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Addax Petroleum Announces Second Quarter 2007 Results

Calgary, Alberta, August 7th, 2007 –

• Funds Flow From Operations increased by 46 per cent and net income increased by 74 per cent
• Working interest gross oil production increased by 54 per cent, to an average of 123,000 barrels per day
• Continued exploration success offshore Nigeria and step-out appraisal success at Taq Taq

Addax Petroleum Corporation (“Addax Petroleum” or the “Corporation”) (TSX:AXC and LSE:AXC) today announced its financial and operational results for the quarter ended June 30, 2007. 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 UK securities regulatory authorities of Addax Petroleum’s Financial Statements for the quarter ended June 30, 2007 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 will be held for analysts and investors at 11:00 a.m. Eastern Time / 4:00 p.m. London, U.K. time today, Tuesday August, 7. 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: “Once again we have delivered strong and solid quarterly results. I am delighted to report further production growth which, together with good cost discipline, enables us to continue delivering strong financial and operational performance. We believe that we have excellent reinvestment opportunities, demonstrated in the quarter by our exploration successes offshore Nigeria and step-out appraisal success at Taq Taq. We continue to build a platform for growth for Addax Petroleum. During the quarter, we increased our capital base through a well-received convertible bond issue and completed our secondary listing on the London Stock Exchange which I expect to be an important contributor to our objective of maximising shareholder value.”

Selected Financial Highlights

• Petroleum sales before royalties in the second quarter of 2007 amounted to $753 million, an increase of 44 per cent over petroleum sales before royalties of $523 million in the second quarter of 2006. The growth in petroleum sales before royalties arose predominantly from increased petroleum sales volumes as the average crude oil sales price increased slightly by 1 per cent to $68.21 per barrel (/bbl) as compared to $67.85/bbl realized in the corresponding period in 2006.
• Net income in the second quarter of 2007 was $101 million, an increase of 74 per cent over net income of $58 million in the second quarter of 2006. Net income per share increased by 59 per cent to $0.65 per share (basic) in the second quarter of 2007 compared to $0.41 per share (basic) in the corresponding period in 2006.
• Funds Flow From Operations for the second quarter of 2007 increased 46 per cent to $287 million compared to $196 million for the corresponding period in 2006. Funds Flow From Operations per share increased by 32 per cent to $1.85 per share (basic) in the second quarter of 2007 compared to $1.40 per share (basic) in the corresponding quarter in 2006.
• In May, the Corporation successfully issued $300 million of senior unsecured convertible bonds due in 2012.
• Also in May, the Corporation was introduced to the Official List and to trading on the Main Market of the London Stock Exchange.

The following tables summarize the selected second quarter and first half financial highlights.

Selected Operational Highlights

• Average working interest gross oil production in the second quarter of 2007 was 123.0 thousand barrels per day (Mbbl/d), an increase of 54 per cent over second quarter 2006 average oil production of 79.9 Mbbl/d. Nigeria production increased by 30 percent to 104.1 Mbbl/d compared to 79.9 Mbbl/d in the corresponding period in 2006. Gabon contributed 18.9 Mbbl/d in the second quarter of 2007 (no contribution in the second quarter of 2006). Total oil production during the quarter was 11.2 MMbbl, as compared to oil sales volumes of 11.0 MMbbl during the quarter.
• Continued exploration success in OML137 offshore Nigeria, where oil and gas discoveries were made at Ofrima North and, at the start of the third quarter, Udele West, and step-out appraisal success at the Taq Taq field in the Kurdistan Region of Iraq.
• Capital expenditures, excluding new business acquisition considerations, farm-in fees and license signature fees, increased by 52 per cent to $261 million in the second quarter of 2007, up from $172 million in the second quarter of 2006. Development capital expenditures totaled $174 million in the second quarter of 2007, an increase of 28 per cent over second quarter 2006 development capital expenditure of $136 million. Exploration and appraisal capital expenditures increased to $87 million in the second quarter of 2007 from $36 million in the second quarter of 2006.
• Throughout the second quarter of 2007, the Corporation directly operated six drilling rigs: three offshore Nigeria, one onshore Nigeria and two onshore Gabon, and through its joint venture company, Taq Taq Operating Company, one further drilling rig in the Kurdistan Region of Iraq.
• Development project highlights in the second quarter of 2007 include:
  Nigeria
  • four new development wells were drilled, all on OML123 and all four new wells were placed on production during the quarter;
  • surface facilities development was ongoing at the Oron and Adanga fields on OML123.
  Gabon
  • two development wells were drilled on the Corporation’s onshore license areas;
  • a total of three new wells were placed on production, all onshore, comprising the two development wells drilled in the quarter and one previously drilled well;
  • surface facilities development was ongoing at the onshore Maghena and offshore Etame license areas.
• Exploration and appraisal activity and highlights in the second quarter of 2007 include:
  Gulf of Guinea Shallow Water (Nigeria and Cameroon)
  • two exploration wells were drilled offshore Nigeria in the quarter, both on OML137 resulting in the two discoveries, Ofrima North and Udele West, the latter at the start of the third quarter;
  • as reported on July 12, 2007, the Ofrima-2 exploration well, drilled on the Ofrima North structure, discovered a 140 feet gross oil bearing interval which, based on static pressure data measurements, is anticipated to be a light oil of approximately 39 degrees API, and three gas bearing intervals with individual gross gas columns of 29, 43 and 158 feet. A second exploration well, Udele-2, discovered seven gas bearing intervals with individual gross gas columns of between 41 and 113 feet, 542 feet in aggregate. Both discovery wells were suspended and the Corporation intends to re-enter each well to carry out flow tests over selected intervals later in the year.
  • in Cameroon, the Corporation recently contracted for a drilling rig to start exploration drilling on the Ngosso license area later in 2007.
  Gabon
  • the Corporation has started a 3D development and appraisal seismic survey over the southern portion of the Maghena license area. The Corporation is working to extend seismic acquisition to cover the southern portion of the adjacent Awoun license area, operated by Shell Gabon and in which the Corporation has a 40 per cent working interest. The Corporation anticipates that the 3D survey, once acquired, processed and interpreted, will provide valuable information in the further development, appraisal and exploration of this area which contains the Obangue, Koula and Damier fields;
  • as reported on April 10, 2007, the Corporation acquired a 50 per cent interest in and operatorship of the Epaemeno exploration license area, which lies immediately north of the Corporation’s Maghena and Awoun license areas onshore Gabon. The Epaemeno acquisition is subject to the consent of the government of Gabon.
  Gulf of Guinea Deep Water (Nigeria and JDZ)
  • technical studies are ongoing to evaluate exploration prospect drilling locations.
  Kurdistan Region of Iraq
  • as reported on June 4, 2007, a successful step-out appraisal well, TT-06, was drilled and tested at an aggregate rate of 18.9 Mbbl/d from three separate intervals. The TT-06 well was drilled approximately 3.6 kilometres north-northwest of the crestally-located TT-05 well;
  • during the second quarter, the TT-07 well was spudded approximately 2.2 kilometres southeast of the TT-05 well location. Presently, the TT-07 well is being prepared for flow testing, the results of which will be announced following the completion of testing;
  • recently, the TT-08 well was spudded approximately 1.1 kilometers north of the TT-05 well location with the objective of appraising the flank of the field;
  • a 2D seismic survey commenced over the Kewa Chirmila area and was recently concluded, following which a 3D seismic survey was started over the Taq Taq field.
• Operating netbacks in the second quarter of 2007 increased by 4 per cent to $51.17/bbl compared to $49.17/bbl in the second quarter of 2006. Unit operating expenses in the second quarter of 2007 decreased by 18 per cent to $5.75/bbl compared to the second quarter 2006 level of $6.99/bbl, reflecting unit cost improvements on the upgraded replacement FPSO on OML123 offshore Nigeria.

