Addax Petroleum announces record results for 2007



    
    -   59 per cent increase in Funds Flow From Operations to $1,319 million
    -   98 per cent increase in Net Income to $482 million
    -   40 per cent increase in Production to 125.9 Mbbl/d
    -   26 per cent increase in Proved plus Probable Reserves to 446.7 MMbbl
    

    CALGARY, March 13 /CNW/ - Addax Petroleum Corporation ("Addax Petroleum"
or the "Corporation") (TSX:AXC and LSE:AXC), today announced its results for
the year ended December 31, 2007. The financial results are prepared in
accordance with Canadian GAAP and the reporting currency is US dollars. In
addition, the Corporation is announcing an increase to its 2008 capital
expenditure budget.
    This announcement coincides with the filing with the Canadian and U.K.
securities regulatory authorities of Addax Petroleum's Audited Consolidated
Financial Statements for the year ended December 31, 2007 and related
Management's Discussion and Analysis, as well as Addax Petroleum's Annual
Information Form. Copies of these documents may be obtained via www.sedar.com,
www.londonstockexchange.com and the Corporation's website,
www.addaxpetroleum.com.
    A conference call will be held for analysts and investors today Thursday,
March, 13 at 12:00 p.m. (noon) Eastern Time/4:00 p.m. London, U.K. Time. Full
details can be found at the end of this announcement.

    CEO's Comment

    Commenting today, Addax Petroleum's President and Chief Executive
Officer, Jean Claude Gandur, said: "I am extremely pleased to report that
Addax Petroleum's 2007 performance continues our track record for delivering
results and demonstrates record achievements in all aspects of our business.
During the year, Addax Petroleum advanced its operations in all regions with
significant increases in every financial and operational metric, including
continued strong production growth in our two core areas of Nigeria and Gabon.
Addax Petroleum's successful 2007 appraisal campaign in the rapidly developing
Kurdistan Region of Iraq was a major accomplishment for the company and is
expected to translate into first commercial oil production in 2008. During
2007, Addax Petroleum also built substantially on our world-class exploration
portfolio, particularly in the deepwater Gulf of Guinea. We look to accelerate
future reserves growth through an aggressive exploration program in 2008 and
the coming years. I would like to thank our employees, management, board of
directors, business partners and shareholders for their support and
contribution to Addax Petroleum's outstandingly successful 2007."

    
    Selected Financial Highlights

    -   Petroleum sales before royalties in 2007 amounted to $3,412 million,
        an increase of 68 per cent over petroleum sales before royalties of
        $2,029 million in 2006. The increase in petroleum sales before
        royalties was primarily driven by a 40 per cent increase in average
        gross working interest oil production. An increase of 15 per cent in
        average crude oil sales price in 2007 to $72.94 per barrel (/bbl) as
        compared to $63.40/bbl realized in 2006 also contributed
        significantly to the year on year growth in petroleum sales before
        royalties.

    -   Funds Flow From Operations for 2007 increased 59 per cent to
        $1,319 million ($8.49 per basic share) compared to $829 million
        ($5.80 per basic share) in 2006.

    -   Net income for 2007 increased 98% to $482 million ($3.10 per basic
        share) compared to $243 million ($1.70 per basic share) in 2006.

    -   Capital expenditures excluding acquisition considerations, farm-in
        fees and license signature fees increased by 43 per cent to
        $1,147 million in 2007 from $802 million in 2006. Development capital
        expenditures totaled $881 million in 2007, an increase of 47 per cent
        over development capital expenditure of $600 million in 2006.
        Exploration and appraisal capital expenditures increased to
        $266 million in 2007, an increase of 32 per cent over exploration and
        appraisal capital expenditures of $202 million in 2006.

    -   Consideration for the acquisition of the petroleum properties,
        including license signature and farm-in fees, in 2007 amounted to
        $78 million as compared to $297 million in 2006, excluding
        consideration of $1,448 million to acquire the business of Pan-Ocean
        on September 7, 2006.

    -   During 2007, the Corporation issued $300 million principal amount of
        3.75 per cent unsecured convertible bonds, due May 31, 2012, for net
        proceeds of $294 million.

