African Petroleum Plc

Interim Results: 3 Months Ended March 31, 2008

Research Update

AP 3M, March 2008 Interim Results

WEST AFRICA

A Member of the Nigerian Stock Exchange

May 14, 2008

Chart 1: Revenues, 3M Interim and FY2008 Forecast

Strong earnings growth; positive outlook (on the back of capital raise and Zenon merger):

AP recentlyreleased interim results for the three month (3M) period to March 31, 2008. Turnover was up 34.3% to N35.1bn(US$297.5m) compared to the corresponding period in 2007. In a similar vein, Profit before Tax (PBT) was up51.4% to N3.2bn (US$27.1m). This is an impressive performance, following closely on similarly strong FY2007results. We expect the company to maintain this trend going forward, as new management appears to havere-aligned the company’s business model to focus more on higher margin, non-regulated products (such asdiesel for electricity generating sets). AP appears to be benefiting from access to Zenon supply sources for diesel.Zenon is a virtual monopoly in diesel importation into Nigeria. We expect strong long term growth to comefrom the AP/Zenon merger, but remain

NEUTRAL

on AP at this time; with a

N320.00

12 month price target.

Chart 2: PBT, 3M Interim and FY2008 ForecastSource: NSE, Afrinvest Research Source: NSE, Afrinvest ResearchPrice Target (Naira)

320.00

Share Price, Naira (May 14, 2008)

293.98

Market Cap (Naira, bn)

231.9

Market Cap (US$, bn)

2.0

52-Week Range (Low - High)

57.00 - 300.98

ROE (FY 2008E), %

77.4

2008E P/E, Times

26.7

Shares Outstanding (m)

788.8

Company Description:African Petroleum (AP) is one of the major retail marketersin the Nigerian downstream petroleum sector, with thethird largest market share. Previously governmentcontrolled, AP has now been acquired by a leadingprivately owned downstream operator: Zenon. Plans areunderway to merge AP and Zenon into one company.Chart 3: Key Ratios and StatisticsChart 4: Last Twelve Months Price Performance, versus NSESource: Afrinvest Research Source: NSE, Afrinvest Research

26.235.1140.4-20.040.060.080.0100.0120.0140.0160.02007 3M 2008 3M 2008 FYE

50.0150.0250.0350.0450.0550.0

M a y - 0 7 J u n - 0 7 J u l - 0 7 A u g - 0 7 S e p - 0 7 O c t - 0 7 N o v - 0 7 D e c - 0 7 J a n - 0 8 F e b - 0 8 M a r - 0 8 A p r - 0 8 M a y - 0 8

NSEAP

%, Rebased to 100