Extended notice: African Petroleum Corporation Limited (the “Company”, “African
Petroleum”, with OSE ticker: “APCL”) is pleased to announce that the Company has
entered into an agreement to combine with PetroNor E&P Ltd (“PetroNor”) for an
all-share consideration of c. 816 million shares in African Petroleum (the
“Transaction”). PetroNor is a privately owned, Africa focused E&P independent,
that holds a 10.5% indirect interest in the PNGF Sud fields (“PNGF Sud”) and
right to negotiate entry  into a 14.7% indirect interest in an exploration
license covering the PNGF Bis fields (“PNGF Bis”) (collectively the “Congo
Assets”). Subject to shareholder approval, and certain other customary
conditions, African Petroleum will at completion of the Transaction change its
name to PetroNor E&P Limited (the “Combined Company”).

The Transaction is recommended unanimously by the Board of Directors of African
Petroleum and all members of African Petroleum’s Board of Directors and
executive management holding shares in the Company have provided their
pre-commitment to vote for the Transaction in a general meeting expected to be
held in April 2019 (the “EGM”). 

Transaction highlights
· The Company will combine with PetroNor for an all-share consideration of c.
816 million shares in African Petroleum
· The existing African Petroleum shareholders will receive one for one (c. 155
million) warrants to preserve potential upside from the Company’s existing
exploration portfolio in The Gambia and Senegal
· The Transaction transforms the Company from an exploration-focused player into
a cash-flow generating producer with a significant growth profile 
· The Transaction provides the Company with diversified, low risk, long life and
high-quality producing assets, with current net (working interest) production of
c. 2,300 bbl/d and medium-term exploration upside in a well-established
operating jurisdiction
· During 2018, PetroNor generated a post-tax asset cash flow (pre SG&A) of USD
17m based on an average net (working interest) production of 2,127 bbl/d 
· Strengthened ability to preserve and develop the Company’s portfolio in The
Gambia and Senegal through access to PetroNor’s existing cash,future cash flow
and assets with additional debt capacity
· Subject to shareholder approval and satisfaction of all conditions precedent,
the Transaction is expected to close by end of April 2019 
· This is the first step in a renewed strategic focus for the Company that will
aim to steadily build and increase its reserve base while using free cash flow
to pursue defined exploration targets in selected and highly prospective basins.
The PetroNor team has extensive experience doing business in Africa, which,
together with African Petroleum’s public platform, will be used to grow the
Company into a leading African focused E&P independent 

Jens Pace, CEO of African Petroleum and proposed CEO of the Combined Company,
commented:
“This is a truly transformative transaction that diversifies our portfolio
considerably whilst simultaneously strengthening our position with regards to
ongoing arbitration and farm-down processes. We have been proactively seeking
opportunities to diversify our footprint away from pure-exploration, and this
proposed combination with PetroNor delivers all the criteria we sought.  The
combined company will benefit from a proven reserve base generating strong and
predictable cash flow and material upside potential from the Congo assets, as
well as considerable exploration upside from our existing portfolio. We believe
that this proposed transaction is undoubtedly in the best interest of our
shareholders as it will help protect value from our existing portfolio and
provide a much stronger platform from which we can deliver long-term value.”

Transformational acquisition of producing assets 
Through the Transaction, African Petroleum will acquire diversified, low risk,
long life and high quality producing assets with competitive unit costs. PNGF
Sud is operated by Perenco, a well-regarded, efficient operator, who is also
expected to become the operator of PNGF Bis. The Transaction will transform the
Company from a pure-play exploration company into a full cycle E&P company with
material reserves, cash flow and significant upside potential. 
The Congo Assets, which are located in shallow waters offshore Congo
(Brazzaville), have estimated net 2P reserves of  8.5 mmbbl and net production
of approximately 2,300 bbl/d from four fields currently in production, in
addition to net 2C contingent resources of 7.6 mmbbl as at 1 January 2019. In
addition to the Congo Assets, PetroNor is in negotiations regarding the
acquisition of a producing asset offshore Nigeria with significant upside
potential from contingent resources to be developed. Should the Nigeria
acquisition materialize, further information will be provided in due course.

