Addax Petroleum announces record second quarter 2008 results



    
    -   83 per cent increase in Funds Flow From Operations to $524 million
    -   190 per cent increase in Net Income to $293 million
    -   8 per cent increase in Production to 132.9 Mbbl/d
    

    CALGARY, Aug. 6 /CNW/ - Addax Petroleum Corporation ("Addax Petroleum" or
the "Corporation") (TSX:AXC and LSE:AXC), today announced its results for the
quarter ended June 30, 2008. The financial results are prepared in accordance
with Canadian GAAP and the reporting currency is US dollars.
    This announcement coincides with the filing with the Canadian and U.K.
securities regulatory authorities of Addax Petroleum's Unaudited Consolidated
Financial Statements for the quarter ended June 30, 2008 and related
Management's Discussion and Analysis. 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 and webcast will be held for analysts and investors
today Wednesday, August 6, 2008 at 11.00 a.m. 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 pleased to report that robust
production performance in a record oil price environment has propelled Addax
Petroleum to yet another quarter of record financial results. Activity levels
on all our business fronts were high through the second quarter and, on
balance, our operational performance was good. Our production levels were
slightly below expectations, and may remain so for the balance of the year,
but continue to be strong given supply constraints ongoing in the sector.
During the second quarter, we also continued to expand Addax Petroleum's
property portfolio with four new license interest acquisitions. This new
business activity is closely aligned with our dynamic exploration program,
which had mixed results during the second quarter, but remain exciting for the
balance of the year. I am particularly pleased and encouraged that our
initiatives to commercialize our reserves in Kurdistan and gas resources in
Nigeria are gaining momentum and can offer excellent value for our
shareholders."

    Selected Financial Highlights

    
    -   Petroleum sales before royalties in the second quarter of 2008
        amounted to $1,493 million, an increase of 98 per cent over petroleum
        sales before royalties of $753 million in the second quarter of 2007.
        The increase in petroleum sales before royalties was primarily driven
        by a 81 per cent increase in the average crude oil sales price in the
        second quarter of 2008 to $123.17 per barrel (/bbl) as compared to
        $68.21/bbl realized in the second quarter of 2007 and an 11 per cent
        increase in sales volumes between the same periods. Inventory levels
        diminished slightly over the quarter as compared to Q1 2008 by
        0.069 MMbbl, however the Corporation still retains a large oil
        inventory balance that is expected to decline further before the end
        of Q3 2008.

    -   Funds Flow From Operations for the second quarter of 2008 increased
        83 per cent to $524 million ($3.37 per basic share) compared to
        $287 million ($1.85 per basic share) in the second quarter of 2007.

    -   Net income in the second quarter of 2008 increased 190 per cent to
        $293 million ($1.88 per basic share) compared to $101 million
        ($0.65 per basic share) in the corresponding period in 2007.

    -   Capital expenditures, excluding acquisition costs, increased by
        34 per cent to $350 million in the second quarter of 2008 from
        $261 million in the second quarter of 2007. Development capital
        expenditures totaled $297 million in the second quarter, an increase
        of 71 per cent over development capital expenditure of $174 million
        in the second quarter of 2007. Exploration and appraisal capital
        expenditures totaled $53 million in the quarter, a decrease of
        39 per cent over exploration and appraisal capital expenditures of
        $87 million in the second quarter of 2007.

    -   Acquisition costs associated with new business activities increased
        to $19 million in the second quarter of 2008 from $nil in the second
        quarter of 2007. New business activities included the acquisition of
        two new exploration license areas for the Corporation's property
        portfolio, the increase of the Corporation's working interest in two
        other exploration license areas and the commencement of an integrated
        gas utilization project in Nigeria.

    -   At the end of the second quarter 2008, bank debt totaled
        $910 million, a decrease of $40 million over the corresponding
        quarter in 2007. Bank debt is currently drawn under a 5-year,
        $1.6 billion senior secured term facility, with 4 years remaining. In
        addition, during the quarter, a new two year loan facility was signed
        and underwritten for an amount of $450 million, which may increase to
        $500 million after syndication. No amounts have been drawn on this
        facility as at June 30, 2008.


