first lien security over the Ebok Collateral, Okoro Collateral and other assets that are subject to a mortgage, charge, pledge, lien, assignment or other security interest or encumbrance granted by the Company and certain subsidiaries of the Company that are not part of the Ebok Collateral or the Okoro Collateral.

(F) New 2019 Notes and New 2020 Notes

As part of the Scheme, 25% of the face value of the outstanding principal amount (and accrued interest) of the Existing Notes (being approximately US\$234 million) will be released and converted into equity pursuant to the issue of new Ordinary Shares to Existing Noteholders, which will result in Existing Noteholders holding 80% of the increased share capital of the Company immediately following such conversion (the "Debt for Equity Swap").

The remainder of the Existing Notes will be cancelled and reissued by the Issuer into equal amounts of approximately US\$350 million of new notes due 2019 and 2020 (the "New 2019 Notes" and the "New 2020 Notes", respectively). The New 2019 Notes and the New 2020 Notes will be guaranteed by the Company and certain of its operating subsidiaries. The New 2019 Notes and the New 2020 Notes will have an annual interest rate of 9.1%, payable in kind until the New Senior Notes are fully repaid and then payable in cash, each payable semiannually.

Covenants

The New 2019 Notes and the New 2020 Notes contain high-yield style covenants, subject to certain agreed exceptions and qualifications, including, without limitation, exceptions that expressly permit the transactions required in connection with the Restructuring, and covenants restricting the ability of the Issuer and the guarantors of the New 2019 Notes and the New 2020 Notes to, among other things:

incur or guarantee additional indebtedness, or issue disqualified stock or preferred stock;
pay dividends or make distributions;
repurchase or redeem capital stock of the Issuer or any parent of the Issuer or subordinated indebtedness of the Issuer or any restricted subsidiary of the Issuer;
make investments or acquisitions;
incur restrictions on the ability of certain of the Company's subsidiaries to pay dividends or to make other payments to the Issuer;
enter into transactions with affiliates;
create liens;
merge or consolidate with other companies or transfer all or substantially all of the

assets of the Company or certain of its subsidiaries;

• transfer or sell assets, including capital stock of subsidiaries; and prepay, redeem or repurchase debt that is junior in right of payment to the New 2019 Notes and the New 2020 Notes.

In addition, the Issuer of the New 2019 Notes and the New 2020 Notes are required to redeem such Notes at a premium in certain circumstances, including when a certain percentage of the Company's cash flow exceeds a certain threshold.

Events of Default

Events of default under the New 2019 Notes and the New 2020 Notes include, without limitation, subject in certain cases to grace periods, thresholds and other qualifications:

non-payment of amounts due under the New 2019 Notes and the New 2020 Notes or certain other debt instruments by the Issuer and the guarantors of the New 2019 Notes and the New 2020 Notes;
breach of certain covenants by the Issuer or the guarantors of the New 2019 Notes and the New 2020 Notes;
certain final non-appealable judgments, including judgments related to insolvency, against the Company or certain of its subsidiaries entered by a court or courts of competent jurisdiction;
commencement of or consent to certain insolvency proceedings or actions by the Company or certain of its subsidiaries;
unenforceability or invalidity of certain obligations of the Issuer or any guarantor of the New 2019 Notes and the New 2020 Notes under the New 2019 Notes and the New 2020 Notes;
it is or becomes unlawful for any party to perform any of its obligations under certain sales contracts or material contracts, subject to certain exceptions;
certain sales contracts or material contracts are not or cease to be valid, binding or enforceable in whole or in part, subject to certain exceptions;
certain sales contracts or material contracts are terminated, subject to certain exceptions;
any seizure or expropriation or other action by or on behalf of any government or other authority in relation to certain of the Group's Nigerian assets; and
any guarantor of the New 2019 Notes and the New 2020 Notes ceases to be a wholly owned subsidiary of the Company, subject to certain exceptions.

Security

The New 2019 Notes and the New 2020 Notes are secured by a second lien security over the Okoro Collateral and other assets that are subject to a mortgage, charge, pledge, lien, assignment or other security interest or encumbrance granted by the Company and certain subsidiaries of the Company that are not part of the Ebok Collateral or the Okoro Collateral, and a third lien security over the Ebok Collateral.

(G) Alternative New Senior Notes and New 2021 Notes

Under the Alternative Restructuring, among other things, the New Senior Notes will be issued, but on amended terms (the "Alternative New Senior Notes"), and the Debt for Equity Swap will not be implemented and, instead, approximately US\$234 million of Existing Notes which would have been repaid under the Debt for Equity Swap will be reinstated as a new series of notes that will become due in December 2021, with interest at 20.2% per annum payable in kind (the "New 2021 Notes"). For a full description of the terms of the Alternative Restructuring, including the terms of the Alternative New Senior Notes and the New 2021 Notes see "Importance of the vote and consequences of a failure to implement the Restructuring" in Part I (Letter from the Chairman to Shareholders).

(H) Investor Rights Agreement

If the Resolution is not approved and the Alternative Restructuring is implemented, the Company, the Notes Issuer and Afren International Limited will enter into an investor rights agreement (by way of deed poll) upon the implementation of the Scheme which will entitle the Noteholder Majority (by notice in writing) to nominate a majority of the directors to the Board and the board of directors of each of the Notes Issuer and Afren International Limited. Under the Investor Rights Agreement, the obligations of each of the Company, the Notes Issuer and Afren International Limited are limited to undertaking to ensure that such nominated persons are appointed to the relevant board of directors.

(I) The Scheme

Overview

It is intended that the Restructuring or the Alternative Restructuring (as applicable) will be effected in part pursuant to the Scheme. A scheme of arrangement is a process under the laws of England and Wales. If the Restructuring or the Alternative Restructuring (as applicable) is implemented pursuant to the Scheme, the Existing Notes will be cancelled and the relevant Scheme Creditor Entitlements will be issued to Scheme Creditors.

In brief, the Scheme provides for, amongst other things:

(i) the waiver and release by Scheme Creditors of all claims under the Existing Notes;
(ii) the execution and delivery of documentation for the issue to Scheme Creditors of new debt and, if applicable, equity instruments; and
(iii) new indebtedness of Afren and Afren Finance plc to which Scheme Creditors are entitled or can choose to participate in.

If the Effective Date occurs, the assets that will be distributed to the Scheme Creditors will be their relevant Scheme Creditor Entitlements, which shall be determined in accordance with the terms of the Scheme.

Despite any Scheme Creditor not voting on the Scheme, upon the occurrence of the Effective Date, such Scheme Creditor (or its nominated recipient(s)) will remain entitled to receive its Scheme Creditor Entitlements provided that it has validly completed and submitted certain documents within the required period.

If the Scheme becomes effective, each present and future holder of any Scheme Creditor Entitlements will be bound by the Scheme and the Restructuring Documents (or the Alternative Restructuring Documents (as applicable)), whether or not such holder approved the Scheme, objected to the Scheme or took no action in respect of the Scheme.

The Scheme Meeting will be held at or about 1:00 p.m. on 29 July 2015, in each case at the offices of White & Case LLP at 5 Old Broad Street, London EC2N 1DW. In order for the Restructuring or the Alternative Restructuring (as applicable) to become effective, the

Scheme requires the approval of both a majority in number and at least 75% in value of the Scheme Creditors present and voting (either in person or by proxy) at the Scheme Meeting.

Conditions to the Scheme becoming effective

The Scheme will become effective on the Effective Date (being either the "Restructuring Effective Date" or the "Alternative Restructuring Effective Date" (as applicable)). The Scheme will not become effective until the conditions precedent to the Effective Date have been fulfilled or waived.

Pursuant to the Scheme, following:

approval by the requisite majorities of Scheme Creditors (as set out above);
the granting by the Court of an order sanctioning the Scheme; and
the date of the delivery of the order sanctioning the Scheme to the Registrar of Companies (together the "Scheme Lodgement Date"),

the instructions, authorisations, directions and authorities contained in the Scheme will take effect and all of the Restructuring Documents (or all Alternative Restructuring Documents (as applicable)) will be signed and dated. However, the effectiveness of the Restructuring Documents (or all Alternative Restructuring Documents (as applicable)) will be subject to satisfaction of the other conditions precedent to the Effective Date (as set out below). The Company will file the Court Order at Companies House as soon as reasonably practicable after receiving it.

Effective Date

The Restructuring Effective Date conditions are:

the occurrence of the Scheme Lodgement Date;
the provision of a final-form tax paper prepared by Grant Thornton UK LLP (or another suitably qualified advisor acceptable to the Notes Creditor Committee Advisors and Afren) in form and substance satisfactory to the Note Creditor Committee;
the Scheme Escrow Agent confirming to Afren (who shall promptly inform the Scheme Creditors of the same) that it holds in cleared funds to be released by Afren or any other member of the Restructured Group (as applicable) an amount equal to or greater than the aggregate amount required to be paid by Afren in cash to holders of the Bridge Securities on the Restructuring Effective Date;
the granting of the Chapter 15 Order, which condition may be waived by Scheme Creditors representing at least 50% (by value) of the aggregate Scheme Claims who have responded to a request from Afren to waive this condition within 5 business days of such request being made;
the completion of the Security Reorganisation, which condition may be waived by the Note Creditor Committee as confirmed to Afren by the Notes Creditor Committee Advisers;
all conditions precedent to each restructuring document (other than the occurrence of the Restructuring Effective Date) have been satisfied or have been waived;
all conditions precedent to the Amended Okwok/OML 113 Facility (other than the occurrence of the Restructuring Effective Date) have been satisfied or have been waived;
all conditions precedent to the Amended Ebok Facility (other than the occurrence of the Restructuring Effective Date) have been satisfied or have been waived;
the Amended Okwok/OML 113 Facility has been executed in form and substance satisfactory to the Note Creditors Committee as confirmed to Afren by the Notes Creditor Committee Advisers;
the Amended Ebok Facility has been executed in form and substance satisfactory to the Note Creditors Committee as confirmed to Afren by the Notes Creditor Committee Advisers; and
the payment by Afren or another member of the Group of all of the then outstanding agreed fees, costs and expenses of each of its advisers, provided that each adviser may waive this condition with respect to fees, costs and expenses owed to it.

The Alternative Restructuring Effective Date conditions are:

the occurrence of the Scheme Lodgement Date;
the provision of a final-form tax paper prepared by Grant Thornton UK LLP (or another suitably qualified advisor acceptable to the Notes Creditor Committee Advisors and Afren) in form and substance satisfactory to the Note Creditor Committee;
the Scheme Escrow Agent confirming to Afren (who shall promptly inform the Scheme Creditors of the same) that it holds in cleared funds to be released by Afren or any other member of the Restructured Group (as applicable) an amount equal to or greater than the aggregate amount required to be paid by Afren in cash to holders of the Bridge Securities on the Alternative Restructuring Effective Date;
the granting of the Chapter 15 Order, which condition may be waived by Scheme Creditors representing at least 50% (by value) of the aggregate Scheme Claims who have responded to a request from Afren to waive this condition within 5 business days of such request being made;
the completion of the Security Reorganisation, which condition may be waived by the Note Creditor Committee as confirmed to Afren by the Notes Creditor Committee Advisers;
the Investor Rights Agreement is in form and substance satisfactory to the Note Creditor Committee as confirmed to Afren by the Notes Creditor Committee Advisers;
all conditions precedent to each Alternative Restructuring Document (other than the occurrence of the Alternative Restructuring Effective Date) have been satisfied or have been waived;
all conditions precedent to the Amended Okwok/OML 113 Facility (other than the occurrence of the Alternative Restructuring Effective Date) have been satisfied or have been waived;
all conditions precedent to the Amended Ebok Facility (other than the occurrence of the Alternative Restructuring Effective Date) have been satisfied or have been waived; and
the Amended Okwok/OML 113 Facility has been executed in form and substance satisfactory to the Note Creditors Committee as confirmed to Afren by the Notes Creditor Committee Advisers;
the Amended Ebok Facility has been executed in form and substance satisfactory to the Note Creditors Committee as confirmed to Afren by the Notes Creditor Committee Advisers; and
the payment by Afren or another member of the Group of all of the then outstanding agreed fees, costs and expenses of each of its advisers, provided that each adviser may waive this condition with respect to fees, costs and expenses owed to it.
15.2 Material contracts entered into by the Group in the two years prior to publication of this document (including any amendments as a result of the Restructuring):

(A) Pari Passu Intercreditor Agreement

On 9 December 2013, an amended and restated intercreditor agreement (the "Pari Passu Intercreditor Agreement") was entered into by and among the Company and Deutsche Bank Trust Company Americas, in its capacities as trustee in respect of the 2016 Notes (the "2016 Notes Trustee"), the 2019 Notes (the "2019 Notes Trustee") and the 2020 Notes (the "2020 Notes Trustee"), including any additional notes issued under the respective indentures, and primary collateral agent in respect of each of the 2016 Notes, the 2019 Notes and the 2020 Notes (the "Primary Collateral Agent"), in order to:

regulate the enforcement of certain security interests for the 2016 Notes, the 2019 Notes, the 2020 Notes and any pari passu indebtedness of the Company and/or its subsidiaries also secured by the Okoro Collateral ("Pari Passu Indebtedness"), constituted by:
(i) the capital stock of AERL;
(ii) the bank accounts of each of AERL and Afren Okoro;
(iii) the assets of AERL that are subject to fixed and floating charges, including property, equipment, facilities and insurance policies, in each case related to the Okoro Project (as defined therein);
(iv) the rights of Afren Okoro in respect of certain hedging agreements, if any, and intercompany loans; and
(v) the rights of the Company under funding loans, if any, made to AERL with the proceeds of the 2016 Notes.
ensure that all proceeds of the enforcement of the Okoro Collateral are distributed pari passu and pro rata.

The Bridge Securities constitute Pari Passu Indebtedness and are therefore subject to, and benefit from, the Pari Passu Intercreditor Agreement.

The Okoro Collateral does not extend to assets, including bank accounts, held by or jointly held with the Company's indigenous partners.

The Pari Passu Intercreditor Agreement provides that notwithstanding any date, manner or order of perfection of the security interests and liens in respect of Okoro Collateral granted to the 2016 Notes Trustee, the 2019 Notes Trustee, the 2020 Notes Trustee and the holders of any class of Pari Passu Indebtedness (together, the "Creditor Representatives") or the Primary Collateral Agent, and notwithstanding whether the Primary Collateral Agent or any Creditor Representative has possession of all or any part of the Okoro Collateral, as between secured creditors party to the Pari Passu Intercreditor Agreement, all claims shall for all purposes be treated as though they are secured by the Okoro Collateral on a pari passu basis, and all proceeds from enforcement of the Okoro Collateral will be distributed in accordance with the Pari Passu Intercreditor Agreement.

The Pari Passu Intercreditor Agreement provides that the Primary Collateral Agent shall enforce the Okoro Collateral on the instructions of (a) holders of loans evidenced by loan, credit guarantee facility agreements or similar evidencing Pari Passu Indebtedness ("Pari Passu Loans") that have the right to give (or cause their Creditor Representative to give) the relevant instructions thereunder and, (b) if there are no Pari Passu Loans outstanding, holders of the 2016 Notes, 2019 Notes, 2020 Notes, any other notes constituting Pari Passu Indebtedness (including the Bridge Securities) and creditors that have acceded to the Pari Passu Intercreditor Agreement as Hedging Creditors thereunder ("Pari Passu Hedging Creditors") to whom are owed in aggregate more than 50% of the aggregate principal amount of all notes issued under the 2016 Notes Indenture, the 2019 Notes Indenture, the 2020 Notes Indenture, all notes issued under an indenture or similar instrument creating or evidencing Pari Passu Indebtedness (including the Bridge Securities) and the outstandings owed to Pari Passu Hedging Creditors (the "Instructing Creditors").

The Primary Collateral Agent shall incur no liability as a result of the sale or realisation of any asset of the Okoro Collateral at any private sale conducted in a commercially reasonable manner, and the Primary Collateral Agent shall not be obliged to monitor any enforcement action, and all parties to the Pari Passu Intercreditor Agreement waive any claim against the Primary Collateral Agent regarding any price at which any asset may have been sold at a private sale was less than the price that might have been obtained at a public sale.

The proceeds of any sale or other realisation upon all or any assets of the Okoro Collateral under the Pari Passu Intercreditor Agreement shall be distributed by the Primary Collateral Agent (it being understood that the Creditor Representatives shall be responsible for providing the Primary Collateral Agent with details of the amounts required to be paid), and any such distributions shall be final and the Primary Collateral Agent shall have no duty to inquire as to the application of proceeds by the parties after distribution.

The Pari Passu Intercreditor Agreement includes provisions whereby the proceeds of the enforcement of the Okoro Collateral is applied:

first, to the payment of taxes and filing, registration, and other government fees incurred with the sale or realisation of the Okoro Collateral;
second, to the payment of expenses incurred by the Primary Collateral Agent in connection with such sale or realisation and any amounts owed to the Primary Collateral Agent under the Pari Passu Intercreditor Agreement or any other security document, including without limitation, all amounts for which the Primary Collateral Agent is entitled to indemnification under the 2016 Notes Indenture, the 2019 Notes Indenture, the 2020 Notes Indenture, the documents evidencing Pari Passu Indebtedness or any accession agreement pursuant to which a Pari Passu Hedging Creditor acceded to the Pari Passu Intercreditor Agreement; and any other amount owed to the Primary Collateral Agent in connection with its performance of its functions or the preservation and protection of the Okoro Collateral;
third, pro rata and pari passu to (a) the 2016 Notes Trustee to reimburse any costs and expenses then due and payable under the 2016 Notes Indenture, (b) the 2019 Notes Trustee to reimburse any costs and expenses then due and payable under the 2019 Notes Indenture, (c) the 2020 Notes Trustee to reimburse any costs and expenses then due and payable under the 2020 Notes Indenture, and (d) each other Creditor Representative to reimburse any costs and expenses then due and payable under the document evidencing Pari Passu Indebtedness;
fourth, to reimburse any Creditor Representative or the Primary Collateral Agent pursuant to the Intercreditor Documents not covered previously;
fifth, to the pro rata and pari passu payment of any obligations of the Company to the 2016 Noteholders, the 2019 Noteholders, the 2020 Noteholders and to the holders of obligations constituting Pari Passu Indebtedness; and

• finally, to pay the relevant collateral provider or its successors or assigns, or as a court may direct, any surplus proceeds.

Pursuant to the Pari Passu Intercreditor Agreement, the Primary Collateral Agent is obliged to take enforcement action against the Okoro Collateral on the instructions of the Instructing Creditors, but shall not be obliged to take any enforcement action on the Okoro Collateral if it determines that such action is contrary to the terms of the Pari Passu Intercreditor Agreement, any applicable law or regulation, or if the Primary Collateral Agent is not indemnified and/or secured to its satisfaction.

The Pari Passu Intercreditor Agreement also contains certain Nigerian upstamping provisions in respect of the Okoro Collateral that is Nigerian Collateral.

The Pari Passu Intercreditor Agreement includes provisions pursuant to which the Okoro Collateral may be substituted or released and new security granted only to the extent permitted by the 2016 Notes Indenture, the 2019 Notes Indenture, the 2020 Notes Indenture and any documents evidencing Pari Passu Indebtedness and the related security documents (it being understood that the Primary Collateral Agent shall have no responsibility to make any determination as to whether such release is permitted under the relevant documents, but shall be entitled to rely upon the direction of the Company, without investigation). Furthermore, the Instructing Creditors shall have the right to instruct the Primary Collateral Agent to release any or all of the Okoro Collateral for the purpose of any enforcement action to be taken in accordance with the underlying security documents.

The Pari Passu Intercreditor Agreement and any actions arising out of or in connection with it are governed by the laws of the State of New York.

Accession of Okoro Security Trustee

On 30 April 2015 Deutsche Bank Trust Company Americas was replaced by UMB Bank, N.A. in its capacities as 2016 Notes Trustee, 2019 Notes Trustee, 2020 Notes Trustee and Primary Collateral Agent. On 30 June 2015 UMB Bank, N.A. acceded to the Pari Passu Intercreditor Agreement in its capacity as security trustee for each holder of the Bridge Securities in respect of the Okoro Collateral (the "Okoro Security Trustee"). As a result of such accession, the Bridge Securities rank pari passu with the 2016 Notes, the 2019 Notes and the 2020 Notes in respect of the Okoro Collateral.

