Update on third quarter 2021 financial results and audiocast details for 29 October 2021

Update on third quarter 2021 financial results and audiocast details for 29 October 2021

Update on third quarter 2021 financial results and audiocast details for 29 October 2021

14 October 2021

Lundin Energy AB (Lundin Energy) will publish its financial report for the third quarter 2021 on Friday, 29 October 2021. For the third quarter 2021, Lundin Energy will expense pre-tax exploration and appraisal costs of approximately MUSD 38 and recognise a net foreign exchange loss of approximately MUSD 97.

Exploration and appraisal costs
It is the Company’s policy to capitalize costs associated with its exploration and appraisal activities and if it is determined that a commercial discovery has not been achieved, the associated costs are charged to the income statement. For the third quarter of 2021, Lundin Energy will incur a pre-tax charge to the income statement of MUSD 38 relating to exploration and appraisal costs. These costs will be offset by a tax credit of approximately MUSD 30. The costs are mainly related to the Merckx well in PL981, the second Iving appraisal well in PL820S and relinquished licences.

Foreign exchange loss
Lundin Energy will recognise a net foreign exchange loss of approximately MUSD 97 for the third quarter of 2021. Both the Norwegian Krone and the Euro weakened against the US Dollar by approximately three percent during the third quarter of 2021. The foreign exchange loss 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 2021, Lundin Energy was overlifted by 7.6 Mboepd.

Revenue from 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 2021, revenue from the sale of crude oil from third parties amounted to MUSD 119.8 offset by the purchase of crude oil from third parties of MUSD 118.8, resulting in a gross profit of MUSD 1.0.

Release of report and audiocast on 29 October 2021
Lundin Energy’s financial report for the third quarter 2021 will be published on Friday 29 October at 07:30 CEST, followed by a live audiocast at 14:00 CEST where Nick Walker, 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:

Sweden +46 8 56642651
UK +44 3333000804
United States +1 6319131422
Norway +47 23500243
Access Pin : 73770326
Link : https://edge.media-server.com/mmc/p/egyufnjf

 

First oil from the Solveig field

First oil from the Solveig field

First oil from the Solveig field

01 October 2021

Lundin Energy AB (Lundin Energy) announces first oil from the operated Solveig field was achieved on Thursday 30 September 2021. Solveig is a subsea tie back development into the Edvard Grieg platform.

The Solveig field in PL359, is located 15 km south of the Edvard Grieg field and the Phase 1 development consists of a five well subsea tie-back to the Edvard Grieg platform. Phase 1 has gross proved plus probable (2P) reserves of 57 million barrels of oil equivalent (MMboe) and with gross peak plateau production of 30 thousand barrels of oil equivalent per day (Mboepd) it will be a significant contributor to the extension of the plateau production period at Edvard Grieg, which has already been extended by five years to the end of 2023. First oil has been delivered on schedule and in line with the budget estimate of USD 810 million gross, and with a breakeven oil price of below USD 20 per boe.

Solveig Phase 1 drilling results to date have been above expectations, with two of the five development wells already completed. With further discovered resources in the area, such as Segment D, and further upside potential being de-risked by the Phase 1 development drilling data and production performance, a Plan for Development and Operation (PDO) for a Phase 2 development could be submitted by the end of 2022. The total gross resource potential for Solveig, including upsides, is up to 100 MMboe. In combination with the results from the Rolvsnes extended well test, currently on stream, the plateau production period at the Edvard Grieg platform could be further extended beyond 2023.

Lundin Energy is operator of both the PL359 (Solveig) and PL338 (Edvard Grieg) licences with a 65 percent working interest and the partners are OMV and Wintershall Dea with 20 and 15 percent working interests respectively. This alignment of ownership allows for optimisation of production and maximises value for all partners.

Nick Walker, President and CEO of Lundin Energy, commented:
”I am very pleased to announce first oil from our Solveig development, a key pillar of our strategy to extend the plateau production period at Edvard Grieg. The development has been executed on time and on budget and the breakeven cost is below USD 20 per boe, making these barrels highly valuable for us. I am also confident that there is significant potential to bring additional resources on stream in the area, to extend the plateau production period even further at Edvard Grieg.”
 
 

 

The third quarterly dividend instalment of USD 0.45 per share will amount to SEK 3.93 per share (September 2021)

The third quarterly dividend instalment of USD 0.45 per share will amount to SEK 3.93 per share

The third quarterly dividend instalment of USD 0.45 per share will amount to SEK 3.93 per share

28 September 2021

Lundin Energy AB (Lundin Energy) announces that the third quarterly dividend instalment of USD 0.45 per share will amount to SEK 3.93 per share, with a total amount of MSEK 1,118, corresponding to approximately MUSD 128.

Information about the third quarterly instalment of the dividend:

Amount per share
(SEK)
Total dividend amount
(MSEK)
Ex-dividend dateRecord dateExpected payment date
3.931,1181 October 20214 October 20217 October 2021

The Annual General Meeting of Lundin Energy held on 30 March 2021 resolved on a dividend for 2020 of USD 1.80 per share, to be paid in quarterly instalments of USD 0.45 per share.

According to the dividend resolution, before payment, each quarterly dividend of USD 0.45 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 8.7253.