With the continued uncertainty related to African Petroleum’s licenses in The
Gambia and Senegal (the “Existing Assets”), the Transaction will bring much
needed stability and downside protection to the Company, while maintaining
substantial upside potential towards the Existing Assets. Additionally, through
the improved financial strength as well as additional competence, contacts and
resources brought to African Petroleum by PetroNor, the Transaction is expected
to have a positive impact on African Petroleum’s ongoing arbitration and
farm-down processes related to the Existing Assets. Furthermore, following the
Transaction, the Combined Company will generate substantial free cash flow that
can be reinvested into value accretive growth, including, but not limited to,
the Existing Assets. Potential upside from the exploration portfolio is
preserved through issuance of c. 155m warrants to the existing African Petroleum
shareholders. 

About PetroNor
PetroNor is a privately held, Africa focused E&P independent, which is owned 50%
by Petromal Sole Proprietorship LLC (“Petromal”) (economic benefit interest
45.572%) and 50% by NOR Energy AS (“NOR Energy”) (economic benefit interest
54.428%). Petromal is the oil and gas arm of National Holding L.L.C., one of Abu
Dhabi's leading investment groups with interests in industrial, investment,
property, general trading and the oil & gas industry. NOR Energy is a privately
owned oil company with its history from the North Sea and Africa.

PetroNor holds a 10.5% indirect interest in PNGF Sud and has a right under the
umbrella agreement related to PNGF Sud, to in good faith negotiate with the
Republic of Congo an entry into a 14.7% indirect interest in PNGF Bis. Following
finalisation of license terms for PNGF Bis, the Combined Company intends to
enter into a production sharing contract for this license, with Perenco as the
operator.

PetroNor was incorporated in Cyprus as a limited liability Company on 3 April
2017. PetroNor has twelve employees. The Board of Directors of PetroNor consists
of Eyas Alhomouz as Chairman (CEO of Petromal), Knut Søvold, Gerhard Ludvigsen
and Hawary Marshad. 

As of 31 December 2018, PetroNor is estimated to have cash and cash equivalents
of USD 6.5 million and debt of USD 10 million. The debt carries an interest rate
of  1-month LIBOR +10%, has a maturity date of May 2020 and amortizes in monthly
instalments.  

The Congo Assets
The Congo Assets are located approximately 25km off the coast of Pointe Noire in
water depths of 80-100 metres. PetroNor, through its subsidiary Hemla E&P Congo
(“HEPCO”) participated in the 2016 tender process with the Congo Ministry of
Petroleum for participation in the PNGF Sud license (brown field), and was as of
1 January 2017 awarded a 20% working interest (net 10.5% to PetroNor) and a
right to negotiate an entry into an exploration license for the PNGF Bis fields
(28% working interest – 14.7% net to PetroNor). Perenco is the operator and
largest license holder in PNGF Sud and is expected to become the operator and
largest license holder of PNGF Bis, subject to the conclusion of the license
negotiations.
 
PNGF Sud
Based on a competent persons report with effective date 1 January 2018 and
prepared by AGR Petroleum Services in October 2018, PNGF Sud is estimated to
hold net 2P reserves as at 1 January 2019 of 8.5 mmbbl (adjusted for 2018
production of 0.8 mmbbl) and 2C contingent resources of 3.4 mmbbl. 

Initially discovered in 1979, PNGF Sud commenced production in 1987 and is
currently producing c. 21,600 bbl/d gross from four oil fields; Tchibouela,
Tchendo, Tchibeli and Litanzi. Following the entry of the new license group in
2017, significant operational improvements have been made, increasing gross
production from c. 15,000 bbl/d in January 2017 to today’s level, and reducing
operating costs from circa 26 USD/bbl to current level of less than 11 USD/bbl.
The production increase has mainly been driven by work-overs of existing wells
and been achieved by minor investments of USD 30 million gross. Through further
work-overs, surface and process improvements and infill drilling, gross
production from PNGF Sud is expected to continue to grow in the coming years.

The PNGF Sud fields are developed with seven wellhead platforms and currently
produce from more than 50 active production wells, with oil exported via the
onshore Djeno terminal (Tchibouela, Tchendo and Tchibeli) and the Nkossa FPSO
(Litanzi). With its long production history, substantial well count and
extensive infrastructure, PNGF Sud offers well diversified and low risk
production and reserves with low break-even. 