Global Intercreditor Agreement

As part of the proposed Restructuring, Afren will enter into the Global Intercreditor Agreement which will replace the Pari Passu Intercreditor Agreement and the other intercreditor agreements which have been entered into by Afren and certain of its secured creditors in respect of the Ebok Collateral and pursuant to which, amongst other things, with respect to the Okoro Collateral and the Ebok Collateral, the New Senior Notes will rank ahead of the Amended Ebok Facility and the Reinstated Notes (and the Amended Ebok Facility and the Reinstated Notes will rank pari passu except in relation to the Ebok Collateral, in respect of which the Amended Ebok Facility will rank ahead of the Reinstated Notes).

The Global Intercreditor Agreement will come into effect only if the Restructuring is completed.

(B) Ebok Facility

Afren Resources as borrower and Afren as guarantor entered into a senior secured reserves based lending revolving credit facility (the "Ebok Facility") dated as at 24 March 2010, as amended and restated on 23 June 2010, 3 March 2011 and 22 March 2013, with BNP Paribas, Citibank, N.A., London Branch, Natixis, Deutsche Bank AG, Amsterdam Branch, Firstrand Bank Limited, acting through its Rand Merchant Bank Division, Merrill Lynch International Bank Limited, London, Nedbank Limited, London Branch, Sumitomo Mitsui Banking Corporation Europe Limited, Stanbic IBTC Bank Plc and Standard Chartered Bank and any bank or financial institution which accedes to the Ebok Facility as a mandated lead arranger, for the purpose of, among other things as further described below, funding capital expenditure in respect of the Ebok Assets (as defined below) (the "Ebok Facility Agreement"). The Ebok Facility has a final maturity date of 30 April 2016 and a margin of 400 to 480 basis points.

Commitments

The Ebok Facility Agreement provides for a revolving credit facility in an aggregate amount equal to the total commitments from time to time. As at the date of this document, the aggregate commitments under the Ebok Facility were US\$300 million in accordance with the reduction schedule provided for in the Ebok Facility. In addition, the Ebok Facility also provides terms (on an uncommitted basis) for the issuance of letters of credit which are not issued under the Ebok Facility but will nonetheless form part of the secured liabilities.

Purpose

Afren Resources is permitted to draw the funds available under the Ebok Facility towards the following (in the same order): (i) funding capital expenditure relating to (a) the oil and gas field known as Ebok located in the OML 67, Gulf of Guinea, offshore in Nigeria, (b) the facilities relating to such field and/or (c) the interests in such field, system, project or facilities ((a), (b) and (c) together, the "Ebok Asset"); (ii) funding interest, fees, costs and other expenses accruing under the Ebok Facility and the related finance documents; and (iii) general corporate purposes including on lending to other members of the Group to the extent permitted by the Ebok Facility.

Reduction and repayment

Loans made under the Ebok Facility must be repaid in full on the final maturity date, being 30 April 2016. Amounts repaid by the borrower may be re borrowed in accordance with the terms of the Ebok Facility Agreement.

The total aggregate commitments under the Ebok Facility reduce at a rate of US\$50 million per three month period beginning on 31 January 2015 to US\$50 million on 31 January 2016, with the total commitment falling to zero on the final maturity date.

Prepayment

The Ebok Facility will be immediately cancelled, and all obligations thereunder will be payable on the last day of the relevant interest period in the event of illegality. If there is a change of control, the Majority Lenders (as defined therein) may declare the outstanding loans immediately due and payable.

In the event that an obligor under the Ebok Facility Agreement prepays more than US\$75 million (in aggregate) of amounts outstanding under the 2020 Notes (as defined therein, which includes the 2016 Notes and the 2019 Notes), the borrower shall prepay and cancel the Ebok Facility in an amount equal to any such excess over US\$75 million save to the extent such prepayment is made using the proceeds of the issuance of new Notes which have a maturity date later in time than the 2020 Notes which have been prepaid.

The borrower may voluntarily prepay or prepay and cancel amounts outstanding under the Ebok Facility without penalty or premium, at any time in whole or in part, subject to a minimum repayment of US\$5 million, on not less than five business days' notice to the facility agent.

Interest

The rate of interest payable is calculated on the basis of a formula which incorporates the aggregate of the applicable margin, LIBOR, and the mandatory cost, if any.

Covenants

The Ebok Facility contains customary operating and financial covenants, subject to certain agreed exceptions, including covenants restricting the ability of each borrower and each guarantor (and where expressly provided, each security provider and the subsidiaries of the borrowers and guarantors) to, among other things:

create security;
make material acquisitions or disposals, sell, lease, transfer or dispose of assets;
amalgamate or merge with other companies;
change its principal business activity;
incur indebtedness or issue guarantees (does not apply to Afren);
pay dividends, redeem share capital or redeem affiliate indebtedness;
issue shares (does not apply to Afren); and
enter into affiliate transactions (does not apply to Afren).

The Ebok Facility also requires each borrower and each guarantor (and in certain cases, the security providers and the subsidiaries of the borrowers or guarantors) to observe certain affirmative covenants, subject to certain agreed exceptions and including, but not limited to, covenants relating to:

maintenance of relevant authorisations;
compliance with laws, including environmental laws and regulations;
payment of taxes;
maintenance of insurance;
ensuring that the claims of the finance parties under the Ebok Facility rank at least pari passu with the claims of other unsecured and unsubordinated creditors;
maintenance of project accounts;
selection of an acceptable offtaker; and
provision of financial and other information to lenders.

The Ebok Facility also requires Afren to (i) comply with a maximum ratio of total net indebtedness to EBITDA of 3.00 to 1.00, tested each June 30 and December 31 with respect to the prior six months (though such testing is postponed until repayment of the New Senior Notes) and (ii) ensure that the total group sources exceed total group uses in certain test periods, subject to certain exceptions and (iii) the gross production level of the Ebok Asset for the period of six months ending on each quarter date is at least 30,000 barrels per day on average (excluding any production during Planned Maintenance). In addition, the Ebok Facility requires Afren Resources to ensure that at all times, 2P reserves attributed to the Ebok Asset are equal to at least 150% of the aggregate amount of outstanding utilisations under the Ebok Facility.

Events of Default

The Ebok Facility sets out certain events of default, the occurrence of which would allow the majority lenders to accelerate all outstanding loans and cancel their commitments and/or declare that all or part of the utilisations and other amounts outstanding are immediately due and payable. The events of default include, among other events and subject in certain cases to grace periods, thresholds and other qualifications:

non-payment of amounts due under a finance document;
breach of covenants;
inaccuracy of a representation or statement when made, deemed to be made or repeated;
invalidity or unlawfulness of certain sales contract and material contracts;
cross defaults (including cross payment defaults in respect of Afren Resources, in excess of US\$5 million and in respect of Afren, US\$15 million, and any default under the Okwok/OML 113 Facility);
insolvency;
change of control of Afren Resources;
invalidity or unlawfulness of the finance documents;
seizure, nationalisation or expropriation in relation to the Ebok Asset or any obligor, security provider or any asset the subject of security;
abandonment or destruction of Ebok Asset;
audit qualification;
an adverse change in the political situation in Nigeria; and
material adverse change.

Security

The Ebok Facility is secured by (i) a fixed and floating charge and security over substantially all of the assets and undertakings of Afren Resources, (ii) a pledge by Afren Nigeria Holdings Limited of the shares in Afren Resources, (iii) account pledges over Afren Resources' onshore and offshore bank accounts and (iv) assignment of insurances, reinsurance rights and major contracts (including the FPSO unit services contract entered into in January 2010). The 2020 Notes will be secured on a contractual second priority basis by the same collateral that secures the Ebok Facility. See "—Ebok Intercreditor Agreement."

Overview of Amendments to the Ebok Facility as part of the Restructuring

The amortisation profile under the Ebok Facility will also be amended as follows:

no amortisation payments will be made until the earlier of the first quarter date following the New Senior Notes being repaid and 30 September 2018; and
thereafter, eight quarterly amortisations of up to a maximum of US\$39.2 million, including:
o a fixed amortisation of US\$15.56 million rising to US\$27.22 million; and
o the remaining amortisation (up to US\$39.2 million in aggregate together with the fixed amortisation) being subject to a DSCR and cash test.

To the extent that the full US\$39.2 million amortisation has not been paid in a given quarter, it will be deferred until the maturity of the loan (unless there are certain minimum cash balances in the Group).

Any default under the Amended Okwok/OML 113 Facility or the New Senior Notes is a cross-default under the Amended Ebok Facility.

(C) Okwok/OML 113 Facility

AEPNA, as borrower, and Afren and FHN 113 Limited, as guarantors, entered into a bridge loan facility (the "Okwok/OML 113 Facility") with Access Bank as lender, pursuant to an offer letter dated 30 September 2014, for the purpose of the financing of capital and operating expenditure for the development plans and work programmes of OML 67 Okwok and OML 113 Aje field oil and gas assets in relation to the Okwok and Aje fields. The Okwok/OML 113 Facility has an interest rate of 7.5% over LIBOR, and a term of one year.

Commitments

The Okwok/OML 113 Facility provided a credit facility in the amount of US\$100 million.

Repayment

Repayment shall be made as a bullet payment on the maturity date of the Okwok/OML 113 Facility or upon closing and successful syndication of the Ebok refinancing, whichever is earlier.

Prepayment

AEPNA may voluntarily prepay the loan in a minimum of US\$5 million without premium or penalty, subject to the payment of the accrued interest and break funding costs (if the prepayment is made other than on an interest payment date) and related hedge breakage costs (if any), on not less than five business days' notice to Access Bank.

The Okwok/OML 113 Facility will be immediately cancelled, and all obligations thereunder will be payable on the last day of the relevant interest period in the event of (i) illegality; (ii) change of control; (iii) disposal of assets (including sale of the Okwok licence); (iv) expropriation or nationalisation; (v) judgments and insurance claims; and (vi) change of operatorship.

Interest

Interest is calculated on the basis of actual days elapsed/360 days.

Covenants

The Okwok/OML 113 Facility requires AEPNA to observe certain affirmative covenants, subject to certain exceptions and including, but not limited to, covenants relating to:

maintenance of relevant authorisations;
compliance with laws, including environmental laws and anti-corruption laws;
payment of taxes;
maintenance of insurance; and
ensuring that its obligations under the Okwok/OML 113 Facility rank at least pari passu with the claims of other creditors.

The Okwok/OML 113 Facility also requires AEPNA to refrain from certain activities, including covenants relating to:

negative pledge;
loans or credit;
guarantees or indemnities;
incurrence of financial indebtedness; and
change of business.

Events of Default

The Okwok/OML 113 Facility sets out certain events of default. The events of default include, and subject in certain cases to grace periods, thresholds and other qualifications:

non-payment of any amount due under the Finance Documents (as defined therein);
insolvency proceedings of AEPNA;
material breach by AEPNA, FHN 113 Limited or Afren of any other obligation under the Finance Documents;
revocation, cancellation or termination of any material contract;
breach of representations and warranties by AEPNA;
cross default;
AEPNA, FHN 113 Limited or Afren fails to comply with court judgment or arbitral award;
unlawfulness and invalidity of any obligations of AEPNA, FHN 113 Limited or Afren under any of the Finance Documents
any litigation is commenced in relation to the Finance Documents or against Afren and its subsidiaries; and
an event occurs which Access Bank believes is likely to have a material adverse effect.

Security

The Okwok/OML 113 Facility is secured by: (i) a Nigerian law all assets debenture granted by AEPNA, including, but not limited to (a) a fixed and floating charge over all its shares in its subsidiaries and the secured bank accounts held with Access Bank and (b) an assignment over insurances and material contracts (subject to obtaining any relevant consents of the counterparties); (ii) a Nigerian law all assets debenture granted by FHN 113 Limited, including, but not limited to (a) a fixed and floating charge over all its shares in its subsidiaries and (b) an assignment over insurances and material contracts (subject to obtaining any relevant consents of the counterparties); (iii) a Nigerian law governed share charge over the shares in AEPNA and FHN 113 Limited; (iv) a corporate guarantee and indemnity of Afren and FHN 113 Limited covering the facility amount; and (v) an irrevocable undertaking to domicile free and unencumbered cashflows into Afren's account.

Overview of Amendments to the Okwok/OML 113 Facility as part of the Restructuring

As part of the proposed Restructuring, Afren has entered into an amendment agreement with Access Bank in respect of the Okwok/OML 113 Facility (the "Amended Okwok/OML 113 Facility"), pursuant to which the period for repayment of the US\$50 million Okwok/OML 113 Facility will be extended until 30 June 2018. The amortisation profile under the Okwok/OML 113 Facility will also be amended such that US\$20 million of amortisation payments will be made by the end of March 2016, with the balance being amortised through equal quarterly payments until 30 June 2018. The interest rate under this facility will remain at 9.5% per annum, but the lender will receive a fee equal to 1.5% of the facility, payable at the maturity of the facility

The Amended Okwok/OML 113 Facility is conditional upon the other parts of the Restructuring being implemented.

(D) OML 26 Facility

FHN 26 as borrower entered into the OML 26 Facility with Zenith Bank as lender, pursuant to an offer letter dated 24 January 2014, for the purpose of the financing of capital and operational expenditure as well as general corporate purposes with respect to OML 26. The OML 26 Facility has an interest rate of 6.5% over LIBOR, and a term of four years inclusive of a fifteen month moratorium.

Commitments

The OML 26 Facility provided a loan facility in the amount of US\$100 million.

Repayment

FHN 26 must make eleven quarterly repayments of the principal commencing after the fifteen month moratorium period, and sixteen quarterly repayments of interest from the date of first drawdown.

Prepayment

FHN 26 may, on giving 14 business days' written notice to Zenith Bank, voluntarily prepay the loan in whole or in part without penalty.

Covenants

The OML 26 Facility requires FHN 26 to covenant:

to provide copies of its audited accounts for each financial year to Zenith Bank while the facility is outstanding;
to notify Zenith Bank of any event of default upon becoming aware of it;
to procure that its obligations under the OML 26 Facility will rank at least pari passu with all its other present and future unsecured and unsubordinated obligations; and
to not materially change the nature of the business being carried on by it.

Events of Default

The OML 26 Facility sets out certain events of default, the occurrence of which would allow Zenith Bank to (i) declare that the amount of the facility outstanding and the interest accrued and any other moneys payable are immediately due and payable; and (ii) terminate its obligation to provide money under the OML 26 Facility. The events of default include, and subject in certain cases to grace periods, thresholds and other qualifications:

non-payment by FHN 26 of any amount due under the facility;
FHN 26 being wound-up or going into liquidation or dissolution;
FHN 26 suspending payment of its debts or ceasing to carry on its business;
FHN 26 changing the domiciliation of cash flows and receivables from Zenith Bank
any encumbrancer taking possession or a receiver being appointed for the assets of FHN 26;
execution or distress levied upon or against property of FHN 26;
FHN 26 being unable to pay its debts;
breach by FHN 26 of any obligations under the facility; and
breach of representations and warranties by FHN 26;

Security

The OML 26 Facility is secured by (i) a deed creating a charge over FHN 26's interest in OML 26 in favour of Zenith Bank; (ii) a deed of pledge over FHN 26's account receivables and cash flows on OML 26; and (iii) a letter of awareness from Afren.

(E) 2020 Notes

On 9 December 2013, Afren issued US\$360 million aggregate principal amount of 6⁵ /8% senior secured notes due 9 December 2020 (the "2020 Notes"). The 2020 Notes were issued pursuant to an indenture dated 9 December 2013. The 2020 Notes are senior secured debt ranking pari passu in right of payment to all of Afren's existing and future senior indebtedness. The 2020 Notes are guaranteed on a senior basis (the "2020 Senior Guarantees") by Afren Nigeria, AERL and Afren Okoro, and on a senior subordinated basis (the "2020 Subordinated Guarantee" and, together with the 2020 Senior Guarantees, the "2020 Note Guarantees") by the same entity that guarantees the 2016 Notes on a senior subordinated basis, Afren Resources (collectively, the "2020 Note Guarantors"). The 2020 Senior Guarantees in respect of the 2020 Notes are senior debt of each of the relevant 2020 Note Guarantors ranking pari passu in right of payment to all of the relevant 2020 Note Guarantor's existing and future senior indebtedness, including guarantees of the 2020 Notes. The 2020 Subordinated Guarantee in respect of the 2020 Notes is subordinated in right of payment to Afren Resources' existing and future senior indebtedness, including indebtedness under the Ebok Facility. The 2020 Notes and the 2020 Note Guarantees in respect thereof are secured by first priority liens on certain assets related to Okoro and the 2020 Notes and the 2020 Subordinated Guarantee in respect thereof are secured by a second priority floating charge and certain other second priority liens on certain assets related to Ebok that secure Afren Resources' obligations under the Ebok Facility. The trustee for the 2020 Notes is party to the Ebok Intercreditor Agreement and party to the Pari Passu Intercreditor Agreement in its capacities as the trustee for the 2016 Notes, the 2019 Notes and the 2020 Notes.

The 2020 Notes may be redeemed at any time prior to 9 December 2016, subject to a specified "make whole" premium. On or after 9 December 2016, all or part of the 2020 Notes may be redeemed for specified redemption prices. Prior to 9 December 2016, Afren may redeem, at its option, up to 35% of the 2020 Notes with the net proceeds from certain equity offerings. If Afren undergoes a change of control or sells certain of its assets, it may be required to make an offer to purchase the 2020 Notes. In the event of certain developments affecting taxation, Afren may redeem all, but not less than all, of the 2020 Notes. Events of default include any acceleration under the Ebok Facility, the Okwok/OML 113 Facility or the Note Purchase Agreement or the deferred principal amount under the Ebok Facility becomes due.

Please also see the section entitled "New 2019 Notes and New 2020 Notes" in this Part IX (Additional Information).

(F) 2019 Notes

On 8 March 2012, Afren issued US\$300 million aggregate principal amount of 10¹ /4% senior secured notes due 8 April 2019 (the "2019 Notes"). The 2019 Notes were issued pursuant to an indenture dated 8 March 2012. The 2019 Notes are senior secured debt ranking pari passu in right of payment to all of Afren's existing and future senior indebtedness. The 2019 Notes are guaranteed on a senior basis (the "2019 Senior Guarantees") by the same entities that guarantee the 2016 Notes on a senior basis, Afren Nigeria Holdings Limited, Afren Cote d'Ivoire Ltd, Afren Okoro, Lion G.P.L SA and AERL (other than the following non-operating subsidiaries that, as at the date hereof, do not own or operate any assets, directly or indirectly, with any reserves: Afren Nigeria Holdings (Nigeria) Limited, Afren CI (UK) Limited and Afren CI (II) Limited), and on a senior subordinated basis (the "2019 Subordinated Guarantee" and, together with the 2019 Senior Guarantees, the "2019 Note Guarantees") by the same entity that guarantees the 2016 Notes on a senior subordinated basis, Afren Resources (collectively, the "2019 Note Guarantors"). The 2019 Senior Guarantees in respect of the 2019 Notes are senior debt of each of the relevant 2019 Note Guarantors ranking pari passu in right of payment to all of the relevant 2019 Note Guarantor's existing and future senior indebtedness, including guarantees of the 2019 Notes. The 2019 Subordinated Guarantee in respect of the 2019 Notes is subordinated in right of payment to Afren Resources' existing and future senior indebtedness, including indebtedness under the Ebok Facility. The 2019 Notes and the 2019 Note Guarantees in respect thereof are secured by first priority liens on certain assets related to Okoro and the 2019 Notes and the 2019 Subordinated Guarantee in respect thereof are secured by a second priority floating charge and certain other second priority liens on certain assets related to Ebok that secure Afren Resources' obligations under the Ebok Facility. The trustee for the 2019 Notes is party to the Ebok Intercreditor Agreement party to the Pari Passu Intercreditor Agreement in its capacities as the trustee for the 2016 Notes, the 2019 Notes and the 2020 Notes.

