Update on third quarter 2020 financial results and audiocast details for presentation on 30 October 2020

Update on third quarter 2020 financial results and audiocast details for presentation on 30 October 2020

Update on third quarter 2020 financial results and audiocast details for presentation on 30 October 2020

14 October 2020

Lundin Energy AB (Lundin Energy), will publish its financial report for the third quarter 2020 on Friday, 30 October 2020. For the third quarter 2020, Lundin Energy will recognise a net foreign exchange gain of approximately MUSD 143.

Foreign exchange
Lundin Energy will recognise a net foreign exchange gain of approximately MUSD 143 for the third quarter of 2020. The Norwegian Krone strengthened against the US Dollar by approximately 3 percent and the Euro strengthened against the US Dollar by approximately 5 percent during the third quarter of 2020. The foreign exchange gain is largely non-cash and mainly relates to the revaluation of loan balances at the prevailing exchange rates at the balance sheet date.

Change in under/overlift balances
Lundin Energy recognises income based on its sold volume (sales method). Consequently, changes in inventory and under/overlift balances are reported as an adjustment to cost, valued at production cost, including depletion. During the third quarter of 2020, Lundin Energy was underlifted by 11.4 Mboepd.

Revenue from the crude oil sales from third parties
Lundin Energy markets its own crude oil production and at times markets crude oil from third parties. For the third quarter 2020, revenue from the sale of crude oil from third parties amounted to MUSD 133 offset by the purchase of crude oil from third parties of MUSD 130, resulting in a gross profit of MUSD 3 on third party activities for the third quarter 2020.

Release of report and audiocast on 30 October 2020
Lundin Energy’s financial report for the third quarter 2020 will be published on Friday, 30 October 2020 at 07:30 CET, followed by a live audiocast at 09:00 CET where Alex Schneiter, President and CEO, and Teitur Poulsen, CFO, will be commenting on the report and the latest developments in Lundin Energy.

Follow the presentation live on www.lundin-energy.com or dial in using the following telephone numbers:

UK/International:..+44 207 192 8338
Sweden:………………+46 8 566 184 67
Norway: ……………..+47 21 56 30 15
USA: ………………….+1 646 741 3167
Access code/pin:  8031159

Link: https://edge.media-server.com/mmc/p/ga7xerab

 


Strike threatening Johan Sverdrup production called off

Strike threatening Johan Sverdrup production called off

Strike threatening Johan Sverdrup production called off

12 October 2020

Lundin Energy AB (Lundin Energy) announces that following a settlement between the Norwegian labour union, Lederne and the Norwegian Oil and Gas Association (NOROG), the strike which threatened to shutdown the Johan Sverdrup field on 14 October 2020, has been called off and operations will continue as normal.

 

 

Risk of Johan Sverdrup shutdown from union strike action

Risk of Johan Sverdrup shutdown from union strike action

Risk of Johan Sverdrup shutdown from union strike action

7 October 2020

Lundin Energy AB (Lundin Energy) announces that due to the ongoing strike action by the Norwegian labour union Lederne, there is a risk that the Johan Sverdrup field will have to temporarily shut down production upon the next crew rotation on 14 October 2020.

It is hoped that the Norwegian Oil and Gas Association (NOROG) and Lederne, in the intervening period, may reach a settlement and avert a temporary shutdown of Johan Sverdrup.

None of Lundin Energy’s other producing fields have been impacted by the Lederne strike action.

 

 

Lundin Energy – Business update audiocast

Lundin Energy - Business update audiocast

Lundin Energy – Business update audiocast

5 October 2020

Lundin Energy will be hosting a live audiocast at 14:00 CEST today, 5 October 2020, where Nick Walker, COO and Teitur Poulsen, CFO, will be commenting on the IPN transaction, as well as the resumption of the exploration programme and the recent reserves increase at the Edvard Grieg field.

Follow the presentation live by clicking the web link below or dial in using the following telephone numbers:

Link : https://edge.media-server.com/mmc/p/bfs9oa3v
By Telephone:
UK/International:   +44 207 192 8338
Sweden:    +46 8 566 184 67
Norway:    +47 21 56 30 15
USA:     +1 646 741 3167
Access code/pin:  2978689

 

 

Acquisition of Barents Sea portfolio from Idemitsu Petroleum Norge

Acquisition of Barents Sea portfolio from Idemitsu Petroleum Norge

Acquisition of Barents Sea portfolio from Idemitsu Petroleum Norge

5 October 2020

Lundin Energy AB is pleased to announce that its wholly-owned subsidiary, Lundin Energy Norway AS (together Lundin Energy), has entered into an agreement with Idemitsu Petroleum Norge AS (IPN) to acquire interests in a portfolio of licences in the Barents Sea, including a 10 percent working interest in the Wisting oil discovery and a further 15 percent working interest in the Alta oil discovery.