    -   Bank debt increased in 2007 by $120 million to $950 million and is
        currently drawn under a 5-year, $1.6 billion facility.

    The following table summarizes the selected financial highlights.

    -------------------------------------------------------------------------
    Selected financial highlights                         Year ended/
                                                       as at December 31
    $ million unless otherwise stated               2007      2006    Change
    -------------------------------------------------------------------------

    Petroleum sales before royalties               3,412     2,029       68%
    Average crude oil sales price, $/bbl           72.94     63.40       15%

    Funds Flow From Operations                     1,319       829       59%
    Net income                                       482       243       98%

    Weighted average common shares outstanding
     (basic, millions)                               155       143        8%
    Funds Flow From Operations per share
     ($/basic share)                                8.49      5.80       46%
    Earnings per share ($/basic share)              3.10      1.70       82%

    Weighted average common shares outstanding
     (diluted, millions)                             156       143        9%
    Funds Flow From Operations per share
     ($/diluted share)                              8.38      5.80       44%
    Earnings per share ($/diluted share)            3.09      1.70       82%
    Total assets                                   3,759     2,978       26%
    Long-term debt, excluding convertible bonds      950       830       14%

    Capital Expenditures - by Region
    Nigeria (excluding deepwater) & Cameroon         826       638       29%
    Gabon                                            216        66      227%
    Kurdistan Region of Iraq                          83        58       43%
    Deepwater Nigeria & JDZ                           16        13       23%
    Corporate                                          6        27      -78%
    subtotal                                       1,147       802       43%
    Acquisitions, farm-in and license signature
     fees (excl. Pan-Ocean)                           78       297      -74%
    Total                                          1,225     1,099       11%

    Capital Expenditures - by Type
    Development                                      881       600       47%
    Exploration & appraisal                          266       202       32%
    subtotal                                       1,147       802       43%
    Acquisitions, farm-in and license signature
     fees (excl. Pan-Ocean)                           78       297      -74%
    Total                                          1,225     1,099       11%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Selected New Business Highlights

    -   During 2007, Addax Petroleum concluded two strategic transactions
        which have (i) further consolidated a considerable exploration
        position in the Gulf of Guinea deep water play, and (ii) confirmed
        Addax Petroleum as a significant developer and producer in Gabon.

    -   New business highlights in 2007 include:

        Gulf of Guinea Deep Water

        -  in September 2007, Addax Petroleum consolidated its strategic 2006
           entry into the Gulf of Guinea deep water exploration play with the
           acquisition of a 40% interest in Block 1 of the JDZ, an offshore
           area operated under treaty between Nigeria and Sao Tome and
           Principe. The acquisition is subject to the approval of the Joint
           Development Authority. Addax Petroleum operates JDZ Block 4 and
           OPL 291 and holds non-operating interests in JDZ Blocks 2 and 3.
           At year end, Addax Petroleum holds a net acreage position of
           430,500 acres in the Gulf of Guinea deep water.

        Gabon

        -  in April 2007, Addax Petroleum acquired a 50% operating interest
           in and became the operator of the Epaemeno license area. The
           Epaemeno license area covers approximately 331,100 acres (gross)
           and lies immediately north of Addax Petroleum's Maghena and Awoun
           license areas, onshore Gabon. At year end, Addax Petroleum holds a
           net acreage position of 1,442,800 acres onshore and offshore
           Gabon.

    Selected Operational Highlights

    -   Average gross working interest oil production in 2007 was 125,940
        barrels per day (bbl/d) an increase of approximately 40 per cent over
        the 2006 average production of 90,050 bbl/d. Average oil production
        for 2007 included 104,510 bbl/d from Nigeria and 21,430 bbl/d from
        Gabon.

    -   Total gross working interest proved plus probable reserves, as
        evaluated by Netherland, Sewell & Associates as at December 31, 2007
        and in accordance with National Instrument 51-101, increased by
        approximately 26 per cent to 446.7 MMbbl from 353.7 MMbbl as at
        December 31, 2006. The Corporation did not make reserves acquisitions
        or disposals during the year and the 2007 reserve additions arose
        primarily from the Corporation's operational activity, including
        extensions and discoveries, and favourable economic factors.

