PetroNor E&P ASA

Earnings Release • Aug 31, 2017

UNAUDITED FINANCIAL REPORT FOR THE HALF YEAR ENDED 30 JUNE 2017

UNAUDITED FINANCIAL REPORT FOR THE HALF YEAR ENDED 30 JUNE 2017

Please find enclosed African Petroleum Corporation Limited's

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

for the half year ended 30 June 2017.

HIGHLIGHTS

- The Ayamé-1X exploration well was spudded on 29 April 2017 on

the CI-513 licence (Ophir Energy (Operator) 45%, African Petroleum

45%, Petroci 10%) in Côte d'Ivoire using the Seadrill West Saturn

drillship, targeting Santonian and Turonian turbidite channel

complexes through a water depth of 2,835 metres. On 15 May 2017

the Company announced the Ayamé-1X well had reached total depth of

5,394m TVDSS. Oil shows were recorded in the target reservoirs

but significant hydrocarbons were not encountered and the well was

plugged and abandoned as a dry hole.

- On 23 January 2017 the Company completed a private placement to

raise NOK 26,675,000 (approx. US$ 3.1 million) (before costs)

through the issue of 10,670,000 new fully paid ordinary shares at

a price of NOK 2.50 per share.

- The Company completed a further private placement on 12 May 2017

to raise NOK 257,687,500 (approx. US$ 30 million) (before costs)

through the issue of 33,250,000 new fully paid ordinary shares at

a price of NOK 7.75 per share.

- On 18 April 2017 the Company announced the signing of a non-

binding heads of terms and binding exclusivity agreement ("Heads

of Terms Agreements") with a well-funded, listed oil and gas

company with a strong track record in offshore deep-water

drilling. The agreements provided a framework for the incoming

party to secure a 70% operated interest in the Company's SOSP PSC

(Senegal) and the A1 and A4 licences (The Gambia).

- Post period end, on 20 July 2017 African Petroleum announced

that the parties had mutually agreed to not extend the Heads of

Terms Agreements and to allow them to expire. The Company

considered it to be in the best interests of the Company to allow

the agreements to lapse, thereby enabling the Company to enter

into discussions with other interested parties in its SOSP Licence

in Senegal whilst it seeks to resolve the situation in The Gambia.

- The Company continued meetings and discussions with the

government of The Gambia regarding the A1 and A4 licence terms and

obligations, including meetings with President Barrow on 19

February 2017 and 13 July 2017. The Company has reiterated its

firm position over its legal rights to the A1 and A4 licences in

The Gambia. As at the date of this report, the Company has not

received formal feedback from the government regarding the

Company's proposal on the licences and accordingly the Company is

finalising the necessary legal preparations to utilise the dispute

resolution provisions of the licences in order to protect African

Petroleum's legal rights.

- Approximately US$16.1 million cash at bank as at 30 June 2017,

together with US$2.0 million restricted cash.

- On 19 January 2017 the Company appointed BDO Audit (WA) Pty Ltd,

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

as auditor of the Company.

COMPANY BACKGROUND

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

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

oil and gas exploration company led by an experienced Board and

management team, with substantial experience in oil and gas

exploration, appraisal, development and production. The Company is

a significant net acreage holder in West Africa with estimated net

unrisked mean prospective oil resources in excess of 7.4 billion

barrels.

African Petroleum has equity interests in eight licences across

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

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

proven hydrocarbon basins, where several discoveries have been

made in recent years.

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

its existing licences and has participated in the drilling of four

exploration wells in West Africa.

CEO STATEMENT

"It has undoubtedly been an eventful first half of the year in

terms of operational and corporate activity. We were pleased to

complete a Private Placing in May which enabled the Company to

return to drilling activities in Côte d'Ivoire alongside our

partner Ophir Energy, as well as providing us with the necessary

resources to enable more flexibility and optionality with regards

to our ongoing potential partner discussions across our portfolio.

The well in Côte d'Ivoire was ultimately unsuccessful; however, we

continue to work with our partner in analysing the data in terms

of future activity, and were pleased that the well was completed

ahead of schedule and under budget. Whilst the results were not

what we were hoping for, it was pleasing to return to exploration

drilling activity as this is the essence of our company and

something we look forward to continuing throughout the coming

years.