Highlights

  • Strengthens Lundin Energy’s position in one of its core exploration areas and provides an interest in a major commercial oil discovery, currently being matured towards development
  • 10 percent working interest in the major Wisting oil discovery and a further 15 percent working interest in the Alta oil discovery (taking Lundin Energy’s working interest to 55 percent)
  • Strategic acquisition of pre-development resources contributing to sustaining long-term production profile
  • Adds estimated net contingent resources of approximately 70 MMboe, for a cash consideration of MUSD 125
  • Lundin Energy commences programme of material exploration wells in the Barents Sea, targeting gross unrisked prospective resources of over 800 MMboe

The transaction gives Lundin Energy a 10 percent working interest in the major Wisting oil discovery (licences PL537 and PL537B*) with estimated gross resources of 500 million barrels of oil (MMbo), scheduled to be one of the next Barents Sea production hubs. Equinor, the operator of Wisting in the development phase, is targeting a PDO by end 2022, to benefit from the temporary tax incentives established by the Norwegian Government in June 2020.

The transaction also provides Lundin Energy with a further 15 percent working interest in licences PL609, PL609B and PL609D, increasing the Company’s working interest in the operated Alta oil discovery, from 40 percent to 55 percent. The potential to accelerate the development of Alta is being assessed, with the aim to benefit from the temporary tax incentives.

Additionally, Lundin Energy increases its working interests in licences PL609C and PL851, raising the Company’s working interest in the operated Polmak exploration well from 40 percent to 47.5 percent. Polmak is the first of three high impact exploration prospects to be drilled by the Company in the Barents Sea during the fourth quarter of 2020, which are targeting gross unrisked prospective resources of over 800 MMbo. Polmak will be drilled by the West Bollsta semi-submersible drilling rig, with spud expected in early October 2020.

This strategic transaction builds on the Company’s already substantial acreage position in the Barents Sea core exploration area and provides a material interest in the major Wisting oil discovery, expected to contribute to sustaining the Company’s production in the long-term.

The transaction, which is effective from January 2020, adds estimated net contingent resources of approximately 70 MMboe for a cash consideration of MUSD 125, and is subject to approval of the Board of Directors of Idemitsu Kosan Co.,Ltd. (the parent company of IPN) and usual Norwegian regulatory approvals.

Alex Schneiter, President and CEO of Lundin Energy:
“I am very pleased to announce this strategic acquisition which strengthens Lundin Energy’s position in one of our core exploration areas and provides an interest in a major commercial oil discovery, as well as increasing our working interest in the operated Alta oil discovery. As we have always maintained, we will look to supplement our successful organic growth strategy with value-add, bolt-on acquisitions which add high quality, commercial resources and importantly, also complement our low cost and low carbon emissions production portfolio. With the high impact Polmak well due to spud shortly, I am excited at the opportunity and position we have built in the Barents and look forward to reporting on our progress in the months ahead.”

– Audiocast details –
Lundin Energy will be hosting a live audiocast at 14:00 CEST today, 5 October 2020, where Nick Walker, COO and Teitur Poulsen, CFO, will be commenting on the IPN transaction, as well as the resumption of the exploration programme and the recent reserves increase at the Edvard Grieg field.

Follow the presentation live on www.lundin-energy.com, use the below web link or dial in using the following telephone numbers:

Link : https://edge.media-server.com/mmc/p/bfs9oa3v
By Telephone:
UK/International:   +44 207 192 8338
Sweden:    +46 8 566 184 67
Norway:    +47 21 56 30 15
USA:     +1 646 741 3167
Access code/pin:  2978689

 

*Map of certain Lundin Energy Barents Sea licences, including the post IPN transaction interests

 

 

Edvard Grieg reserves increased by 50 million barrels of oil equivalent and plateau production extended to late 2023

Edvard Grieg reserves increased by 50 million barrels of oil equivalent and plateau production extended to late 2023

Edvard Grieg reserves increased by 50 million barrels of oil equivalent and plateau production extended to late 2023

29 September 2020

Lundin Energy AB (Lundin Energy) is pleased to announce that due to the continued outperformance of the Edvard Grieg field, the gross proved plus probable (2P) reserves have been increased by approximately 50 million barrels of oil equivalent (MMboe), lifting the gross 2P ultimate recovery for the field to 350 MMboe1, 2. The expected plateau production period from the Greater Edvard Grieg Area, which also includes the Solveig Phase 1 and Rolvsnes Extended Well Test (EWT) developments, has been extended by a further year to late 2023.

