Addax … The Act … The Bill … & The Plan PETAN Panel Discussion Offshore Technology Conference Houston, Texas May 4, 2010

2© Addax Petroleum Corp., 2010 All rights reserved Production Growth Addax Petroleum in Nigeria Reserves Growth – Addax Petroleum was awarded 2 Production Sharing Contracts in 1998, covering four blocks currently known as Oil Mining Leases 123, 124, 126 and 137 – In more recent years, Addax, in partnership with an Indigenous company, has been awarded a Deep Offshore PSC and has joined with other Indigenous companies as a Technical Partner – Addax Petroleum is anxious to continue finding and developing resources for the benefit of Nigeria, as long as the prevailing fiscal, legal and regulatory conditions remain viable

3© Addax Petroleum Corp., 2010 All rights reserved Annual Investment Direct Benefits for Nigeria Annual Royalties and Taxes – Nigeria has benefited greatly from the successful development and redevelopment of resources in OMLs 123, 124, 126 and 137 between 1998 and 2009 –USD 5 billion total investment in development, facilities and infrastructure that now belong to the FRN –USD 6 billion total in royalties, taxes and profit oil paid to the FRN (DPR, FIRS, NNPC) – Addax Petroleum has a significant investment program planned (over one billion USD for 2010) that will bring further benefits to Nigeria and the Nigerian government through additional royalty, taxes and profit share (est. USD 800 million for 2010)

4© Addax Petroleum Corp., 2010 All rights reserved Nigerian Content Development – Addax Petroleum is a strong supporter of developing Nigeria’s indigenous oil & gas industry by partnering with Nigerian companies and using Nigerian contractors whenever possible – Addax Petroleum’s success has been based largely on the technical skills of its human resources, most of whom are highly skilled Nigerians, many of whom have developed their skills almost exclusively within Addax Petroleum – Partners with Nigerian companies in 7 of 9 contract areas in Nigeria and JDZ – 100% project design – Recently completed drilling first well with fully indigenous jack-up rig Nigerian Content Nigerian Employment – Over 300 Nigerian employees working in Nigeria and Geneva – Over 100 Nigerian Contractors – Over 600 Nigerians employed through Service Contracts

5© Addax Petroleum Corp., 2010 All rights reserved “The Act” “An Act to Provide for the Development of Nigeria Content in the Nigerian Oil and Gas Industry; for Nigerian Content Plan; for Supervision, Coordination, Monitoring and Implementation of Nigerian Content and for Matters Incidental Thereto, 2010” Establishes a Nigerian Content Monitoring Board (NCMB) Requires all “operators” to submit a Nigerian Content Plan before carrying out any “project” in the Nigerian oil and gas industry and provides a “Schedule” of the minimum Nigerian Content in any undertaking Provides “Bidding” criteria and priorities based on “Nigerian Content” Requires that the NCMB Approve all advertisements, pre-qualification criteria, technical bid documents, technical evaluation criteria and proposed bidder lists for any contract with a Ceiling Value in excess of USD 1,000,000 Requires quarterly forecasts of contracts to be bid or awarded and quarterly reports of all contracts awarded Requires other plans for training, employment, R and D, Insurance, Legal and Financial Services, etc. each with corresponding reporting requirements

6© Addax Petroleum Corp., 2010 All rights reserved “The Bill” “A Bill for an Act to Provide for the Establishment of Legal and Regulatory Framework, Institutions and Regulatory Authorities for the Nigerian Petroleum Industry; Establish Guidelines for the Operation of the Upstream and Downstream Sectors” – Addax Petroleum enthusiastically supports the laudable objectives of the Petroleum Industry Bill … to improve transparency and accountability throughout the Nigerian oil and gas industry … to distinctly segregate the regulatory and commercial functions of the Nigerian Government, to create a fully commercialized, and self funding National Oil Company and to provide fiscal regimes that are globally competitive. – And many versions of the Bill or the Inter Agency Team’s Memoranda, on the Bill, appear to be successful in accomplishing many of these objectives

7© Addax Petroleum Corp., 2010 All rights reserved The “But” However, to our knowledge, the Bill proposes to: – Dramatically increase effective royalty rates (on PSCs), – Significantly increase effective tax rates (on PSCs), – Eliminate the Investment Tax Incentives and Allowances, and – Eliminate the possibility of obtaining full cost recovery, among other things. The concern of the Addax Petroleum and other members of the petroleum producer’s community in Nigeria, is that the cumulative effect of these provisions will be to reduce investment in exploration for and development of Nigeria’s hydrocarbon resources, leading to a reduction in benefits to Nigeria in terms of both revenues and employment.

8© Addax Petroleum Corp., 2010 All rights reserved “The Plan” National Gas Master Plan A comprehensive plan for the management of Nigeria’s gas resources and stimulation of viable domestic and export gas markets through: – Introduction of a Domestic Gas Supply Obligation, – Provision of a pricing framework and commercial structures, and – Provision of a blueprint for infrastructure development.

9© Addax Petroleum Corp., 2010 All rights reserved Oil Mining Lease 126 Nda Gas Injection Project Objectives Flare down in OML 126 Enhanced oil recovery Status Fully operational. Associated gas is currently being re-injected for enhanced oil recovery. Delivery On stream 15 August 2009

10© Addax Petroleum Corp., 2010 All rights reserved Oil Mining Lease 124 Izombe Compressor Upgrade Project Objectives Flare down in OML 124 Delivery of 40MMSCFD of fuel gas to NDPHC’s power plant at Egbema Status Compressors are fully operational, gas is currently being re-injected for conservation and OML 124 flare has been extinguished Delivery PSC related works complete “Gas to Power” dependent on completion of gas transmission pipeline and power plant

11© Addax Petroleum Corp., 2010 All rights reserved Oil Mining Lease 123 New Adanga Production Facility Project Objectives Flare down in OML 123 Delivery of 100 MMSCFD of fuel gas to NDPHC’s Power Plant at Calabar Enhanced oil production capability and preservation of oil reserves in OML 123 Compressed gas for artificial lift Status Final concept development work in progress Delivery Mid subject to NNPC approvals

Thank You PETAN … Thank you Oilserv And THANK YOU all … for attending!