The 2019 Notes may be redeemed at any time prior to 8 April 2016, subject to a specified "make whole" premium. On or after 8 April 2016, all or part of the 2019 Notes may be redeemed for specified redemption prices. Prior to 8 April 2015, Afren may redeem, at its option, up to 35% of the 2019 Notes with the net proceeds from certain equity offerings. If Afren undergoes a change of control or sells certain of its assets, it may be required to make an offer to purchase the 2019 Notes. In the event of certain developments affecting taxation, Afren may redeem all, but not less than all, of the 2019 Notes. On 12 November 2013, Afren commenced a tender offer in respect of up to US\$100 million of its outstanding 2019 Notes. On 26 November 2013, Afren amended the tender offer in respect of the 2019 Notes to tender for up to US\$50 million of its outstanding 2019 Notes. Under the terms of the Concurrent Tender Offers, Afren offered to purchase for cash in an amount of US\$1,140 per US\$1,000 principal amount of 2019 Notes and also offered an additional early tender payment for holders that tender its 2019 Notes prior to an early tender deadline in an amount of US\$30.00 per US\$1,000 principal amount. The consummation of the Concurrent Tender Offers was subject to the satisfaction or waiver of certain conditions precedent. Events of default include any acceleration under the Ebok Facility, the Okwok/OML 113 Facility or the Note Purchase Agreement or the deferred principal amount under the Ebok Facility becomes due.

Please also see the section entitled "New 2019 Notes and New 2020 Notes" in this Part IX (Additional Information).

(F) 2016 Notes

On 3 February 2011, Afren issued US\$450 million aggregate principal amount of 111 /2% senior secured notes due 1 February 2016 (the "Original 2016 Notes"). The Original 2016 Notes were issued pursuant to an indenture dated 3 February 2011. Pursuant to this indenture, Afren issued the Additional 2016 Notes, (the Additional 2016 Notes and the Original 2016 Notes, being the "2016 Notes"). The 2016 Notes are senior secured debt ranking pari passu in right of payment to all of Afren's existing and future senior indebtedness. The 2016 Notes are guaranteed on a senior basis (the "2016 Senior Guarantees") by the same entities that guarantee the 2019 Notes on a senior basis, Afren Nigeria Holdings Limited, Afren Cote d'Ivoire Ltd, Afren Okoro, Lion G.P.L SA and AERL (other than the following nonoperating subsidiaries that, as at the date hereof, do not own or operate any assets, directly or indirectly, with any reserves: Afren Nigeria Holdings (Nigeria) Limited, Afren CI (UK) Limited and Afren CI (II) Limited) and on a senior subordinated basis (the "2016 Subordinated Guarantee" and, together with the 2016 Senior Guarantees, the "2016 Note Guarantees") by the same entity that guarantees the 2019 Notes on a senior subordinated basis, Afren Resources (collectively, the "2016 Note Guarantors"). The 2016 Senior Guarantees in respect of the 2016 Notes are senior debt of each of the relevant 2016 Note Guarantors ranking pari passu in right of payment to all of the relevant 2016 Note Guarantor's existing and future senior indebtedness, including guarantees of the 2016 Notes. The 2016 Subordinated Guarantee in respect of the 2016 Notes is subordinated in right of payment to Afren Resources' existing and future senior indebtedness, including indebtedness under the Ebok Facility. The 2016 Notes and the 2016 Note Guarantees in respect thereof are secured by first priority liens on certain assets related to Okoro and the 2016 Notes and the 2016 Subordinated Guarantee in respect thereof are secured by a second priority floating charge and certain other second priority liens on certain assets related to Ebok that secure Afren Resources' obligations under the Ebok Facility. The trustee for the 2016 Notes is party to the Ebok Intercreditor Agreement and party to the Pari Passu Intercreditor Agreement in its capacities as the trustee for the 2016 Notes, the 2019 Notes and the 2020 Notes.

The 2016 Notes are non-call for life, subject to a specified "make whole" premium. Prior to 1 February 2014, Afren may redeem, at its option, up to 35% of the 2016 Notes with the net proceeds from certain equity offerings. If it undergoes a change of control or sells certain of its assets, it may be required to make an offer to purchase the 2016 Notes. In the event of certain developments affecting taxation, Afren may redeem all, but not less than all, of the 2016 Notes. On 12 November 2013, Afren commenced a tender offer in respect of any and all of its outstanding 2016 Notes. Under the terms of the Concurrent Tender Offers, Afren offered to purchase for cash in an amount of US\$1,135 per US\$1,000.00 principal amount of 2016 Notes and also offered an additional early tender payment for holders that tender their 2016 Notes prior to an early tender deadline in an amount of US\$30.00 per US\$1,000.00 principal amount. The consummation of the Concurrent Tender Offers was subject to the satisfaction or waiver of certain conditions precedent. Events of default include any acceleration under the Ebok Facility, the Okwok/OML 113 Facility or the Note Purchase Agreement or the deferred principal amount under the Ebok Facility becomes due.

Please also see the section entitled "New 2019 Notes and New 2020 Notes" in this Part IX (Additional Information).

15.3 Material Agreements relating to the Company's Assets

The key terms of certain material contracts relating to the Company's assets entered into in the ordinary course of business are described below. The following summaries of selected provisions are qualified in their entirety by reference to the full text of the actual agreements and should not be considered to be a full statement of the terms and provisions of such agreements. The terms summarised below reflect the current terms of such agreements on the date of this Prospectus unless otherwise indicated. Capitalised terms used below have the meaning ascribed to them in the relevant agreement unless defined below.

(A) Ebok

Farm-In Agreement

Oriental entered into a farm-in agreement with Afren Resources on 31 March 2008. This agreement sets out the terms upon which Afren Resources accepts the assignment and transfer of a 40% participatory interest in the rights and obligations of Oriental in respect of the Ebok Farm-Out Agreement (including those referred to below), the farm-out area and the JOA (described below). In consideration for such participating interest Afren Resources paid US\$11.5 million to Oriental and US\$1 million to Sovereign Oil & Gas Company II, LLC ("Sovereign") following satisfaction of certain conditions precedent, and paid US\$11.5 million to Oriental and US\$1 million to Sovereign following the approval of a development plan submitted to the Nigerian Government. Oriental had the right to require such payment to be satisfied in whole or in part by the issue of shares in Afren Resources of a number of shares to be agreed between the parties. The conditions precedent were satisfied in respect of the agreement on 22 August 2008 and Afren Resources paid the initial payments referred to above within 15 business days of that date. The field development program was approved by the DPR on 5 October 2009 and payment was made within 15 business days. Under the agreement, Afren Resources also agreed to bear and pay all capital costs and all operating costs (until Afren Resources has recovered all capital costs) as well as 40% of the payment obligations of Oriental and the provision of abandonment security under the Ebok Farm-Out Agreement referred to below. Afren has provided a parent company guarantee in favour of Oriental and the Mobil/NNPC Joint Venture to guarantee Afren Resources' obligations in respect of the farm-in.

Ebok Farm-Out Agreement

The Mobil/NNPC Joint Venture holds participating interests in several OMLs, including OML 67, in which Ebok is situated. The Mobil/NNPC Joint Venture entered into a farm-out agreement with Oriental on 25 May 2007 (the "Ebok Farm-Out Agreement") under which Oriental was granted a 100% effective working interest in an area within OML 67 for the purpose of conducting petroleum operations for an initial period of 60 months in consideration for Oriental making monthly payments to the Mobil/NNPC Joint Venture of 30% of the profit oil and profit gas arising from the farm-out area and certain other payments and complying with a number of obligations in relation to OML 67. Subject to obtaining approval from the DPR and Oriental complying with its obligations under the Ebok Farm-Out Agreement, the Ebok Farm-Out Agreement continues for so long as the Mobil/NNPC Joint Venture continue to have the right to conduct petroleum operations within the relevant area of OML 67.

Joint Operating Agreement

Oriental and Afren Resources entered into a JOA on 31 March 2008 to set out the parties' obligations with respect to the conduct of petroleum operations in the farm-out area, with Oriental as operator and Afren Resources as technical advisor. Afren Resources is liable to fund all costs to drill one exploration well and (unless Afren Resources decides to relinquish its rights in the interest at that time) one exploration, appraisal or development well and other work program costs. Available crude oil from the farm-out area (after deducting royalty amounts due to the Nigerian Government, overriding royalty amounts due to the Mobil/NNPC Joint Venture and Sovereign and amounts due for taxes) will be allocated 100% to Afren Resources until Afren Resources has recovered its capital and operating costs. Thereafter, available crude oil will be shared between Afren Resources and Oriental equally. The JOA is effective for so long as both the parties retain an interest in the Ebok Farm-Out Agreement referred to above and farm-out area. In August 2013, an amendment to the JOA was entered into to secure additional benefits in the period from 2016 to 2021, including Afren having sole right to use capital allowances arising from the commencement of the project up to 2015.

Overview of Amendments to the Ebok JOA

Afren Resources entered into an amendment agreement with Oriental in April 2015 with respect to the Ebok JOA, pursuant to which:

Afren Resources' obligation to fund 100% of capital expenditure is terminated;
the Farmor is responsible for lifting a portion of crude oil produced from the Ebok field to cover the Farmor Royalty to be paid under the Ebok Farm-Out Agreement;
Afren Resources and Oriental would each be independently responsible for lifting, marketing and selling 50% of the crude oil produced from the Ebok field (excluding the portion of crude oil lifted to cover Farmor Royalty); and
Afren Resources, as technical adviser, will cash-call Oriental and itself for government royalty, capital expenditure and operating cost (including all taxes and other charges).

The amendment of the Ebok JOA is also subject to receipt of consents from the Ebok Lenders and the holders of the Existing Notes and Bridge Securities, as applicable. These consents are in the process of being sought.

FPSO Unit

A services contract for the provision of a FPSO unit was entered into between Afren Resources and Mercator (the "Contractor") on or about 13 January 2010. This unit will initially be used at Ebok and, depending on the outcome of drilling, at the Okwok field at a later stage. The Contractor is responsible for the provision, operation and maintenance of the FPU which, according to the FPU specifications, should be capable of receiving, processing, storing and exporting processed stabilised crude oil to an offloading tanker and gas to a gas lift/gas injection pipeline. The Contractor shall provide such personnel as are required to properly execute the contract and shall take all responsibility for the health and safety risks in connection with the FPU. Afren Resources shall secure at its expense any and all authorisations and permits required for the FPU and all ancillary materials. The term of the contract is seven years from the issuance of the provisional acceptance certificate with an option for Afren Resources to extend the term for a period of one year. If such extension option has been exercised, Afren Resources is entitled to further extend the period for one year, provided that it provides at least six months' prior written notice. Rates are applied daily for the FPU hire in the amount of US\$70,608 per day and the operation and maintenance services in the amount of US\$36,109 per day, subject to review. Under the agreement, if Afren Resources fails to pay the Contractor within 60 days of receipt of an invoice, the Contractor may present a demand to the issuer of the standby letter of credit for payment of the outstanding sum. Within 20 days from such payment, Afren Resources shall replenish the standby letter of credit up to the amount of US\$6 million. An affiliate of Mercator has been appointed as the guarantor for the Contractor under this agreement. Afren Resources has also provided a standby letter of credit until 1 July 2015 from BNP Paribas to guarantee timely payment which is renewed annually.

Afren Resources may terminate the contract on not less than three months' written notice to the Contractor provided that if termination occurs before the end of the primary term (and any extension) of the contract, an early termination payment is payable by Afren Resources. An early termination payment is not incurred in the case of termination as a result of certain conditions including force majeure events or material breach of the Contractor's material obligations. The Contractor is also entitled to terminate the contract under certain circumstances, including failure to provide the letter of credit and material breach of Afren Resources' material obligations. The Contractor shall indemnify Afren Resources from any claim resulting from pollution damage in respect of leaks from the facilities or property of the Contractor. Each party agrees to indemnify the other against loss of or damage to property, personal injury and loss of or damage to any wells, formation and/or reservoir arising from its negligence or breach of duty. Under the agreement, Afren Resources has the option to purchase the FPU provided that six months' written notice is given to the Contractor. In the event of early termination, the Contractor shall sell the FPU to Afren Resources in exchange for the early termination payment. If Afren Resources purchases the FPU while the Contract continues, the contract will terminate on the purchase of the FPU. The Contractor may grant security over the FPU property and assign its rights under the contract for the benefit of its financiers. Each party may assign its obligations with the prior written consent of the other party which shall not be unreasonably withheld or delayed.

(B) Okoro

Production Sharing and Technical Services Agreement

A production sharing and technical services agreement was entered into between Amni, Afren and AERL on 24 March 2006 (as amended) with respect to the Okoro and Setu fields. Afren's rights and obligations were novated to Afren Okoro pursuant to a novation deed dated 1 March 2007. Under the agreement, AERL is appointed as the contractor and technical operator. Afren Okoro is obligated to lend to AERL and Amni the initial field development costs. Afren Okoro is entitled to recover such costs (plus interest of 8% per annum on 50% of its capital (representing the amount of initial field development costs apportioned to Amni)) from 90% of the sales proceeds of crude oil (net of royalties and taxes). The remaining 10% is split evenly between AERL and Amni. Following cost recovery, proceeds are to be shared equally between Amni and AERL (unless a separate OML has been issued in respect of the Okoro and Setu fields). Until such amount is repaid, Amni and AERL have granted a bank account charge, an asset charge and a share option agreement (in respect of shares in Amni) as security for the repayment of the amounts loaned by Afren Okoro. To the extent the development does not result in sales proceeds being generated, Afren Okoro is not entitled to recoup any amounts from Amni or AERL. The agreement remains in effect until terminated in accordance with its terms. On 1 October 2010, Afren entered into a deed of amendment to the March 2006 technical services agreement that seeks to clarify the treatment of some key cost and tax components in relation to the proposed drilling of infill wells at Okoro. Specifically, the allocation of amounts paid into the joint bank account were amended, in addition to the order of priority for payments to be made from the account. The amendment also details, among other related terms, the terms and costs associated with the drilling of the infill wells at Okoro. On 11 December 2013, Afren entered into an amended and restated production sharing and technical services agreement which amends and restates in its entirety the March 2006 technical services agreement. The agreement seeks to regulate the parties' mutual rights and liabilities, and the management and business activity of the Okoro and Setu fields.

Marketing Services and Sale and Purchase Agreement for Crude Oil

AERL, Amni and BP Oil International Limited (the "Buyer") entered into an agreement for the purchase of Okoro crude oil on 5 November 2012. AERL extended this agreement until 31 December 2013. Under the agreement, AERL shall sell 100% of its entitlement to Okoro Crude Oil to the Buyer, which shall be of normal export quality. AERL shall provide one safe berth for loading the crude oil at the FSO which must at all times conform to standards not less than those set out in the International Code for the Security of Ships and of Port Facilities. The price for the crude oil shall be determined as set out in the agreement to which a premium of US\$1.32 per barrel shall be applied. The Buyer pays in full, without discount, within 30 calendar days after the bill of lading date. Any loss or damage to the oil during loading shall be for the account of the Buyer. The quality and quantity of oil shall be determined in accordance with the usual practice at the terminal. The Buyer shall procure that its vessel shall comply with the requirements of the International Ship and Port Facility Security Code. AERL and Amni shall be jointly and severally liable for their respective obligations and liabilities arising under the agreement.

Contract for the Provision of FPSO Unit

A contract for the provision of FPSO unit was entered into between AERL (on behalf of itself and its co-venturers) and Bumi Armada Berhad on 3 April 2007. This contract was then novated and split pursuant to a novation agreement dated 8 February 2008 between AERL, Bumi Armada Berhad (as guarantor of the contractor), Armada Floating Solutions Limited (as contractor) and Bumi Armada (Singapore) PTE. Limited into (i) the Bareboat Charter Contract (entered into between AERL and Armada Floating Solutions Limited); and (ii) the Operation and Maintenance Contract (entered into between AERL and Bumi Armada (Singapore) PTE. Limited). Bumi Armada (Singapore) PTE. Limited is responsible for the operation and maintenance of the FPSO, and Armada Floating Solutions Limited is to provide the FPSO. The term for both contracts is five years from the issuance of the provisional acceptance certificate on the first flow of oil into the FPSO with an option for AERL to extend the term for an additional one to five years. The provisional acceptance certificate was issued on 1 July 2009. Rates are applied daily for the FPSO hire at US\$42,426 per day and the operation and maintenance services at US\$22,000 per day, subject to review. The technical fee in the Operation and Maintenance Contract is US\$1.88 million per annum. Under the Bareboat Contract, AERL has an exclusive option to purchase the FPSO at its sole discretion. AERL may terminate the Bareboat Contract and the Operation and Maintenance Contract on 180 days' notice provided that if termination occurs before the end of the primary term of the contracts, an early termination payment is payable by AERL. An early termination payment is not incurred in the case of termination as a result of certain conditions including force majeure events or the actual or constructive loss of the FPSO. The contracts also provide each party with the right to terminate upon a default by the other party. Events of default are linked between the two contracts. Parent company guarantees have been provided by Armada Floating Solutions Limited and Bumi Armada (Singapore) PTE Limited and Afren from Bumi Armada Berhad and by AERL from Afren and are to be valid until the expiry of 180 days after the demobilisation of the FPSO, or in the case of a total loss of requisition of the FPSO, the date of termination of the contracts. In addition, AERL is obliged to provide Armada Floating Solutions Limited and Bumi Armada (Singapore) PTE. Limited with a bank guarantee or letter of credit for a sum not exceeding US\$6 million. This letter of credit is in place until 1 July 2015.

(C) Okwok

Addax Farm-Out Agreement

On 7 July 2009, AEPNA and Addax entered into a farm-out agreement whereby Addax agreed to assign 70% of its rights, entitlements and obligations under (i) a joint venture agreement dated 14 September 2005 between Oriental and Addax; (ii) a technical services agreement dated 16 November 2005 between Oriental and Addax; (iii) a JOA dated 9 May 2006 between Oriental and Addax; (iv) a deed of assignment dated 6 June 2006; (v) a crude oil sales and agency agreement dated 16 November 2005; and (vi) a conveyance of overriding royalty interest dated 14 September 2005 between Oriental, Addax and Sovereign, in consideration for AEPNA agreeing to drill one appraisal well in the farm-out area and paying all costs associated therewith. AEPNA was also granted an option, exercisable within six months after the drilling of the well is complete (and, if AEPNA elects, the production testing of one or more of the crude oil-bearing sections of that well), to purchase Addax's residual interest in the project. In consideration for such option, AEPNA is to pay US\$55 million together with an amount equal to the sum of all expenditure and liabilities incurred by Addax in respect of its residual interest on or after such completion of the drilling of the first well (and production testing if applicable).

Joint Operating Agreement

On 19 August 2009, Oriental, Addax and AEPNA entered into a JOA to determine how the Okwok oil field is to be managed. Under the agreement, Oriental is appointed as operator and AEPNA is appointed as its technical advisor during the drilling of one exploration or appraisal well. The parties can elect to take part in proposed site projects. Oriental may propose and conduct site projects where neither of the other parties is willing to approve a work program containing a firm well or a development plan within a fixed period of time. If parties elect not to participate in such a project, they have an option to reinstate such rights and participate within a specified timeframe and subject to certain conditions and payments. No exclusive operations shall conflict with projects in which all three parties have agreed to participate. Each party shall have the right to own, take in kind and separately dispose of its share of total production in such quantities and in accordance with such procedures as set out in an offtake agreement.

(D) OPL 310

Participation Agreement and Production and Revenue Sharing Agreement

A participation agreement was entered into by Optimum and Afren Investments Oil & Gas (Nigeria) Limited ("Afren Investments") on 8 September 2008 and was amended by a Production and Revenue Sharing Agreement on 19 December 2008. Optimum, as holder of 100% of the participating interest in OPL 310, agreed to assign 40% of such interest to Afren Investments. Under the agreement, Afren Investments agreed to pay US\$10 million to the Government of Nigeria as initial payment for revalidation of the OPL 310 licence being allocated to Optimum and to take on certain liabilities and obligations in relation to operations pursuant to the OPL 310 licence. These include the obligation to make a payment to Optimum of (i) US\$3 million following governmental approval being given to Optimum's proposed assignment to Afren Investments, (ii) US\$10 million after the issue of the OML with respect to the area the subject of the OPL 310 licence in the joint names of Optimum and Afren Investments, (iii) US\$4 million after the date on which production of petroleum commences pursuant to the first development plan with respect to the area the subject of the OPL 310 licence which receives all necessary governmental consents ("Production Date"), and (iv) subject to an independent third party having certified there is at least 100 mmboe of recoverable reserves in the area of the subject of the OPL 310 licence, and US\$8 million after the date on which the cumulative production of petroleum from such area reaches 50 mmboe. If the first well drilled after 8 September 2008 results in the discovery of petroleum and an independent third party certifies that the discovery will produce at least 10,000 boe per day, then Afren Investments is to pay Optimum US\$5 million, with the amount to be paid pursuant to (ii) above reduced to US\$9 million and the amount to be paid pursuant to (iii) above reduced to zero. Afren Investments must also pay the Government of Nigeria US\$10 million after the issue of the OML in the joint names of Optimum and Afren Investments and the same amount again once the Production Date is achieved. Afren Investments is required to pay all capital and operating expenditures from 8 September 2008 until the Production Date. After the Production Date and until Afren Investments recovers certain costs incurred as a result of carrying Optimum's capital and operating expenditure obligations until the Production Date, Afren Investments will bear all capital expenditures. After Afren Investments has recovered its costs, Optimum and Afren Investments will bear 70% and 30% of capital expenditure, respectively. After the Production Date, operating expenditures will be apportioned between the parties in proportion to each party's share of net available production. Optimum is to pay the royalty and concession rental on behalf of the parties and liability for such payments will be shared in proportion to each party's share of net available production. Until Afren Investments recovers certain costs, it is entitled to 91% of net available production. Optimum then has an entitlement to 79% of net available production until it recovers certain costs, then the parties are to share in net available production with Optimum being entitled to 30% and Afren Investments being entitled to 70%. The agreement is effective from 8 September 2008 and continues for a term of the OPL 310 licence or such replacement licence, including any extension thereof, unless otherwise terminated. The DPR transmitted the ministerial approval for the assignment of 40% interest to Afren Investments on 26 May 2009.