Our assets in The Gambia and Senegal continue to attract a high

level of industry attention, driven by their proximity to

significant recent discoveries in what is widely regarded as one

of the most exciting hydrocarbon basins in the world. We were

pleased to announce that we had signed a Heads of Terms Agreement

("HoT") with a prospective partner for SOSP in Senegal and A1 and

A4 in The Gambia. The terms were conditional on the Company

obtaining the necessary amendments to the licences and, post-

period in July, the rhetoric from The Gambian government in terms

of these amendments was not in line with the previous dialogue

that we had maintained with them. As a result, we took the

decision that it was best for both companies to allow the

exclusivity on the HoT to expire in order to unbundle the

Senegalese and Gambian assets and allow us to engage with

interested parties with regards to SOSP in a standalone basis

whilst we seek clarification on the situation in The Gambia. We

are confident that we will receive approval from the Senegalese

authorities on our proposal to extend the SOSP licence, subject to

farming out to a suitable partner.

We have made progress in our discussions with the Gambian

officials and recently had an audience with President Barrow

during which we reaffirmed our position in terms of being the

rightful and legal owner of the A1 and A4 licences. We also

emphasised in no uncertain terms that we would be sure to utilise

dispute resolution mechanism provisions for the licence should the

Government not consider the amendments that we are seeking.

Having invested over $60 million dollars into The Gambia as an

early stage investor and operator, and played a significant role

in developing the industry there, we believe that our argument is

strong and our dialogue with the most senior officials in country

recognises this position. It is clearly not in the interest of

the Company nor the Government for the situation to descend into a

legal dispute and we hope that sense will prevail and we will

obtain the approvals that we seek. However, as of the time of

preparing this statement, the Company has not received formal

feedback from the government regarding the Company's proposal on

the licences and accordingly the Company is finalising the

necessary legal preparations to utilise the dispute resolution

provisions of the licences in order to protect our legal rights.

We appreciate that this situation has been concerning for

shareholders and we are fully committed to transparent

communication to ensure shareholders are well informed of what has

been a rather fluid situation. In return, we hope that

shareholders appreciate that there are commercial and legal

sensitivities that restrict a lot of what we can say on this

matter, and ultimately, we are not in control of the timelines or

outcomes. Our sole intention is to protect shareholder value and

seek a return on the substantial historic investment that we have

made in the country to date and we will do everything in our power

to ensure we can do this.

In summary, the year to date has been a busy period with mixed

outcomes. We remain fully focussed on delivering successful

outcomes in terms of our ongoing discussions and, as evidenced by

the previous HoT that we signed, we know that there is significant

demand for our acreage and we will be well placed to deliver value

accretive deals as and when we obtain the necessary approvals we

require from the officials in The Gambia and Senegal. We thank

our shareholders for their patience and look forward to updating

on material events in the second half of this year."

OPERATIONAL & CORPORATE UPDATE

AYAME-1X EXPLORATION WELL - COTE D'IVOIRE

On 29 April 2017 the Ayamé-1X exploration well was spud on the CI-

513 licence (Ophir Energy (Operator) 45%, African Petroleum 45%,

Petroci 10%) in Côte d'Ivoire using the Seadrill West Saturn

drillship. The Ayamé-1X well was targeting Santonian and Turonian

turbidite channel complexes through a water depth of 2,835 metres.

On 15 May 2017 the Company announced that the Ayamé-1X exploration

well had reached total depth of 5,394m True Vertical Depth Sub

Sea. Oil shows were recorded in the target reservoirs but

significant hydrocarbons were not encountered and the well was

plugged and abandoned as a dry hole.

Ophir Energy completed the well safely and under budget with a

final gross cost of approximately US$19 million.

Work is now underway to incorporate the Ayamé-1X exploration well

results into the Company's views of the prospect inventory in the

area. The well encountered good reservoir sands with oil shows,

and so potential traps up-dip are being examined in detail. This

includes a recalibration of the 3D seismic using the petrophysical

data acquired from the well.

