Lundin Petroleum to Drill Two Exploration Wells in France

Lundin Petroleum, which is engaged in oil and gas exploration and production, has signed a farmout agreement with Gaz de France in the Pays de Saulnois license in the Lorraine region, onshore France.

As part of the agreement, Lundin Petroleum will transfer to Gaz de France a 50% interest in the Pays de Saulnois license and Lundin Petroleum will retain the remaining 50% and operatorship.

An exploration well in the license will be drilled in the third quarter of 2008 and will target the Vaxy prospect which has unrisked gross prospective recoverable gas resources of about half a trillion cubic feet (tcf), which is approximately 90 million barrels of oil equivalent. Gaz de France will pay a disproportionate share of the costs of the drilling of the first well for which a drilling rig has already been secured.

An additional farmout agreement has been signed with Societe Petroliere de Production et d’Exploitation (SPPE), a private French independent oil company. The agreement is in relation to the Ferrieres exploration license in the Paris Basin, onshore France where Lundin Petroleum will transfer to SPPE a 35% interest in the license and will retain the remaining 65% interest and operatorship.

Alex Schneiter, COO of Lundin Petroleum, said: “These two deals ensure that we will have an active exploration program in France this year. Our existing French assets are generating strong cash flow in today’s oil price environment. The Pays de Saulnois prospect is of material size and any exploration success in France being close to market and existing infrastructure can easily be monetized.”