Lundin proves further oil in Luno area

Lundin Petroleum has discovered oil in the Avaldsnes prospect in the Norwegian North Sea which could match the potential of its nearby Luno field.

Offshore staff

STOCKHOLM, Sweden -- Lundin Petroleum has discovered oil in the Avaldsnes prospect in the Norwegian North Sea which could match the potential of its nearby Luno field. Avaldsnes is 25 km (15.5 mi) east of Luno on the eastern flank of the Utsira High (Luno is on the western flank).

Well 16/2- was drilled by the semisubmersible Transocean Winner on the flank of a large structure in PL 501. According to the Norwegian Petroleum Directorate, its primary target was to prove petroleum in the Hugin formation in Upper Jurassic rocks, while the secondary target was in Lower Paleocene rocks (the Ty formation).

The well proved a 17-m (56-ft) oil column in the Draupne and Hugin formation in the Upper to Middle Jurassic, while the Ty formation lacked reservoir development. During production tests, the well flowed at a restricted rate of roughly 5,000 b/d of oil through a 52/64-in. choke.

Lundin estimates Avaldsnes’ recoverable reserves at 100 - 400 MMboe. It plans to drill further appraisal wells to fully delineate the structure in 2011.

This was the first well in the license, which was awarded under Norway’s APA 2008 licensing round. It was drilled in a water depth of 115 m (377 ft), and to a vertical subsurface depth of 2,132 m (6,995 ft), before being terminated in the Upper Permian Zechstein Group.

Ashley Heppenstall, president and CEO, said: "The Avaldsnes discovery is a major milestone for Lundin Petroleum and has confirmed our view that following the Luno discovery additional hydrocarbons would be found in the Greater Luno Area.

“The well has proven the migration of hydrocarbons to the eastern side of the Utsira High which is very positive. We have found at Avaldsnes excellent reservoir quality within a large mapped structure and as a result the potential resources are larger than our pre-drill estimates."

Lundin Norway AS operated PL501 with a 40% interest, in partnership with Statoil Petroleum and Maersk Oil Norway.

Transocean Winner will transfer to Lundin’s PL 338 license to drill the Apollo prospect.

09/17/2010

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