    -   The Corporation's overall 2007 reserves replacement ratio was 302 per
        cent. The reserves replacement ratio is calculated by dividing the
        gross working interest proved plus probable reserve additions of
        139.0 MMbbl (before deduction of 2007 production of 46.0 MMbbl) by
        the 2007 production.

    -   Development project highlights in 2007 include:

        Nigeria

        -  conversion of Oil Prospecting License OPL225 to Oil Mining Lease
           OML137;

        -  drilled 18 new development wells offshore, 17 in OML123 and one in
           OML126, 17 of which were placed on production during the year;

        -  drilled four new development wells onshore in OML124, doubling the
           production from the license area; and

        -  ongoing surface facilities development at the Oron and Adanga
           fields on OML123, and subsurface facilities development at the
           Okwori and Nda fields on OML126.

        Gabon

        -  drilled 17 development wells on the Corporation's onshore and
           offshore license areas, of which 16 were placed on production
           during the year;

        -  ongoing surface facilities development at the onshore Maghena and
           offshore Etame license areas; and

        -  commenced the extension of the Corporation's onshore export
           system, including a new 38-kilometre, 12-inch pipeline which will
           allow for further increases in production by availing of spare
           capacity through the Shell operated Rabi station. The Corporation
           expects the expanded export system to be commissioned in the
           second half of 2008.

    -   Total gross working interest best estimate unrisked prospective oil
        resources were 2,246 MMbbl as at December 31, 2007 as compared to
        2,199 MMbbl as at December 31, 2006. Risked prospective oil resources
        increased by approximately 10 per cent to 738 MMbbl as at
        December 31, 2007 from 670 MMbbl as at December 31, 2006. Of the
        year-end 2007 unrisked prospective oil resources, 1,204 MMbbl or 54
        per cent relate to the Corporation's Deep Water Gulf of Guinea
        portfolio, 907 MMbbl or 40 per cent to onshore Nigeria and shallow
        water offshore Nigeria and Cameroon, and 136 MMbbl or 6 per cent to
        Gabon, predominantly offshore.

    -   Total gross working interest best estimate contingent gas resources
        increased by approximately 71 per cent to 2,415 Bcf as at
        December 31, 2007 from 1,412 Bcf as at December 31, 2006. Best
        estimate liquids associated with contingent gas resources increased
        by approximately 106 per cent to 77.2 MMbbl as at December 31, 2007
        from 37.4 MMbbl as at December 31, 2006. The largest additions are in
        OML137 where 926 Bcf and 25.3 MMbbl were added arising from the
        Corporation's successful exploration efforts during 2007.

    -   Exploration and appraisal activity and highlights in 2007 include:

        Gulf of Guinea Shallow Water (Nigeria and Cameroon)

        -  drilled two exploration wells in OML123, offshore Nigeria, which
           discovered and appraised the Antan prospect. Significant
           quantities of oil were discovered for which 17 MMbbl probable
           reserves were booked at year end 2007. A third exploration well
           was drilled in OML123 on the Ibeno-E prospect but it was found to
           be gas bearing;

        -  drilled two exploration wells in OML137, offshore Nigeria, which
           discovered the Ofrima North and Udele West fields. Following the
           results of Ofrima North exploration well, 17 MMbbl of probable oil
           reserves were also booked at year end 2007. The Ofrima North and
           Udele West exploration wells also confirmed the gas potential of
           the OML137 licence area and 926 Bcf of contingent gas resources
           were booked at 2007 year end;

        -  drilled one appraisal well in OML126 on the Nda West prospect but
           it was unsuccessful;

        -  drilled an additional three field extension appraisal wells on
           OML123, of which one encountered oil and two were unsuccessful;
           and

        -  commenced site preparation of the drilling location for the
           Corporation's first two exploration wells at Ngosso, offshore
           Cameroon, which are to be drilled in the first half of 2008. The
           first of these exploration wells was spudded in early March 2008
           and targeting the Odiong prospect.

