ANNUAL REPORT 2006 10,000 250 0 0 0 0 02 03 04 05 06 02 03 04 05 06 02 03 04 05 06 02 03 04 05 06 1 Adjusted to Exclude Sale of Assets

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ANNUAL REPORT 2006 10,000 250 0 0 0 0 02 03 04 05 06 02 03 04 05 06 02 03 04 05 06 02 03 04 05 06 1 Adjusted to Exclude Sale of Assets THE YEAR 2006 PRODUCTION (BOEPD) PROFIT (MSEK) 1 EBITDA (MSEK) CASH FLOW (MSEK) 40,000 1,000 3,000 3,000 30,000 750 2,000 2,000 20,000 500 1,000 1,000 ANNUAL REPORT 2006 10,000 250 0 0 0 0 02 03 04 05 06 02 03 04 05 06 02 03 04 05 06 02 03 04 05 06 1 Adjusted to exclude sale of assets 2006 SUMMARY 4Average production of 29,400 boepd (33,100 boepd) LUNDIN PETROLEUM AB ANNUAL REPORT PETROLEUM AB ANNUAL LUNDIN 4Operating income of MSEK 4,414.5 (MSEK 4,190.2) 4Net profi t of MSEK 794.4 (MSEK 994.0) 4Operating cash fl ow of MSEK 2,271.0 (MSEK 2,627.4) 4EBITDA MSEK 2,731.5 (MSEK 2,782.6) 4Diluted earnings per share SEK 2.81 (SEK 3.87) 4Debt/equity ratio 12% (9%) 2005 in brackets 4Reserves increased by 29% 4The Oudna fi eld development in Tunisia successfully completed, onstream in November 4Ongoing development of the Alvheim fi eld in Norway 2006 OUTLOOK 2007 4Capital budget for development and exploration over MUSD 530 Corporate Head Offi ce President’s Offi ce 4Development projects – MUSD 290: Lundin Petroleum AB (publ) Lundin Petroleum AB (publ) - Norway Alvheim fi eld, onstream 2007 Hovslagargatan 5 5 chemin de la Pallanterie - Norway Volund fi eld, onstream 2009 SE-111 48 Stockholm CH-1222 Vésenaz - United Kingdom, Broom fi eld, development drilling Sweden Switzerland - United Kingdom, Heather fi eld, development drilling Telephone: 46-8-440 54 50 Telephone: 41-22-595 10 00 - United Kingdom, Thistle fi eld, redevelopment Telefax: 46-8-440 54 59 Telefax: 41-22-595 10 05 - Russia, ongoing development drilling - France, Villeperdue fi eld development drilling E-mail: [email protected] E-mail: [email protected] - Indonesia, Singa fi eld development, onstream 2009 4Exploration programme – MUSD 230: - United Kingdom, 5 wells - Norway 3 wells - Russia 2 wells - Sudan 3 wells - Indonesia 6 wells www.lundin-petroleum.com 4Total unrisked prospective resource potential of 1.4 billion barrels VISION As an international oil and gas exploration and production company operating globally, the aim is to explore for and produce oil & gas in the most economically effi cient, socially responsible and environmentally acceptable way, for the benefi t of shareholders, employees, and co-ventures. Lundin Petroleum applies the same standards to all activities CONTENTS DEFINITIONS worldwide to satisfy both the commercial and ethical 2006 Summary 1 requirements. Lundin Petroleum strive to continuously Letter to shareholders – C. Ashley Heppenstall, CEO 2 DEFINITIONS improve the performance and to act in accordance with Words from the chairman – Ian H. Lundin 5 An extensive list of defi nitions can be found on the Lundin Petroleum good oilfi eld practice and high standards of corporate Understanding reserves and resources 6 website www.lundin-petroleum.com under the heading “Defi nitions” citizenship. Market overview 8 Abbreviations SEK Swedish krona OPERATIONS USD US dollar Operations review 10 CHF Swiss franc 2006 achievements 11 NOK Norwegian krona GBP British pound Norway 12 TSEK Thousand SEK United Kingdom 13 TUSD Thousand USD Tunisia 14 TCHF Thousand CHF France, Netherlands 15 MSEK Million SEK Indonesia, Albania, Ireland 16 MUSD Million USD Sudan 17 Oil related terms and measurements Russia 18 bbl Barrel (1 barrel = 159 litres) New ventures 19 bcf Billion cubic feet (1 cubic foot = 0.028 m3) boe Barrels of oil equivalents boepd Barrels of oil equivalents per day GOVERNANCE , SHARE INFORMATION bopd Barrels of oil per day Corporate responsibility 20 Mbbl Thousand barrels (in Latin mille) HSE and corporate donations 22 MMbo Million barrels of oil The code of conduct 23 MMboe Million barrels of oil equivalents Attract, develop and retain the best people 24 MMbpd Million barrels per day MMbopd Million barrels of oil per day The Lundin Petroleum share and shareholders 25 Mcf Thousand cubic feet Five year fi nancial summary 28 Mcfpd Thousand cubic feet per day Corporate governance report 29 MMscf Million standard cubic feet - Board of directors 32 Probable reserves - Management and auditors 34 Probable reserves are those unproved reserves which analysis of - Internal control report 36 geological and engineering data suggests are more likely than not to be recoverable.In this context, when probablistic methods are used, there should be at least a 50% probability that the quantities actually FINANCIAL recovered will equal or exceed the sum of estimated proved plus Key fi nancial data 38 probable reserves. Proved reserves Directors’ report 39 Proved reserves are those quantities of petroleum which, by analysis of Income statement 48 geological and engineering data, can be estimated with reasonable Balance sheet 49 