PNGF Bis
Through an umbrella agreement associated with the PNGF Sud license, the PNGF Sud
license partnership has the right to, in good faith, negotiate with the Republic
of Congo, license terms to enter into PNGF Bis, where PetroNor is expected to
have a 14.7% indirect interest (i.e. its pro-rata share of participants in the
license negotiations). Following finalization of license terms for PNGF Bis, the
Combined Company intends to enter into the license. PNGF Bis is located to the
west of PNGF Sud and contains two undeveloped discoveries, Loussima and Loussima
SW, discovered in 1985 and 1987/1991 respectively. Loussima SW is estimated to
hold net 2C contingent resources of 4.2 mmbbl. 
Early production from PNGF Bis is targeted through an extended test production
of Loussima SW, estimated to commence in 2020 through the use of an existing
mobile offshore production unit. At an estimated gross capex of USD 37 million
and 1.9 mmbbl gross recoverable resources, the PNGF Bis test production is
expected to both generate positive stand-alone economics and substantially
de-risk a full field development. Further development of PNGF Bis is conditional
upon the results of the test production, but based on current estimates,
economics are very robust with estimated gross 2C resources of 29 mmbbl and
expected capex of less than 10 USD/bbl.  

REFER TO ATTACHED PDF FOR TABLE		

As per 1.1.2019 – CPR by AGR Petroleum Services, reserves and resources per
1.1.2018 adjusted for 2018 production 

 
Key financial information
The table below sets forth key financial information (unaudited) for PetroNor
E&P Ltd on a consolidated basis for the financial year ended 31 December 2017
and 2018.

Selected consolidated financial information PetroNor Ltd
			
REFER TO ATTACHED PDF FOR TABLE	 		 

Corporate update African Petroleum
As of 1 March 2019, African Petroleum had a cash balance of USD 5.3 million (30
June 2018: USD 9.4 million). The cash burn rate since 30 June 2018 has been
affected by certain non-recurring costs and is not reflective of the Company’s
expected burn rate going forward.

The Combined Company
The Combined Company’s vision is to be a full-cycle, Africa focused E&P company
focusing on producing assets with upside and development of stranded assets,
combined with targeted high impact exploration. The Combined Company will aim to
steadily build and increase its reserve base and production while using free
cash flow to pursue defined exploration targets in selected and highly
prospective basins with a view to delivering significant value to its
shareholders from high impact wells. With the enhanced financial strength, the
Combined Company seeks to rigorously protect its position in The Gambia and
Senegal through reinstatement of its licenses and subsequent farm-outs to ensure
drilling of wells without exposing the balance sheet of the Combined Company.

Transaction details and consideration
The Transaction is structured as a sale to African Petroleum of all issued and
outstanding shares in PetroNor against a consideration in the form of
816,198,842 shares in African Petroleum (the “Base Consideration”). As part of
the relative values applied for the Transaction, existing shareholders of
PetroNor will be entitled to receive the accrued dividends related to the
financial year 2018.

In conjunction with the Transaction, existing shareholders of African Petroleum
as of the date of the EGM, as reflected in the shareholder register on a
customary T+2 basis (“Record Date”), will, subject to approval by the EGM,
receive one (1) warrant per existing share held in the Company, in total
155,466,446 warrants (the “APCL Warrants”). Key information regarding the record
date for the right to receive APCL Warrants will be provided as soon as this is
available, and no later than at the time of the notice of the EGM.

The APCL Warrants will vest upon (x) either (a) the reinstatement of the A1 and
A4 licenses in Gambia or (b) the reinstatement of the SOSP license in Senegal,
whichever comes first, and (y) a farm-in agreement to such license(s) being
signed and legally binding, where the Company will be fully carried for the
current phase work program under the license(s), on commercially acceptable
terms approved by the Company Board (the “APCL Warrants Vesting Event”). The
APCL Warrants will lapse without compensation to the holder(s) if the APCL
Warrants Vesting Event has not occurred by 31 December 2019. The APCL Warrants
will not be listed or tradable and shares issued pursuant to the APCL Warrants
will not be listed or tradable until the APCL Warrants Vesting Event has
occurred and the APCL Warrants have been exercised accordingly.