FARM OUT PROCESS

African Petroleum seeks to build on the success of attracting

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

d'Ivoire in 2016 by forming other strategic partnerships to

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

Gambia, and Sierra Leone. The strategy, supported by detailed

technical work and prospect definition, is to use the significant

equity held in this prospective portfolio to fund a high impact

exploration drilling campaign. The industry interest in The Gambia

and Senegal licences in particular, due to the regional context of

hydrocarbon discoveries being made in adjacent blocks in this part

of the Atlantic Margin, provides management with confidence that

agreements will be concluded in due course.

Heads of Terms Agreements

On 18 April 2017 the Company announced the signing of a non-

binding heads of terms and binding exclusivity agreement ("Heads

of Terms Agreements") with a well-funded, listed oil and gas

company with a strong track record in offshore deep-water

drilling. The agreements provided a framework for the incoming

third party to secure a 70% operated interest in the Company's

SOSP production sharing contract ("PSC") in Senegal and the A1 and

A4 licences in The Gambia.

Post period end, on 20 July 2017 African Petroleum announced that

the parties had mutually agreed to not extend the Heads of Terms

Agreements and to allow them to expire.

Due to recent developments whereby the Senegalese authorities have

expressed a willingness to proceed with the SOSP licence extension

upon the Company securing a farm-out, and the delays being

experienced in The Gambia, the Heads of Terms Agreements (which

regarded both Senegal and The Gambia as one transaction) was

viewed as too restrictive, as the Company could not secure the

SOSP PSC extension without first resolving the situation in The

Gambia.

Accordingly, the Company considered it to be in the best interests

of the Company to allow the Heads of Terms Agreements to lapse,

thereby enabling the Company to enter into discussions with other

interested parties in its SOSP PSC in Senegal whilst it seeks to

resolve the situation in The Gambia.

The Gambia

During the first half of 2017 the Company continued meetings and

discussions with the Government of The Gambia regarding the A1 and

A4 licence terms and obligations.

In February 2017, a delegation from the Company travelled to The

Gambia to attend the 52nd Independence Anniversary Celebrations

and Inauguration of His Excellency Mr Adama Barrow, President of

the Republic of The Gambia, and to hold a private meeting with

President Barrow.

Post period end, a delegation from African Petroleum, including

the CEO and CFO, travelled to The Gambia for a further meeting

with President Barrow in Banjul on 13 July 2017.

The Company has reiterated its firm position over its legal rights

to the A1 and A4 licences in The Gambia and has communicated to

the government that it will utilise the dispute resolution

mechanism provisions of the licences should the outcome of the

government's decision not be favourable to the Company.

The Company has invested over US$64 million in The Gambia under

the licences, has undertaken extensive technical analysis of the

oil resources and remains committed to the exploration and

development of the licenced areas.

As at the date of this report, the Company has not received formal

feedback from the government regarding the Company's proposal on

the licences and accordingly the Company is finalising the

necessary legal preparations to utilise the dispute resolution

provisions of the licences in order to protect African Petroleum's

legal rights.

In the meantime, the Company has been approached by other industry

players that are interested to join the Company in the A1 and A4

licences when the situation with the Gambian government is

resolved.

Senegal

The Senegalese authorities are currently considering the Company's

proposal to extend the SOSP PSC for a period of 18-24 months in

order to allow additional time to acquire 3D seismic and to drill

an exploration well on the block.

Any such extension is conditional on African Petroleum bringing in

a suitable partner on the PSC and to this end, the management team

commenced discussions with companies who had expressed interest in

farming into SOSP but were restricted from entering into

commercial negotiations as a result of the Exclusivity Agreement

that had been in place since mid-April 2017.

The SOSP PSC continues to generate industry interest and the

Company hopes to finalise a standalone farm-out transaction on the

SOSP PSC shortly in order to enable the licence extension to be

granted.

African Petroleum continues to reserve its rights on the ROP PSC

while it negotiates the SOSP extension.

LICENCE PHASES

African Petroleum is actively engaged in discussions with a number

of governments regarding possible licence extensions and

amendments to existing and future work obligations. The Company

maintains strong relationships with host governments founded upon

recognition of the Company's efforts to progress the exploration

of these licences. Based on the dialogue experienced to date with

the governments of Senegal, The Gambia, Côte d'Ivoire and Sierra

Leone, we are confident that we will achieve outcomes that are

mutually beneficial for our host countries, potential industry

partners and African Petroleum.

