Lundin Petroleum has created a strategic portfolio of assets on the Norwegian Continental Shelf (NCS). The Alvheim field came on stream in the second quarter 2008. Highlights for 2007-2008 include the Luno discovery, the Pi North discovery and the successful appraisal of the Nemo field.

Production
The Alvheim field came on stream during the second quarter 2008 and has been producing above expectations. Alvheim field consists of excellent quality Paleocene sandstone reservoirs. Oil and gas have been found in a group of oil, and oil / gas accumulations, of which the main three accumulations are currently under development (Kneler, Kameleon and Boa). Additional smaller discoveries within the complex may be incorporated into the development later in field life. The field is producing via an FPSO, with oil exported by shuttle tanker and gas by pipeline to the UK. The field is ideally located to act as a hub for satellite production. To date, both the Norsk Hydro Vilje oil field and Volund (Marathon/Lundin Petroleum) with net remaining reserves 17.5 MMboe, oil and gas find have been sanctioned for development. Vilje was part of the initial production stream, and Volund is scheduled to come on stream in 2009.

In March 2008, a sale and purchase agreement was signed with Det Norske Oljeselskap ASA to sell Lundin Petroleum’s interest in the Jotun field for a cash consideration of NOK 72 million with an effective date of 1 January 2008. The deal was completed on 31 July 2008.

Development - Contingent Resources
• Alvheim area – the Kobra and Gekko discoveries all represent potential additions to the Alvheim field development and will be further assessed as the development continues.

• PL088, Peik field – Lundin Petroleum has an interest in both the UK and Norway blocks that contain the Peik gas condensate field. Development studies are ongoing with a likely plan of development (PDO) submitted in 2009.

• PL006c South East Tor discovery – appraisal drilling of this 1970’s chalk discovery is currently planned for Q4 2008.

• PL148, Nemo discovery – located in Block 7/7-2, this oil discovery was successfully appraised in Q1 2008 confirming the extension of the Nemo field. Ongoing conceptual development studies including a potential host platform decision will most likely result in a development decision for the field.

• PL292, Pi South discovery – the potential of this oil and gas discovery, located close to BG’s UK Armada field complex, was further enhanced by the discovery of Pi North in May 2008. The Pi North and South structures have estimated recoverable reserves of 19–32 mmboe. The plan forward is the submission of a PDO.

• PL340 – modest contingent resource volumes are carried in this relatively heavy oil discovery in the high quality Tertiary sands. Maturation of these resources will be contingent on success of the neighbouring exploration well planned by the Alvheim group in 2008.

Exploration - Luno Oil Discovery
The Luno oil discovery was made in October 2007 in PL338. Light oil was discovered in a clastic Jurassic reservoir. The size of the discovery is estimated at between 65 mmboe and 190 mmboe of gross recoverable oil from the Jurassic reservoir with additional upside potential from the Triassic reservoir which was penetrated by the well. The first appraisal well on the Luno discovery will be spudded in the second half of 2008. The well will test the lateral continuity if the Jurassic reservoir as well as the upside potential of the Triassic reservoir. Recent technical analysis has identified additional potential in extensions of the Luno discovery located up-dip of the Luno discovery which contain significant additional reserve potential. Further exploration wells will be drilled to further test the potential in the Greater Luno area during 2009.

Exploration - Prospective Resources
Licence portfolio comprising some 29 licences. Most of the licences are Lundin Petroleum operated. The majority of the licences are located in the North Sea area of the Norwegian offshore from Quadrant 25 in the north (Alvheim area) to Quadrant 3 in the south (adjacent to the Danish border). Three licences are held in the Barents Sea, offshore northern Norway.

Exploration wells planned for 2008/2009 are the following:

• PL 0006c – Hyme (Lundin operator, 75%)
• PL304 – Aegis prospect (Lundin operator, 50%)
• PL338 – Luno extentions (Lundin operator, 50%)
• PL412 – Hugin South (Noreco operator, 30%)
• PL363 – Mon (Lundin operator, 60%)
• PL340 – Marihone A/B prospect (Marathon operated, Lundin 15%)
• PL359 – Luno High (Lundin operator, 70%)
• PL476 – Frusalen (DNO operated, 30%)
• PL410 – Luno 3 (Lundin operator, 100%)
• PL203 – South Kneler (Marathon operated, 15%)