Addax Petroleum Announces Production Milestone In Nigeria

CALGARY, Canada, July 7 /PRNewswire/ --

- 200 Million Barrels Produced From OML 123 Offshore Nigeria

Addax Petroleum Corporation (TSX: AXC and LSE: AXC) ("Addax Petroleum" or the "Corporation") announces today that the historic milestone of 200 million barrels of oil production from the Addax Petroleum operated Oil Mining Lease ("OML") 123 offshore Nigeria has been achieved. OML123, the Corporation's first Nigerian license and largest license by production and reserves volumes, is located in the shallow water offshore in the Niger Delta Basin, one of the most prolific petroleum basins in the world.

Commenting, Jean Claude Gandur, President and Chief Executive Officer of Addax Petroleum said: "I am extremely proud of this recent accomplishment given Addax Petroleum acquired OML123 in 1998 with a fraction of the reserves we have there today. Achieving this 200 million barrel production milestone, along with celebrating 10 successful years of operating in Nigeria, highlights the quality of our Nigerian assets and our track record of delivering results that enhance shareholder value. We believe that OML123 will continue to be a major production hub for us in the coming years, given the new fields we will be bringing on stream and the substantial exploration potential still contained within the block as demonstrated by our plans to drill up to 6 exploration wells by the end of Q1 2009."

The OML123 license area covers approximately 90,700 acres (367 km(2)) and is located offshore approximately 60 km south of the town of Calabar in the south-eastern part of Nigeria. As at December 31, 2007, Netherland, Sewell & Associates Inc. ("NSAI") estimates the Corporation's gross proved plus probable reserves for OML123 to be 161.4 MMbbl and gross proved plus probable plus possible reserved to be 220.6 MMbbl. In addition, as at December 31, 2007, NSAI estimates the Corporation's best estimate contingent resources for OML123 for gas to be 999.9 Bcf and for associated liquids to be 27.9 MMbbl, and gross best estimate unrisked prospective oil resources for identified prospects on OML123 to be 401.2 MMbbl (110.3 MMbbl risked). Addax Petroleum is currently producing just under 60Mbbl/d from 51 wells in 7 producing fields.

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 139,100 bbl/d for the first quarter of 2008. Further information about Addax Petroleum is available at http://www.sedar.com, http://www.londonstockexchange.com or the Corporation's website, http://www.addaxpetroleum.com.

Information about Reserves and Resources Estimates

Reserves and resources information in this news release are set out in greater detail in Addax Petroleum's Annual Information Form dated March 13, 2008, which is available on the SEDAR website, http://www.sedar.com, the London Stock Exchange Market News website, http://www.londonstockexchange.com or the Corporation's website, http://www.addaxpetroleum.com.

Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. Contingent resources are those quantities estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Addax Petroleum's contingent gas resources for OML123 are comprised of natural gas, liquefied petroleum gas ("LPG") and pentanes plus ("C5+") components, and are located in fields in which wells have been drilled through the gas portion of the reservoirs to help define the gas pay thickness, reservoir quality and areal extent. There are no gas sales from the properties since no gas market connection is available, and Addax Petroleum has yet to conclude negotiations with the Nigerian National Petroleum Corporation ("NNPC") regarding the terms governing the exploitation of gas under the Production Sharing Contract. It is currently investigating commercialization of produced gas through several markets. No economic evaluation has been performed on these resources as at December 31, 2007. All produced gas is presently flared, consumed for lease use or reinjected into the oil reservoirs to maintain reservoir pressure. There is no certainty that these contingent resources will be commercially viable.

Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. The prospective oil resources indicate exploration opportunities and development potential in the event a commercial discovery is made and should not be construed as reserves or contingent resources. There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

Legal Notice - Forward-Looking Statements

Certain statements in this news 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 in this news release includes, but is not limited to, 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, financing and capital activities, contingent liabilities, the Corporation's business strategy and goals, future capital and other expenditures and reserves and resources estimates. 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; volatility of prices of oil and natural gas; general economic, market and business conditions; industry capacity; competitive action by other companies; refining and marketing margins; the ability to produce and transport crude oil and natural gas to markets; the results of exploration and development drilling and related activities; fluctuation 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 news release is made as of the date of this news 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 news release is expressly qualified by this cautionary statement.

For further information: 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; Ms. Marie-Gabrielle Cajoly, Press Relations, Tel.: +41(0)22-702-94-44, marie-gabrielle.cajoly@addaxpetroleum.com; Mr. Nick Cowling, Press Relations, Tel.: +1-416-934-8011, 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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