Annual Report 2009

Sivu: 96 Sivu: 94 Sivu: 95 Sivu: 93 Sivu: 92 Sivu: 91 Sivu: 89 Sivu: 90 Sivu: 87 Sivu: 88 Sivu: 86 Sivu: 85 Sivu: 84 Sivu: 83 Sivu: 82 Sivu: 81 Sivu: 80 Sivu: 79 Sivu: 78 Sivu: 77 Sivu: 76 Sivu: 75 Sivu: 73 Sivu: 74 Sivu: 72 Sivu: 71 Sivu: 70 Sivu: 69 Sivu: 68 Sivu: 67 Sivu: 66 Sivu: 65 Sivu: 64 Sivu: 63 Sivu: 62 Sivu: 61 Sivu: 59 Sivu: 60 Sivu: 56 Sivu: 57 Sivu: 58

Sivu: 55

DIRECTORS’ REPORT Other provisions amounted to MSEK 119.6 (MSEK 55.5) as at 31 December 2009 and relate to an exchange obligation of Etrion amounting to MSEK 40.5 (MSEK -), termination indemnity provisions in Indonesia and Tunisia amounting to MSEK 28.9 (MSEK 27.0) and other provisions amounting to MSEK 50.2 (MSEK 28.5). Long-term interest bearing debt amounted to MSEK 3,883.7 (MSEK 4,339.8) as at 31 December 2009. The financing facility consists of a MUSD 850 revolving borrowing base and letter of credit facility with a seven year term expiring 2014. Under the MUSD 850 facility, MUSD 35 of Letters of Credit in support of future site restoration costs payable to former owners of the Heather field, offshore United Kingdom, have been issued. The cash drawings outstanding under the credit facility amounted to MUSD 544 (MSEK 3,871.4) as at 31 December 2009. The long-term interest bearing debt also includes the long-term portion of a bank loan drawn by a jointly controlled entity in Russia and the long-term bank loan drawn by Etrion. Current liabilities Current liabilities as at 31 December 2009 amounted to MSEK 1,832.5 (MSEK 2,026.5) and are detailed in Note 33 and 34. The overlift position as at 31 December 2009 amounted to MSEK 9.2 (MSEK 106.8). Joint venture creditors as at 31 December 2009 amounted to MSEK 996.6 (MSEK 954.5) and relate to ongoing operational costs. Short-term loans as at 31 December 2009 amounted to MSEK 230.6 (MSEK 53.9) and relates to the current portion of a bank loan drawn by a jointly controlled entity in Russia for an amount of MSEK 17.1 (MSEK 53.9) and the advance in relation to the agreement with Gunvor for an amount of MSEK 213.5 (MSEK -). Tax payables as at 31 December 2009 amounted to MSEK 148.5 (MSEK 123.4). The short-term portion of the fair value of the interest rate swap entered into in January 2008 and the interest rate swap entered into in November 2009 by a renewable energy company included in current liabilities as at 31 December 2009 amounted to MSEK 50.3 (MSEK 304.5). The proposed 2010 LTIP for Management other than senior executives is related to the Company’s share price and includes cash payments related to the Company’s share price and are payable over a three year period. Senior executives, being the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer and the Senior Vice President Operations, will not participate in any proposed 2010 LTIP. Lundin Petroleum’s undertaking under the proposed LTIP is a cash liability and will not include any dilution of the share capital. The details of the proposed LTIP are described in the Board of Directors’ complete proposal provided in the AGM documentation. The Board of Directors will further seek authorisation from the 2010 AGM to repurchase its own shares, inter alia, to secure its undertakings under the LTIP, if needed. In addition, the Board of Directors will seek authorisation to deviate from the Policy on Remuneration in case of special circumstances in a specific case. For a detailed description of the remuneration policy applied in 2009 and the Management remunerations for the year ended 31 December 2009 refer to Note 42. SHARE INFORMATION For the AGM resolution on issuance of new share capital share see page 41, The Lundin Petroleum Share and Shareholders. DIVIDEND The Directors propose that no dividend be paid for the year. For details of the dividend policy refer to the share information page, page 42. PROPOSED DISPOSITION OF UNAPPROPRIATED EARNINGS The Board of Directors propose that the unrestricted equity of the Parent Company of TSEK 6,976,267, including the net result for the year of TSEK -32,271 be brought forward. CHANGES IN BOARD ANNUAL GENERAL MEETING The Annual General Meeting will be held in Stockholm on 6 May 2010. At the AGM of 13 May 2009 Dambisa F. Moyo was elected member of the Board of Directors of Lundin Petroleum. No changes are proposed at the 2010 AGM. REMUNERATION TO MANAGEMENT The Board of Directors is of the opinion that the principles of the Policy on Remuneration applied by the Company in 2009 provide for adequate remuneration to Group Management and support the Company in attracting and retaining qualified executives needed to achieve the strategic objectives of the Group. It is therefore the intention of the Board of Directors to propose to the 2010 AGM the adoption of a Policy on Remuneration that follows the same principles as applied in 2009, and that contains the same elements of remuneration, i.e. basic salary, yearly variable salary, long-term incentive plan (“LTIP”), pension arrangements and non-financial benefits. FINANCIAL STATEMENTS The result of the Group’s operations and financial position at the end of the financial year are shown in the following income statement, statement of comprehensive income, balance sheet, statement of cash flow, statement of changes in equity and related notes. The Parent Company’s income statement, balance sheet, statement of cash flow, statement of changes in equity and related notes can be found on pages 84–89. 53 FINANCIALS

Sivu: 55 Sivu: 54 Sivu: 53 Sivu: 52 Sivu: 51 Sivu: 50 Sivu: 49 Sivu: 48 Sivu: 47 Sivu: 45 Sivu: 46 Sivu: 44 Sivu: 43 Sivu: 42 Sivu: 40 Sivu: 41 Sivu: 39 Sivu: 38 Sivu: 37 Sivu: 36 Sivu: 35 Sivu: 34 Sivu: 33 Sivu: 32 Sivu: 31 Sivu: 29 Sivu: 30 Sivu: 26 Sivu: 27 Sivu: 28 Sivu: 23 Sivu: 24 Sivu: 25 Sivu: 20 Sivu: 21 Sivu: 22 Sivu: 17 Sivu: 18 Sivu: 19 Sivu: 16 Sivu: 11 Sivu: 12 Sivu: 13 Sivu: 14 Sivu: 15 Sivu: 8 Sivu: 9 Sivu: 10 Sivu: 1 Sivu: 2 Sivu: 3 Sivu: 4 Sivu: 5 Sivu: 6 Sivu: 7