    The following table summarizes the selected financial highlights:

    -------------------------------------------------------------------------
    Selected second quarter financial highlights        Quarter ended
                                                           June 30
    $ million unless otherwise stated              2008      2007     Change
    -------------------------------------------------------------------------

    Petroleum sales before royalties               1,493       753        98%
    Average realized sales price, $/bbl           123.17     68.21        81%
    Sales volumes, MMbbl                            12.2      11.0        11%

    Funds Flow From Operations                       524       287        83%
    Net income                                       293       101       190%

    Weighted average common shares outstanding
     (basic, millions)                               156       155         1%
    Funds Flow From Operations per share
     ($/basic share)                                3.37      1.85        82%
    Earnings per share ($/basic share)              1.88      0.65       189%

    Weighted average common shares outstanding
     (diluted, millions)                             162       157         3%
    Funds Flow From Operations per share
     ($/diluted share)                              3.24      1.82        78%
    Earnings per share ($/diluted share)            1.83      0.65       182%

    Total assets                                   4,502     3,282        37%
    Long-term debt, excluding convertible bonds      910       950        -4%

    Capital Expenditures - by Region
    Nigeria (excluding deepwater) & Cameroon         235       177        33%
    Gabon                                            106        43       147%
    Kurdistan Region of Iraq                           9        35       -74%
    Deepwater Nigeria & JDZ                            3         2        50%
    Corporate, acquisitions, farm-in and
     license signature fees                           16         4       300%
    Total                                            369       261        41%

    Capital Expenditures - by Type
    Development                                      297       174        71%
    Exploration & appraisal                           53        87       -39%
    subtotal                                         350       261        34%
    Acquisitions, farm-in and license
     signature fees                                   19         0        n/a
    Total                                            369       261        41%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    Selected first half year financial highlights      Half Year Ended
                                                           June 30
    $ million unless otherwise stated              2008      2007     Change
    -------------------------------------------------------------------------

    Petroleum sales before royalties               2,647     1,380        92%
    Average realized sales price, $/bbl           109.58     63.09        74%
    Sales volumes, MMbbl                            24.2      21.8        11%

    Funds Flow From Operations                       993       550        81%
    Net income                                       533       180       196%

    Weighted average common shares outstanding
     (basic, millions)                               156       155         1%
    Funds Flow From Operations per share
     ($/basic share)                                6.38      3.55        80%
    Earnings per share ($/basic share)              3.42      1.16       195%

    Weighted average common shares outstanding
     (diluted, millions)                             162       156         4%
    Funds Flow From Operations per share
     ($/diluted share)                              6.14      3.51        75%
    Earnings per share ($/diluted share)            3.35      1.16       189%

    Total assets                                   4,502     3,282        37%
    Long-term debt, excluding convertible bonds      910       950        -4%

    Capital Expenditures - by Region
    Nigeria (excluding deepwater) & Cameroon         496       342        45%
    Gabon                                            172        74       132%
    Kurdistan Region of Iraq                          16        50       -68%
    Deepwater Nigeria & JDZ                            6         5        20%
    Corporate, acquisitions, farm-in and license
     signature fees                                   19         6       217%
    Total                                            709       477        49%

    Capital Expenditures - by Type
    Development                                      543       319        70%
    Exploration & appraisal                          147       158        -7%
    subtotal                                         690       477        45%
    Acquisitions, farm-in and license
     signature fees                                   19         0        n/a
    Total                                            709       477        49%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Selected New Business Highlights

    -   The second quarter of 2008 continued an active new business program
        for Addax Petroleum with the addition of two new exploration license
        areas to the Corporation's property portfolio and the increase of the
        Corporation's working interest in two other exploration license
        areas. In addition, Addax Petroleum received Federal Government of
        Nigeria approval of an integrated gas utilization initiative which
        could lead to the development and monetization of the Corporation's
        considerable gas resources in Nigeria.

    -   New business highlights for the second quarter of 2008 include the
        following:

        Gulf of Guinea Shallow Water (Nigeria and Cameroon)

        -  The integrated gas utilization project in Nigeria was proposed by
           Addax Petroleum together with partners Chrome Oil Services
           Limited, a leading Nigerian oil and gas company, and Korea Gas
           Corporation, South Korea's national gas company and the largest
           LNG importer in the world (the "Consortium"). As approved by the
           Federal Government of Nigeria, the project is intended to include
           the exploration and development of gas fields in Nigeria,
           including the Corporation's OML137, to secure the gas reserves
           necessary to commercialize a new LNG production facility of up to
           10 million tons per annum to be sited on Brass Island in Bayelsa
           State, to provide domestic power generation capacity of up to
           1,000 megawatts and to provide feedstock for the development of
           petrochemical facilities. As part of the Federal Government
           approval, the Consortium has been instructed to cooperate with the
           Nigerian Ministry of State for Energy (Gas), the Department of
           Petroleum Resources and the Nigerian National Petroleum
           Corporation to establish fiscal and commercial terms for the
           upstream and downstream activities that meet the required
           investment levels for all participants in the project. The
           Corporation believes that these negotiations will take place
           rapidly and can be concluded in a timely fashion to achieve final
           investment decision by the end of 2009;