The following tables summarize the selected second quarter and first half operational information.

Dividend

The Board of Directors of the Corporation has declared a dividend of CDN$0.05 per share for the second quarter of 2007. The dividend is payable on September 13, 2007 to shareholders of record on August 30, 2007. A dividend of CDN$0.05 per share was declared and paid in the second quarter of 2007 relating to the first quarter of 2007. In accordance with Canada Revenue Agency Guidelines, dividends paid by the Corporation during the period are eligible dividends.

AOG Shareholding in Addax Petroleum Corporation

As reported on July 20 and July 31 last, the Corporation’s largest shareholder, the Addax & Oryx Group Ltd. (“AOG”), has reduced its shareholding in Addax Petroleum to approximately 55.5 million shares, representing approximately 36 per cent of the Corporation’s issued shares. The reduction in AOG’s shareholding in the Corporation took place when some shareholders in AOG exchanged their shares in AOG for shares in the Corporation already held by AOG. The beneficial interests of the Corporation’s executive management in Addax Petroleum remain unaltered as a result of the reduction of AOG’s shareholding.

Outlook

The Corporation’s outlook for 2007 is in line with guidance provided to date. Addax Petroleum expects average working interest gross oil production to approximate 127 to 133 Mbbl/d from its Nigeria and Gabon operations in 2007. Capital expenditure in 2007 is forecast to total $1,150 million, a decrease from $1,178 million, with $340 million allocated for exploration and $810 million for development expenditures. Forecast capital expenditures are allocated as follows: $750 million is forecast to be spent on Nigerian producing assets, $30 million to be spent on Nigerian non-producing assets, and $240 million to be spent on Gabon producing assets, $90 million on Taq Taq and $40 million on other assets, primarily on JDZ and Cameroon.

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” 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, and environmental matters. 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; 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 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 profit margin associated with the production and sale of crude oil and is calculated as the funds flow from operations per barrel sold, prior to corporate charges. 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 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.

Analyst Conference Call

Financial analysts are invited to participate in a conference call today Tuesday, August 7 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 listen to the conference call, please call one of the following:

Toronto: 416 644 3418
Toll-free (Canada and the U.S): 1 800 732 6179
Toll-free (U.K.): 00 800 0000 2288
Toll-free (Switzerland): 00 800 0022 8228

A replay of the call will be available at (416) 640-1917 or (877) 289-8525, passcode 21240077# until Tuesday, August 21, 2007.

For additional information, please contact:

Mr. Michael Ebsary
Chief Financial Officer
Tel.: +41 (0) 22 702 94 03
michael.ebsary@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

Ms. Marie-Gabrielle Cajoly
Press Relations
Tel.: +41(0) 22 702 94 44
marie-gabrielle.cajoly@addaxpetroleum.com

Mr. Mac Penney
Press Relations
Tel.: +1 (416) 934 80 11
mac.penney@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