STOCKHOLM, SWEDEN--(Marketwire - Jan. 5, 2012) -Lundin Petroleum AB (TSX:LUP)(OMX:LUPE) ("Lundin Petroleum") is pleased to announce that as at 31 December 2011 its net proven and probable working interest reserves are 210.7 million barrels of oil equivalent (MMboe) which equates to a 21 percent increase to reserves and a reserve replacement ratio of 264 percent, when compared to 31 December 2010.

The reserves are based upon a third party independent audit conducted by Gaffney Cline and Associates ("GCA"). The Proven and Probable Reserves have been calculated using 2007 Petroleum Resources Management System (SPE PRMS) Guidelines of the Society of Petroleum Engineers (SPE), World Petroleum Congress (WPC), American Association of Petroleum Geologists (AAPG) and Society of Petroleum Evaluation Engineers (SPEE) and have been reviewed for compliance with the Canadian Oil and Gas Evaluation Handbook (COGEH) and the Canadian National Instrumental 51-101 Standards of Disclosure for Oil and Gas Activities. The reserves were calculated using an oil price of USD 100 per barrel in 2012, with prices and costs escalating at 2 percent per annum.

Oil accounts for 85 percent of the total Proven and Probable Reserves. In addition 98 percent of the reserves are located in countries with a tax/royalty regime.

Increases in proven and probable reserves were mainly recorded in Norway. Reserves increases are related to the producing assets, Alvheim and Volund as well as the Luno field where reserves increased as a result of the inclusion of the Tellus discovery and updated reservoir models. Furthermore reserves for the Bøyla development were included for the first time. Reserves in Norway further increased due to the acquisition of an additional 20 percent interest in the Brynhild field.

In addition to its reserves Lundin Petroleum has further assets classified as Contingent Resources with "Best Case" values (as defined by the COGEH) of 731 MMBoe in aggregate of which oil accounts for almost 92 percent. The Contingent Resources include contributions from the Avaldsnes field in Norway and the Cempulut, Titik Taran and Tarap discoveries in Malaysia. These Contingent Resources have been audited by GCA***. Furthermore Lundin Petroleum has an interest in the Aldous Major South discovery in Norway. Including the mid point of the Aldous Major South operator's resource estimates increases Lundin Petroleum's Contingent Resources to a total of 851 MMBoe.

Ashley Heppenstall President & CEO of Lundin Petroleum commented as follows: "We are extremely pleased that our net reserves and contingent resources have increased to over one billion barrels. In Norway new reserve additions at Tellus and Bøyla as well as reserve upgrades at Alvheim and Volund have contributed to another year of reserve increases and a strong reserve replacement ratio. The Avaldsnes/ Aldous Major South appraisal and discovery has resulted in a significant increase to our contingent resource base and will lead to further reserve increases as this project is moved forward."

* BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

**As per industry standards the reserve replacement ratio is defined as the ratio of reserve additions to production during the year, excluding acquisitions/sales. The reserves increase is calculated as the ratio of the 31.12.2011 reserves additions over the 31.1.2010 reserves adjusted for sales and production.

*** Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies.

The contingent resource range has been estimated including uncertainties in reservoir extent, reservoir properties and recovery factors.

The main contingency for the Avaldsnes discovery in Norway preventing classification of the resources as reserves is the definition of a conceptual development plan. Other contingencies in Norway relate to proof of commerciality and finalising technical studies. The main contingency in Russia relates to finalising Russian state participation in the Morskaya production license. Contingencies for the Malaysian discoveries relate to the definition of an economic development plan.

The recovery and production estimates of the Company's resources provided herein are only estimates and there is no guarantee that the estimated resources will be recovered or produced. Actual resources may be greater than or less than the estimates provided here. There is no certainty that it will be commercially viable for the Company to produce any portion of these resources.

The effective date of the resource estimate is 31 December 2011.

GCA advises that there is always a risk that accumulations containing contingent resources might not be developed and achieve commercial production. The Contingent Resources reported herein are "Unrisked" in this respect.

Lundin Petroleum is a Swedish independent oil and gas exploration and production company with a well balanced portfolio of world-class assets primarily located in Europe and South East Asia. The Company is listed at the NASDAQ OMX, Stockholm (ticker "LUPE") and at the Toronto Stock Exchange (TSX) (Ticker "LUP"). Lundin Petroleum has proven and probable reserves of 210.7 million barrels of oil equivalent (MMboe).

The above information has been made public in accordance with the Securities Market Act and/or the Financial Instruments Trading Act.

FORWARD-LOOKING STATEMENTS

Certain statements made and information contained herein constitute "forward-looking information" (within the meaning of applicable Canadian securities legislation). Such statements and information (together, "forward-looking statements") relate to future events, including the Company's future performance, business prospects or opportunities. Forward-looking statements include, but are not limited to, statements with respect to estimates of reserves and or resources, future production levels, future capital expenditures and their allocation to exploration and development activities, future drilling and other exploration and development activities, ultimate recovery of reserves or resources are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

All statements other than statements of historical fact may be forward-looking statements. Statements concerning proven and probable reserves and resource estimates may also be deemed to constitute forward-looking statements and reflect conclusions that are based on certain assumptions that the reserves and resources can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions) are not statements of historical fact and may be "forward-looking statements". Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations and assumptions will prove to be correct and such forward-looking statements should not be unduly relied upon. These statements speak only as on the date of this news release and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable laws. These forward-looking statements involve risks and uncertainties relating to, among other things, operational risks (including exploration and development risks), productions costs, availability of drilling equipment and access, reliance on key personnel, reserve estimates, health, safety and environmental issues, legal risks and regulatory changes, competition, geopolitical risk, financial risks. These risks and uncertainties are described in more detail under the heading "Risk Factors" and elsewhere in the Company's 2010 annual report. Readers are cautioned that the foregoing list of risk factors should not be construed as exhaustive. Actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements included in this new release are expressly qualified by this cautionary statement.

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