(E) Barda Rash

Farm-In Agreement

Beta Energy Limited ("Beta Energy"), a wholly-owned subsidiary of Afren (and subsequently re-named Afren MENA Limited), and Komet Group S.A. ("Komet") entered into a farm-in agreement relating to the transfer of a 60% participating interest in respect of the Barda Rash block in the Kurdistan region of Iraq on 27 July 2011. In consideration of the 60% interest, Beta Energy agreed to pay Komet approximately US\$400 million of which US\$62.9 million represented the proportion of

past petroleum costs incurred by Komet since 20 June 2008. Komet transferred its 20% interest in the Barda Rash block PSC to the KRG on 6 June 2013 and the JOA between Beta Energy and Komet was terminated on the same date.

Production Sharing Contract

The KRG and Komet entered into a PSC for the Barda Rash block in the Kurdistan region of Iraq on 20 June 2008. Pursuant to this agreement, the KRG retained a 20% interest in the block which it can transfer, along with all rights and benefits, to other another public company, provided that the transfer wouldn't result in the transferor or transferee holding less than a 5% participating interest. On 27 July 2011, the KRG, Komet and Beta Energy entered into an Assignment, Novation and First Amendment Agreement to the PSC effecting the transfer of Komet's 60% interest to Beta Energy and documenting the KRG's consent of the assignment (the "Assignment Agreement"). Under the terms of the Assignment Agreement, Beta Energy agreed to pay the KRG US\$18.75 million, representing Beta Energy's proportional share of a capacity building bonus of approximately US\$24 million. The Assignment Agreement also contained a confirmation from the KRG that no other party has a right to the interest transferred to Beta Energy.

The term of the PSC is divided into two periods, an exploration period and a development period. The block recently transitioned into the development period upon declaration in November 2011 of a commercial discovery covering the whole block. The contractor group has the exclusive right to develop and produce such discovery for a period of 20 years commencing on the declaration of such commercial discovery, with an automatic right to a five year extension. Once the block begins producing, the KRG is entitled to a 10% royalty, either in cash or in-kind (at their discretion), on both oil and natural gas production. After the deduction of the 10% royalty, the contractor group is entitled to recover all costs incurred under the PSC from up to 40% of the oil and 50% of the non-associated natural gas (as defined therein) produced at the block in each contract year. To the extent that costs are not recovered during any calendar year, the remaining amounts can be carried over indefinitely. In addition, the contractor group is further entitled to a percentage share of profit petroleum (i.e., production after the recovery of allotted costs and application of the royalty rate) of between 15% to 30% of oil and 18% to 35% of gas based on the ratio of cumulative revenues to cumulative costs incurred by the contractor group. The KRG is entitled to the remaining proportion of production. In addition, the KRG also reserves the right to request the transfer of any amounts of crude oil that is deemed necessary to meet the Kurdistan region of Iraq internal consumption requirements.

Following the declaration of a commercial discovery, the contractor group is also responsible for paying the KRG the following bonuses upon reaching certain production thresholds as assessed separately for oil and gas: (i) US\$2.5 million at production commencement of both oil and gas production; (ii) US\$5 million when production reaches 10 mmbbl and 10 mmboe; (iii) US\$10 million when production reaches 25 mmbbl and 25 mmboe; and (iv) US\$20 million when production reaches 50 mmbbl and 50 mmboe. The PSC is subject to termination based on non-completion of certain activities. Pursuant to the PSC, as amended, members of the contractor group are jointly and severally responsible for making monthly capacity building payments in the amount of 20% of their respective profit petroleum.

(F) Intercreditor Agreements

Ebok Intercreditor Agreement

On 3 February 2011, the then trustee for the 2016 Notes, with BNP Paribas (in its capacities as agent (the "Senior Agent") and security agent for the lenders under the Ebok Facility and also in its capacity as Ebok Collateral Agent) entered into an intercreditor agreement (the "Ebok Intercreditor Agreement"). On 9 December 2013, the trustee for the 2019 Notes and the 2020 Notes acceded to the Ebok Intercreditor Agreement. The Ebok Intercreditor Agreement purports to:

o regulate the circumstances in which the security for the 2016 Notes, the 2019 Notes and the 2020 Notes constituted by the shares in or any assets of Afren Resources (the "Ebok Note Security") and the guarantee of the 2016 Notes, the 2019 Notes and the 2020 Notes by Afren Resources as Senior Subordinated Guarantor (the "Subordinated Ebok Guarantee") may be enforced; and

o ensure that all proceeds of the enforcement of security over the assets of and shares in Afren Resources are applied in the discharge of the indebtedness under the Ebok Facility (as increased or refinanced from time to time as permitted by the Ebok Facility Agreement and the 2020 Notes Indenture (the "Senior Ebok Debt")) before being applied in or towards the discharge of indebtedness under the 2020 Notes Indenture, indebtedness under the 2020 Notes or indebtedness constituted by claims against Afren Resources under its guarantee of the 2020 Notes, indebtedness under the 2016 Notes and the 2019 Notes or indebtedness constituted by claims against Afren Resources under its guarantee of the 2016 Notes and the 2019 Notes (such claims against Afren Resources, collectively the "Subordinated Ebok Guarantee Obligations" and the documents constituting the Subordinated Ebok Guarantee Obligation, the "Note Documentation") or any other indenture pursuant to which any additional notes are issued as permitted by the 2020 Notes Indenture (all such other indentures, additional notes and agreements relating thereto, including those relating to the incurrence of indebtedness incurred to refinance all or any part of the indebtedness constituted by the Note Documentation, being "Additional Note Documentation").

The Ebok Intercreditor Agreement includes accession arrangements for the trustees ("Additional Trustees") under any Additional Note Documentation such that (a) any security over the assets the subject of the Ebok Note Security for the indebtedness attributable to such Additional Note Documentation ("Additional Notes Ebok Security") will rank pari passu with the Ebok Note Security and (b) the rights of such trustees with respect to the enforcement of their guarantee claims against Afren Resources and the Additional Notes Ebok Security will be limited to the same extent as the Ebok Intercreditor Agreement limits the rights of the trustee for the 2016 Notes and the 2019 Notes and will limit the rights of the trustee of the 2020 Notes with respect to the enforcement of the Ebok Note Security and the guarantee of the 2020 Notes by Afren Resources as Senior Subordinated Guarantor.

The Ebok Intercreditor Agreement also provides that the Senior Ebok Debt will rank in right and priority of payment before the indebtedness constituted by the Note Documentation and the Additional Note Documentation, including claims under the Subordinated Ebok Guarantee and any claims against Afren Resources under any guarantee included in any Additional Note Documentation (collectively the "Subordinated Guarantee") (collectively, the "Bond Debt").

The Ebok Intercreditor Agreement provides that neither the trustee for the 2016 Notes, the trustee for the 2019 Notes, the trustee for the 2020 Notes nor any Additional Trustee will be entitled to enforce the Ebok Note Security or the Additional Note Ebok Security (the "Subordinated Ebok Security") or a Subordinated Note Guarantee except:

o with the consent of the Senior Agent acting on the instructions of all the lenders under the Ebok Facility;
o if the requisite majority of the lenders under the Ebok Facility have instructed that the security for the Senior Ebok Debt be enforced (in which case the same or equivalent action may be taken with respect to the enforcement of any of the Subordinated Ebok Security and demand may be made under any Subordinated Note Guarantee);
o if the 2020 Notes, any additional Notes, the 2016 Notes or the 2019 Notes have been accelerated (otherwise than as a result of certain non-payment events under the Note Documentation or the Additional Note Documentation or as a result of certain cross default events under the Note Documentation or the Additional Note Documentation) and:
(i) the Senior Agent has received notice thereof and of the relevant default;
(ii) a period of not less than 270 days has elapsed after the date on which the Senior Agent received such notice; and
(iii) the relevant default has not been remedied or waived, the acceleration has not been cancelled and the relevant indebtedness remains outstanding and immediately payable at the end of such 270 day period;
o if there occurs a payment default under the Note Documentation or the Additional Note Documentation and:
(i) the Senior Agent has received notice thereof and of the relevant payment default;
(ii) a period of not less than 179 days has elapsed after the date on which the Senior Agent received such notice; and
(iii) the relevant default has not been remedied or waived and the relevant indebtedness remains outstanding at the end of such 179 day period; or
o if Afren Resources has been declared bankrupt or insolvent by a court of competent jurisdiction and such declaration has not been appealed to a higher court within 10 business days and the requisite majority of the lenders under the Ebok Facility have not instructed that the security for the Senior Ebok Debt be enforced within 20 business days of that event.

The Ebok Intercreditor Agreement provides that in no event will the restrictions on enforcement described above operate to prevent or in any way restrict the trustee for the 2016 Notes, the trustee for the 2019 Notes, the trustee for the 2020 Notes or any Additional Trustee from exercising or enforcing its rights (i) under the Note Documentation or the Additional Note Documentation to accelerate the Company's payment obligations in respect of the relevant notes, (ii) under any guarantee in respect of any Bond Debt granted by any person other than Afren Resources or (iii) under any security (other than Subordinated Ebok Security) which secures any Bond Debt.

The Ebok Intercreditor Agreement includes provisions whereby (a) any guarantee claims in relation to any Indebtedness under the Note Documentation or the Additional Note Documentation against any entity that accedes to the Ebok Facility as an additional obligor thereunder otherwise than contrary to the terms of the Note Documentation or the Additional Note Documentation will be subordinated to the Senior Ebok Debt, (b) any security granted by any such entity to secure the Indebtedness under the Note Documentation or the Additional Note Documentation will be subordinate to any security granted by that entity as security for the Senior Ebok Debt and (c) the rights of the trustee for the 2016 Notes, the trustee for the 2019 Notes, the trustee for the 2020 Notes and any Additional Trustee with respect to the enforcement of any such guarantee claims or security in respect of the Indebtedness under the Note Documentation or the Additional Note Documentation will be limited to the same extent as its rights with respect to the enforcement of the Subordinated Guarantee or the Subordinated Ebok Security (as the case may be).

The Ebok Intercreditor Agreement provides that the security for the Senior Ebok Debt (the "Senior Ebok Security") will:

o rank in priority to the Subordinated Ebok Security, irrespective of the order of execution, creation, registration, notice, enforcement or otherwise; and
o secure the Senior Ebok Debt, irrespective of:
(i) the date on which the Senior Ebok Debt arose;
(ii) whether a lender under the Ebok Facility was obliged to advance any Senior Ebok Debt; or
(iii) any fluctuation in the amount, or any intermediate discharge in whole or in part, of any Senior Ebok Debt,

and in addition will contain limitations pursuant to which none of the Subordinated Ebok Security will have Nigerian stamp duty paid to an extent greater than that contemplated by the Ebok Facility Agreement and that all "upstamping" of the Senior Ebok Security and the Subordinated Ebok Security will be effected in such a way that the priority of the Senior Ebok Security and the Subordinated Ebok Security is preserved and all proceeds of the enforcement thereof will be required to be applied as specified in the following paragraph.

The Ebok Intercreditor Agreement includes provisions whereby the proceeds of the enforcement of the Senior Ebok Security and the Subordinated Ebok Security will be applied:

o first, in or towards payment of any unpaid fees, costs, expenses, liabilities and remuneration of the Ebok Collateral Agent and its advisors and agents;
o second, in or towards payment to the Senior Agent for application towards any other unpaid costs and expenses incurred in connection with enforcement of the Senior Ebok Debt;
o third, in or towards payment to the Senior Agent for application towards the balance of the Senior Ebok Debt (in accordance with the Ebok Facility);
o fourth, in or towards payment to the Trustee and any Additional Trustee for application towards the pro rata payment of any unpaid fees, costs, expenses, liabilities and remuneration of the Trustee and any Additional Trustee;
o fifth, in or towards payment to the Trustee and any Additional Trustee for pro rata application towards the balance of the Indebtedness under the Note Documentation and the Additional Note Documentation (in accordance with the Note Documentation and the Additional Note Documentation); and
o sixth, after the final discharge date, in payment of the surplus (if any) to the relevant obligor or other person entitled to it.

Pursuant to the Ebok Intercreditor Agreement, until the Senior Ebok Debt has been discharged the Ebok Collateral Agent will be obliged to act (or to refrain from acting) on the instructions of the requisite majority of the lenders under the Ebok Facility. Thereafter (subject as mentioned in the final sentence of this paragraph), it will be obliged to act (or refrain from acting) on the instructions of the trustee for the 2016 Notes, the trustee for the 2019 Notes, the trustee for the 2020 Notes or any Additional Trustee. Subject as mentioned in the final sentence of this paragraph, the Ebok Collateral Agent will also be obliged to act on the instructions of the trustee for the 2016 Notes, the trustee for the 2019 Notes, the trustee for the 2020 Notes or any Additional Trustee before the Ebok Senior Debt Discharge Debt, but only if (i) the trustee for the 2016 Notes, the trustee for the 2019 Notes, the trustee for the 2020 Notes or such Additional Trustee is then entitled to enforce the relevant Subordinated Ebok Security and (ii) the lenders under the Ebok Facility have taken no action with respect to the enforcement of the Senior Ebok Security. The Ebok Collateral Agent will not be obliged to act on the instructions of the trustee for the 2016 Notes, the trustee for the 2019 Notes, the trustee for the 2020 Notes or any Additional Trustee (or the respective noteholders for whom they act) (and in particular will not be obliged to take any enforcement action on their behalf) until it has received such security as it may require for any cost, loss or liability that may arise as a result of taking such action or following such instructions.

The Ebok Intercreditor Agreement includes provisions pursuant to which the Subordinated Ebok Security is required to be released at the request of the Ebok Collateral Agent for the purpose of any enforcement action to be taken in accordance with the Ebok Intercreditor Agreement or any disposal permitted by the Ebok Facility, the Note Documentation and the Additional Note Documentation.

The Ebok Intercreditor Agreement includes the terms and conditions upon which the Ebok Collateral Agent is to act in that capacity on behalf of the Trustee and each Additional Trustee and the respective noteholders for whom they act. Such terms and conditions include provisions which exonerate the Ebok Collateral Agent from liability for actions taken by it in relation to the Subordinated Ebok Security, the Senior Ebok Security or the Ebok Intercreditor Agreement unless directly caused by its gross negligence or wilful misconduct.

The Ebok Intercreditor Agreement includes provisions pursuant to which the Ebok Collateral Agent may resign or be replaced and the Ebok Intercreditor Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

ICA 2 and ICA 3

On 30 April 2015, in connection with the implementation of the Interim Funding, Afren entered into an additional Ebok intercreditor agreement ("ICA 2") which, amongst other things, provides that the Interim Funding and the security in respect thereof ranks ahead of the 2016 Notes, the 2019 Notes and the 2020 Notes, and the Subordinated Ebok Security (respectively) and a separate intercreditor agreement ("ICA 3") which, amongst other things, provides that the Interim Funding and the security in respect thereof ranks ahead of the Senior Ebok Debt and the Senior Ebok Security (respectively).

Global Intercreditor Agreement

As part of the proposed Restructuring, Afren will enter into the Global Intercreditor Agreement which will replace the Ebok Intercreditor Agreement, ICA 2 and ICA 3 and pursuant to which, amongst other things, with respect to the Okoro Collateral and the Ebok Collateral, the New Senior Notes will rank ahead of the Amended Ebok Facility and the Reinstated Notes (and the Amended Ebok Facility and the Reinstated Notes will rank pari passu except in relation to the Ebok Collateral, in respect of which the Amended Ebok Facility will rank ahead of the Reinstated Notes).

The Global Intercreditor Agreement will come into effect only if the Restructuring is completed.

15.4 Hedging Arrangements and Derivatives

Commodity hedging

Afren has entered into International Swaps and Derivatives Association master agreements with several hedging partners in order to protect its minimum cash flow requirements and mitigate a portion of the risk associated with volatile crude oil prices. As at the date of this Prospectus, Afren has closed out its trades in relation to hedging arrangements.

16. Working Capital

The Company is of the opinion that, taking into account the proceeds of the Restructuring, as at the date of this document the Group does not have sufficient working capital for its present requirements, that is, for at least the 12 months following the date of this document.

Alongside the announced Restructuring on 13 March 2015, the Company announced the 2015 Business Plan that reflected the Directors' intention to maintain an operating business focused on its core producing assets. The Company has reviewed its working capital requirements, which it has drawn up as requested in accordance with the ESMA guidance, under (a) the Restructuring being approved by shareholders, (b) the Restructuring not being approved by shareholders (the Alternative Restructuring) and (c) the Restructuring and Alternative Restructuring not completing. Details of these are in Part I (Letter from the Chairman to Shareholders). The Company has reviewed its working capital requirements under the RWC Scenario with a number of risks assumed to adversely impact on the working capital of the Group.

a. Restructuring being approved by shareholders

b. Restructuring not being approved by shareholders (Alternative Restructuring)

c. Restructuring and Alternative Restructuring not completing

If the Restructuring and the Alternative Restructuring do not complete, the Directors believe that the Group would face an immediate risk of being unable to meet its contractual obligations when they fall due and in such circumstances shareholders would be very unlikely to receive any return of their current investment as explained below:

Afren Resources will be in breach of its obligations under the Ebok Facility and will be required to pay the two amortisation payments of US\$50 million under the Ebok Facility which were due on 31 January 2015 and 30 April 2015 and which were deferred as part of the negotiation of the terms of the Restructuring;
the Company shall be liable to pay US\$15 million of accrued and unpaid interest under the 2016 Notes which was due on 1 February 2015 and which was deferred as part of the negotiation of the terms of the Restructuring;
the Company shall be liable to pay US\$12.8 million of accrued and unpaid interest under the 2019 Notes which was due on 8 April 2015 and which was deferred as part of the negotiation of the terms of the Restructuring;
the Company shall be liable to pay US\$11.9 million of accrued and unpaid interest under the 2020 Notes which was due on 9 June 2015 and which is unlikely to be paid following the expiry of the 30 day grace period;
the Company will be required to pay further amortisation payments of US\$50 million each under the Ebok Facility which are due on 31 July and 31 October 2015 and 31 January 2016;
the Okwok/OML 113 Facility will be due and payable in full (in the amount of US\$50 million plus accrued interest) on 30 September 2015;
the 2016 Notes will be due and payable in full (in the amount of US\$253 million plus accrued interest) on 1 February 2016;
the Bridge Securities will be due and payable in full (in the amount of US\$211.6 million plus accrued interest) on 25 April 2016 (save that the non-approval of the Restructuring or the Alternative Restructuring shall be an event of default); and
the New Senior Notes, which would have provided a further net US\$148 million in cash to the Group, will not be issued.

The Group will also be in default under the 2016 Notes and 2019 Notes (and the 2020 Notes upon the expiry of the grace period noted above) for non-payment of interest when previously due.