        -  The Corporation was awarded a 40 per cent interest in Oil
           Prospecting License ("OPL") 227, offshore Nigeria. Addax Petroleum
           has paid a farm-in fee to our license area partners and a
           signature bonus to the Federal Government of Nigeria, and is
           obligated to fund 80 per cent of a work program comprising a
           minimum of 500 km(2) of 3D seismic acquisition during the
           exploration period. Addax Petroleum will also initially fund
           80 per cent of all capital and operating costs on OPL227, and will
           be entitled to a higher than pro-rata share of the net production
           from OPL227 until all capital costs have been recovered after
           which all parties will be entitled to their pro rata share of
           production; and,

        -  Addax Petroleum signed a Production Sharing Contract ("PSC") with
           the Republic of Cameroon, relating to the Iroko exploration
           license area. Under the PSC, Addax Petroleum acquires a
           100 per cent interest in the Iroko license area and is the
           operator. The Société Nationale des Hydrocarbures ("SNH"), the
           national oil company of Cameroon, holds a back-in right of 30% in
           case of a development. In consideration for its interest in Iroko,
           Addax Petroleum paid a signature bonus of $3 million and will
           undertake within the first three years a minimum work program
           valued at $17.5 million, which includes the acquisition of 3D
           seismic data and the drilling of one well.

        Gabon

        -  Addax Petroleum acquired an additional 18 per cent working
           interest in the Iris Marin license area offshore Gabon by the
           acquisition of a subsidiary of Sterling Energy plc. Addax
           Petroleum will hold up to a 51.33 per cent working interest in the
           Iris Marin license area and, subject to Government approval,
           intends to become the operator.

        Joint Development Zone ("JDZ")

        -  Addax Petroleum was awarded an additional 7.2 per cent
           participating interest in Block 4 of the Nigeria/Sao Tome and
           Principe JDZ by an independent arbitration tribunal. The award
           increases Addax Petroleum's interest in the license area from
           38.3 per cent to 45.5 per cent. Addax Petroleum is also the
           operator of Block 4. Addax Petroleum has contracted to commence
           drilling operations in JDZ Block 4 in the fourth quarter of 2008,
           but believes that the drilling rig will not be delivered until the
           second half of 2009. In the interim, the Corporation continues to
           seek a rig of opportunity to drill the Kina prospect in JDZ
           Block 4 as early as the fourth quarter of 2008.

    Selected Exploration and Appraisal Highlights

    -   During the second quarter of 2008, Addax Petroleum continued
        progressing the exploration program within its property portfolio
        through the drilling of four exploration and appraisal wells offshore
        Cameroon, commencing a seismic acquisition campaign onshore Gabon and
        additional appraisal work in the Kurdistan Region of Iraq.

    -   Exploration and appraisal highlights for the second quarter of 2008
        include the following:

        Gulf of Guinea Shallow Water (Nigeria and Cameroon)

        -  In Cameroon, the Corporation completed drilling its first
           exploration wells in the Ngosso and Iroko license areas. As part
           of the campaign, Addax Petroleum drilled two wells plus a
           sidetrack at Ngosso and one well at Iroko. The sidetrack drilled
           as part of the Ngosso drilling campaign established a gross
           hydrocarbon column of 79 feet while the two Ngosso exploration
           wells were plugged and abandoned. The Corporation believes the
           sidetrack discovery may be developed in the future together with
           existing oil discoveries in an overall field development. The
           Iroko well encountered hydrocarbons in the main objective interval
           and the Corporation is currently evaluating core, pressure and
           wireline data obtained during the drilling of the well. The
           Corporation plans to enter the next exploration period, including
           a commitment to drill one exploration well, and to acquire
           additional 3D seismic data on the prospective northern part of the
           license area.

