Addax Petroleum Announces Update on Discussions with the Kurdistan Regional Government

    Amendments to the Production Sharing Contract for the Taq Taq License

    CALGARY, Feb. 29 /CNW/ - Addax Petroleum Corporation ("Addax Petroleum"
or the "Corporation") (TSX:AXC and LSE:AXC) today confirms that it has signed
an agreement with the Kurdistan Regional Government ("KRG") 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 "Taq Taq PSC").
The Taq Taq license area includes the Taq Taq field and the Kewa Chirmila
prospect. The purpose of the amendments is to bring the Taq Taq PSC into
conformity with the Oil and Gas Law of the Kurdistan Region - Iraq (the "Oil
and Gas Law") and Model PSC, including the royalty, cost recovery and profit
share components.
    Commenting today, Addax Petroleum's President and Chief Executive
Officer, Jean Claude Gandur, said: "We are pleased to be working closely and
in a spirit of cooperation with our partners at the KRG to arrive at a result
that is beneficial to all parties. The new terms of our Taq Taq PSC are now in
line with the recently enacted legislation and our stakeholders will be
pleased to know that our economic and operational interest is materially
unchanged. The results from our appraisal campaign at Taq Taq to date have
been extremely positive and we are encouraged by the exploration potential we
are uncovering through seismic surveys. We look forward to continued strong
relations with the KRG as we seek to implement a full field development
program with the potential of first oil as early as next year."
    The review and renegotiations were conducted between the KRG,
Genel Enerji and Addax Petroleum in accordance with Article 54 of the Oil and
Gas Law which required review of the Taq Taq PSC by the Regional Council for
the Oil and Gas Affairs of the Kurdistan Region - Iraq (the "Regional
Council"), taking into consideration the prevailing conditions when the
Taq Taq PSC was originally entered into.
    The most significant changes to the terms of the Taq Taq PSC include i)
the combination of previously separate terms for the Taq Taq and Kewa Chirmila
areas, including the synchronization of the government back-in rights at up to
20 per cent, ii) a reduction in the maximum Cost Oil recoverable in a given
year, which is partially offset by an effective increase through an interim
period that accelerates the recovery of the initial capital investment by the
Contractor, and iii) the introduction of a "R factor" in the Profit Oil
calculation, which adjusts the financial returns to the Contractor and
Government based on relative level of cumulative capital spending and
cumulative revenue. The ultimate financial impact of the amendments to the
terms of the Taq Taq PSC is dependent on operational outcomes, including
reserve, production and cost levels. However, the Corporation believes that
under most of the likely scenarios and considering the further exploration
potential of the PSC area, the amendments do not result in a material change
to the financial or operational interests of Addax Petroleum.

    About Addax Petroleum

    Addax Petroleum is an international oil and gas exploration and
production company with a strategic focus on West Africa and the Middle East.
Addax Petroleum is one of the largest independent oil producers in West Africa
and has increased its crude oil production from an average of 8,800 bbl/d for
1998 to an average of approximately 126,000 bbl/d for 2007. Further
information about Addax Petroleum is available at or at

    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
    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

For further information:

For further information: Mr. Patrick Spollen, Investor Relations, Tel.:
+41 (0) 22 702 95 47,; Mr. Nick Cowling,
Press Relations, Tel.: +1 (416) 934 80 11,; Mr.
Craig Kelly, Investor Relations, Tel.: +41 (0) 22 702 95 68,; Mr. James Henderson, Press Relations, Tel.:
+44 (0) 20 7743 6673,; Ms. Marie-Gabrielle
Cajoly, Press Relations, Tel.: +41(0) 22 702 94 44,; Mr. Alisdair Haythornthwaite, Press
Relations, Tel.: +44 (0) 20 7743 6676,

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