Please refer to the next section "Licence Information" for further

information on specific licences.

PRIVATE PLACEMENTS

On 23 January 2017 the Company completed a private placement to

certain existing and new investors to raise NOK 26,675,000

(approximately US$ 3.1 million) (before costs) through the issue

of 10,670,000 new fully paid ordinary shares at a price of NOK

2.50 per share.

On 12 May 2017 the Company completed a further private placement

to certain existing and new investors to raise NOK 257,687,500

(approximately US$ 30 million) (before costs) through the issue of

33,250,000 new fully paid ordinary shares at a price of NOK 7.75

per share.

The proceeds from the two private placements were used to

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

fund the Company's ongoing exploration program, including the

Ayamé-1X exploration well drilled in Côte d'Ivoire in May 2017, as

well as for working capital and for general corporate purposes.

CHANGE IN AUDITOR

On 19 January 2017 the Company appointed BDO Audit (WA) Pty Ltd

("BDO"), a member firm of BDO International Ltd, as auditor of the

Company. BDO were selected to replace Ernst & Young as the

Company's auditors for the financial year ending 31 December 2016

and subsequent financial years on the basis that BDO are more

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

continued strategy to reduce corporate costs.

LICENCE INFORMATION

Côte d'Ivoire: Blocks CI-509 & CI-513

In Côte d'Ivoire, African Petroleum holds:

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

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

d'Ivoire. The Company was awarded CI-509 in March 2012; and

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

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

10% held by Petroci. A new PSC for CI-513 was signed in December

2015 and became effective in March 2016.

The two licence interests have a combined net acreage of 1,633km2.

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

the Company has not received a formal notice of termination and

the Company remains in positive dialogue regarding the proposed

suspension of the licence to enable sufficient time for a regional

technical study and the introduction of a new partner by the

Company, at which point it is anticipated the licence will be

renewed.

Independent petroleum consultant ERC Equipoise prepared an

assessment of prospective oil resources attributable to the

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

mean prospective oil resources at 1,273MMStb (adjusted for Ophir

Energy's 45% interest in CI-513).

Senegal: Rufisque Offshore Profond & Senegal Offshore Sud Profond

In Senegal, African Petroleum Senegal Limited holds a 90% operated

working interest in exploration blocks Rufisque Offshore Profond

("ROP") and Senegal Offshore Sud Profond ("SOSP"). The National

Oil Company Petrosen, holds the remaining 10% equity. The

Company's Senegal production sharing contracts ("PSC") are located

offshore southern and central Senegal, with a net acreage of

14,216km2.

The current phase of the ROP PSC ended in October 2015; however,

the Company has lodged a request for an extension with the

Government of Senegal. Under the terms of the ROP PSC the block

remains active unless and until a termination procedure is enacted

by the Republic of Senegal. To date, the Republic of Senegal has

not validly enacted such termination procedure, and accordingly

the Company reserves its rights under the ROP PSC.

The Company was required to elect whether to continue with the

current phase of the SOSP PSC in June 2016 by committing to the

drilling of an exploration well; however, the Company has not

elected to commit to the drilling of the exploration well and has

entered into dialogue regarding the possible amendment of this

licence commitment.

Independent petroleum consultant ERC Equipoise prepared an

assessment of prospective oil resources attributable to the

Company's Senegal PSCs and estimates the net unrisked mean

prospective oil resources at 1,779MMStb.

The Gambia: Blocks A1 & A4

African Petroleum holds a 100% operated working interest in

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

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

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

prospects in its acreage to that of the recent SNE and FAN

discoveries drilled by Cairn Energy in Senegal.

The current phase of the A1 and A4 licences required the Company

to drill an exploration well on either of the licences no later

than 1 September 2016. The Company was unable to meet this

drilling commitment and is in dialogue with the Government of The

Gambia regarding the transfer of the outstanding drilling

commitment into the next phase and entry into the next phase of

the licences.

The terms of the licences state that the licences remain active

unless and until a termination procedure is enacted by the

government. No such termination procedure has been enacted by the

government and African Petroleum therefore reserves its legal

rights over the licences.