        Gulf of Guinea Deep Water (Nigeria and JDZ)

        -  continued building an in-house sub-surface interpretation and
           drilling technical team following the establishment of the
           Corporation's Gulf of Guinea deep water position in 2006; and

        -  3D seismic processing throughout the JDZ and selecting the
           prospect in Block 4 which the Corporation has budgeted to drill in
           the second half of 2008.

        Gabon

        -  126 km(2) of 3D seismic data acquisition over the Corporation's
           Panthere NZE and Awoun license areas, onshore Gabon; and
        -  successful appraisal drilling of the Autour field in the Panthere
           NZE license area, onshore Gabon.

        Kurdistan Region of Iraq

        -  seismic acquisition program comprised of 292 km(2) of 3D seismic
           data over the Taq Taq field and 218 km of 2D seismic over the Kewa
           Chirmila prospect and surrounding area which the Corporation plans
           to drill in mid-2008; and

        -  drilled and tested the three appraisal and development wells on
           the Taq Taq field (TT-05, TT-06 and TT-07) and commenced drilling
           of two more appraisal and development wells (TT-08 and TT-09)
           which were tested in early 2008. The five wells have tested at
           aggregate flow rates ranging from 16,170 bbl/d to 37,560 bbl/d
           from three separate zones.

        -  Operating netbacks in 2007 increased 19 per cent to $53.70/bbl
           compared to $44.97/bbl in 2006. Unit operating expenses in 2007
           increased to $6.70/bbl, an increase of 6 per cent over the 2006
           level of $6.33/bbl.

    The following table summarizes selected operational information.

    -------------------------------------------------------------------------
    Selected operational results                           Year ended/
                                                        as at December 31
                                                    2007      2006    Change
    -------------------------------------------------------------------------
    Annual average gross working interest
     oil production (Mbbl/d)
      Nigeria (offshore)                            97.1      82.5       18%
      Nigeria (onshore)                              7.4       3.8       95%
      Nigeria sub-total                            104.5      86.3       21%

      Gabon (offshore)                               6.4       1.6      300%
      Gabon (onshore)                               15.0       2.1      614%
      Gabon sub-total                               21.4       3.7      478%

      Total                                        125.9      90.0       40%

    Prices, expenses and netbacks ($/bbl)
      Average realized price                       72.94     63.40       15%
      Operating expense                             6.70      6.33        6%
      Operating netback                            53.70     44.97       19%

    Gross working interest oil reserves (MMbbl)
      Proved                                       233.3     182.0       28%
      Proved plus Probable                         446.7     353.7       26%
      Proved plus Probable plus Possible           580.3     480.4       21%

    Gross working interest best estimate
     prospective oil resources (MMbbl)
      Unrisked                                     2,246     2,199        2%
      Risked                                         738       670       10%

    Gross working interest best estimate
     contingent resources
      Gas (Bcf)                                    2,415     1,412       71%
      Associated gas liquids (MMbbl)                77.2      37.4      106%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Dividends

    For information purposes, the Corporation declared and paid aggregate
dividends in 2007 of CDN$0.20 per share. A dividend of CDN$0.10 per share was
declared and will be paid in the first quarter of 2008. In accordance with
Canada Revenue Agency Guidelines, dividends paid by the Corporation during the
period are eligible dividends.

    Recent Developments

    In January 2008, the Corporation tested the TT-09 step-out appraisal and
development well on the Taq Taq field in the Kurdistan Region of Iraq. The TT-
 09 well tested at an aggregate oil rate of 16,170 bbl/d from two separate
zones.
    In February 2008, the Corporation signed an agreement with the Kurdistan
Regional Government amending the production sharing contract it holds together
with Genel Enerji in respect of the Taq Taq license area in the Kurdistan
Region of Iraq. The purpose of the amendments was to bring the terms of the
Taq Taq production sharing contract into conformity with recently enacted oil
and gas legislation in the Kurdistan Region of Iraq.
    In March 2008, the Corporation tested the TT-08 step-out appraisal and
development well on the Taq Taq field in the Kurdistan Region of Iraq. The TT-
 08 well tested at an aggregate oil rate of 35,750 bbl/d from two separate
zones.
    Also in March 2008, the Corporation announced the successful appraisal of
and addition to the Kita Marine discovery. The KTM-6 well encountered an
aggregate gross oil column of 173 feet over four zones. The Kita Marine
discoveries lie in the northern part of the prolific OML123 block offshore
Nigeria in an area which has not previously had production.

