Lundin Spuds Morskaya-1 Exploration Well in Caspian Sea

Lundin Petroleum AB is pleased to announce that it has started drilling the Morskaya-1 exploration well in the Lagansky block, situated in the northern Caspian Sea in Russia. Lundin Petroleum has currently a 70% net interest in the Lagansky block.

The well, with a planned depth of 2,000 meters, is targeting Triassic and Jurassic Sandstone Reservoirs. The Morskaya structure is on trend with several major discovered oil and gas accumulations in the northern Caspian Sea.

The Morskaya-1 well is the first in a four well drilling program planned for 2008 and 2009.

The gross unrisked prospective resources for the Morskaya prospect within the Lagansky block are estimated at 640 million of barrels of oil equivalents (MMboe).

Gazprom has a call option to acquire a 50% plus one share in the Lagansky block. Lundin Petroleum has a call option to acquire an additional 30% from minority shareholders. If both options are exercised Lundin Petroleum will retain 50% minus one share in the Lagansky block and Gazprom will hold a 50% plus one share in the Lagansky block.