Additionally, PetroNor shareholders (being Nor Energy and Petromal) will receive
in total 155,466,446 warrants related to a business development opportunity
offshore Nigeria which is in advanced phase of negotiations (the “PetroNor
Warrants”). The PetroNor Warrants will vest upon (x) a signed
acquisition/farm-in agreement for a gas asset in Nigeria, and (y) a signed and
legally  binding gas offtake agreement relating to the gas from such asset, both
agreements on commercially acceptable terms approved by the Company Board (the
“PetroNor Warrants Vesting Event”). The PetroNor Warrants will lapse without
compensation to the holder(s) if the PetroNor Warrants Vesting Event has not
occurred by 31 December 2019. The PetroNor Warrants will not be listed or
tradable and shares issued pursuant to the PetroNor Warrants will not be listed
or tradable until the PetroNor Warrants Vesting Event has occurred and the
PetroNor Warrants have been exercised accordingly.

In addition, 15,740,000 existing options issued to Board, management and
consultants of African Petroleum will be replaced with 8,513,848 new performance
options with the same vesting conditions as the APCL Warrants (the “APCL
Replacement Performance Options”).
 
Following the Transaction, African Petroleum will have a total of 971,665,288
outstanding shares and 322,817,378 warrants and options, whereof existing
shareholders of African Petroleum will hold 155,466,446 outstanding shares and
155,466,446 warrants, and existing African Petroleum Board, management and
consultants will hold 8,513,848 APCL Replacement Performance Options. Prior to
the exercise of any warrants, existing shareholders of APCL will hold 16% of the
shares of the Company and existing shareholders of PetroNor will hold 84% of the
shares. 

The below table sets out the warrants and options which will be in issue in the
Combined Company as per completion of the Transaction:

REFER TO ATTACHED PDF FOR TABLE	
 
Post exercise of all warrants and options (excluding options under any employee
incentive program which is expected to be proposed for approval by the
shareholders post-closing of the Transaction), existing shareholders and option
holders of APCL will hold ~24.9% of the shares of the Company and existing
shareholders of PetroNor will hold ~75.1%. Following completion of the
transaction, a new incentive program for management and employees will be
established. 
In connection with the Transaction, each of NOR Energy, Petromal as well as the
CEO and CFO of African Petroleum have undertaken a six month lock-up on
customary terms for all of their shares to the benefit of the Combined Company.
Other than the granting of the PetroNor Warrants and Performance Warrants, no
agreements have or will be entered into in connection with the transaction for
the benefit of the Company’s senior employees or members of the board of
directors or for the senior employees or board of directors of PetroNor.

Timing and conditions precedent
The Company has commenced the process to obtain an independent expert report
(the “Expert Report”) as required pursuant to the Australian Corporations Act,
following which the Company will summon the EGM in order to obtain the approvals
required for consummation of the Transaction. The Expert Report will be attached
to the calling notice for the EGM. The shareholders’ approval required will
include an approval in accordance with s611 item 7 of the Australian
Corporations Act of 2001 to permit the acquisition of a controlling stake in the
Company. As an Australian domiciled company subject to take-over regulations
which conflicts with the Norwegian take-over regulations as set out in chapter 6
of the Norwegian Securities Trading Act, African Petroleum has been granted an
exemption from the Norwegian take-over rules from the Oslo Stock Exchange.
Consequently, the Transaction will not trigger a mandatory offer pursuant to the
Norwegian take-over rules.

The Transaction is subject to customary closing conditions, including:
· Approval by the shareholders of African Petroleum eligible to vote at the EGM
with requisite majority (greater than 50% of shareholders voting at the EGM),
including approval of the acquisition of a relevant interest in the Company by
Petromal and NOR Energy and issuance of the warrants;
· A confirmation by the Oslo Stock Exchange that the listing status of African
Petroleum will be maintained following completion of the Transaction;
· No Material Adverse Effect with respect to PetroNor or its business having
occurred; and
· No Material Adverse Effect with respect to African Petroleum having occurred. 
Subject to completion of all conditions precedent, the parties expect that the
Transaction will complete by end of April 2019. The Transaction is subject to a
six month long stop date from the date of signing of the Agreement.