The Edvard Grieg field continues to outperform, with the water production levels significantly lower than anticipated, which is supported by a recently completed 4D seismic survey that provides excellent imaging of the movement of water in the reservoir and shows the water injection flood front to be further away from the production wells than predicted, indicating increased oil-in-place in the field. An updated reservoir model has been completed, incorporating these latest results, which supports increased reserves and an extension to the plateau production period.

Edvard Grieg gross 2P reserves are increased by approximately 50 MMboe (33 MMboe net to Lundin Energy), lifting the gross 2P ultimate recovery for the field to 350 MMboe1,2, representing an increase of 90 percent from the original PDO. These additional reserves are significantly value accretive as no additional investment is required, above the planned infill well programme. The reserves estimates have been audited by ERCE3.

The gross 2P ultimate recovery for the Greater Edvard Grieg Area, which includes Edvard Grieg, as well as the Solveig Phase 1 and Rolvsnes EWT developments, is increased to 410 MMboe2. These additional reserves extend the plateau production period for the Greater Edvard Grieg Area by a further year, to late 2023, representing a five-year extension from the original PDO.

There is significant further upside in the Greater Edvard Grieg Area, where the total gross ultimate resource potential is estimated to be 800 MMboe, which includes upsides to existing fields and unrisked prospective resources. Several attractive exploration targets have been identified within tie-back distance to the existing facilities, with the operated Merckx prospect in licence PL981, scheduled for drilling in the fourth quarter 2020. The aim is to progressively mature these opportunities in order to keep the facilities full beyond 2023.

Nick Walker, COO of Lundin Energy, said:
“Since Edvard Grieg first oil in 2015, the field has year on year exceeded our expectations both from a reservoir as well as an operational performance perspective. What has been achieved at Edvard Grieg epitomises the best of Lundin Energy, through the application of subsurface expertise, cutting-edge technology and operational excellence, combined with a determined and entrepreneurial approach to operatorship. This reserve increase and plateau extension is incredibly value accretive, as it comes with limited additional investment. I’m confident, that as we continue to explore in the Greater Edvard Grieg Area, it will grow further and drive material additional value to the partnership and Norway.”

(1) The reserves were calculated using a nominal Brent oil price of USD 42 per barrel in 2020, 48 in 2021, 54 in 2022, 61 in 2023, 62 in 2024,
64 in 2025, 66 in 2026, 67 in 2027, 68 in 2028, 70 in 2029 and increasing by 2 percent per year thereafter.
(2) 2P ultimate recovery is cumulative production to date plus remaining proved plus probable (2P) reserves. The remaining Edvard Grieg gross 2P reserves were 190 MMboe as at 31 July 2020.
(3) The reserves for Edvard Grieg have been audited by ERC Equipoise Limited, a third party independent reserves auditor, and were calculated in accordance with the 2018 Petroleum Resource 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). The effective date of the analysis was 31 July 2020.

 

The third quarterly instalment of the dividend of USD 0.25 per share will amount to SEK 2.28 per share

The third quarterly instalment of the dividend of USD 0.25 per share will amount to SEK 2.28 per share

The third quarterly instalment of the dividend of USD 0.25 per share will amount to SEK 2.28 per share

28 September 2020

Lundin Energy AB (Lundin Energy) announces that the third quarterly instalment of the dividend of USD 0.25 per share will amount to SEK 2.28 per share, with a total amount of MSEK 648, corresponding to approximately MUSD 71.

Information about the first quarterly instalment of the proposed dividend:

Amount per share
(SEK)
Total dividend amount
(MSEK)
Ex-dividend dateRecord dateExpected payment date
2.286481 October 20202 October 20207 October 2020

The Annual General Meeting of Lundin Energy held on 31 March 2020 resolved on a dividend for 2019 of USD 1.00 per share, to be paid in quarterly instalments of USD 0.25 per share.

According to the dividend resolution, before payment, each quarterly dividend of USD 0.25 per share shall be converted into a SEK amount 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) and the exchange rate used for the conversion is 9.1129.

Information about the approved dividend is available on www.lundin-energy.com.

