PetroNor E&P ASA

Regulatory Filings • Jul 20, 2017

CORPORATE UPDATE - THE GAMBIA & SENEGAL

CORPORATE UPDATE - THE GAMBIA & SENEGAL

African Petroleum Corporation Limited ("African Petroleum"

or the "Company") provides the following corporate update

covering its licence interests in The Gambia and Senegal,

West Africa:

Highlights

- Exclusivity Agreement allowed to lapse to enable the

Company to engage with other interested parties for the SOSP

licence in Senegal and to provide flexibility in government

discussions regarding the A1 and A4 licences in The Gambia

- Ongoing discussions with Gambian officials to agree a

forward plan for A1 and A4 licences, including meeting with

President Barrow on 13 July 2017

- The Board of African Petroleum reiterates and maintains

its legal position on the A1 and A4 licences in The Gambia,

and reiterates its willingness to utilise dispute resolution

mechanism provisions if the outcome is unfavourable for the

Company

- The Company expects formal feedback from the Gambian

government in early August 2017

- The Company is confident that the Senegalese authorities

will approve the Company's proposal to extend the SOSP

licence, subject to farming out to a suitable partner

Heads of Terms Agreement

Further to the announcement on 7 June 2017 regarding an

extension to the previously announced Exclusivity Agreement

covering the SOSP licence in Senegal, and the A1 and A4

licences in The Gambia, the Company announces that the

parties have mutually agreed to not extend the Exclusivity

Agreement which expired today.

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

Exclusivity Agreement (which regarded both countries as one

transaction) was viewed as too restrictive, as the Company

could not secure the SOSP licence 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 Exclusivity Agreement

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 Gambia

Since the announcements in early July 2017 regarding its A1

and A4 licences in The Gambia, the Company has been engaged

in dialogue with Gambian officials with a view to

identifying a solution that is in the best interest of all

stakeholders. The Company confirms that a local

representative for the Company met with the Minister for

Petroleum and Energy and Permanent Secretary on 6 July 2017,

and a delegation from African Petroleum, including the CEO

and CFO, travelled to The Gambia for a meeting with

President Barrow in Banjul on 13 July 2017.

Further to the meeting with the President and subsequent

dialogue, it is the understanding of the management team

that the government is considering the Company's proposal

regarding the licences and it is anticipated that the

Company will receive formal feedback and clarity on the

situation from the government in early August 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.

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 licence 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 licence and to this

end, the management team will commence discussions with a

number of 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 licence continues to generate industry interest and

the Company hopes to finalise a standalone farm-out

transaction on the SOSP licence shortly in order to enable

the licence extension to be granted.

African Petroleum continues to reserve its rights on the ROP

licence while it negotiates the SOSP extension.

Commenting on the update, African Petroleum's CEO Jens Pace

said:

"After much consideration, we have decided to allow the

Exclusivity Agreement to lapse as we now have more

flexibility to engage in standalone commercial discussions

on our SOSP licence in Senegal whilst we seek to resolve the

uncertainty over our position in The Gambia.

We have continued to engage with the relevant authorities in

The Gambia and had an audience with the President who is

well informed of the situation and understands the measures

that we will take should we not receive a positive outcome

next month. I think the fact that we were granted an

audience with the President highlights that the significant

investment made by the Company in these licences is

recognised by the Gambian government and we hope that sense

will prevail in finding a way forward.

Our near-term focus will be on seeking a positive resolution

on our position in The Gambia whilst concurrently

formalising an agreement for SOSP licence. We know that

there are a number of interested parties who we expect to

engage with in the coming days now that we are no longer

bound by an exclusivity agreement."

For further information, please contact:

Jens Pace, Chief Executive Officer

Stephen West, Chief Financial Officer

Tel: +44 20 3655 7810

Angeline Hicks, Company Secretary

Tel: + 61 401 489 883

Media Contacts:

Buchanan

Ben Romney/Chris Judd

Tel: +44 207 466 5000

About African Petroleum

African Petroleum is an independent oil and gas exploration

company with an equity interest in eight licences in four

countries offshore West Africa (Senegal, The Gambia, Côte

d'Ivoire and Sierra Leone). The Company's assets are located

in proven hydrocarbon basins in the West African Transform

Margin and the Atlantic Margin, where several discoveries

have been made in recent years.

For more information about African Petroleum, please see

www.africanpetroleum.com.au