Lundin Petroleum AB divests subsidiary in Venezuela acquires 42.5% stake in PetroFalcon Corporation

Nordic Business Report, July 19, 2007

NORDIC BUSINESS REPORT-19 July 2007-Lundin Petroleum AB divests subsidiary in Venezuela acquires 42.5% stake in PetroFalcon Corporation(C)1994-2007 M2 COMMUNICATIONS LTD http://www.m2.com

Swedish oil company Lundin Petroleum AB said on Wednesday (18 July) that it has signed a binding letter of intent to sell its wholly-owned subsidiary Lundin Latina de Petroleos SA (Lundin Venezuela) to PetroFalcon Corporation for USD41m in shares.

In connection with the deal Lundin Petroleum has also agreed to purchase additional shares for USD8m.

Following the transactions Lundin Petroleum will be the largest shareholder in PetroFalcon with a holding of approximately 42.5% of the share capital.

PetroFalcon is a natural resource company with oil and gas operations in Venezuela with existing proven and probable reserves of 36.3 million barrels of oil equivalent. The company is listed on the Toronto Stock Exchange in Canada.

"The sale of our Venezuelan interest and the equity investment in PetroFalcon gives Lundin Petroleum continued exposure to the Venezuelan oil and gas market. PetroFalcon plan to proactively invest in Venezuela through their existing portfolio as well as exploration and new acquisitions," commented Ashley Heppenstall, president and CEO of Lundin Petroleum.

Lundin Petroleum, headquartered Stockholm, Sweden, is an independent oil exploration and production company with assets in Europe, Africa, Russia and the Far East. The company has existing proven and probable reserves of 176.4 million barrels of oil equivalent. Lundin Petroleum is listed on the Nordic Exchange in Stockholm.

One British pound (GBP) is worth approximately 2.03 US dollars (USD).

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