        Gabon

        -  The Corporation has recently completed a 2D seismic survey on its
           Remboue licence area during Q2 2008. The Corporation has also
           commenced a large-scale seismic acquisition survey on its onshore
           properties which is expected to include some 700-1000 km of
           2D seismic on its Maghena and Epaemeno licence areas by mid-2009.

        Gulf of Guinea Deep Water (Nigeria and JDZ)

        -  The Corporation continued its evaluation of drilling locations in
           the JDZ license areas and its efforts to secure a rig of
           opportunity to commence drilling operations in the fourth quarter
           of 2008. In OPL291, the Corporation is also planning to acquire
           3D seismic survey in the second half of 2008.

        Kurdistan Region of Iraq

        -  Addax Petroleum has imported a second, larger drilling rig
           (Kurdistan-1) and is expects to commence drilling the TT-10 well
           in August 2008, followed by the drilling of the Kewa Chirmila
           exploration well; and

        -  A successful acid stimulation campaign was performed on two wells
           during the second quarter. The stimulation campaign was focused on
           reservoir intervals which had previously demonstrated moderate
           flow potential. In all instances, flow potential was significantly
           improved. In the Shiranish formation in the TT-04 well, the flow
           rate was improved from 3,940 bbl/d pre-acidization to 11,080 bbl/d
           post-acidization. In the TT-06 well, two intervals were acidized
           resulting in flow rate improvements pre and post acidization from
           2,020 bbl/d to 18,580 bbl/d in the Kometan formation and from
           1,500 bbl/d to 3,080 bbl/d in the Qamchuqa formation.

    Selected Operational Highlights

    -   Average gross working interest oil production in the second quarter
        of 2008 was 132,880 barrels per day (bbl/d) representing an increase
        of approximately 8 per cent over the 2007 average production of
        123,000 bbl/d. Average oil production in the second quarter of 2008
        included 105,500 bbl/d from Nigeria and 27,390 bbl/d from Gabon
        compared to a 2007 second quarter average production level of
        104,100 bbl/d and 18,900 bbl/d, respectively.

    -   Development project highlights in the second quarter of 2008 include:

        Nigeria

        -  drilled 8 new development wells which included 4 oil production
           wells and 2 water injection wells in OML123, 1 oil production well
           in OML126 and 1 oil production well in OML124;

        -  placed a total of 2 new oil production wells on production in the
           quarter, representing 2 of the 6 production wells drilled in the
           quarter;

        -  experienced contractor delays during the construction and
           installation of pipelines and related facilities which have
           resulted in approximately 6 Mbbl/d being shut-in at Oron West
           South in OML123. Partial production from Oron West South is
           expected to commence in Q3 2008, with full production expected to
           follow in Q4 2008 after the completion of related infrastructure
           construction. The Corporation has also been experiencing
           logistical constraints on its Nigeria properties related to
           increased security measures implemented during the quarter; and

        -  continued preparation of the Kita Marine and Antan field
           development plans.

        Gabon

        -  drilled 5 new development wells onshore of which 3 were in the
           Addax Petroleum operated Tsiengui field in the Maghena license
           area and 2 were in the Shell-operated Koula field in the Awoun
           license area;

        -  placed a total of 3 new oil production wells on production in the
           Tsiengui field in the quarter of which 1 was drilled in the
           quarter and 2 were drilled in the previous quarter;

        -  experienced delays arising from the rectification of a well
           completion failure and temporarily higher than expected decline
           rates in some producing wells which inhibited production growth at
           the current drilling rates. New production from the Awoun license
           and increased capacity with the completion of the pipeline to
           Shell's Rabi facility are expected to augment production; and

        -  continued ongoing surface facilities development at the onshore
           Addax Petroleum operated Tsiengui and Obangue fields and the
           Shell-operated Koula field, including the extension of the
           Corporation's onshore oil export pipeline system, and at the
           offshore non-operated Ebouri field.

        Kurdistan Region of Iraq

        -  completed the construction of the first phase for an early
           production system to provide approximately 10,000 bbl/d of
           capacity. Continuing construction on the early production system
           is expected to provide further capacity;

        -  continued trial production from the Taq Taq field at reduced rates
           with intermittent local sales. The Corporation is targeting to
           commence commercial oil production attributable to its working
           interest in the second half of 2008; and

        -  conducted studies during the quarter to support front-end
           engineering and design for an export pipeline.

