African Petroleum is in talks with two Chinese suitors interested in acquiring a stake of up to 10 per cent in the West Africa-focused oil and gas explorer, a source says.

If successful, the transaction could be worth "several hundreds of millions of dollars" that would boost funding for African Petroleum's projects.

Negotiations are advanced and could see the issue of new shares to the two Chinese groups.

Interest in West Africa's Transform Margin region has been building and analysts say it is poised for one of the largest deepwater exploration programs in the world. Anadarko Petroleum of the US, London-listed Tullow Oil and Spain's Repsol YPF are among the companies that own interests in exploration acreage in the region.

Western Australia-based African Petroleum has amassed a substantial position in the coastal region, and in February it caught the market's attention when it said it had made a significant oil discovery at its Narina-1 well offshore of Liberia. That news sparked a 70 per cent jump in its share price on the day.

The stock has more than tripled since the start of the year to grow the company's market capitalisation to $2.36 billion. That means it accounts for roughly two-thirds of the combined value of companies on the National Stock Exchange.

The company last month said it had $US152 million ($155.6m) cash in the bank as of the end of March, plus about $US19m held in escrow accounts as security for the acquisition of seismic data, a drilling contract and a bank guarantee for the government of the Ivory Coast.

The largest shareholder in African Petroleum is the Timis Trust, with a stake of almost 40 per cent. Frank Timis, who is non-executive chairman, is also the biggest shareholder and executive chairman of AIM-listed African Minerals, where he is currently also acting chief executive following the retirement, after just three years at the helm, of industry veteran Alan Watling. African Minerals in March sold a 25 per cent stake to Shandong Iron & Steel for $US1.5bn.

Also on African Petroleum's board is deputy chairman Tony Sage, chief executive of Cape Lambert Resources, which has a strategy of buying resources assets, building them up and then selling them on.