Organizational changes
Following completion of the Transaction, the parties have agreed that Jens Pace
will continue as the Chief Executive Officer, Stephen West will continue as the
Chief Financial Officer and Michael Barrett will continue as Exploration
Director. The co-founders of PetroNor, Knut Søvold and Gerhard Ludvigsen, will
become Chief Operating Officer and Business Development Manager respectively,
and Claus Frimann-Dahl will be appointed Chief Technical Officer. 
Furthermore, it will be proposed to the shareholders of African Petroleum that
Eyas Alhomouz (representing Petromal), Knut Søvold (representing NOR Energy) and
Joseph Iskander (representing Petromal) be appointed directors of the Combined
Company. Further, it is proposed that on his appointment to the Board of
Directors, Eyas Alhomouz will assume the role of Chairman. Jens Pace, Stephen
West, Bjarne Moe, David King, and Timothy Turner will remain board members
following completion of the Transaction. Further details about the new directors
will be provided in the notice of the EGM.

The Transaction will trigger requirements pursuant to Oslo Børs’ Continuing
Obligations to provide an Information Document, which will include pro forma
financial information. The Information Document will be published prior to
completion of the Transaction, and in no event later than 30 Oslo Børs' trading
days after the date of the EGM. It is, however, expected that the Information
Document will be published prior to the EGM.

A corporate presentation is available on African Petroleum’s website
http://www.africanpetroleum.com.au/ and the CPR prepared by AGR Petroleum
Services will be available upon request. African Petroleum will hold a press
conference at 16.30 CET today at Felix Konferansesenter, Bryggetorget 3, 0250
Oslo. The presentation can also be viewed at the following website:
http://webtv.hegnar.no/presentation.php?webcastId=97819344. Following the press
conference, a recording of the press conference will be made be available on
African Petroleum’s website http://www.africanpetroleum.com.au/ 

This announcement is made pursuant to section 5-12 of the Securities Trading Act
as well as section 3.4 of the Continuing Obligations for companies listed on
Oslo Stock Exchange and Oslo Axess.

Pareto Securities AS acts as Financial Advisor and Arntzen de Besche
Advokatfirma AS acts as legal advisor to African Petroleum in relation to the
Transaction. Arctic Securities AS acts as Financial Advisor and Advokatfirmaet
Schjødt AS acts as legal advisor to PetroNor in relation to the Transaction. 

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 

About African Petroleum
African Petroleum is an independent oil and gas exploration company with license
interests in offshore West Africa (Senegal and The Gambia). The Company’s assets
are located in proven hydrocarbon basins in the Atlantic Margin, where several
discoveries have been made in recent years. 

For more information about African Petroleum, please see
www.africanpetroleum.com.au

IMPORTANT INFORMATION 
This release does not constitute an offer, invitation or solicitation of an
offer to buy, subscribe or sell any shares in the Company. The distribution of
this release in certain jurisdictions is restricted by law. This release is not
for distribution or release, directly or indirectly, in or into any jurisdiction
in which the distribution or release would be unlawful. Matters discussed in
this release may contain certain forward-looking statements relating to the
business, financial performance and results of the Company and/or the industry
in which it operates, Forward-looking statements concern future circumstances
and results and other statements that are not historical facts, sometimes
identified by the words "believes", expects", "predicts", "intends", "projects",
"plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar
expressions. Any forward-looking statements contained in this release, including
assumptions, opinions and views of the Company or cited from third party sources
are solely opinions and forecasts which are subject to risks, uncertainties and
other factors that may cause actual events to differ materially from any
anticipated development. Neither the Company nor any of its subsidiary
undertakings or any such person's affiliates, officers or employees provides any
assurance that the assumptions underlying such forward-looking statements are
free from errors, nor do any of them accept any responsibility for the future
accuracy of the opinions expressed in this release or the actual occurrence of
the forecasted developments. The Company assumes no obligation to update any
forward-looking statements or to confirm these forward-looking statements to our
actual results.