Amendment to proposed 2019 dividend and further update on AGM planning

Amendment to proposed 2019 dividend and further update on AGM planning

Amendment to proposed 2019 dividend and further update on AGM planning

23 March 2020

The Board of Directors of Lundin Petroleum AB (Lundin Petroleum or the Company) announces that in order to maintain financial prudence and further liquidity flexibility in the light of current market conditions, it is amending its dividend proposal to the 2020 Annual General Meeting (AGM) down to USD 1.0 per share (corresponding to MUSD 284) from USD 1.80 per share, as set out in the notice of the AGM published on 27 February 2020. The Company would also like to make shareholders aware that due to the deteriorating situation in regards to the Covid-19 viral pandemic, no member of the Board of Directors and no member of group management will be attending the AGM in person, but members of the Board of Directors and group management will instead attend via live video link.

Amended 2019 dividend proposal
Lundin Petroleum operates with one of the lowest cost bases in the offshore industry and has a free cash flow breakeven on average over the next seven years of around USD 17 per barrel of oil equivalent (boe), which gives the Company certain resilience to commodity price cycles. However, in the light of the recent fall in the oil price, compounded by a significant deterioration of the macro economic environment, the Board of Directors has taken the prudent measure, in order to provide further liquidity flexibility, of amending its dividend proposal to USD 1.0 per share (corresponding to MUSD 284), from USD 1.80 per share (corresponding to MUSD 511), which is to be voted on by shareholders at the AGM on 31 March 2020. The full revised dividend proposal together with a statement from the Board of Directors is available on the Lundin Petroleum website www.lundin-petroleum.com.

Details in regards to the updated proposed 2019 dividend to be paid in four equal instalments in 2020 and 2021
The Board of Directors will propose to the 2020 Annual General Meeting a dividend for 2019 of USD 1.0 per share, corresponding to MUSD 284 (rounded off), to be paid in quarterly instalments of USD 0.25 per share, corresponding to MUSD 71 (rounded off). Before payment, each quarterly dividend of USD 0.25 per share shall be converted into a SEK amount, and paid out in SEK, based on the USD to SEK exchange rate published by Sweden’s central bank (Riksbanken) four business days prior to each record date (rounded off to the nearest whole SEK 0.01 per share). The final USD equivalent amount received by the shareholders may therefore slightly differ depending on what the USD to SEK exchange rate is on the date of the dividend payment. The SEK amount per share to be distributed each quarter will be announced in a press release four business days prior to each record date.

Information about the proposed dividend to be paid out as follows:

Expected Ex-dividend dateExpected Record dateExpected payment date
1 April 20202 April 20207 April 2020
2 July 20203 July 20208 July 2020
1 October 20202 October 20207 October 2020
30 December 20204 January 20218 January 2021

In order to comply with Swedish company law, a maximum total SEK amount shall be pre-determined to ensure that the dividend distributed does not exceed the available distributable reserves of the Company and such maximum amount for the dividend has been set to a cap of SEK 5.188 billion (i.e. SEK 1.297 billion per quarter). If the total dividend would exceed the cap of SEK 5.188 billion, the dividend will be automatically adjusted downwards so that the total dividend corresponds to the cap of SEK 5.188 billion.

Update on precautionary measures at the AGM
The AGM will take place on 31 March 2020 in “Vinterträdgården” at Grand Hôtel, Södra Blasieholmshamnen 8, in Stockholm, commencing at 13.00.

Given the deteriorating situation in regards to the Covid-19 viral pandemic and restrictions in relation to it, the Company has decided to take the precautionary measure of restricting attendance in person to a minimum and instead, members of the Board of Directors and group management will be present via live video link. All other precautionary measures as announced on 13 March 2020 will remain in place, namely:

  •  The AGM agenda will be addressed by the Chairman of the AGM without any specific presentations, and it is proposed that there be no speech by the Chief Executive Officer
  • To enable shareholders to vote whilst not being physically present at the AGM, the registrar Computershare is offering a service to any shareholder registered to attend the AGM and holding no more than 100,000 shares to appoint Computershare to vote on their behalf, the proxy is available on request by contacting Computershare at telephone +46-8-518 01 554 or by e-mail info@computershare.se – the Company encourages shareholders to exercise their voting rights accordingly
  • Any shareholders displaying symptoms of illness or being part of a risk group are specifically requested not to attend the AGM and to exercise their voting power through proxy There will be no ancillary showcases or informal engagement with representatives of Lundin Petroleum
  • There will be no food or beverages served before, during or after the AGM
  • The meeting will be held entirely in Swedish and no translation services will be provided
  • Attendees, who nonetheless wish to attend in person, may be subject to health screening at the entrance and will be asked to spread out in the room and avoid close contact with other attendees
  • Under all circumstances, only registered shareholders (including proxies and advisers) that have given notice of attendance to the Company in due order will be allowed to enter the meeting, meaning that the AGM will resolve that no external guests, including media and other stakeholders will be allowed to attend