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Proposed Demerger of UK Continental Shelf Oil & Gas Assets of Petrofac Energy Developments to Create EnQuest PLC

Petrofac The Board of Petrofac ("the Board") today announces its intention to demerge Petrofac Energy Developments Limited ("PEDL") from the Petrofac group and combine it with the UK Continental Shelf oil & gas assets of Lundin Petroleum AB ("Lundin") to form a new company, EnQuest PLC ("EnQuest") (the "Demerger"). PEDL is the subsidiary within Petrofac's Energy Developments business unit which holds Petrofac's UK Continental Shelf assets, including a 27.7 per cent. interest in the West Don field, a 60 per cent. interest in the Don Southwest field (of which 5 per cent. is held through PEDL's subsidiary, Petrofac Energy Development Oceania Limited ("PEDOL")) and a 100 per cent. interest in the Elke discovery (together the "PEDL Assets").

Following the Demerger, EnQuest will be an independent oil & gas production and development company whose activities will be focused on the UK Continental Shelf. EnQuest shares (the "EnQuest Shares") will be admitted to the Official List and to trading on the main market for listed securities of the London Stock Exchange (the "London Admission") and will be admitted to trading on NASDAQ OMX Stockholm via a secondary listing (the "Stockholm Admission") (together "the Admissions").

Following the Demerger, Petrofac shareholders will own 100 per cent. of the Petrofac New Shares in issue (which will constitute the entire share capital of Petrofac following the Demerger) and approximately 45 per cent. of the issued EnQuest Shares as at the date of completion of the Demerger. Lundin shareholders will own approximately 55 per cent. of the EnQuest Shares following the Admissions and the planned distribution of EnQuest Shares to Lundin shareholders.

Petrofac Energy Developments

Petrofac, through its Energy Developments business unit, seeks to invest in oil & gas development, production, processing and transportation assets and to leverage the extensive engineering and operations capability of the Petrofac group.

The Petrofac Energy Developments business unit operates a "build and harvest" strategy and, having maximised the value to be added from the application of its services capability, believes that it is an appropriate time to consider realisation options for its assets in the UK Continental Shelf.

Following the Demerger, Petrofac will continue to focus on being a leading international provider of facilities solutions to the oil & gas production and processing industries. Equally, the Energy Developments business unit will remain a key constituent of Petrofac's business portfolio, and will continue to hold significant assets including Chergui (Tunisia), Cendor (Malaysia), Ohanet (Algeria), the Krygz Petroleum Company refinery (Krygz Republic) and the Floating Production Facility (FPF1). Petrofac continues to look for further opportunities in which the Energy Developments business unit can invest and bring to bear the Petrofac group's services to add value for itself, its partners and its shareholders.

Creation of EnQuest

Once the Demerger has been effected, EnQuest will be an independent oil & gas production and development company whose activities will be focused on the UK Continental Shelf. EnQuest intends to deliver sustainable growth in shareholder value by exploiting the reserves it will hold, commercialising and developing discoveries, converting contingent resources into reserves and pursuing selective acquisitions.

EnQuest believes that the UK Continental Shelf represents a significant hydrocarbon basin in a low risk region. The UK Continental Shelf continues to benefit from an extensive installed infrastructure base and skilled labour to develop, operate and manage assets. EnQuest's management have considerable experience of working in the UK Continental Shelf region and are familiar with the regulatory authorities and competitive landscape.

With a portfolio of producing assets, development opportunities and appraisal and exploration opportunities, strong cash flow generation and an experienced management and staff that have a proven development and operating record, EnQuest believes that it will be well positioned to increase its production and reserves and benefit from the opportunities that exist in the UK Continental Shelf.

Other information

Subject to market conditions, following receipt of EnQuest Shares by Lundin and Petrofac shareholders, certain major shareholders in Petrofac (including Ayman Asfari and Maroun Semaan, both Directors of Petrofac) and Lundin (including entities associated with the Lundin family)(together, the "Selling Shareholders") may sell a portion of their shareholdings in EnQuest in a secondary offering to institutional investors only (the "Offer").

On completion of the Petrofac STA, Amjad Bseisu will step down from his role as Chief Executive of the Energy Developments business unit and as a Director of Petrofac and will become Chief Executive Officer of EnQuest. Following Mr Bseisu's departure, Ayman Asfari (Group Chief Executive of the Petrofac group) will, on an interim basis, oversee the Energy Developments and Production Solutions business units, supported by Robert Jewkes, currently Managing Director, Energy Developments, and Gordon East, currently Managing Director, Production Solutions.

To implement the Demerger it is necessary to reorganise Petrofac's share capital. The Resolution to effect this reorganisation will be proposed at an extraordinary general meeting of Petrofac (the "EGM") to be held on Monday 29 March 2010 at 10.00 am. Petrofac is also publishing today a Circular to Petrofac shareholders containing further details of the Demerger.

Ayman Asfari, Group Chief Executive of Petrofac, commented:

"The creation of EnQuest brings together Petrofac's UK Continental Shelf assets with those of Lundin and demonstrates Petrofac's ability to create value for its shareholders. This Demerger provides shareholders with an opportunity to retain an investment in a separately listed entity and the ability to participate in its future growth prospects. This is the first time we have harvested value from our Energy Developments business, and we will continue to seek value creating opportunities in oil & gas upstream developments and energy infrastructure."

Amjad Bseisu, Chief Executive Officer of EnQuest, commented:

"EnQuest has a strong staff and asset base having been formed from the UKCS assets of Petrofac and Lundin. We are confident that the combination of these assets, along with our staff, provides us with the skills, scale and financial strength to become one of the UK's leading independent oil and gas production and development companies.

"As a focused independent company, we will be positioned to grow EnQuest in and around our core areas and through selective acquisitions. I am excited about the future prospects of the Company and the opportunities available to us."

Posted 04/03/2010

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