LUNDIN PETROLEUM: LUNDIN PETROLEUM AB - YEAR END REPORT 2010

LUNDIN PETROLEUM: LUNDIN PETROLEUM AB - YEAR END REPORT 2010
(For complete Year end report see attached file)
HIGHLIGHTS

Fourth Quarter 2010
•	Production of 32,600 boepd up 19% from fourth quarter 2009
•	Brent oil averaged USD 86.46 per barrel
•	Net result of MUSD 86.3
•	Operating cash flow of MUSD 156.9 - up 40% from fourth quarter 2009
•	EBITDA of MUSD 177.7 - up 43%  from fourth quarter 2009
•	Distribution of shareholding in Etrion resulting in a MUSD 58 profit after tax
•	Completion of sale of Salawati Indonesian production assets

2010
•	Exploration success with Avaldsnes and Apollo discoveries
•	Reserve increase of 18% and reserve replacement ratio of 237%
•	Strong production of 32,700 boepd driven by Alvheim and Volund fields
•	Net result of MUSD 498.5
•	Operating cash flow of MUSD 598.6 - up 27% from 2009
•	EBITDA of MUSD 635.6 - up 31%  from 2009
•	Spin-off of UK assets with a reported MUSD 358 profit after tax


Comments from C. Ashley Heppenstall, President and CEO

2010 was a very successful year for Lundin Petroleum. The fundamental
cornerstone of our strategy is to create shareholder value through exploration
and this delivered positive results in 2010 with the Avaldsnes and Apollo
discoveries in the Greater Luno Area offshore Norway. We have already commenced
in 2011 an additional five well drilling programme in the Greater Luno Area to
appraise the Avaldsnes discovery as well as targeting additional exploration
prospects. I believe that our Avaldsnes discovery has the potential to open up
a new production hub on the Norwegian Continental Shelf and with Lundin
Petroleum being one of the largest owners of acreage in this area, this will be
extremely positive for us. 

I am pleased that we continue to increase our reserves and production. In 2010
our reserves increased by 18 percent and we achieved a reserve replacement
ratio of close to 240 percent. In my opinion our ability to grow our reserve
base is the most important factor in increasing shareholder value. Lundin
Petroleum reserves are expected to increase further in 2011 as we book the
reserves from our exploration discoveries such as Avaldsnes and Apollo. The
increase to our reserve base will subsequently lead to increases in our
production and operating cash flow as these reserves are developed and brought
into production. Our production from non-divested assets will increase in 2011
by approximately 10 percent and production will double from current levels to
over 60,000 boepd in the next five years from various development projects in
Norway. 

Our production growth will come from five development projects in Norway which
collectively will double our current production to over 60,000 boepd within the
next five years. I am confident that the net capital cost of these projects
estimated at USD 2 billion can be funded from a combination of internally
generated cash flow and bank borrowings without the requirement for further
equity funding. 

Our exploration led growth strategy has yielded positive results particularly
in Norway where we have been one of the most successful exploration companies
in recent years. Following the successes in discovering Luno, Avaldsnes and
Apollo we believe that our continued exploration driven strategy will lead to
further discoveries. Lundin Petroleum's 2011 work programme involves the
drilling of a further ten appraisal and exploration wells in Norway including
five wells in the Greater Luno Area. 


Listen to President & CEO Ashley Heppenstall and CFO Geoffrey Turbott comment
on the report at the audio cast presentation 9 February at 10.00 CET. 

The presentation and slides will be available on www.lundin-petroleum.com
following the presentation. Please dial in to listen to the presentation on the
following telephone number: + 44 (0) 203 043 24 36. 

To view the whole report see attached document.

Visit our website: www.lundin-petroleum.com