If neither the Restructuring nor the Alternative Restructuring proceeds, the Directors are of the opinion that, given the defaults under the Group's existing borrowings, the Group will be unable to meet its debts as they fall due. This is because the Directors believe that the Group's lenders would be highly likely to accelerate the Group's borrowings given the existing events of default under the Group's facilities and other borrowings and the failure of the Group to complete a consensual restructuring. In such circumstances:

• the Company would cease trading and the subsidiaries of the Company would become subject to applicable insolvency processes; and/or

the Ebok Lenders would be able to enforce their security over the shares in Afren Resources and thereby acquire the Group's interest in OML 67; and/or
the OML 26 Lender would be able to enforce its security over the shares in FHN and thereby acquire the Group's interest in OML 26; and/or
the Okwok/OML 113 Lender would be able to enforce its security and thereby acquire the Group's interest in Okwok; and
Shareholders would be very unlikely to receive any proceeds from the sale of the Group's assets or other return of income or capital by the Company.

Additional actions to improve the Company's working capital

In addition to the mitigating actions under its control, the Group has certain additional actions available to pursue to improve its working capital position:

the Group could conserve cash through stricter working capital management (which may deliver limited benefits by further stretching payment terms with creditors and suppliers but which is not expected to be a long-term solution);
the Group could further reduce planned capital expenditure, including drilling wells and placing operating assets on care and maintenance (which may be achievable, subject to existing contractual obligations and commitments under the relevant licences, but would adversely affect the Group's ability to maintain production and therefore revenue);
the Group could further reduce its cost base (which may be achievable through additional headcount reduction but which could require additional up-front costs and could, adversely affect the Group's operational capabilities);
the RWC Scenario assumes higher royalties based on an adverse interpretation of the marginal field tax regime. The Company would intend to continue to pay at the previously agreed and accepted rates whilst disputing any proposed increase through negotiations and thereby deferring payment;
the Group would also look at disposals of certain non-core assets, farming out additional acreage and subleasing the rig, thus significantly reducing the capital exposure (although there is no certainty that such sales or farm-outs could be realised in the available timeframe on acceptable terms or at all). Any such disposals will also be subject to the Listing Rules on substantial transactions and the agreement of certain partners and suppliers; and
the Group would seek to renegotiate or defer existing contractual obligations in respect of amounts due to creditors including suppliers, bank facilities and Noteholders (although there is no certainty that such agreements could be obtained or obtained on terms acceptable to the Group).

Under the Restructuring, the Group would benefit from 50% of any proceeds raised via the Open Offer of up to US\$75 million, the other 50% of the proceeds is required to repay debt. The Open Offer is not included in the RWC Scenario as the Open Offer is not underwritten.

In addition, certain market and operational factors could benefit the forecast working capital shortfall including, but not limited to:

an improvement in global oil prices;
ongoing production achieving rates at or exceeding those planned during the period;
lower costs being incurred for future expenditure through improved terms in the light of longer term low oil prices;
improved differentials for crude sold being achieved;
cash receipts for the settlement for underlifted crude oil on OML 26 in line with the Company's position; or
improved cash flow agreement with ExxonMobil/NNPC regarding NPI share on Ebok.

17. Related party transactions

Details of related party transactions (which for these purposes are those set out in the Standards adopted according to Regulations (EC) No 1606/2002), Afren has entered into:

(a) St. John Advisors Ltd and STJ Advisors LLP are the contractor companies for the consulting services of John St. John, a Non-Executive Director of the Company and colleagues, for which they receive fees, including contingent completion and success fees, from the Group. St. John Advisors also received a monthly retainer of £15,000 under a contract which started from 27 June 2008. The contract was terminated in May 2014;
(b) Other related parties include two individuals who served on Afren's Board of Directors during the year who each had a close family member employed by the Group. These individuals were employed at market rates and received compensation totalling US\$0.1 million and US\$0.1 million (2013: US\$0.2 million and US\$ nil) under the terms of their contracts of employment. In addition, a close family member of a member of key management personnel was employed by the Group during the year at market rates and received compensation totalling US\$0.1 million (2013: US\$0.1 million) under the terms of their contract of employment;
(c) Tzell Travel Group ("Tzell") has been utilised by Afren for some of its travel needs, an employee of which is a close family member of Osman Shahenshah. The Company does not believe Tzell should be considered a related party. Afren uses several travel agents as there is a significant travel element to its operations. Transactions totalling US\$0.1 million (2013: US\$0.4 million) were entered into with Tzell during the year, upon which commission of approximately US\$40 per transaction was paid by Afren to Tzell, the balance being direct costs for air fares and hotel accommodation. As at 31 December 2014, amounts totalling US\$ nil (2013: US\$ nil) were outstanding and included within trade creditors. No further transactions are expected with Tzell; and
(d) In July 2013, Afren entered into a put and call agreement with Earl Act in respect of 18,299,993 million FHN shares, representing approximately 12.5% of FHN share capital, at a price of US\$3.32 per share. Afren received notification that Earl Act expected the put and call option to also cover an additional tranche of 13,780,008 FHN shares currently held by an affiliate of Earl Act, which at the option price of US\$3.32 would amount to an additional US\$46.1 million. These shares are those previously held by current and previous members of the Board and senior management, and were disposed of during 2013. The Directors are of the opinion that at the time of their disposal, there was no arrangement between Afren, Earl Act, the affiliate of Earl Act or the current and previous members of the Board as to any obligation to acquire such shares at a future date. As a result, Afren believes there was no related party transaction to be disclosed in respect of this additional tranche of FHN shares,

all of which are incorporated by reference into this document.

18. Litigation

Save as set out below, there are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which Afren is aware), during the 12 months preceding the date of this document which may have, or have had in the recent past significant effects on the financial position or profitability of the Group.

Since the announcement of the review of the Group's capital structure and funding requirements in January 2015, Afren has received a number of claims for breaches of contract for non-payment of amounts due for services provided and/or the termination of services contracts. These claims have arisen in part due to the liquidity constraints facing the Group, as well as actions taken to reduce costs in line with the revised focus on the Group's core producing assets. Such claims include:

Notices of claim by West African Ventures in excess of US\$104 million in termination and cancellation fees, costs, losses and expenses under oil services contracts resulting from the termination by AEPNA and AERL of Okwok and Okoro field contracts, respectively, with West African Ventures. AEPNA and AERL dispute any liability and the quantum of claims raised by West African Ventures. The parties are in ongoing without prejudice negotiations seeking to resolve the dispute.
A notice of termination of the PSTSA from Amni arising as a result of AERL's termination of the oil services contract between Amni and AERL relating to Okoro. Amni has separately claimed that it considers that all costs and expenses of AERL's termination of the Okoro field contract are entirely for the account of AERL and that Amni has no obligation to make any contribution in respect of the costs expenses arising from the termination of the Okoro field contract. AERL is seeking to arrange a meeting with Amni to discuss the dispute. Amni has not taken any further steps to remove AERL as service provider and operations are continuing. The magnitude of this claim cannot be quantified at this stage.
Arbitration proceedings by Lion Petroleum for US\$10 million in damages plus costs in respect of certain breaches of the JOA signed between East African Exploration (Kenya) Limited and Lion Petroleum in respect of Block 1, Kenya. Lion Petroleum claims:
o for monetary compensation for the delays in meeting the minimum work obligations;
o for over-charging of overheads; and
o that the December 2014 cash call was invalid and that Lion Petroleum is not obliged to pay further cash calls until it claims for the alleged over-charging of the joint account are met.

East African Exploration (Kenya) Limited's view is that these claims are dependent on Lion Petroleum proving that that its conduct of the joint operations amounted to gross negligence or wilful misconduct, both of which is a high threshold. Accordingly, East African Exploration (Kenya) Limited believes that Lion Petroleum's claim cannot be justified and some the claims may amount to technical breaches which can be remedied.

In July 2015, Lion Petroleum will submit its statement of case together with its expert witness statements, facts witness statements and documentary evidence. In September 2015, East African Exploration (Kenya) Limited will submit its defence statement together with its expert statements, facts witness statements and documentary evidence.

Afren disputes and/or has rejected such claims and is in discussions with the relevant claimants regarding potential settlements and/or withdrawal of such claims.

19. Dividends

No dividends were declared or paid during 2014 to holders of Existing Shares. Given the Company's current financial condition and the terms of the Restructuring, the Directors do not expect that the Company will declare or pay any dividends to Shareholders in the near to medium term.

20. Mandatory bids and compulsory acquisition rules relating to shares

Other than as provided by the Takeover Code and Chapter 28 of the Companies Act, there are no rules or provisions relating to mandatory bids and/or squeeze-out and sell-out rules relating to Afren.

20.1 Mandatory bid

The Takeover Code applies to Afren. Under the Takeover Code, if an acquisition of interests in shares were to increase the aggregate holding of the acquirer and its concert parties to interests in shares carrying 30% or more of the voting rights in Afren, the acquirer and, depending on circumstances, its concert parties would be required (except with the consent of the Panel on Takeovers and Mergers) to make a cash offer for the outstanding shares in Afren at a price not less than the highest price paid for interests in shares by the acquirer or its concert parties during the previous 12 months. This requirement would also be triggered by any acquisition of interests in shares by a person holding (together with its concert parties) shares carrying between 30% and 50% of the voting rights in Afren if the effect of such acquisition were to increase that person's percentage of the total voting rights in Afren.

20.2 Squeeze-out

Under the Companies Act, if an offeror were to make an offer to acquire all of the shares in Afren not already owned by it and were to acquire 90% of the shares to which such offer related it could then compulsorily acquire the remaining 10% The offeror would do so by sending a notice to outstanding members telling them that it will compulsorily acquire their shares and then, six weeks later, it would deliver a transfer of the outstanding shares in its favour to Afren which would execute the transfers on behalf of the relevant members, and pay the consideration to Afren which would hold the consideration on trust for outstanding members. The consideration offered to the members whose shares are compulsorily acquired under this procedure must, in general, be the same as the consideration that was available under the original offer unless a member can show that the offer value is unfair.

20.3 Sell-out

The Companies Act would also give minority members a right to be bought out in certain circumstances by an offeror who has made a takeover offer. If a takeover offer related to all the shares in Afren and, at any time before the end of the period within which the offer could be accepted, the offeror held or had agreed to acquire not less than 90%, of the shares, any holder of shares to which the offer related who had not accepted the offer could by a written communication to the offeror require it to acquire those shares.

The offeror would be required to give any member notice of his/her right to be bought out within one month of that right arising. The offeror may impose a time limit on the rights of minority members to be bought out, but that period cannot end less than three months after the end of the acceptance period or, if later, three months from the date on which notice is served on members notifying them of their sell-out rights. If a member exercises his/her rights, the offeror is entitled and bound to acquire those shares on the terms of the offer or on such other terms as may be agreed.

21. Consents

Morgan Stanley has given and has not withdrawn its written consent to the issue of this document with references to its name being included in the form and context in which it appears.

22. Significant change

There has been no significant change to the trading or financial position of the Group since 31 March 2015, the date to which the latest financial information of the Group was published.

23. Sources of financial information

Unless otherwise stated, all financial information disclosed in this document has been extracted without material adjustment from the 2014 Annual Report.

24. Information incorporated by reference

Information from the following documents has been incorporated into this document by reference:

Documents containing information incorporated by reference	Section of this document which refers to the document containing information incorporated by reference	Where the information can be accessed to Shareholders
Afren's 2012 Annual Report	"Related Party Transactions" in Part IX (Additional Information) "Directors' service contracts/	www.afren.com/download.axd?id=
	letters of appointment" in Part IX (Additional Information) "Related Party Transactions" in	1683
Afren's 2013 Annual Report	Part IX (Additional Information) "Directors' service contracts/ letters of appointment" in Part IX (Additional Information)	www.afren.com/download.axd?id= 1847
	Part I (Letter from the Chairman), Part II (Description of the Business) and Part III (Operating and Financial Review), "Related
Afren's 2014 Annual Report	Party Transactions" in Part IX (Additional Information) "Directors' service contracts/ letters of appointment" in Part IX (Additional Information)	www.afren.com/download.axd?id= 2004

The table below sets out the various sections of documents which are incorporated by reference into this document, so as to provide the information required pursuant to the Prospectus Rules and to ensure that Qualifying Shareholders and others are aware of all information which, according to the particular nature of Afren and of the New Shares, is necessary to enable Qualifying Shareholders and others to make an informed assessment of the assets and liabilities, financial position, profit and losses and prospects of Afren, and of the rights attaching to the New Shares. These documents are available free of charge in electronic format through Afren's website at www.Afren.com.

Reference document	Information incorporated by reference	Page number in the reference documents
2014 Annual Report Strategic Report		18 – 22 (inclusive)
	Report of the Directors	32 – 46 (inclusive)
	Directors report on going concern	76 – 78 (inclusive)
	Corporate Governance on going concern	90
	Accounts	104 – 148 (inclusive)
2013 Annual Report Strategic Report		9 – 25 (inclusive)
	Report of the Directors	36 – 52 (inclusive)
	Corporate Governance	100
	Accounts	110 – 145 (inclusive)
2012 Annual Report Business Review		9 – 36 (inclusive)
	Operations Review	38 – 46 (inclusive)
	Financial Statements	113 – 122 (inclusive)

The documents incorporated by reference in this document have been incorporated in compliance with Prospectus Rule 2.4.1. Information that is itself incorporated by reference or referred or cross-referred to it in the documents referred to above is not incorporated by reference into this document. Except as set forth above, no other portion of the documents referred to above is incorporated by reference into this document and those portions which are not specifically incorporated by reference in this document are either not relevant for prospective investors or the relevant information is included elsewhere in this document.

A copy of each of the documents listed above is available for inspection in accordance with the section headed "Documents available for inspection" of this Part IX (Additional Information).

25. Documents available for inspection

Copies of the following documents may be inspected at Afren's UK registered office at Kinnaird House, 1 Pall Mall East, London, SW1Y 5AU during usual business hours on any weekday (not including Saturdays, Sundays or any public holidays in the United Kingdom) from the date of this document up to and including the date of the General Meeting:

(a) the Articles;
(b) 2012 Annual Report;
(c) 2013 Annual Report;
(d) 2014 Annual Report;
(e) the audited financial information of the Company for the years ended 31 December 2014, 2013 and 2012
(f) the consent letter referred to in paragraph 21 (Consents) above; and
(g) Form of Proxy.

The above documentation will also be available for inspection on the date and at the place of the General Meeting for at least 15 minutes before the General Meeting is held until its conclusion.

DEFINITIONS AND INTERPRETATION

1C	low estimate scenario of contingent resources;
1P	independently certified proved oil and gas reserves;
2010 PD Amending Directive	Directive 2010/73/EU;
2015 Business Plan	the Company's revised business plan announced alongside the announced Restructuring on 13 March 2015;
2016 Notes	the Additional 2016 Notes together with the Original 2016 Notes;
2016 Note Guarantees	the 2016 Subordinated Guarantee and the 2016 Senior Guarantees;
2016 Note Guarantors	the entries guaranteeing the 2016 Notes on a senior basis and on a senior subordinated basis;
2016 Notes Indenture	the indenture dated 3 February 2011 relating to senior secured notes due 2016;
2016 Notes Trustee	Deutsche Bank Trust Company Americas, in its capacity as trustee in respect of the 2016 Notes;
2016 Senior Guarantees	the guarantee of the 2016 Notes on a senior basis by Afren Nigeria Holdings Limited, Afren Cote d'Ivoire Ltd, Afren Okoro, Lion G.P.L SA and AERL (other than the following non-operating subsidiaries that, as at the date hereof, do not own or operate any assets, directly or indirectly, with any reserves: Afren Nigeria Holdings (Nigeria) Limited, Afren CI (UK) Limited and Afren CI (II) Limited);
2016 Subordinated Guarantee	the guarantee of the 2016 Notes on a senior subordinated basis by Afren Resources;
2019 Notes	the senior secured notes due 8 April 2019;
2019 Note Guarantees	the 2019 Subordinated Guarantee and the 2019 Senior Guarantees;
2019 Note Guarantors	the entries guaranteeing the 2019 Notes on a senior basis and on a
	senior subordinated basis;
2019 Notes Indenture	the indenture dated 8 March 2012 relating to senior secured notes due 2019;
2019 Notes Trustee	Deutsche Bank Trust Company Americas, in its capacity as trustee in respect of the 2019 Notes;
2019 Senior Guarantees	the guarantee of the 2019 Notes on a senior basis by Afren Nigeria Holdings Limited, Afren Cote d'Ivoire Ltd, Afren Okoro, Lion G.P.L SA and AERL (other than the following non-operating subsidiaries that, as at the date hereof, do not own or operate any assets, directly or indirectly, with any reserves: Afren Nigeria Holdings (Nigeria) Limited, Afren CI (UK) Limited and Afren CI (II) Limited);
2019 Subordinated Guarantee	the guarantee of the 2019 Notes on a senior subordinated basis by Afren Resources;

2020 Note Guarantees	the 2020 Subordinated Guarantee and the 2020 Senior Guarantees;
2020 Note Guarantors	the entries guaranteeing the 2020 Notes on a senior basis and on a senior subordinated basis;
2020 Notes Indenture	the indenture dated 9 December 2013 relating to senior secured notes due 2020;
2020 Notes Trustee	Deutsche Bank Trust Company Americas, in its capacity as trustee in respect of the 2020 Notes;
2020 Senior Guarantees	the guarantee of the 2020 Notes on a senior basis by Afren Nigeria, AERL and Afren Okoro;
2020 Subordinated Guarantee	the guarantee of the 2020 Notes on a senior subordinated basis by Afren Resources;
2C	best estimate scenario of contingent resources;
2P	independently certified proved plus probable oil and gas reserves;
3C	high estimate scenario of contingent resources;
3P	independently certified proved, probable and possible oil and gas reserves;
Access Bank	Access Bank Plc;
Addax	Addax Petroleum (Nigeria Offshore) Ltd;
Additional 2016 Notes	additional senior secured notes due 1 February 2016;
Additional Commitment Issue	the increase of the Early Subscriber Issue by 0.1205% of the fully diluted share capital of the Company if the New Senior Notes are issued after 7 August 2015 for each day from 8 August 2015 until the date of issue of the New Senior Notes;
Additional Note Documentation	any other indenture pursuant to which any additional notes are issued as permitted by the 2020 Notes Indenture;
Additional Notes Ebok Security	any security over the assets the subject of the Ebok Note Security for the indebtedness attributable to such Additional Note Documentation;
Additional Trustees	the trustees under any Additional Note Documentation;
Adjusted EBITDAX	EBITDAX, plus impairment of property, plant and equipment, impairment of exploration and evaluation assets, impairment of goodwill, unrealised gains/(losses) on derivative financial instruments and share-based payments (credit)/charge;
Admission	the proposed admission of the Ordinary Shares to (i) the premium segment of the Official List and (ii) trading on the London Stock Exchange's main market for listed securities (together "Admission");
Adopted IFRS	IFRS as adopted by the European Union;
AEPNA	Afren Exploration & Production Nigeria Alpha Limited;
AERL	Afren Energy Resources Limited;

Afren	Afren plc, a company incorporated under the laws of England and Wales with registered number 5304498 whose registered office is at Kinnaird House, 1 Pall Mall East, London, SW1Y 5AU United Kingdom;
Afren Investments	Afren Investments Oil & Gas (Nigeria) Limited;
Afren Resources	Afren Resources Limited, a limited liability company incorporated under the laws of Nigeria with company number 728332 and whose registered office is at 1st Floor, The Octagon, 13A, A.J Marinho Drive, Victoria Island Annex, Lagos, Nigeria;
AGR TRACS	AGR TRACS International Limited;
AGR TRACS Report	the reserves report prepared by AGR TRACS in respect of Aje as at 25 July 2014;
Alternative New Senior Notes	the amended New Senior Notes under the Alternative Restructuring;
Alternative Restructuring	the Restructuring, on adjusted terms arising as a result of a failure by Shareholders to approve the Resolution by the requisite majority, details of such adjusted terms being set out in paragraph 5 of Part I (Letter from the Chairman to Shareholders);
Alternative Restructuring Document	the documents necessary to give effect to the Alternative Restructuring;
Alternative Restructuring Effective Date	the date on which the Scheme will become effective if the Alternative Restructuring is implemented;
Amended Ebok Facility	the amendment agreement entered into between Afren and the Ebok Lenders in respect of the Ebok Facility;
Amended Okwok/OML 113 Facility	the amendment agreement with Access Bank in respect of the Okwok/OML 113 Facility;
Amended PSTSA	the amended and restated production and technical services agreement entered into between Amni, AERL, Afren and Okoro Limited;
Amendment Agreement	the amendment agreement entered into by Afren Resources and Oriental to amend the Ebok JOA;
Amni	Amni International Petroleum Development Company Limited;
Amni Guarantee	the bank guarantee issued by Afren to UBA to the value of US\$70.0 million in respect of Amni's financial obligations to UBA;
Amni Resolution Agreement	the resolution agreement between Amni, AERL, Afren and Okoro Limited;
Application Form	the personalised application form on which Qualifying Shareholders who are registered on the register of the Company at the Record Date may apply for Open Offer Shares under the Open Offer;
Articles	the articles of association of Afren;

