Lundin Petroleum has signed Production Sharing Contracts (PSCs) for the exploration and production of oil and gas in two blocks located offshore Peninsular Malaysia and two offshore Sabah.

PM308A & B Overview
The combined PM308A and B blocks cover an area of 14,100 km2 in water depths ranging from 20 to 70 metres spanning the entire Malaysian portion of the Penyu Basin in the Natuna Sea (see figure 1). Although the blocks have both been explored by operators in the past, only one small oil discovery, the Rhu field, has been found to date.

Exploration efforts to date have utilised only 2D seismic data. The complex faulted nature and subtle relief of the prospective structures requires precise imaging and well placement and makes the use of 3D seismic essential.

Numerous prospects and leads have been identified on both blocks based on Lundin Petroleum’s technical evaluation. More importantly, Lundin Petroleum’s analysis indicates that with the acquisition of sub-regional 3D seismic surveys, many more of these subtle prospects will be identified.

Exploration Strategy
The exploration strategy and work programme are designed to evaluate the hydrocarbon potential by drilling wildcat exploration wells guided by interpretations from 3D seismic. Although the primary focus of the exploration campaign will be on oil resources, gas has value in the nearby Malaysian markets.

A number of exploration wells were drilled in the PM308A and B block yielding one undeveloped small oil discovery, the Rhu field. None of the exploration wells in either block were drilled on 3D seismic data. Blocks PM308A and B contain approximately 14,000 km of 2D data and a 660 km2 exploration 3D (in PM308A) that was shot by Petronas after the last exploration well was drilled in the block.

The key exploration attributes of PM308A and PM308B include:
-	Predominantly oil plays.
-	Large and diverse portfolio of play types, prospects and leads.
-	One oil discovery (Rhu).
-	Convincing dry hole analysis indicates previous wells located off structure.
-	No exploration wells were drilled on the recently acquired 3D seismic.
-	Critical technical risks include seal quality and reservoir distribution in the Tertiary plays and porosity, permeability and lithology prediction in the basement play.
-	Prospect target depths range from 2800-4000 m.

Play types in the PM308A and PM308B exploration portfolio include:
-	A Pre-Tertiary fractured and weathered basement play (metamorphic and granitic objectives).
-	Oligo-Miocene clastic fault block and inversion play.
-	Oligocene clastic drape play.
-	Oligocene “wedge”/Onlap play.

Although there is a variety of play types with differing risk, the existence of the Rhu oil field demonstrates that the petroleum system is effective. Through the use of 3D seismic, additional structures have been identified and more will materialise with additional surveys. In addition, the application of state-of-theart basin charge modeling coupled with insightful structural evolution of all prospects through time will be the key to exploration success. The key for commercial development of these multiple small potential structures is the use of creative, synergistic and optimised development plans and concepts which will enable development costs to be modest.

Lundin Petroleum’s exploration strategy will include an aggressive exploration programme that will include new 3D seismic and multiple exploration wells in various plays.

SB303 Overview
The SB303 block covers an area of 5,000 km2 in water depths ranging from 0 to 150 meters and is situated offshore in the northeastern most portion of Sabah (see figure 2). The block contains three basins. One moderately explored basin with a proven petroleum system and two unexplored frontier basins; at least one of these basins contains active oil seeps. Although the block has been explored by several operators in the past, only a small gas/condensate discovery, the Titik Terang discovery (ca. 250 BCF), has been found to date.

Although a portion of the block does contain 3D seismic, drilling exploration efforts to date have utilised only 2D seismic data. Widely spaced vintage 2D seismic data has been shot over the frontier basins, but is insufficient to image and delineate the identified structures. Leads and prospects, several with direct hydrocarbon indicators (DHIs), have been currently identified in two of the basins. Lundin Petroleum’s analysis indicates that with the acquisition of sub-regional 3D seismic surveys, and additional 2D seismic, many more prospects will be identified, particularly in the frontier basins.

Exploration Strategy
The exploration strategy and work programme are designed to evaluate the block’s exploration potential by drilling wildcat exploration wells guided by exploration 3D seismic. The primary focus of the exploration campaign will be on black oil prospectivity and commercially attractive oil development projects.

A number of exploration wells were drilled in the SB303 block yielding one undeveloped gas/condensate discovery (Titik Terang, ca 250 BCF). The SB303 block contains 1,200 km of 2D data and an 860 km2 exploration 3D. No wells were drilled on this 3D within the confines of this block. Leads and prospects have been currently identified in two of the basins in the block. The expectation is that many more leads will be recognised after acquiring additional 3D and 2D seismic data.

The key exploration attributes of SB303 include:
-	Both oil and oil & gas plays.
-	A diverse portfolio of plays, prospects and leads, some DHI supported.
-	Two unexplored frontier basins, one with active oil seepage.
-	A number of exploration wells drilled yielding one gas/condensate discovery.
-	No exploration wells yet drilled on 3D seismic.
-	Technical risks include poor to limited top/lateral seal in the clastic and carbonate plays, lack of charge access in the carbonate play, and gas flushing.
-	Prospect target depths range from 750-2800 m.

The key plays in the SB303 exploration portfolio:
-	Late Miocene clastic faulted anticline, fault traps and stratigraphic plays.
-	Late Miocene – Pliocene carbonate build-up & platform play.

Although there is a variety of play types with differing risk, the existence of the Titik Terang gas/condensate discovery, other DHI supported leads and the presence of live oil seeps demonstrates an active petroleum system, at minimum, is effective. Through the use of 3D seismic, additional fault block structures have been identified and more will materialise with additional 2D and 3D seismic surveys. As with the Penyu Basin blocks the application in Block SB303 of up to date modeling techniques to identify prospects will be key to exploration success. The key for commercial development of these multiple small potential structures is the use of creative, synergistic and optimized development plans and concepts which will enable development costs to be modest.

Lundin Petroleum’s exploration strategy will include an aggressive exploration programme that will include new 3D/2D seismic and multiple exploration wells in various plays. A 2,150 km2 3D seismic acquisition programme over the three blocks is ongoing and will be completed in 2009.Processing and interpretation will take place during 2010 and exploration drilling is scheduled to commence in 2011.

SB307 and SB308
Lundin A new PSC was signed in May 2010 covering blocks SB307 and SB308, offshore Sabah. The blocks contain one oil discovery that will be the subject of further evaluation to determine if it can be commercially developed. In addition, several prospects and leads have been identified in the blocks from previous 2D and 3D seismic campaigns.

Further seismic data acquisition, reprocessing and the drilling of at least one exploration well will be completed on these two blocks 2011