    Outlook & 2008 Capital Budget Increase

    The Corporation's production outlook for 2008 is in line with guidance
provided to date. Addax Petroleum expects annual average working interest
gross oil production to be approximately 140,000 to 145,000 bbl/d from its
Nigeria and Gabon operations.
    In addition, in response to strong operational results and a robust oil
price environment, Addax Petroleum is increasing its 2008 capital expenditures
budget to $1,615 million from $1,509 million announced in November 2007. This
increase is driven by a 23 per cent increase in the Corporation's exploration
budget to $406 million which will fund an accelerated exploration program in
the Corporation's core areas in offshore Gabon and offshore Nigeria and
Cameroon. The accelerated exploration program will include the drilling of up
to four additional exploration wells, bringing the total wells drilled in the
Corporation's exploration portfolio to 20 wells in 2008, as well as a 307 km
2D seismic program onshore Gabon. Addax Petroleum has extended its contract
for the jack-up drilling rig, the Hercules-156, which is currently drilling
the first exploration well for the Corporation at Ngosso, to early 2009 to
support its accelerated exploration program. The Corporation has also
increased its development capital expenditure budget by three per cent which
will fund the drilling of an additional two development wells in Nigeria.
    The following table summarises the Corporation's current oil production
guidance and increased 2008 capital expenditure budget:

    
    -------------------------------------------------------------------------
    2008 Outlook Highlights
                                              Mar 2008    Nov 2007    Change
                                                Budget      Budget
    -------------------------------------------------------------------------
    Oil Production Guidance, Mbbl/d
    Nigeria                                 106 to 111  106 to 111       n/a
    Gabon                                     31 to 36    31 to 36       n/a
    Total                                   140 to 145  140 to 145       n/a

    Capital Expenditure Budget - by Region,
     $ million
    Nigeria (excluding deepwater) & Cameroon     1,102       1,034        7%
    Gabon                                          345         307       12%
    Deepwater Nigeria & JDZ                         90          90        0%
    Kurdistan Region of Iraq                        74          74        0%
    Corporate                                        4           4        0%
    Total                                        1,615       1,509        7%

    Capital Expenditure Budget - by Type,
     $ million
    Development                                  1,209       1,179        3%
    Exploration & appraisal                        406         330       23%
    Total                                        1,615       1,509        7%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Analyst Conference Call

    Financial analysts are invited to participate in a conference call today
Thursday, March, 13 at 12:00 p.m. (noon) Eastern Time / 4:00 p.m. London, U.K.
time with Mr. Jean Claude Gandur, President and Chief Executive Officer, Mr.
Michael Ebsary, Chief Financial Officer and Mr. James Pearce, Chief Operating
Officer. The media and shareholders may participate on a listen only basis. To
participate in the conference call, please dial one of the following:

    Toronto:                             416 644 3419
    Toll-free (Canada and the US):       1 800 731 5774
    Toll-free (UK):                      00 800 2288 3501
    Toll-free (Switzerland):             00 800 2288 3501

    A replay of the call will be available at (416) 640 1917 or
(877) 289 8525, passcode 21264945 followed by the number sign until Saturday,
March 29, 2008.
    