 

Appointment of Daniel Fitzgerald as Chief Operating Officer effective 1 January 2021

Appointment of Daniel Fitzgerald as Chief Operating Officer effective 1 January 2021

Appointment of Daniel Fitzgerald as Chief Operating Officer effective 1 January 2021

21 August 2020

Lundin Energy AB (Lundin Energy) is pleased to announce the appointment of Daniel Fitzgerald as Chief Operating Officer (COO) of Lundin Energy, effective 1 January 2021.

Daniel Fitzgerald is currently COO of International Petroleum Corporation (IPC) having previously held senior management and operational leadership positions with Lundin Petroleum AB. Following the spin out of IPC, Daniel held the VP Operations and subsequently COO positions within IPC, responsible for operations and investments across their international portfolio. Prior to joining Lundin and IPC, Daniel worked for Shell’s upstream business in the UK in a range of asset and operational leadership positions.

Daniel’s appointment follows the decision by Alex Schneiter, President and CEO of Lundin Energy to step down from the Company and the appointment of Lundin Energy’s current COO Nick Walker, to replace Alex as President and CEO.

Alex Schneiter, President and CEO of Lundin Energy, said:
“I am very pleased to announce Daniel’s appointment as COO. He is well known to the Lundin Group, having previously worked for Lundin Petroleum and now serving successfully as COO with IPC. I have known Daniel since 2014 and his strong technical background and leadership qualities, as well as his knowledge of our assets and people, make him a great candidate for the role. This is a very exciting time for Lundin Energy as we emerge resiliently from this recent oil market cycle; the strong production growth profile to target over 200 thousand barrels of oil equivalent per day production, combined with our industry leading low operating cost and sustainably produced barrels, uniquely positions the business for growth and the energy transition.”

 

Lundin Energy Announces Nick Walker appointed as President and CEO of Lundin Energy effective 1 January 2021

Lundin Energy Announces Nick Walker appointed as President and CEO of Lundin Energy effective 1 January 2021

Lundin Energy Announces Nick Walker appointed as President and CEO of Lundin Energy effective 1 January 2021

18 August 2020

Lundin Energy AB (Lundin Energy) is pleased to announce that the Board of Directors has appointed Nick Walker as President and Chief Executive Officer (CEO) of Lundin Energy following Alex Schneiter’s decision to step-down from the position. This will become effective as of 1 January 2021.

Nick Walker has been appointed CEO effective 1 January 2021 as Alex Schneiter has today advised the Board of his decision to step-down from his position as of 1 January 2021. Nick has been Chief Operating Officer (COO) of Lundin Energy since 2015 and has worked closely with the strong Norwegian team to deliver the on-going out-performance at the Edvard Grieg field, overseeing the continuous drive for organic production growth and operational efficiency and help successfully deliver the world class Johan Sverdrup project. He brings to the job of CEO over 30 years’ experience in the industry, coming from a technical and operational background. He has also developed a strong relationship with the investment and financial community and will continue to work closely with the Board of Directors to continue the strategic growth of the company.

Alex Schneiter has offered to remain on the Board as a non-Executive Director and will also stay involved in an advisory capacity with the wider Lundin Group of Companies. He has held the position of CEO since 2015, having been with the business since its inception in 2001. Alex has led Lundin Energy on a strong growth trajectory over his five years as CEO, creating significant shareholder value and overseeing an eight-fold growth in production. His focus on exploration, financial resilience and production efficiency coupled with a passion for responsible practices, has positioned Lundin Energy at the forefront of the upstream operators’ response to the energy transition. He personally led the Company to develop its first ever Decarbonisation Strategy, placing Lundin Energy firmly on the map as the first offshore oil company to target carbon neutrality by 2030, setting out a deliverable timeline in which to achieve that.

Alex and Nick will work closely over the next five months to ensure a seamless transition. The appointment of a new Chief Operating Officer will be announced shortly.

Ian Lundin, Chairman of the Board of Lundin Energy commented:
“The Board and I very much look forward to working with Nick in his new capacity as CEO with his expert knowledge, not only of our assets but the offshore oil and gas industry as a whole. He is the ideal leader to take the Company into the next, exciting phase of our organic growth story and retain our position as best in class.”

“Alex has played a major role in the success of the Company not just as CEO, but throughout his career here, and the wider Lundin Group, for almost 30 years. His contribution has been outstanding, both as a technical expert and explorer, and as a CEO and leader of the teams across all the jurisdictions in which we have operated. I wish him all the best in his future endeavours and look forward to continuing to work with him in his advisory role for the wider Lundin Group.”

Please follow this link for a Shareholder Letter from Alex Schneiter, President and CEO of Lundin Energy: