CALGARY, Canada, May 6 /PRNewswire/ --

- 78 per cent Increase in Funds Flow From Operations to US$469 Million

- 204 per cent Increase in Net Income to US$240 Million

- 20 per cent Increase in Production to 139.1 Mbbl/d

Addax Petroleum Corporation ("Addax Petroleum" or the "Corporation") (TSX:AXC and LSE:AXC), today announced its results for the quarter ended March 31, 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 Audited Consolidated Financial Statements for the quarter ended March 31, 2008 and related Management's Discussion and Analysis. Copies of these documents may be obtained via http://www.sedar.com, http://www.londonstockexchange.com and the Corporation's website, http://www.addaxpetroleum.com.

A conference call will be held for analysts and investors today Tuesday, May 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 Addax Petroleum's performance in the first three months of 2008 continues to build upon our track record for delivering robust results, strong operational performance and excellent netbacks. Exploration and appraisal activity this year has been very encouraging and we are pleased to add further to our exploration portfolio through the acquisition of the Iroko exploration license in Cameroon. In the Kurdistan Region of Iraq, we are integrating the promising results of the two most recent step-out appraisal wells into a full field development plan and have commenced construction of an early production facility. Lastly, we have significantly expanded our ability to fund additional future growth through our first senior unsecured credit facility obtained successfully despite the difficult credit markets, which is a demonstration of the support for Addax Petroleum's strategy and growth potential in the financial community."