    Legal Notice - Forward-Looking Statements

    Certain statements in this press release constitute forward-looking
statements under applicable securities legislation. Such statements are
generally identifiable by the terminology used, such as "anticipate",
"believe", "intend", "expect", "plan", "estimate", "budget", "outlook", "may",
"will", "should", "could", "would" or other similar wording. Forward-looking
information includes, but is not limited to, reference to business strategy
and goals, future capital and other expenditures, reserves and resources
estimates, drilling plans, construction and repair activities, the submission
of development plans, seismic activity, production levels and the sources of
growth thereof, project development schedules and results, results of
exploration activities and dates by which certain areas may be developed or
may come on-stream, royalties payable, financing and capital activities,
contingent liabilities, environmental matters, and government approvals. By
its very nature, such forward-looking information requires Addax Petroleum to
make assumptions that may not materialize or that may not be accurate. This
forward-looking information is subject to known and unknown risks and
uncertainties and other factors, which may cause actual results, levels of
activity and achievements to differ materially from those expressed or implied
by such information. Such factors include, but are not limited to: imprecision
of reserves and resources estimates; ultimate recovery of reserves; prices of
oil and natural gas; general economic, market and business conditions;
industry capacity; competitive action by other companies; fluctuations in oil
prices; refining and marketing margins; the ability to produce and transport
crude oil and natural gas to markets; the ability to market and sell natural
gas under its production sharing contracts; the effects of weather and climate
conditions; the results of exploration and development drilling and related
activities; fluctuations in interest rates and foreign currency exchange
rates; the ability of suppliers to meet commitments; actions by governmental
authorities, including increases in taxes; decisions or approvals of
administrative tribunals; changes in environmental and other regulations;
risks attendant with oil and gas operations, both domestic and international;
international political events; expected rates of return; and other factors,
many of which are beyond the control of Addax Petroleum. More specifically,
production may be affected by such factors as exploration success, start-up
timing and success, facility reliability, reservoir performance and natural
decline rates, water handling, and drilling progress. Capital expenditures may
be affected by cost pressures associated with new capital projects, including
labour and material supply, project management, drilling rig rates and
availability, and seismic costs. These factors are discussed in greater detail
in filings made by Addax Petroleum with the Canadian provincial securities
commissions.
    Readers are cautioned that the foregoing list of important factors
affecting forward-looking information is not exhaustive. Furthermore, the
forward-looking information contained in this press release is made as of the
date of this press release and, except as required by applicable law, Addax
Petroleum does not undertake any obligation to update publicly or to revise
any of the included forward-looking information, whether as a result of new
information, future events or otherwise. The forward-looking information
contained in this press release is expressly qualified by this cautionary
statement.

    Non-GAAP Measures

    Addax Petroleum defines "Funds Flow From Operations" or "FFFO" as net
cash from operating activities before changes in non-cash working capital.
Management believes that in addition to net income, FFFO is a useful measure
as it demonstrates Addax Petroleum's ability to generate the cash necessary to
repay debt or fund future growth through capital investment. Addax Petroleum
also assesses its performance utilizing Operating Netbacks which it defines as
the per barrel pre-tax profit margin associated with the production and sale
of crude oil and is calculated as the average realized sales price less
royalties and operating expenses, on a per barrel basis. FFFO and Operating
Netback are not recognized measures under Canadian GAAP. Readers are cautioned
that these measures should not be construed as an alternative to net income or
cash flow from operating activities determined in accordance with Canadian
GAAP or as an indication of Addax Petroleum's performance. Addax Petroleum's
method of calculating this measure may differ from other companies and
accordingly, it may not be comparable to measures used by other companies.





For further information:

For further information: Mr. Michael Ebsary, Chief Financial Officer,
Tel.: +41 (0) 22 702 94 03, michael.ebsary@addaxpetroleum.com; Ms.
Marie-Gabrielle Cajoly, Press Relations, Tel.: +41 (0) 22 702 94 44,
marie-gabrielle.cajoly@addaxpetroleum.com; Mr. Patrick Spollen, Investor
Relations, Tel.: +41 (0) 22 702 95 47, patrick.spollen@addaxpetroleum.com; Mr.
Craig Kelly, Investor Relations, Tel.: +41 (0) 22 702 95 68,
craig.kelly@addaxpetroleum.com; Mr. Nick Cowling, Press Relations, Tel.: (416)
934 8011, nick.cowling@cossette.com; Mr. James Henderson, Press Relations,
Tel.: +44 (0) 20 7743 6673, james.henderson@pelhampr.com; Mr. Alisdair
Haythornthwaite, Press Relations, Tel.: +44 (0) 20 7743 6676,
alisdair.haythornthwaite@pelhampr.com

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