certainty to be commercially recoverable, from a given date forward, Defi nitions: from known reservoirs and under current economic conditions, Lundin Petroleum is pursuing the following strategy: Statement of cash fl ow 50 STRATEGY References to “Lundin Petroleum” or “the operating methods and governmental regulations. Proved reserves 4 Company” pertain to the corporate group in Statement of changes in equity 51 Proactively investing in exploration to organically grow its reserve base. Lundin can be categorised as developed or undeveloped. If deterministic which Lundin Petroleum AB (publ) (company Accounting principles 52 Petroleum has an inventory of drillable prospects with large upside potential and methods are used, the term reasonable certainty is intended to express registration number 556610–8055) is the Notes to the fi nancial statements of the group 58 continues to actively pursue new exploration acreage around the world particularly parent company or to Lundin Petroleum AB a high degree of confi dence that the quantities will be recovered. in areas which have not been fully explored. (publ), depending on the context. Annual accounts of the parent company 83 If probablistic methods are used, there should be at least a 90% 4 To exploit its existing asset base with a proactive subsurface strategy to enhance Notes to the fi nancial statements of the parent company 87 probability that the quantities actually recovered will equal or exceed the estimates. ultimate hydrocarbon recovery. Lundin Petroleum is investing actively in mature Auditors’ report 90 assets through infi ll drilling, workovers and enhanced recovery techniques to Supplemental information – reserve quantity information 91 Financial reporting dates and AGM 92 maximize profi tability. Images on the front and inside cover 4 To acquire new hydrocarbon reserves, resources and exploration acreage where are of the testing of Oudna-3 well. Defi nitions 93 opportunities exist to enhance value. Printed in Sweden Landsten Reklam – Vindspelet Grafi ska THE YEAR 2006 PRODUCTION (BOEPD) PROFIT (MSEK) 1 EBITDA (MSEK) CASH FLOW (MSEK) 40,000 1,000 3,000 3,000 30,000 750 2,000 2,000 20,000 500 1,000 1,000 ANNUAL REPORT 2006 10,000 250 0 0 0 0 02 03 04 05 06 02 03 04 05 06 02 03 04 05 06 02 03 04 05 06 1 Adjusted to exclude sale of assets 2006 SUMMARY 4Average production of 29,400 boepd (33,100 boepd) LUNDIN PETROLEUM AB ANNUAL REPORT PETROLEUM AB ANNUAL LUNDIN 4Operating income of MSEK 4,414.5 (MSEK 4,190.2) 4Net profi t of MSEK 794.4 (MSEK 994.0) 4Operating cash fl ow of MSEK 2,271.0 (MSEK 2,627.4) 4EBITDA MSEK 2,731.5 (MSEK 2,782.6) 4Diluted earnings per share SEK 2.81 (SEK 3.87) 4Debt/equity ratio 12% (9%) 2005 in brackets 4Reserves increased by 29% 4The Oudna fi eld development in Tunisia successfully completed, onstream in November 4Ongoing development of the Alvheim fi eld in Norway 2006 OUTLOOK 2007 4Capital budget for development and exploration over MUSD 530 Corporate Head Offi ce President’s Offi ce 4Development projects – MUSD 290: Lundin Petroleum AB (publ) Lundin Petroleum AB (publ) - Norway Alvheim fi eld, onstream 2007 Hovslagargatan 5 5 chemin de la Pallanterie - Norway Volund fi eld, onstream 2009 SE-111 48 Stockholm CH-1222 Vésenaz - United Kingdom, Broom fi eld, development drilling Sweden Switzerland - United Kingdom, Heather fi eld, development drilling Telephone: 46-8-440 54 50 Telephone: 41-22-595 10 00 - United Kingdom, Thistle fi eld, redevelopment Telefax: 46-8-440 54 59 Telefax: 41-22-595 10 05 - Russia, ongoing development drilling - France, Villeperdue fi eld development drilling E-mail: [email protected] E-mail: [email protected] - Indonesia, Singa fi eld development, onstream 2009 4Exploration programme – MUSD 230: - United Kingdom, 5 wells - Norway 3 wells - Russia 2 wells - Sudan 3 wells - Indonesia 6 wells www.lundin-petroleum.com 4Total unrisked prospective resource potential of 1.4 billion barrels VISION As an international oil and gas exploration and production company operating globally, the aim is to explore for and produce oil & gas in the most economically effi cient, socially responsible and environmentally acceptable way, for the benefi t of shareholders, employees, and co-ventures. Lundin Petroleum applies the same standards to all activities CONTENTS DEFINITIONS worldwide to satisfy both the commercial and ethical 2006 Summary 1 requirements. Lundin Petroleum strive to continuously Letter to shareholders – C. Ashley Heppenstall, CEO 2 DEFINITIONS improve the performance and to act in accordance with Words from the chairman – Ian H. Lundin 5 An extensive list of defi nitions can be found on the Lundin Petroleum good oilfi eld practice and high standards of corporate Understanding reserves and resources 6 website www.lundin-petroleum.com under the heading “Defi nitions” citizenship. Market overview 8 Abbreviations SEK Swedish krona OPERATIONS USD US dollar
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