Selected Financial Highlights

- Petroleum sales before royalties in the first quarter of 2008 amounted to US$1,154 million, an increase of 84 per cent over petroleum sales before royalties of US$627 million in the first quarter of 2007. The increase in petroleum sales before royalties was primarily driven by a 66 per cent increase in the average crude oil sales price in the first quarter of 2008 to US$96.03 per barrel (/bbl) as compared to US$57.86/bbl realized in the first quarter of 2007 and a 12 per cent increase in sales volumes between the same periods. Noteworthy in the first quarter of 2008 is that oil production exceeded sales volumes by 0.64 MMbbl, or the equivalent of approximately 7 Mbbl/d, resulting in a large build of oil in inventory. - Funds Flow From Operations for the first quarter of 2008 increased 78 per cent to US$469 million (US$3.02 per basic share) compared to US$263 million (US$1.70 per basic share) in the first quarter of 2007 - Net income in the first quarter of 2008 increased 204% to US$240 million (US$1.54 per basic share) compared to US$79 million (US$0.51 per basic share) in the corresponding period in 2007. - Capital expenditures increased by 57 per cent to US$340 million in the first quarter of 2008 from US$216 million in the first quarter of 2007. Development capital expenditures totaled US$246 million in the first quarter, an increase of 68 per cent over development capital expenditure of US$146 million in the first quarter of 2007. Exploration and appraisal capital expenditures increased to US$94 million in the quarter, an increase of 34 per cent over exploration and appraisal capital expenditures of US$70 million in the first quarter of 2007. - At the end of the first quarter 2008, bank debt totaled US$1,125 million, an increase of US$150 million over the corresponding quarter in 2007. Bank debt is currently drawn under a 5-year, US$1.6 billion senior secured term facility, with 4 years remaining. - In late April 2008, the Corporation expanded its borrowing capacity and entered into a 2-year, US$450 million senior unsecured bank loan facility. This loan facility is currently undrawn, but is intended to provide funding for future growth opportunities through potential acceleration of or increase in capital expenditure projects and/or other acquisition opportunities. The following table summarizes the selected financial highlights: ------------------------------------------------------------------------- Selected financial highlights Quarter ended March 31 US$ million unless otherwise stated 2008 2007 Change ------------------------------------------------------------------------- Petroleum sales before royalties 1,154 627 84% Average crude oil sales price, US$/bbl 96.03 57.86 66% Funds Flow From Operations 469 263 78% Net income 240 79 204% Weighted average common shares outstanding (basic, millions) 156 155 0% Funds Flow From Operations per share (US$/basic share) 3.02 1.70 78% Earnings per share (US$/basic share) 1.54 0.51 202% Weighted average common shares outstanding (diluted, millions) 162 155 5% Funds Flow From Operations per share (US$/diluted share) 2.86 1.70 68% Earnings per share (US$/diluted share) 1.51 0.51 196% Total assets 4,178 3,113 34% Long-term debt, excluding convertible bonds 1,125 975 15% Capital Expenditures - by Region Nigeria (excluding deepwater) & Cameroon 261 165 58% Gabon 66 31 113% Kurdistan Region of Iraq 7 15 -53% Deepwater Nigeria & JDZ 3 3 0% Corporate 3 2 50% Total 340 216 57% Capital Expenditures - by Type Development 246 146 68% Exploration & appraisal 94 70 34% Total 340 216 57% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Selected New Business Highlights - During the first quarter of 2008, the Corporation renegotiated an amended production sharing contract for the Taq Taq license area in the Kurdistan Region of Iraq, keeping the Corporation's economic and operational interest materially unchanged. Early in the second quarter of 2008, Addax Petroleum concluded one strategic acquisition which increased the Corporation's exploration portfolio, offshore Cameroon. - New business highlights to date in 2008 include: Kurdistan Region of Iraq - as previously announced 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. Cameroon - as previously announced in April 2008, Addax Petroleum acquired a 100% working interest in the Iroko exploration license area, offshore Cameroon. The Societe Nationale des Hydrocarbures, the national oil company of Cameroon, holds a back-in right of 30 per cent in case of a development. The Corporation is obligated to pay a signature bonus of US$3 million and undertake a minimum work program valued at US$18 million. There are no wells drilled on Iroko but there is oil production nearby from the Pecten (Shell)- operated Mokoko-Abana field complex. The Corporation is presently undertaking an exploration program on the Ngosso license area offshore Cameroon, after which it plans to start exploration drilling on the Iroko license area. Selected Exploration and Appraisal Highlights - During the first quarter of 2008, Addax Petroleum had significant exploration and appraisal success in its program offshore Nigeria and in the Kurdistan Region of Iraq and also commenced its exploration program offshore Cameroon. The Corporation also progressed its exploration and appraisal portfolio in Gabon and the Joint Development Zone and is planning for exploration and appraisal activities later in the year. - Exploration and appraisal highlights to date in 2008 include: Gulf of Guinea Shallow Water (Nigeria and Cameroon) - in OML137, two successful appraisal wells were drilled on the Ofrima North discovery. The Ofrima-3A well confirmed the western extension of the H42 oil reservoir discovered by the Ofrima-2 well drilled in 2007 and the Ofrima-3 well discovered 62 feet of oil and 92 feet of liquids-rich gas in deeper horizons. Development planning studies for Ofrima North are currently underway; - in OML123, two wells were successfully appraised at the Kita Marine and Oron West fields, the results of which are presently being incorporated into field development options. The ORW-C1AST well successfully appraised an extension to the producing Oron West field and the KTM-6 well discovery in March 2008 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; and - in Cameroon, the Corporation started its first exploration drilling campaign. The campaign comprises drilling up to three exploration wells in the Ngosso license area followed by an exploration well in the recently-awarded Iroko license area. The 2008 Cameroon exploration drilling campaign is planned to be completed during the second quarter. 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 second half of 2008. In OPL291, the Corporation is planning to acquire 3D seismic survey also in the second half of 2008. Gabon - the Corporation participated in the unsuccessful THAM-1 exploration well drilled by Sterling Energy to test the Admiral prospect on the Themis Marin offshore license area. The Themis Marin license was subsequently relinquished with all work commitments completed. Onshore Gabon, the Corporation acquired development and exploration seismic data in its operated Remboue license area. Kurdistan Region of Iraq - 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 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. Selected Operational Highlights - Average gross working interest oil production in the first quarter of 2008 was 139,100 barrels per day (bbl/d) representing an increase of approximately 20 per cent over the 2007 average production of 116,090 bbl/d. Average oil production in the first quarter of 2008 included 109,700 bbl/d from Nigeria and 29,400 bbl/d from Gabon compared to a 2007 first quarter average production level of 97,880 bbl/d and 18,210 bbl/d, respectively. - Development project highlights in the first quarter of 2008 include: Nigeria - drilled three new development wells which included one oil production well and one water injection well in OML123 and one oil production well in OML124; - placed a total of two new oil production wells on production in the quarter which were the two wells drilled in the quarter; - in OML123, the Oron West South platform was installed while the first of two platform substructures were installed on the Adanga North Horst field and water injection pipelines were laid and facilities commissioned; Gabon - drilled seven new development wells onshore of which five, comprising four oil production wells and one gas injection well, were in the Addax Petroleum operated Tsiengui field in the Maghena license area and a further two oil development were wells in the Shell-operated Koula field in the Awoun license area; - placed a total of five new oil production wells on production in the Tsiengui field in the quarter of which two were drilled in the quarter and three were drilled in the previous quarter; - 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 - commenced construction of an early production facility; and - started 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. - Operating netbacks in the first quarter of 2008 increased 72 per cent to US$72.49/bbl compared to US$42.05/bbl in the first quarter of 2007. Unit operating expenses in the first quarter of 2008 increased to US$8.09/bbl, an increase of 3 per cent over the 2007 level of US$7.84/bbl as the Corporation continues to face cost inflation pressures for the provision of services. The following table summarizes selected operational information: ------------------------------------------------------------------------- Selected operational highlights Quarter ended March 31 2008 2007 Change ------------------------------------------------------------------------- Quarter average gross working interest oil production (Mbbl/d) Nigeria (offshore) 102.3 92.1 11% Nigeria (onshore) 7.4 5.8 28% Nigeria sub-total 109.7 97.9 12% Gabon (offshore) 7.0 6.3 11% Gabon (onshore) 22.4 11.9 88% Gabon sub-total 29.4 18.2 62% Total 139.1 116.1 20% Prices, expenses and netbacks (US$/bbl) Average realized price 96.03 57.86 66% Operating expense 8.09 7.84 3% Operating netback 72.49 42.05 72% ------------------------------------------------------------------------- -------------------------------------------------------------------------

Dividend

During the first 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 May 2, 2008 which is payable on June 12, 2008 to shareholders of record on May 29, 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 first quarter of 2008, the Corporation made the following announcements:

- on April 3, 2008, the Corporation announced the acquisition of a 100 per cent interest in and operatorship of the Iroko exploration license area, offshore Cameroon; - on May 1, 2008, the Corporation announced the successful appraisal of the Ofrima North discovery in OML137 offshore Nigeria.

In addition, during April 2008, a new two year loan facility was signed and underwritten for an amount of US$450 million, which may increase to US$500 million after syndication. This loan facility will be used to provide funding in relation to the acceleration of or increase in capital expenditure projects and/or other acquisition opportunities.

Outlook

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 for 2008 to be approximately 140,000 to 145,000 bbl/d from its Nigeria and Gabon operations.

Analyst Conference Call

Financial analysts are invited to participate in a conference call today Tuesday, May 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: 416-644-3424 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 +1-416-640-1917 or +1-877-289-8525, passcode 21269672 followed by the number sign until Tuesday, May 20, 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, 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, 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: 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.: +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 .

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.: +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