    -   Operating netbacks in the second quarter of 2008 increased
        78 per cent to $91.14/bbl compared to $51.17/bbl in the second
        quarter of 2007. Unit operating expenses in the second quarter of
        2008 increased to $9.55/bbl, an increase of 66 per cent over the 2007
        level of $5.75/bbl as the Corporation continues to face cost
        inflation pressures for the provision of services.

    The following table summarizes selected operational information:

    -------------------------------------------------------------------------
    Selected second quarter operational highlights      Quarter ended
                                                           June 30
                                                   2008      2007     Change
    -------------------------------------------------------------------------
    Quarter average gross working interest
     oil production (Mbbl/d)
      Nigeria (offshore)                            98.5      96.6         2%
      Nigeria (onshore)                              7.0       7.5        -7%
      Nigeria sub-total                            105.5     104.1         1%

      Gabon (offshore)                               7.0       6.4         9%
      Gabon (onshore)                               20.4      12.5        63%
      Gabon sub-total                               27.4      18.9        45%

      Total                                        132.9     123.0         8%

    Prices, expenses and netbacks ($/bbl)
      Average realized sales price                123.17     68.21        81%
      Operating expenses                            9.55      5.75        66%
      Operating netback                            91.14     51.17        78%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    Selected first half year operational highlights    Half Year Ended
                                                           June 30
                                                   2008      2007     Change
    -------------------------------------------------------------------------
    Quarter average gross working interest
     oil production (Mbbl/d)
      Nigeria (offshore)                           100.4      94.4         6%
      Nigeria (onshore)                              7.2       6.6         9%
      Nigeria sub-total                            107.6     101.0         7%

      Gabon (offshore)                               7.0       6.4         9%
      Gabon (onshore)                               21.4      12.2        75%
      Gabon sub-total                               28.4      18.6        53%

      Total                                        136.0     119.6        14%

    Prices, expenses and netbacks ($/bbl)
      Average realized sales price                109.58     63.09        74%
      Operating expenses                            8.81      6.72        31%
      Operating netback                            81.78     46.75        75%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Dividend

    During the second quarter of 2008, the Corporation paid a dividend of
CDN$0.10 per share. The Board of Directors of the Corporation declared a
dividend of CDN$0.10 per share on August 5, 2008 which is payable on September
11, 2008 to shareholders of record on August 28, 2008. In accordance with
Canada Revenue Agency Guidelines, dividends paid by the Corporation during the
period are eligible dividends.

    Recent Developments

    Since the end of the second quarter of 2008, the Corporation made the
following announcements:

    
    -   on July 4, 2008, the Corporation announced the results of drilling 3
        exploration wells plus a sidetrack in the Ngosso and Iroko license
        areas;
    -   on July 7, 2008, the Corporation announced that the historic
        milestone of 200 million barrels of oil production from the Addax
        Petroleum operated OML123 offshore Nigeria had been achieved; and
    -   on July 16, 2008, the Corporation announced that it has been awarded
        an additional 7.2 per cent participating interest in Block 4 of the
        Nigeria/Sao Tome and Principe JDZ by an independent arbitration
        tribunal, increasing Addax Petroleum's interest in the license area
        to 45.5 per cent.
    

    Outlook

    Due to year-to-date results, delays in the installation of pipelines and
related facilities and other operational issues, the Corporation is revising
its production outlook for 2008. Addax Petroleum expects annual average
working interest gross oil production for 2008 to be approximately 136,000 to
140,000 bbl/d. The Corporation's capital budget for 2008 remains unchanged at
$1,615 million.

    Analyst Conference Call

    Financial analysts are invited to participate in a conference call and
webcast today Tuesday, August 6, at 11:00 a.m. 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): 1 800 732 6179
    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 21277903 followed by the number sign until Friday, August 22,
2008.

    Investors are invited to listen to the live webcast of the presentation
via the following link:

    http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2363680

    The presentation slides for the above will be available prior to the
conference call and webcast on Addax Petroleum's website at
www.addaxpetroleum.com.

    Legal Notice - Forward-Looking Statements

    Certain statements in this report constitute forward-looking statements
under applicable securities legislation. Such statements are generally
identifiable by the terminology used, such as "may", "will", "should",
"could", "would", "anticipate", "believe", "intend", "expect", "plan",
"estimate", "budget", "outlook" 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, government approvals and
syndication of new financing. 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, production 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 report is made as of the date of
this report 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
report 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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