Independent petroleum consultant ERC Equipoise prepared an

assessment of prospective oil resources attributable to the

Company's Gambian licences and estimates the net unrisked mean

prospective oil resources at 3,079MMStb.

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

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

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

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

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

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

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

to the south of Freetown, offshore Sierra Leone.

On 4 August 2016 the Company received formal ratification from the

authorities in Sierra Leone for the entry into the First Extension

Period on the SL-03 licence. As previously announced in December

2015, the Petroleum Directorate agreed to modify the work

programme, minimum expenditure requirements and social obligations

in favour of the Company during the First Extension Period on the

licence.

The current phase of the SL-4A-10 licence ended in September 2015,

having fulfilled the commitment to acquire 3D seismic over the

licence. On 23 November 2016 the Company reached agreement with

the Government of Sierra Leone to proceed into the First Extension

Period of the SL-4A-10 licence and to modify the work programme,

minimum expenditure requirements and social obligations in favour

of the Company during the First Extension Period on the licence.

The Company is continuing discussions with the government on

formalising the way forward.

Independent petroleum consultant ERC Equipoise prepared an

assessment of prospective oil resources attributable to the

Company's Sierra Leone licences and estimates the net unrisked

mean prospective oil resources at 1,354MMStb.

HEALTH, SAFETY, ENVIRONMENT AND SECURITY

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

Petroleum to provide a safe working environment and minimise any

adverse impact on the environment. Health, safety, environment

and security policies are embedded throughout all of the Company's

core operations. In this regard, we strive for continuous

improvement as lessons learnt from past operations are

incorporated into business practices going forward.

PRINCIPAL RISKS AND UNCERTAINTIES

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

operates in an inherently risky sector. Oil and gas prices are

subject to volatile price changes from a variety of factors,

including international economic and political trends, expectation

of inflation, global and regional demand, currency exchange

fluctuations, interest rates and global or regional consumption

patterns. These factors are beyond control of the Company and may

affect the marketability of oil and gas discovered. In addition,

the Company is subject to a number of risk factors inherent in the

oil and gas upstream industry, including operational and technical

risks, reserve and resource estimates, risks of operating in a

foreign country (including economic, political, social and

environmental risks) and available resources. We recognise these

risks and manage our operations in order to minimise our exposure.

OUTLOOK

African Petroleum is currently in the midst of some material

events, the outcomes of which will better define the outlook for

the Company in the near-term and beyond. The Company was guided

by the authorities in The Gambia that it would receive

clarification on the situation regarding the A1 and A4 licences in

August. However, as at the date of this report, the Company has

not received formal feedback from the government regarding the

Company's proposal on the licences and accordingly the Company is

finalising the necessary legal preparations to utilise the dispute

resolution provisions of the licences in order to protect African

Petroleum's interest and historic investments in the licences.

Our ongoing dialogue with the Senegalese authorities is positive

with regards to our proposal to obtain an extension on SOSP and we

are confident that we will receive the required approval that will

enable us to bring in a suitable partner on the licence. We would

hope to secure a firm commercial agreement in the months following

receipt of government approval.

As of the date of preparing this report, the Company's near-term

outlook is set to be impacted by a number of catalysts that are

outside of the management team's control and timing. That said,

based on our current dialogue and the historic investment that we

have made in these core assets within our portfolio, we are

confident in our position and are preparing appropriate strategies

for the various possible scenarios. In the success case, we would

be hopeful of finalising commercial agreements and planning the

roadmap towards a number of high-impact exploration wells in the

next couple of years.

STATEMENT OF RESPONSIBILITY

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

of unaudited financial statements for the first half of 2017,

which has been prepared in accordance with IAS34 Interim Financial

Statements, provides a true and fair view of the Company's

consolidated assets, liabilities, financial position and results

of operations, and that the management report includes a fair

review of the information required under the Norwegian Securities

Trading Act section 5-6 fourth paragraph.

For further information, please contact:

Jens Pace, Chief Executive Officer

Stephen West, Chief Financial Officer

Tel: +44 20 3655 7810

Media Contacts:

Buchanan

Ben Romney/Chris Judd

Tel: +44 207 466 5000

This information is subject to disclosure requirements pursuant to

section 5-12 of the Norwegian Securities Trading Act.