Lundin Shareholders Okay Valkyries Acquisition

Meeting in Stockholm on Friday, shareholders of Lundin Petroleum AB approved the previously announced acquisition of Valkyries Petroleum Corp.

In conjunction with the acquisition, Lundin will issue up to 57 million of its shares to current Valkyries shareholders. Based on the current number of outstanding shares of Valkyries and assuming no Valkyries options are exercised prior to completion, the number of Lundin Petroleum shares to be issued on completion of the acquisition will be 55,795,414.

Valkyries is a Canadian upstream oil and gas company with exploration and producing interests in Russia. The company’s year-end proven and probable reserves as of Dec. 31, 2005, plus third-party estimated proven and probable reserves for new acquisitions to date are approximately 31 million barrels of oil. The company’s current net production is approximately 4,500 barrels of oil per day (bopd).

The Valkyries acquisition is expected to close by August 1, 2006. It must be approved by Valkyries’ shareholders at the company’s July 25 extraordinary general meeting. In addition, the deal must win Canadian court approval.

Lundin’s shareholders also resolved the following:

--To authorize Lundin’s board to issue 1million shares to the previous holder of Valkyries’ interest in the Caspian Field upon the Caspian Field producing 2,500 bopd for a continuous period of 30 days in accordance with an agreement previously made by Valkyries with such vendor of the Caspian Field.
--In respect of incentive warrants previously granted or reserved for grant under the Valkyries stock option plan, to issue not more than 799,000 incentive warrants each entitling the holder to subscribe for one new share in Lundin Petroleum. Each warrant may be exercised at the exercise prices agreed by Valkyries, as converted from Canadian dollars into Swedish kronas.
--To issue no more than 275,000 incentive warrants to certain key managers in Valkyries. Each warrant may be exercised to subscribe for a Lundin Petroleum share from May 31, 2007, through May 31, 2009, at an exercise price corresponding to 110 percent of the average closing price for Lundin Petroleum’s shares on the O-list of the Stockholm Stock Exchange during the period from July 24, 2006, up to and including August 4, 2006.

Lundin Petroleum is a Swedish independent oil and gas exploration and production company with a well-balanced portfolio of world-class assets in Albania, France, Indonesia, Ireland, the Netherlands, Nigeria, Norway, Sudan, Tunisia, United Kingdom, and Venezuela.