Assignment Agreement	the Assignment, Novation and First Amendment Agreement entered into on 27 July 2011 by the KRG, Komet and Beta Energy;
Beta Energy	Beta Energy Limited;
Board	the board of Directors of the Company;
Bond Debt	the Senior Ebok Debt and the indebtedness constituted by the Note Documentation and the Additional Note Documentation;
Bridge Noteholders	holders of the Existing Notes and certain of their respective affiliates;
Bridge Securities	the US\$211,640,211.64 million of private placement notes due 25 April 2016 issued by the Company in connection with the Interim Funding pursuant to the Note Purchase Agreement;
Bridge Securities Share Issue	the new Ordinary Shares to be issued to Bridge Noteholders (or their nominees), in an aggregate amount representing 5% of the fully diluted share capital of the Company following the completion of the Debt for Equity Swap, the New Senior Notes Share Issue, the Open Offer and the Early Subscriber Issue;
Business Day	a day on which banks are open for business in London and New York (excluding for the avoidance of doubt, Saturdays, Sundays and public holidays);
Buyer	BP Oil International Limited;
Canada	Canada, its provinces and territories and all areas under its jurisdiction and political subdivisions thereof;
CCSS	the CREST Courier and Sorting Service established by Euroclear to facilitate, inter alia, the deposit and withdrawal of securities;
CEO	chief executive officer;
CFBx	Central Fault Block extension;
CITA	Companies Income Tax Act;
Code	the UK Corporate Governance Code 2012;
Conduct Code	Code of Business Conduct;
Companies Act	the UK Companies Act 2006 (as amended);
Company	Afren plc;
Computershare	Computershare Investor Services PLC;
Concurrent Tender Offers	Afren's offer to purchase for cash in an amount of US\$1,140 per US\$1,000 principal amount of 2019 Notes and an additional early tender payment for holders that tender its 2019 Notes prior to an early tender deadline in an amount of US\$30.00 per US\$1,000 principal amount;
Conditional Subscription Agreement	the conditional subscription agreement dated 30 April 2015 (as amended on 28 May 2015) between, amongst others, Afren and the Initial Purchasers in respect of the issue of the New Senior Notes;

Consenting Creditors	holders of approximately 42% of the aggregate principal amount of the Existing Notes and holders of 100% of the aggregate principal amount of the Ebok Facility as at 13 March 2015;
Consenting Noteholders	the Initial Purchasers, together with holders of at least a further 10.28% of the aggregate principal amount of the Existing Notes, being those that had acceded to the Conditional Subscription Agreement on or before 15 May 2015;
Consolidation	the share consolidation by which the Ordinary Shares are consolidated at a ratio of 10:1;
Contractor	Mercator;
COO	chief operating officer;
CPR	a competent persons report;
Creditor Representatives	the 2016 Notes Trustee, the 2019 Notes Trustee, the 2020 Notes Trustee and the holders of any class of Pari Passu Indebtedness together;
CREST	the system for paperless settlement of trades in listed securities and the holding of uncertificated securities, of which Euroclear is the operator;
CREST Manual	the rules governing the operation of CREST, consisting of the CREST Reference Manual, CREST International Manual, CREST Central Counterparty Security Manual, CREST Rules, Registrars Service Standards, Settlement Discipline Rules, CCSS Operations Manual, Daily Timetable, CREST Application Procedures and CREST Glossary of Terms promulgated by Euroclear on 15 July 1996 and as amended since);
CREST Member	a person who has been admitted by Euroclear as a system member (as defined in the CREST Regulations);
CREST Proxy Instruction	the appropriate CREST message which creates a proxy appointment;
CREST Regulations	the Uncertified Securities Regulations 2001 (SI 2001 No. 3755);
CREST Sponsor	a CREST participant admitted to CREST as a CREST sponsor;
CREST Sponsored Member	a CREST member admitted to CREST as a sponsored member;
Debt for Equity Swap	the release and conversion into equity of 25% of the face value of the outstanding principal amount and accrued interest of the Existing Notes (being approximately US\$234 million) pursuant to the issue of new Ordinary Shares to Existing Noteholders, which will result in Existing Noteholders holding 80% of the increased share capital of the Company immediately following such conversion;
Deferred Bonus Plan	the Afren PLC Deferred Bonus Plan adopted on 11 June 2013;
Deferred Shares	the 99,999 deferred shares of nominal value 0.00001p each;
Deloitte	Deloitte LLP, in its capacity as auditors;

DIBPSA	the Deep Offshore & Inland Basin Production Sharing Contract Act;
Director Nominee	each member of the Company's Board and the board of Directors of the Notes Issuer and Afren International Limited as appointed by the holders of the Alternative New Senior Notes;
Directors	the Executive Directors and the Non-Executive Directors, and each a "Director";
Disclosure Procedures	The disclosure obligations under the UKLA's Listing Rules and Disclosure Rules;
Disclosure and Transparency Rules	the Disclosure and Transparency Rules of the UKLA;
DPR	Department of Petroleum Resources;
dry well	a particular geographic area in which the company undertakes drilling but discovers no oil and gas;
DSCR test	debt service coverage ratio test;
E&P Company	exploration and production company;
Earl Act	Earl Act Global Investments Limited;
Early Subscriber Issue	the additional new Ordinary Shares representing 10% of the fully diluted share capital of the Company to be issued to certain of the Existing Noteholders who subscribed for New Senior Notes following the completion of the Debt for Equity Swap, the New Senior Notes Share Issue, the Open Offer and the Bridge Securities Share Issue;
EBITDA	earnings before interest, taxes, depreciation, and amortization;
EBITDAX	earnings before interest, taxes, depreciation, depletion, amortisation, exploration costs, and finance income;
Ebok Asset	collectively (a) the oil and gas field known as Ebok located in the OML 67, Gulf of Guinea, offshore in Nigeria, (b) the facilities relating to such field and/or (c) the interests in such field, system, project or facilities;
Ebok Collateral	the assets relating to the Ebok Asset that are subject to a mortgage, charge, pledge, lien, assignment or other security interest or encumbrance of any kind granted including that in connection with the Ebok Facility, the 2016 Indenture, the 2019 Indenture and the 2020 Indenture;
Ebok Facility	the US\$300 million revolving credit facility dated 24 March 2010, as amended and restated on 23 June 2010, 3 March 2011 and 22 March 2013, between Afren Resources, Afren and the Ebok Lenders in respect of Ebok;
Ebok Facility Agreement	the agreement dated 24 March 2010, as amended and restated on 23 June 2010, 3 March 2011 and 22 March 2013, with BNP Paribas, Citibank, N.A., London Branch, Natixis, Deutsche Bank AG, Amsterdam Branch, Firstrand Bank Limited, acting through its Rand Merchant Bank Division, Merrill Lynch International Bank Limited, London, Nedbank Limited, London Branch, Sumitomo

	Mitsui Banking Corporation Europe Limited, Stanbic IBTC Bank Plc and Standard Chartered Bank and any bank or financial institution which accedes to the Ebok Facility as a mandated lead arranger, for the purpose of, among other things as further described below, funding capital expenditure in respect of the Ebok Assets;
Ebok Farm-Out Agreement	the farm-out agreement between the ExxonMobil/NNPC Joint Venture and Oriental on 25 May 2007;
Ebok Intercreditor Agreement	the intercreditor agreement dated 3 February 2011 between, among others, Afren, the trustee for the 2016 Notes and BNP Paribas (in its capacities as Senior Agent and security agent for the lenders under the Ebok Facility and also in its capacity as Ebok Collateral Agent);
Ebok JOA	Ebok Joint Operating Agreement
Ebok Lenders	BNP Paribas, Citibank, N.A., London Branch, Natixis, Deutsche Bank AG, Amsterdam Branch, Firstrand Bank Limited, acting through its Rand Merchant Bank Division, Merrill Lynch International Bank Limited, London, Nedbank Limited, London Branch, Sumitomo Mitsui Banking Corporation Europe Limited, Stanbic IBTC Bank Plc and Standard Chartered Bank and any bank or financial institution which accedes to the Ebok Facility;
Ebok Note Security	the security for the 2016 Notes, the 2019 Notes and the 2020 Notes constituted by the shares in or any assets of Afren Resources;
Effective Date	the Restructuring Effective Date or the Alternative Restructuring Effective Date (as applicable);
EHSS	Environmental, Health & Safety and Social management system established by Afren as described in "Business—Environmental, Health and Safety and Social Responsibility";
EIAA	the Environmental Impact Assessment Act;
ESMA	European Securities and Markets Authority;
EU	European Union;
Euroclear	Euroclear Bank, S.A./N.V.;
European Economic Area	the European Union, Iceland, Norway and Liechtenstein;
Excess Application Facility	the facility for Qualifying Shareholders to apply for Excess Shares in excess of their Open Offer Entitlements;
Excess Open Offer Entitlements	in respect of each Qualifying CREST Shareholder who has taken up his Open Offer Entitlement in full, the entitlement (in addition to the Open Offer Entitlement) to apply for Excess Shares up to the number of Open Offer Shares credited to his stock account in CREST pursuant to the Excess Application Facility, which may be subject to scaling down at the discretion of the Company, with the intention that the Company will prioritise applications from Existing Shareholders;
Excess Shares	up to 984,498,244 Open Offer Shares which may be applied for in

	addition to Open Offer Entitlements;
Executive Directors	the Directors who hold the position of executive director, and each an "Executive Director", being Mr. Egbert Imomoh, Mr. Alan Linn and Mr. Darra Comyn;
Exchange Act	the United States Securities Exchange Act of 1934, as amended;
Excluded Territories	Australia, Canada, Japan, New Zealand and the Republic of South Africa and each an "Excluded Territory";
Existing Noteholders	holders of Existing Notes;
Existing Notes	the 2016 Notes, the 2019 Notes and/or the 2020 Notes, as applicable;
Existing Shareholders	holders of Existing Shares;
Existing Shares	the existing Shares of 1 pence each in nominal value in the capital of the Company as at the date of this document;
FCA	Financial Conduct Authority of the United Kingdom;
FCMB	First City Monument Bank Plc;
FCPA	US Foreign Corrupt Practices Act of 1977;
FDP	Field Development Plan;
FHN	First Hydrocarbon Nigeria Limited;
FHN 26	FHN 26 Limited;
Finance Documents	the finance documents as described in the Okwok/OML 113 Facility;
First Oriental Agreement	the agreement dated July 2012 in which Afren agreed to advance US\$100 million to Oriental;
Form of Proxy	the enclosed form of proxy for use in connection with the General Meeting;
FPSO	floating production storage and offloading;
FPU	floating production unit;
FSMA	Financial Services and Markets Act 2000, as amended and supplemented from time to time;
FSO	Floating Storage and Offloading;
Gas Flaring Bill	the Gas Flaring (Prohibition and Punishment) Bill;
GEC	governance, ethics and compliance committee;
General Meeting	the general meeting of the Shareholders to be held at 11.00 a.m. on 24 July 2015, notice of which is set out at the end of this document;
Global Intercreditor Agreement	the global intercreditor agreement as described in Part I (Letter from the Chairman to Shareholders);
gross dividend	the aggregate of the dividend and the associated tax credit;

Group	Afren and all of its direct or indirect subsidiaries;
Guidelines	the Environmental Guidelines and Standards for the Petroleum Industry in Nigeria;
Hunt Oil	Hunt Oil Middle East Limited;
ICA 2	the additional EBOK intercreditor agreement as described in Part I (Letter from the Chairman to Shareholders);
ICA 3	the separate Ebok intercreditor agreement as described in Part I (Letter from the Chairman to Shareholders);
IFRS	International Financial Reporting Standards and interpretations issued by the IFRS Interpretations Committee;
Initial Purchasers	certain members of the ad hoc committee of Existing Noteholders representing at least 35.93% in aggregate principal amount of the Existing Notes as at 28 April 2015;
Instructing Creditors	such creditors that provide instructions to the Primary Collateral Agent to enforce the Okoro Collateral, as described in the Pari Passu Intercreditor Agreement;
Interim Funding	the provision of US\$200 million in net interim funding pursuant to the Note Purchase Agreement;
Intermediate Share	£0.0000001 nominal value; one ordinary share of
Investor Rights Agreement	the investor rights agreement allowing holders of the Alternative New Senior Notes the right to appoint a majority of the Company's Board and the board of directors of the Notes Issuer and Afren International Limited, with control over the process for the sale of the Group's business;
ISIN	the international securities identification number;
Issuer	Afren Finance plc, a newly incorporated direct subsidiary of the Company;
Issuer Guarantor	Afren International Limited, a newly incorporated direct subsidiary of the Company;
JOA	joint operating agreement;
Komet	Komet Group S.A.;
KRG	the Kurdistan Regional Government;
Liabilities	any debt, liability or obligation whatsoever whether it is present, future, prospective or contingent, whether or not its amount is fixed or undetermined, whether or not it involves the payment of money or the performance of an act or obligation and whether it arises at common law, in equity or by statute, in England and Wales or in any other jurisdiction, or in any other manner whatsoever;
Licences	the Group's PSCs, oil production licences and oil mining licences (and related farm-in agreements), as applicable;
Listing Rules	the listing rules made by the FCA under Part VI of the FSMA (as

	amended from time to time);
Local Content Act	the Nigerian Oil and Gas Industry Content Development Act 2010;
London Stock Exchange	London Stock Exchange plc;
Majority Consenting Note Creditors	a majority representing not less than 50% of the holders of Existing Notes that executed or consented to the Restructuring Agreement;
Majority Consenting Ebok Lenders	a majority representing not less than two-thirds of the Ebok Lenders that executed or consented to the Restructuring Agreement;
Mercator	Mercator Offshore (Nigeria) Pte Limited;
MNR	Ministry of Natural Resources;
Mobil	Mobil Producing Nigeria Unlimited;
Money Laundering Regulations	the Money Laundering Regulations 2007, as amended from time to time;
MOPU	Mobil offshore platform unit;
Morgan Stanley	Morgan Stanley & Co. International plc;
MTM	many to many;
New 2019 Notes	US\$350 million of new notes due 2019 to be issued by the Company (or the Issuer);
New 2020 Notes	US\$350 million of new notes due 2020 to be issued by the Company (or the Issuer);
New 2021 Notes	the reinstatement of the Existing Notes as a new series of notes that will become due in December 2021, with interest at 20.2% per annum payable in kind;
new holding	the treatment of a Qualifying Shareholder's Existing Shares and his Ordinary Shares issued pursuant to the Open Offer as a single asset in the event that the Open Offer is treated as a reorganisation;
New Junior PIK Notes	the new junior payment in kind notes due no earlier than six months after the maturity date of the Amended Ebok Facility;
New Notes	the New 2019 Notes, the New 2020 Notes and the New 2021 Notes;
New Senior Notes	the new senior notes due August 2017 to be issued by the Company pursuant to the Scheme;
New Senior Notes Share Issue	the new Ordinary Shares to be issued to holders of New Senior Notes in accordance with the Scheme;
New Senior Notes Trustee	the trustee under the New Senior Notes;
New Senior PIK Notes	the new senior payment in kind notes due August 2017;
New Shares	the new Ordinary Shares to be issued in connection with the Restructuring, being the Shares comprised in the Debt for Equity Swap, the New Senior Notes Share Issue, the Bridge Securities

	Share Issue and the Early Subscriber Issue, together with the Open Offer Shares;
Nigerian Content Act	the Nigerian Oil and Gas Industry Content Development Act No. 2 of 2010;
Nigerian ISA	Nigerian Investments and Securities Act No. 29 of 2007;
Nigerian SEC	the Nigerian Securities and Exchange Commission;
NNPC	Nigerian National Petroleum Corporation;
Nominated Person	any person to whom notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights;
Non-Executive Directors	the Directors who hold the position of non-executive director and each a "Non-Executive Director", being Mr. Toby Hayward, Mr. Peter Bingham, Mr. John St. John, Mr. Patrick Obath, Ms. Sheree Bryant and Mr. Iain McLaren;
Note Creditors Committee	those parties identified as "Consenting Note Creditors" in the Restructuring Agreement for so long as they hold Existing Notes and each other person that becomes a Consenting Note Creditor in accordance with the terms of the Restructuring Agreement;
Notes Creditors Committee Advisors	the Blackstone Group International Partners LLP (as financial advisers) and Akin Gump LLP (as legal advisers);
Note Documentation	the documents constituting the Subordinated Ebok Guarantee Obligation;
Noteholder Majority	the written instructions of a majority of the holders of more than 50% of the principal amount of the New Senior Notes (as may be constituted from time to time);
Note Purchase Agreement	the agreement entered into on 30 April 2015 by the Company, the Bridge Noteholders and Wilmington Trust (London) Limited in respect of the issue of the Bridge Securities;
Notes Issuer	the issuer of the New Senior Notes and the Reinstated Notes;
Notice of General Meeting	the notice of the general meeting of Shareholders, in the form set out at the end of this document;
NPDC	the Nigerian Petroleum Development Corporation;
NPI	Net Profit Interest;
NSAI	Netherland Sewell & Associates, Inc.;
NSAI Report	the reserves report prepared by NSAI in respect of Ebok, Okoro, Okwok and OML 26 as at 31 December 2014;
OGFZ	the Oil and Gas Free Zone;
Offer Price	1 pence per Share;
Official List	the official list of the UKLA;
Okoro Collateral	the assets relating to the oil and gas field known as Okoro and Setu fields located in the OML 112 and 117, Gulf of Guinea, offshore in

	Nigeria (ii) the facilities relating to such field and/or (iii) the interests in such field, system, project or facilities, in each case that are subject to a mortgage, charge, pledge, lien, assignment or other security interest or encumbrance of any kind granted including that in connection with the 2016 Indenture, the 2019 Indenture, the 2020 Indenture and the Bridge Securities;
Okoro FFD	the Okoro Further Field Development;
Okoro Security Trustee	UMB Bank, N.A. in its capacity as security trustee;
Okwok/OML 113 Facility	the bridge loan facility entered into between AEPNA, as borrower, and Afren and FHN 113 Limited, as guarantors, pursuant to an offer letter dated 30 September 2014;
Okwok/OML 113 Lender	Access Bank
OML	oil mining lease;
OML 26 Facility	the US\$100 million loan agreement dated 25 February 2014 made between FHN 26 as borrower and Zenith Bank plc as lender;
OML 26 Lender	Zenith Bank plc;
OOIP	original oil in place;
Open Offer	the pre-emptive open offer to all Shareholders, comprising up to US\$75 million in new Ordinary Shares.
Open Offer Entitlements	the invitation by Afren to Qualifying Shareholders to apply to acquire 4 Open Offer Shares for every 9 Existing Shares at a price of 1 pence per Open Offer Share;
Open Offer Shares	up to 4,922,491,218 Ordinary Shares being offered by the Company to Qualifying Shareholders pursuant to the Open Offer;
Optimum	Optimum Petroleum Development Ltd;
Ordinary Shares or Shares	the ordinary shares in the share capital of Afren, comprising (i) before the Sub-Division, ordinary shares of 1 pence each (ii) after the Sub-Division and before the Consolidation, ordinary shares of 0.00001 pence each and (iii) after the Consolidation, ordinary shares of 0.0001 pence each;
Oriental	Oriental Energy Resources Ltd;
Original 2016 Notes	senior secured notes due 1 February 2016;
OPL	oil prospecting licence;
Overseas Shareholders	Qualifying Shareholders who have registered addresses outside of the United Kingdom;
PA	Petroleum Act;
Pari Passu Hedging Creditors	creditors that have acceded to the Pari Passu Intercreditor Agreement as Hedging Creditors;
Pari Passu Indebtedness	any pari passu indebtedness of the Company and/or its subsidiaries also secured by the Okoro Collateral;

Pari Passu Intercreditor Agreement	the amended and restated intercreditor agreement entered into on 9 December 2013 by the Company and Deutsche Bank Trust Company Americas (subsequently replaced by UMB Bank, N.A.);
Pari Passu Loans	loan, credit guarantee facility agreements or similar evidencing Pari Passu Indebtedness;
PDMR	person discharging managerial responsibilities;
pence	pence, the lawful currency of the United Kingdom;
Performance Share Plan	the performance share plan adopted by the Board on 15 January 2008 and revised and approved by shareholders on 6 June 2011;
Petroci Disposal	the disposal of Afren Côte d'Ivoire Limited and Lion GPL SA;
PIA	Petroleum Investment Allowance;
PIB	the draft Petroleum Industry Bill;
Pound, £, sterling or GBP	pound sterling, the lawful currency of the United Kingdom;
PPTA	Petroleum Profits Tax Act;
PRA	Prudential Regulation Authority;
Primary Collateral Agent	Deutsche Bank Trust Company Americas as primary collateral agent in respect of each of the 2016 Notes, the 2019 Notes and the 2020 Notes (subsequently replaced by UMB Bank, N.A.);
PRMS	Petroleum Resources Management System;
Production Date	the date on which production of petroleum commences pursuant to the first development plan with respect to the area the subject of the OPL 310 licence which receives all necessary governmental consents;
Prospectus Directive	Directive 2003/71/EC;
Prospectus Rules	the prospectus rules made by the FCA under Part VI of the FSMA (as amended from time to time);
PSC	production sharing contract;
PSTSA	Petroleum Sharing and Technical Services Agreement;
QIBs	qualified institutional buyers;
Qualifying CREST Shareholders	Qualifying Shareholders holding Existing Shares in uncertificated form;
Qualifying non-CREST Shareholders	Qualifying Shareholders holding Existing Shares in certificated form who are not resident in an Excluded Territory or the United States;
Qualifying Shareholder	shareholder(s) on Afren's register of members on the Record Date;
Receiving Agent or Registrar	Computershare Investor Services PLC, whose registered address is at The Pavilions, Bridgwater Road, Bristol BS99 6ZZ;
Record Date	close of business on 6 August 2015;

Registrar	Computershare Investor Services PLC;
Regulation S	Regulation S under the Securities Act;
Regulations	the Uncertificated Securities Regulations 2001 including any modifications thereof or any regulations in substitution therefor;
Regulatory Information Service	any information service authorised from time to time by the FCA for the purpose of disseminating regulatory announcements;
Relevant Company	for the purpose of the Articles; the Company, any holding company of the Company or any other body, whether or not incorporated, in which the Company or such holding company or any of the predecessors of the Company or of such holding company has or had any interest whether direct or indirect or which is in any way allied to or associated with the Company, or any subsidiary undertaking of the Company or of such other body
relevant implementation date	the date on which the Prospectus Directive was implemented in the;
relevant member state	each member state of the European Economic Area which has implemented the Prospectus Directive (except for the UK);
relevant shares	the Ordinary Shares accepted in respect of the Open Offer;
Resolution	the resolution to be proposed at the General Meeting (and set out in the Notice of General Meeting at the end of this document) to, among other things, facilitate and approve the Open Offer and the issue of the New Shares;
Restructured Group	the Group immediately after the Effective Date, being Afren and all of its direct and indirect Subsidiaries;
Restructuring	the financial, debt and corporate restructuring of the Group contemplated by the Scheme, the Restructuring documents and the explanatory statement to the Scheme, including (but not limited to) any and all connected compromises/agreements with persons that are not parties to the Scheme;
Restructuring Agreement	the lock up and restructuring agreement dated 12 March 2015 (as amended and/or amended and restated from time to time);
Restructuring Effective Date	the date on which the Scheme will become effective if the Restructuring is implemented;
RPS	RPS Group Plc;
RPS Reports	the reserves reports prepared by RPS in respect of the Barda Rash block and the Ain Sifni block as at 12 January 2015;
Rule 144A	Rule 144A under the Securities Act;
RWC Scenario	the Company's reasonable worst case scenario to its working capital requirements;
sale agreement	an agreement or agreements for the sale of all or substantially all of the Group's business, to be entered into by the end of 2016 under the terms of the Alternative New Senior Notes;

Scheme	the scheme of arrangement under Part 26 of the Companies Act between Afren and the Scheme Creditors, with any modification, addition or condition which the Court may think fit to approve or impose;
Scheme Claim	Any claim or claims in respect of any Liability of Afren to a Scheme Creditor arising directly or indirectly in relation to, or arising out of or in connection, with the Existing Notes, the offering memoranda for the Existing Notes, and the 2016 Notes Indenture, the 2019 Notes Indenture, the 2020 Notes Indenture, including (without limitation) claim or claims in relation to any Liability of Afren in respect of loss or damage suffered or incurred whether directly or indirectly, as a result of or in connection with such liability (including, for the avoidance of doubt, any interest accruing on, or accreditations arising in respect of, such claims), other than those which arise as a result of a failure to comply with the terms of the Scheme;
Scheme Creditors	the persons with a beneficial interest as principal in the Existing Notes held in global form through the Common Depositary at the Record Date (as defined in the Scheme);
Scheme Entitlement	The right to subscribe for up to the pro rata share of the New Senior Notes based on the holding of Existing Notes;
Scheme Escrow Agent	Lucid Issuer Services Limited, in its capacity as the 'Escrow Agent' under an escrow deed or deeds in relation to the Scheme;
Scheme Lodgement Date	the date on which an office copy of the Court Order has been delivered to the Registrar of Companies for registration, in respect of the Scheme;
Scheme Meeting	the meeting of the Scheme Creditors convened in accordance with the permission of the Court pursuant to section 896 of the Companies Act to consider and, if thought fit, approve the Restructuring or the Alternative Restructuring, including any adjournment thereof;
SDRT	Stamp Duty Reserve Tax;
SEC	U.S. Securities Exchange Commission;
SEC basis	the standards of reserves measurement applied by the SEC;
Securities Act	the United States Securities Act of 1933, as amended;
Security Reorganisation	the transfer of all or substantially all assets of the Group to the Issuer or the Issuer Guarantor, in satisfaction of the relevant condition to the Scheme;
Senior Agent	BNP Paribas, in its capacity as agent;
Senior Ebok Debt	security over the assets of and shares in Afren Resources;
Senior Ebok Security	the security for the Senior Ebok Debt;
Senior Managers	the senior management of Afren from time to time, being Mr. Adebayo Ayorinde, Mr. John Beaird, Ms. Jane Barker, Mr. Patrick Cherlet and Mr. David Thomas;

Seplat	SEPLAT Petroleum Development Company plc;
Share Option Scheme	the Company's share option scheme as adopted on 28 June 2005 and amended by the Board on 30 November 2009 and approved by Afren's Shareholders on 6 June 2011;
Share Plans	the Performance Share Plan and Long Term Incentive Plan;
Shareholder	a holder of Shares;
Sovereign	Sovereign Oil & Gas Company II, LLC;
SPDC	Shell Petroleum Development Company of Nigeria Ltd;
Sponsor	Morgan Stanley, in its capacity as sponsor;
Sponsor's Agreement	the agreement entered into on 19 June 2015 by the Company and Morgan Stanley under which the Company has appointed Morgan Stanley as Sponsor in connection with the Open Offer and Admission;
Standards	the Admission and Disclosure Standards of the London Stock Exchange;
Statutes	every statute or enactment for the time being in force concerning companies and affecting the Company;
Sub-Division	the sub-division of each Existing Share at a ratio of 1:100,000 into one ordinary share of nominal value of 0.00001p each together with the "Deferred Shares;
Subordinated Ebok Guarantee	the guarantee of the 2016 Notes, the 2019 Notes and the 2020 Notes by Afren Resources as Senior Subordinated Guarantor;
Subordinated Ebok Guarantee Obligations	claims against Afren Resources under its guarantee of the 2016 Notes and the 2019 Notes;
Subordinated Ebok Security	the Ebok Note Security or the Additional Note Ebok Security;
Subordinated Guarantee	any guarantee included in any Additional Note Documentation;
subsidiary	has the same meaning as in section 1159 of the Companies Act;
Takeover Code	the City Code on Takeovers and Mergers;
Taleveras	Taleveras Energy Resources Ltd;
Tzell	Tzell Travel Group;
UBA	United Bank for Africa Plc;
UK or United Kingdom	the United Kingdom of Great Britain and Northern Ireland;
UK Bribery Act	the United Kingdom Bribery Act of 2010;
UKLA or UK Listing Authority	the FCA acting in its capacity as the competent authority for the purposes of Part VI of FSMA;
uncertified or in uncertificated form	in relation to a share or other securities, a share or other security title to which is recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be

	transferred by means of CREST;
US or United States	United States of America, its territories and possession, any state of the United States of America and the District of Columbia;
US\$ or US\$	United States dollars and cents, the lawful currency of the United States;
verification of identity requirements	The request by Computershare for verification of the identity of the person by whom or on whose behalf an Application Form is lodged with payment;
WFG	Willkie Farr & Gallagher LLP;
WFG Review	the independent review conducted by WFG of certain transactions undertaken by the Group in 2012 and 2013; and
WHP	well head platform.

NOTICE OF GENERAL MEETING

Afren plc

Incorporated and registered in England and Wales with registered number 05304498

NOTICE is hereby given that a General Meeting of Afren plc (the "Company") will be held at 11.00 a.m. on 24 July 2015 at the offices of White & Case LLP, 5 Old Broad Street, London EC2N 1DW for the purpose of considering and, if thought fit, passing the following Resolution, which will be proposed as a special resolution:

Resolution

THAT:

(1) each ordinary share o f £0.01 be sub-divided into (i) one ordinary share of £0.0000001 nominal value (an "Intermediate Share"), such shares having the same rights and being subject to the same restrictions (save as to nominal value) as the existing ordinary shares of £0.01 each in the capital of Afren plc as set out in Afren plc's articles of association as amended by paragraph (2) below, and (ii) 99,999 deferred shares of £0.0000001, such shares having the rights and being subject to the restrictions set out in Afren plc's articles of association as amended by paragraph (2) below;
(2) the articles of association of Afren plc be amended by the insertion of a new Article 6A immediately after Article 6, as follows:
"6A. The rights and restrictions attached to the deferred shares of £0.0000001 each in the capital of the Company (the "Deferred Shares") are as follows:
- (a) notwithstanding any other provisions of these Articles, a Deferred Share:
- (i) does not entitle its holder to receive any dividend or other distribution;
- (ii) does not entitle its holder to receive a share certificate in respect of the relevant shareholding;
- (iii) does not entitle its holder to receive notice of, nor to attend, speak or vote at, any general meeting of the Company;
- (iv) entitles its holder on a return of capital on a winding up of the Company (but not otherwise) only to the repayment of the amount paid up or credited as paid up on that share and only after payment of the amounts entitled to be paid to holders of ordinary shares in the share capital of the Company and the further payment of £10,000,000 on each such ordinary share;
- (v) does not entitle its holder to any further or other participation in the capital, profits or assets of the Company; and
- (vi) shall not be capable of transfer at any time other than with the prior written consent of the Directors:
- (b) the Company may at its option and is irrevocably authorised at any time after the creation of the Deferred Shares to:
- (i) appoint any person to act on behalf of any or all holder(s) of a Deferred Share(s), without obtaining the sanction of the holder(s), to transfer any or all of such shares held by such holder(s) for nil consideration to any person appointed by the Directors and to execute for and on behalf of such holder(s) such documents as are necessary in connection with such transfer;
(ii) without obtaining the sanction of the holder(s), but subject to the 2006 Act:
(A) purchase any or all of the Deferred Shares then in issue and to appoint any person to act on behalf of all holders of Deferred Shares to transfer and to execute a contract of sale and a transfer of all the Deferred Shares to the Company for an aggregate consideration of £1.00 payable to one of the holders of Deferred Shares to be selected by lot (who shall not be required to account to the holders of the other Deferred Shares in respect of such consideration); and
(B) cancel any Deferred Share without making any payment to the holder.
(c) any offer by the Company to purchase the Deferred Shares may be made by the Directors depositing at the registered office of the Company a notice addressed to such person as the Directors shall have nominated on behalf of a l l holders of the Deferred Shares; and
(d) The rights attaching to the Deferred Shares shall not be, or be deemed to be, varied, abrogated or altered by:
(i) the creation or issue of any shares ranking in priority to, or pari passu with, the Deferred Shares;
(ii) any amendment or variation of the rights of any other class of shares of the Company;
(iii) the Company reducing its share capital or share premium account;
(iv) the cancellation of any Deferred Share without any payment to the holder thereof; or
(v) the redemption or purchase of any share, whether a Deferred Share or otherwise,

the passing by the members of the Company or any class of members of any resolution, whether in connection with any of the foregoing or for any other purpose, and accordingly no consent thereto or sanction thereof by the holders of the Deferred Shares, or any of them, shall be required.";

(3) in substitution for any existing authority (but without prejudice to paragraph (7) below), the Directors be and are hereby generally and unconditionally authorised for the purposes of section 551 of the Companies Act 2006 (the "Act") to exercise any power of the Company to allot shares and grant rights to subscribe for or to convert securities into shares in the Company:
(a) up to a maximum nominal amount of £1,771.372946 in connection with the issue of Intermediate Shares:
- (i) in connection with the Debt for Equity Swap (as defined in the prospectus and circular of the Company dated 19 June 2015 (the "Prospectus"));
- (ii) in connection with the New Senior Notes Share Issue (as defined in the Prospectus);
- (iii) in connection with the Open Offer (as defined in the Prospectus);
- (iv) in connection with the Early Subscriber Issue and the Additional Commitment Issue (each as defined in the Prospectus); and

(v) in connection with the Bridge Securities Share Issue (as defined in the Prospectus),

such authority to expire, unless renewed, varied or revoked by the Company, on the earlier of the conclusion of the Company's next annual general meeting and the close of business on 30 June 2016 but, in each case, so that the Company may make offers and enter into agreements prior to the expiration of the authority which would, or might, require shares to be allotted or rights to subscribe for or convert securities into shares to be granted after the authority ends and the Directors may allot shares or grant rights to subscribe for or convert securities into shares under any such offer or agreement as if the authority had not ended;

(4) the offer of Ordinary Shares pursuant to the Open Offer (each as defined in the Prospectus) at a price of 1 pence per ordinary share, being at a discount of more than 10% to the closing middle market price of the ordinary shares on 18 June 2015 (the latest practicable date prior to the announcement of the pricing of the Open Offer), be and is hereby approved (in accordance with the requirements of the Listing Rules of the UK Listing Authority);
(5) in substitution for any existing authority (but without prejudice to paragraph (8) below), the Directors be given power pursuant to section 570 of the Act to allot equity securities (within the meaning of section 560 of the Act) for cash under the authority granted by such resolution, and/or where the allotment is treated as an allotment of equity securities under section 560(2)(b) of the Act as if section 561(1) of the Act did not apply to any such allotment, such power to be limited to the allotment of equity securities in connection with the Restructuring (as defined in the Prospectus) pursuant to and subject to the authority granted under paragraph (3) above, such authority to expire at the conclusion of the Company's next annual general meeting or, if earlier, the close of business on 30 June 2016, unless previously renewed, varied or revoked by the Company, save that the Company may make offers and enter into agreements prior to the expiration of the authority which would, or might, require shares to be allotted or rights to subscribe for or convert securities into shares to be granted after the authority ends and the Directors may allot shares or grant rights to subscribe for or convert securities into shares under any such offer or agreement as if the authority had not ended;
(6) subject to, conditional upon and with effect from the issue of the Intermediate Shares representing the Early Subscriber Issue and the Bridge Securities Share Issue (each as defined in the Prospectus), each Intermediate Share be consolidated into ten ordinary shares of £0.000001 nominal value (a "Consolidated Share"), such shares having the same rights and being subject to the same restrictions (save as to nominal value) as the Intermediate Shares as set out in the Company's articles of association (the "Consolidation"), provided that no member shall be entitled to a fraction of a share and any fractions of Consolidated Shares arising out of the consolidation pursuant to this paragraph (6) will be aggregated and the Directors are authorised to sell (or appoint any other person to sell), on behalf of the relevant members, the whole number of Consolidated Shares so arising and the net proceeds of sale will be distributed in due proportion (rounded down to the nearest penny) among those members who would otherwise have been entitled to such fractional elements, save that any net proceeds of sale not exceeding £5.00 for any member may be retained by the Company. For the purpose of implementing the provisions of this paragraph (6), the Directors may nominate any person to execute transfers on behalf of any person entitled to any such fractions and may generally make all arrangements and do all acts and things which appear to the Directors to be necessary or appropriate for the settlement and/or disposal of such fractional entitlements;
(7) in substitution for any existing authority (other than the authority granted pursuant to paragraph (3) above) and conditional upon and with effect from the Consolidation, the Directors be and are hereby generally and unconditionally authorised for the purposes of section 551 of the Act to exercise any power of the Company to allot shares and grant rights to subscribe for or to convert securities into shares in the Company:
(a) up to a maximum nominal amount of £627.00; and
(b) comprising equity securities (as defined in section 560 of the Act) up to an aggregate nominal amount of £1,254.00 (including within such limit any shares and rights to subscribe for or

convert any security into shares allotted under sub-paragraph (a) of paragraph (7) above) in connection with an offer by way of a rights issue:

(i) to holders of ordinary shares in proportion (as nearly as may be practicable) to their existing holdings; and
(ii) to holders of other equity securities as required by the rights of those securities or as the directors otherwise considers necessary, and so that the Directors may impose any limits or restrictions and make any arrangements which they consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or the requirements of any regulatory body, stock exchange or other matter,

(8) in substitution for any existing authority (other than the authority granted pursuant to paragraph (5) above) and conditional upon and with effect from the Consolidation, the Directors be given power pursuant to section 570 of the Act to allot equity securities (within the meaning of section 560 of the Act) for cash under the authority granted by such resolution, and/or where the allotment is treated as an allotment of equity securities under section 560(2)(b) of the Act as if section 561(1) of the Act did not apply to any such allotment, such power to be limited:
(a) to the allotment of equity securities in connection with an offer of equity securities (but in the case of the authority granted under sub-paragraph (b) of paragraph (7) above, by way of a rights issue only):
- (i) to holders of ordinary shares in proportion (as nearly as may be practicable) to their respective existing shareholdings; and
- (ii) to the holders of other equity securities, as required by the rights of those securities, or as the Directors otherwise consider necessary

and so that the Directors may impose any limits or restrictions and make any arrangements which they consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or the requirements of any regulatory body, stock exchange or other matter; and

(b) in the case of the authority granted under paragraph (b) of paragraph (7) above and/or in the case of a transfer of treasury shares which is treated as an allotment of equity securities under section 560(2)(b) of the Act, to the allotment (otherwise than under paragraph (a) of this resolution) of equity securities up to a nominal amount of £94.10,

such authority to expire at the conclusion of the Company's next annual general meeting or, if earlier, the close of business on 30 June 2016, unless previously renewed, varied or revoked by the Company, save that the Company may make offers and enter into agreements prior to the expiration of the authority which would, or might, require shares to be allotted or rights to subscribe for or convert securities into shares to be granted after the authority ends and the Directors may allot shares or grant rights to subscribe for or convert securities into shares under any such offer or agreement as if the authority had not ended; and;

(9) the Restructuring be approved and all actions undertaken by the Directors and all documents entered into, or to be entered into, by the Company or any of the Company's subsidiary undertakings in connection with, or otherwise related to, the Restructuring or as otherwise described in the Prospectus be ratified and/or approved.

By Order of the Board

Egbert Imomoh Executive Chairman Afren plc

19 June 2015

Incorporated and registered in England and Wales with registered number 05304498 Registered Office: Afren plc Kinnaird House, 1 Pall Mall East, London, SW1Y 5AU

EXPLANATORY NOTES ON THE RESOLUTION

The Resolution is a single resolution covering a number of different authorities. Shareholders will be asked to vote as a single approval, rather than in respect of each different authority. It is proposed as a special resolution and will be passed if not less than 75% of the votes cast are in favour.

Sub-division of Shares (Paragraph 1)

Paragraph 1 deals with the sub-division of each ordinary share of £0.01 into (i) one ordinary share of £0.0000001 nominal value ("Intermediate Share") and (ii) 99,999 deferred shares of £0.0000001 ("Deferred Shares").

The nominal value of the ordinary shares is being reduced to ensure that new shares being subscribed as part of the Restructuring are not issued at a discount to their current nominal value.

The creation of a class of Deferred Shares will ensure that the reduction in the nominal value of the ordinary shares effected by the sub-division will not result in an unlawful reduction in the Company's share capital.

As a result of the subdivision, each ordinary shareholder's proportionate interest in the Company's issued ordinary share capital will remain unchanged. The only changes will be to the nominal value of ordinary shares. The rights attaching to the Intermediate Shares (including voting and dividend rights on return of capital) will be identical in all respects to those of the existing ordinary shares. This reduction in nominal value does not impact the 'value' of the ordinary shares, as the Deferred Shares have no economic value.

Amendments to articles of association to create deferred shares (Paragraph 2)

Paragraph 2 would amend the Company's articles of association to include a new sub-article specifying the rights attaching to the Deferred Shares arising as a result of the sub-division.

The Deferred Shares created on the proposed sub-division becoming effective will not have voting or dividend rights. Each Deferred Share will entitle its holder to participate on a return of assets on a winding up of the Company, such entitlement to be limited to the repayment of the amount paid up or credited as paid up on such share to a maximum of £1, and shall be paid only after the holder of any and all ordinary shares then in issue shall have received payment in respect of such amount as is paid up or credited on those ordinary shares held by them at such time.

The Company may, at any time, seek the transfer and/or purchase and subsequent cancellation of the Deferred Shares using such lawful means as the Directors may determine.

Directors' authority to allot securities in connection with the issue of Intermediate Shares in connection with the Restructuring (Paragraph 3)

The Company's Directors may only allot ordinary shares or grant rights over ordinary shares if authorised to do so by the shareholders. This Paragraph seeks to grant a new authority under section 551 of the Companies Act 2006 to authorise the Directors to allot shares in the Company or grant rights to subscribe for, or convert any security into, shares in the Company in connection with the issue of Intermediate Shares for the purposes of the Restructuring. If given, the authority will expire at the conclusion of the next annual general meeting of the Company to be held in 2016 or, if earlier, the close of business on 30 June 2016.

If passed, paragraph (a) of Paragraph 3 would give the Directors authority to allot shares or grant rights to subscribe for, or convert any security into, shares in the Company in connection with the issue of Intermediate Shares for the purposes of the Restructuring up to an aggregate nominal value of £1,771.372946. It should be noted that this authority is specific to the issue of Intermediate Shares for the purposes of the Restructuring. This Paragraph is without prejudice to Paragraph 7 dealing with a general authority to issue ordinary shares.

Offer of Ordinary Shares pursuant to the Open Offer (Paragraph 4)

Paragraph 4 authorises the offer of Ordinary Shares pursuant to the Open Offer at a price of 1 pence per ordinary share. Under the Listing Rules, if the Company wishes to offer ordinary shares under an Open Offer or similar to shareholders at a discount of more than 10% to the prevailing market price, it must obtain

shareholder approval. The Offer Price is at a discount of more than 10% to the closing middle market price of the ordinary shares on 18 June 2015 (being the latest practicable date prior to the announcement of the pricing of the Open Offer).

Disapplication of pre-emption rights in relation to the allotment of equity securities in connection with the Restructuring (Paragraph 5)

Under section 561(1) of the Companies Act 2006, if the Directors wish to allot any of the unissued shares or grant rights over shares or sell treasury shares for cash (other than pursuant to an employee share scheme) they must in the first instance offer them to existing shareholders in proportion to their holdings. Under the Restructuring, it is proposed that new ordinary shares will be issued for cash on a non-pre-emptive basis in connection with the Debt for Equity Swap, New Senior Notes, Share Issue, Bridge Securities Share Issue and Early Subscriber Issue (and particularly the Additional Commitment Issue). Further, while the Open Offer will be made on a pre-emptive basis, the Directors are seeking discretion to amend such pre-emptive right to deal with any securities laws issues that may prevent such an offer. This cannot be done under the Companies Act 2006 unless the shareholders have first waived their pre-emption rights. Paragraph 5 seeks shareholders authority for this and the authority will be limited to the allotment of equity securities in connection with the Restructuring. If given, the authority will expire at the conclusion of the next annual general meeting of the Company to be held in 2016, or, if earlier, the close of business on 30 June 2016. This Paragraph is without prejudice to Paragraph 8.

Consolidation of Shares (Paragraph 6)

The Company's current issued share capital comprises 1,107,560,524 ordinary shares. Under the Restructuring, the Company will issue up to 17,713,729,426 ordinary shares, resulting in a total issued share capital of up to 18,821,289,950 ordinary shares upon completion (prior to the Consolidation).

The Directors consider that this level of issued share capital is too high for the Company's current circumstances, and therefore they propose to reduce the number of shares in issue after the Restructuring by way of a share consolidation.

This authority will take effect from the issue of the Intermediate Shares representing the Early Subscriber Issue and the Bridge Securities Issue. Paragraph 6, if approved, consolidates each Intermediate Share into 10 ordinary shares of £0.000001 nominal value. Accordingly, immediately following the Consolidation the Company will have a total issued share capital of up to 1,882,128,995 ordinary shares and 1,107,560,524 deferred shares.

As a result of the consolidation, each ordinary shareholder's proportionate interest in the Company's issued ordinary share capital will remain unchanged (ignoring the effects of the treatment of the fractions). The only changes will be to the nominal value and the number of ordinary shares. The rights attaching to the ordinary shares (including voting and dividend rights on return of capital) will be identical in all respects to those of the existing ordinary shares.

Directors' authority to allot securities (Paragraph 7)

The Company's Directors may only allot ordinary shares or grants rights over ordinary shares if authorised to do so by shareholders. This Paragraph seeks to grant a new authority under section 551 of the Companies Act 2006 to authorise the Directors to allot shares (including treasury shares) in the Company or grant rights to subscribe for, or convert any security into, shares in the Company. This authority is separate to that required for the Restructuring and is intended to replace the similar authority sought at the Company's 2015 annual general meeting. Given the change in nominal value of the ordinary shares as part of this Paragraph the authority sought at the 2015 annual general meeting would actually grant the Directors the right to issue more than the increase share capital. Accordingly, this authority is needed to replace such annual general meeting authority. If given, the authority will expire at the conclusion of the next annual general meeting of the Company to be held in 2016 or, if earlier, the close of business on 30 June 2016.

If passed, paragraph (a) of Paragraph 7 would give the Directors authority to allot shares or grant rights to subscribe for, or convert any security into, shares in the Company up to an aggregate nominal value of £627.00. This Paragraph is without prejudice to Paragraph 3.

Disapplication of pre-emption rights (Paragraph 8)

This cannot be done under the Companies Act 2006 unless the shareholders have first waived their preemption rights. Paragraph 8 seeks shareholders authority for this in respect of the new authority sought under Paragraph 7 and in replacement of the similar authority sought at the Company's 2015 annual general meeting. If given, the authority will expire at the conclusion of the next annual general meeting of the Company to be held in 2016 or, if earlier, the close of business on 30 June 2016. This Paragraph is without prejudice to Paragraph 5.

General approval of the Restructuring (Paragraph 9)

Given the significant impact of the Restructuring on the Company and all of its stakeholders, including shareholders and creditors, the Directors consider it appropriate that shareholders approve the Restructuring as a whole.

If passed, Paragraph 9 ratifies and approves the Restructuring and all actions undertaken by the Directors and all documents entered into or to be entered into in relation to the Restructuring.

EXPLANATORY NOTES TO THE NOTICE OF THE GENERAL MEETING:

Entitlement to attend and vote

The right to attend and vote at the General Meeting is determined by reference to the register of members. Only those members registered on the Company's register of members at 6.00 p.m. on 22 July 2015 (or, if the General Meeting is adjourned, at 6.00 p.m. on the day two days prior to the adjourned the General Meeting), shall be entitled to attend and vote at the General Meeting. Changes to the register of members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the General Meeting.

Publication of information in advance of the General Meeting

A copy of this notice of the General Meeting and other information regarding the General Meeting, including information which the Company is required by section 311A of the Companies Act 2006 to publish in advance of the General Meeting, can be accessed at www.Afren.com.

Attending in person

If you wish to attend the General Meeting in person, you are requested to bring your attendance card (which is attached to the Form of Proxy) with you to the meeting. On arrival at the General Meeting venue, all those entitled to vote will be required to register. In order to facilitate these arrangements, please arrive at the General Meeting venue in good time and have your admittance pass to hand. You will be given instructions on how to complete your poll card/vote on a show of hands at the meeting.

Right to ask questions

At the General Meeting the Company must cause to be answered any question that a member attending the General Meeting asks relating to the business being dealt with at the General Meeting in accordance with section 319A of the Companies Act 2006. However, no such answer need be given where (a) answering the question would interfere unduly with the preparation for the General Meeting or involve the disclosure of confidential information; (b) the answer has already been given on a website in the form of an answer to a question; or (c) it is undesirable in the interests of the Company or the good order of t the General Meeting that the question is answered.

Appointment of proxies

1. Members are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf at the meeting. A shareholder may appoint more than one proxy in relation to the General Meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder. A proxy need not be a shareholder of the Company. A proxy form which may be used to make such appointment and give proxy instructions accompanies this notice. If you do not have a proxy form and believe that you should have one, or if you require additional forms, please contact the Company's registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ.
1. To be valid, a duly completed proxy form, together with any power of attorney or other authority under which it is signed or a notarial certified copy of such power or authority, must be received by post at the Company's registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ or by hand only (during normal business hours) at The Pavilions, Bridgwater Road, Bristol, BS13 8AE, or at the electronic address provided on the proxy form at www.Afren.com, in each case no later than 11.00 a.m. on 22 July 2015 (or not less than 48 hours before the time fixed for any adjourned meeting, excluding any part of a day that is not a working day).
1. Appointment of a proxy does not preclude you from attending the General Meeting and voting in person. If you have appointed a proxy and attend the General Meeting in person, your proxy appointment will automatically be terminated.
1. Unless voting instructions are indicated on the proxy form, a proxy may vote or withhold his vote as he thinks fit on the resolutions or on any other business (including amendments to resolutions) which may come before the meeting. A vote withheld is not a vote in law and will not be counted in the calculation of the proportion of votes for or against a resolution.
1. A member must inform the Company in writing of any termination of the authority of a proxy.

Electronic appointment of proxies

As an alternative to completing the hard-copy proxy form, you can appoint a proxy electronically by logging onto www.investorcentre.co.uk/eproxy. You will need to enter the Control Number, Shareholder Reference Number (SRN) and your PIN printed on the proxy form or your email notification if you have elected to receive electronic communications. Full details of the procedure are given on their website. For an electronic proxy appointment to be valid, your appointment must be received by Computershare Investor Services PLC no later than at least 48 hours before the General Meeting or any adjournment thereof.

Appointment of proxies through CREST

1. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so for the General Meeting and any adjournment(s) thereof by utilising the procedures described in the CREST Manual. CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
1. In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & Ireland Limited's ("EUI") specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the issuer's agent (ID 3RA50) no later than at 11.00 a.m. on 23 June 2015. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
1. CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
1. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

Corporate representatives

Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that they do not do so in relation to the same shares.

Issued shares and total voting rights

1. As at 5 p.m. on 18 June 2015, the Company's issued share capital comprised 1,107,560,524 ordinary shares of one penny each. Each ordinary share carries the right to one vote at a general meeting of the Company and, therefore, the total number of voting rights in the Company as at 5 p.m. on 18 June 2015 is 1,107,560,524.
1. The website referred to in note 2 will include information on the number of shares and voting rights.

Website publication of audit concerns

Shareholders should note that it is possible that, pursuant to requests made by shareholders of the Company under section 527 of the Companies Act 2006, the Company may be required to publish on a website a statement setting out any matter relating to: (i) the audit of the Company's accounts (including the auditor's report and the conduct of the audit) that are to be laid before the annual general meeting; or (ii) any circumstance connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual accounts and reports were laid in accordance with section 437 of the Companies Act 2006. The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with sections 527 or 528 of the Companies Act 2006. Where the Company is required to place a statement on a website under section 527 of the Companies Act 2006, it must forward the statement to the Company's auditor not later than the time when it makes the statement available on the website. The business which may be dealt with at the annual general meeting includes any statement that the Company has been required under section 527 of the Companies Act 2006 to publish on a website.

Nominated persons

1. Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights (a "Nominated Person") may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
1. The statement of the rights of shareholders in relation to the appointment of proxies in paragraphs 5 and 6 above does not apply to Nominated Persons. The rights described in these paragraphs can only be exercised by shareholders of the Company.

Communication

1. Except as provided above, members who have general queries about the General Meeting should call our shareholder helpline on 0870 889 3176 (no other methods of communication will be accepted).
1. You may not use any electronic address provided either in this General Meeting notice or any related documents (including the Chairman's letter and proxy form) to communicate for any purposes other than those expressly stated.

Inspection of Documents

1. Copies of the following documents will be available for inspection at the offices of White & Case LLP, 5 Old Broad Street, London, EC2N 1DW for at least 15 minutes prior to the General Meeting and during the General Meeting:
the articles of association of the Company;
the prospectus and circular to shareholders dated 19 June 2015 (the "Prospectus");
the audited consolidated financial statements for the Company for the financial years ended 31 December 2014, 2013 and 2012;
the material contracts referred to in paragraph 15 "Material contracts" of Part IX (Additional Information) of the Prospectus;
copies of the service contracts of executive Directors of the Company;
copies of the letters of appointment of the non-executive Directors of the Company;
the register of Directors' interests in the share capital of the Company;
the written consents referred to in paragraph 21 "Consents" of Part IX (Additional Information) of the Prospectus; and
the form of proxy.

AI Terminal

AFENTRA PLC

7471_prs_2015-06-19_049bf03c-e4de-4956-86a8-5e83c9c65866.pdf

Afren plc

Proposed Capital Restructuring

Morgan Stanley

SUMMARY

RISK FACTORS

1. Risks Relating to the Restructuring

If the Resolution is not passed and the Alternative Restructuring is implemented it is highly likely that there would be no value returned to Shareholders under the terms of the Alternative Restructuring.

The Alternative Restructuring will result in significantly more indebtedness and a higher cost for such indebtedness.

The Alternative New Senior Notes will have security over the assets of the Group and the Company will be required to enter into an agreement by no later than 31 December 2016 to dispose of all of its assets.

The Restructuring is subject to conditions other than to vote in favour of the Resolution; failure to fulfil any one of these conditions will result in neither the Restructuring nor the Alternative Restructuring proceeding.

The Company will have insufficient working capital for its present purposes under a reasonable worst case scenario

Even if the Restructuring does proceed the Company may be unable to return any value to Shareholders.

2. Risks Relating to Afren's Business

The Group may be adversely affected by a substantial or extended decline in prices for crude oil.

Afren's current production is concentrated in two assets and if production at such assets is delayed or interrupted, Afren's ability to generate revenue would be harmed, which would have a material adverse effect on its business, financial condition and results of operations.

Afren has a significant amount of indebtedness which limits its financial and operational flexibility.

The Group's debt service obligations and requirements to comply with related covenants may adversely affect its business, prospects, financial condition and results of operations.

If the Group's new CEO is unable to implement the Company's strategy, or if the Group is unable to strengthen its Board, its business could be harmed.

Afren depends on key members of management and technical, financial and operations personnel and on its ability to retain and hire new qualified personnel and consultants to effectively manage its business and to implement its 2015 Business Plan.

Violation or circumvention of Afren's corporate governance policies and code of conduct, or the Company's internal controls and procedures, could have a material adverse effect on Afren's business, prospects, financial condition and results of operations.

Afren has previously breached its obligations under the Listing Rules and Afren cannot guarantee such breaches will not result in regulatory action or shareholder claims, which could have an adverse effect on the business and financial condition of the Group.

Afren's operations are subject to the risk of claims or litigation, which has the potential to materially adversely impact Afren's business, prospects, financial condition and results of operations.

The Nigerian Government and third parties may cease treating Afren's subsidiary and commercial partners as indigenous companies.

There are risks inherent in Afren's geographically diverse portfolio of assets and any strategic geographic consolidation or divestitures or farm-outs of existing operations may prove to be unsuccessful or costly.

The Group does not insure against certain risks and its insurance coverage may not be adequate for covering losses arising from potential operational hazards and unforeseen interruptions.

Members of the Group may engage in hedging activities from time to time that would expose the Group to losses should markets move against the Group's hedged position.

Failure to obtain necessary equipment, third party services and transportation systems could materially and adversely affect Afren's business, prospects, financial condition and results of operations.

Some of the employees engaged by Afren contractors are unionised and wage demands or work stoppages by unionised employees could have an adverse effect on its business, prospects, financial condition and results of operations.

The Group is subject to foreign exchange and inflation risks, which might adversely affect its financial condition and results of operations.

3. Risks Relating to the Oil and Gas Industry

The Group's exploration and production operations are dependent on the Group's compliance with the obligations under its licences, contracts and field development plans.

Afren faces significant uncertainties in connection with its appraisal, exploration and development activities.

Dry wells or wells discovering less oil and/or gas than expected may lead to a downgrading of the potential value of Afren's production sharing contracts or require further funds to continue exploration work, and if Afren is unable to replace the reserves, the Group's revenues may decline.

The level of Afren's crude oil and gas reserves, their quality and production volumes may be lower than estimated or expected.

The Group faces drilling, exploration and production risks and hazards that may affect the Group's ability to produce crude oil and natural gas at expected levels, quality and costs.

Afren's use of 2D and 3D seismic data is subject to interpretation and may not accurately identify the presence of oil and gas, which could adversely affect the results of its drilling operations.

The Group operates in a highly competitive industry.

The Group may face unanticipated increased or incremental costs.

The Group is obliged to comply with health and safety and environmental regulations and cannot guarantee that it will be able to comply with these regulations. I 8.2

Climate change abatement legislation may have a material adverse effect on Afren's industry.

Uncertainties associated with enhanced recovery methods may result in Afren not realising an acceptable return on its investment in such projects where these methods are used.

4. Risks Relating to the Countries in which Afren Operates

Risks associated with emerging and developing markets generally.

The global economic crisis has impacted, and may continue to impact, the economies of the countries in which the Group operates.

The countries in which the Group operates face political, economic, fiscal, legal, regulatory and social uncertainties which could have a material adverse effect on Afren's business, prospects, financial condition and results of operations.

Uncertainties in the interpretation and application of laws and regulations in the jurisdictions in which Afren operates may affect the Group's ability to comply with such laws and regulations which may increase the risks with respect to the Group's operations.

The countries in which the Group operates suffer from high degrees of corruption which could have an adverse effect on Afren's business, prospects, financial condition and results of operations if Afren or its employees fail to comply with relevant laws.

internal controls and procedures, could have a material adverse effect on Afren's business, financial condition and results of operations".

The countries in which the Group operates suffer from piracy, terrorism and militant activity which could have a material adverse effect on Afren's business, prospects, financial condition and results of operations.

Underdeveloped infrastructure in the countries in which the Group operates could have an adverse effect on Afren's business, prospects, financial condition and results of operations.

Licensing and other regulatory requirements in the countries in which the Group operates may be subject to amendment or reform which could make compliance more challenging.

Afren operates in multiple jurisdictions and its profits, royalties on production and sales revenues are taxed according to the tax laws of such jurisdictions. Afren's effective tax rate may be affected by changes in tax laws or interpretations of tax laws in any given jurisdiction.

The Group is exposed to the risk of adverse sovereign action by governments in the countries in which it operates.

5. Risks Relating to An Investment in Ordinary Shares

An investor in Afren whose principal currency is not pounds sterling is exposed to foreign currency risk.

The ability of Shareholders from outside the United Kingdom to bring actions or enforce judgments against Afren or the Directors may be limited.

Admission of the new Ordinary Shares may not occur when expected.

Subject to certain exceptions, the exercise of rights under the Open Offer will not be available to any Shareholders with a registered address in the United States, and such Shareholders may as a result experience dilution of ownership in Afren.

Shareholders who do not acquire Ordinary Shares in the Open Offer will experience a dilution in their ownership of Afren.

Ordinary Shares acquired pursuant to an exemption from the registration requirements of the Securities Act cannot be freely resold in the United States.

The Shares may be delisted from the Official List if the Restructuring results in an insufficient free float in the Shares.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

RESTRUCTURING AND OPEN OFFER STATISTICS

PRESENTATION OF INFORMATION AND NOTICES TO INVESTORS

General

Cautionary note regarding forward-looking statements

Basis of presentation of financial information

Introduction

Non-IFRS financial measures

Rounding adjustments

Profit forecast

Currency and exchange rates

Sourcing of information

Hydrocarbon Data

General

Notice to all investors

Notice to investors in the European Economic Area (other than the UK)