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Lundin: North Sea Oil Find Luno II May Hold 160M Barrels

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OSLO - Swedish oil company Lundin Petroleum AB estimated that its Luno II discovery off Norway could yield as much as 160 million barrels, the latest in a string of finds that have revived interest in the North Sea.

It was the first indication of the size of the find, and the market was slightly disappointed.

Lundin said it expects the southern part of Luno II to contain between 25 million and 120 million barrels of oil equivalent. Another section to the north could produce between 10 million and 40 million barrels, the company said.

Lundin shares fell 2.2% to trade at SEK152.00 after the announcement, reflecting both uncertainty about the exact size of Luno II and the announcement Sunday of an increase in oil company taxes in Norway.

Luno II is located in a geological formation in the middle of the North Sea called the Utsira High. This is where Lundin discovered the Edvard Grieg in 2007 and the Johan Sverdrup in 2010, both significant finds.

"We are pleased to announce another significant discovery in the Utsira High region, which in terms of size and location is likely to be commercial," said Lundin chief executive Ashley Heppenstall.

Lundin's recent success on the Utsira High has contributed to renewed interest in the North Sea, where most companies thought there was nothing left to find after four decades of oil activity.

Statoil recently reported the discovery of between 40 million and 150 million high-value barrels near Gullfaks, a nearly depleted field in the northern North Sea where production began in the mid-80s.

Mr. Heppenstall said the company continues to explore Utsira High and said he was optimistic about further discoveries.

Lundin is the operator of production license 359 where Luno II was found, with a 40% ownership stake. Statoil ASA and Premier Oil Plc each have a 30% stake in the field.

Copyright (c) 2012 Dow Jones & Company, Inc.

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