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

Successful completion of Lille Prinsen appraisal wells on the Utsira High in the Norwegian North Sea

Leikanger Hydropower

Successful completion of Lille Prinsen appraisal wells on the Utsira High in the Norwegian North Sea

16 September 2021

Lundin Energy AB announces that its wholly owned subsidiary Lundin Energy Norway AS (together Lundin Energy) has successfully completed appraisal wells on the Lille Prinsen discovery, north of the Edvard Grieg field. The two wells have confirmed a combined updated gross resource range of 12 – 60 million barrels of oil equivalent (MMboe) and the discoveries are being matured for possible project sanction before the end of 2022.

The wells in PL167 on the Utsira High, 15 km north of the Edvard Grieg platform, aimed to verify the hydrocarbon potential in the Lille Prinsen discovery, in order to progress the discovery towards a potential development. The 16/1-34 A well was seeking to prove reservoir and production properties in the carbonate sediments of the Permian aged, Zechstein formation and well 16/1-34 S was targeting an oil leg in the Paleocene aged, Heimdal formation. Results confirmed a gross resource range of 10-50 MMboe in the Lille Prinsen discovery, where a drill stem test proved very good reservoir properties, with 33 API oil, tested at a facilities constrained rate of 3,580 barrels of oil per day. A further discovery estimated at 2-10 MMboe was made in the Heimdal formation, with a 7m oil column in a 50m thick sand package, with good reservoir quality.

The partnership will now progress development studies in order to potentially submit a plan for development and operation (PDO) by the end of 2022, to meet the temporary tax incentives put in place by the Norwegian Government in July 2020. With the additional discovery in the Heimdal formation and further prospectivity in the surrounding licence areas, there is potential to add additional phases of development from further discoveries.

The wells were drilled by the Deepsea Stavanger semi-submersible drilling rig. Lundin Energy is the operator of PL167 with a 40 percent working interest and the partners are Equinor Energy AS with 30 percent, Spirit Energy Norway AS with 20 percent, and AkerBP ASA with 10 percent working interests.

The Deepsea Stavanger rig will now proceed to the Merckx exploration prospect in PL981, immediately to the southwest of the Solveig field also on the Utsira High. Well 16/4-12 will target Paleocene aged sandstones and Permian aged carbonates, estimated to hold gross unrisked prospective resources of 152 MMboe. Lundin Energy is the operator with a 60 percent working interest and AkerBP ASA is the partner, with a 40 percent working interest.

 

Carbon neutrality accelerated to 2023 and absolute emissions reduced by over 50 percent

Leikanger Hydropower

Carbon neutrality accelerated to 2023 and absolute emissions reduced by over 50 percent

15 September 2021

 

Highlights

  • Carbon neutral across operations by 2023 – Scope 1, 2 and Scope 3 supply chain emissions1
  • Absolute operational emissions reduced by over 50 percent by 2023, significantly faster than required by the Paris Agreement and in line with a 1.5°C maximum temperature increase
  • Company emissions intensity will be approximately 1 kg CO2 per boe2 by 2023, one of the lowest in the world
  • Residual emissions neutralised using high quality, certified natural carbon capture projects, secured at competitive pricing
  • Further actions planned to continue reducing residual operational and supply chain emissions

Lundin Energy AB (Lundin Energy or the Company) has committed MUSD 800 to reach carbon neutrality, 70 percent of which has already been spent on electrification of the Johan Sverdrup and Edvard Grieg platforms and three renewable energy projects. As a result of the electrification of our main producing assets by the end of 2022, the Company’s carbon intensity will be at an industry leading low level of approximately 1 kg CO2 per boe, over 15 times better than the industry average.

Through the sourcing of high quality, proprietary natural carbon capture projects and carbon credit offtake agreements all future residual emissions will be neutralised. Independent third party due diligence and certification on all of these projects has been obtained, to ensure quality and credibility. Alongside significant reductions in Scope 1 and 2 emissions, the Company has also taken further steps to actively reduce the Scope 3 emissions for which it has influence or control over, such as through a hybrid support vessel fleet and the sourcing of carbon neutral materials.

Nick Walker, President and CEO of Lundin Energy, commented:
“Acceleration of carbon neutrality by two years to 2023 is a key differentiator for our business and one which is based on an absolute operational emissions drop of over 50 percent compared to 2020 levels, in a time when our production is projected to have grown by 40 percent. The defining factor has been the full electrification of our main producing assets by the end of 2022, which when coupled with our focus on reducing operational emissions across other areas of the business, has created a unique position from which I believe significant value will be created. It will further distinguish Lundin Energy as an industry leader and provide tangible examples of how oil and gas production can meet the needs of the energy transition, whilst also decarbonising more rapidly than the Paris agreement requires.”

1) Scope 3 supply chain emissions include supply vessels, logistics and travel.
2) Across Scope 1 and 2 emissions

 

First oil from the Rolvsnes field

First oil from the Rolvsnes field

10 August 2021

Lundin Energy AB (Lundin Energy) announces first oil from the Extended Well Test (EWT) at the operated Rolvsnes field, the first subsea tie back development for the Edvard Grieg platform.

The Rolvsnes field is located in PL338C on the southern side of the Edvard Grieg field and is a weathered and fractured granite basement reservoir. During 2018, the successful drilling and testing of a horizontal appraisal well (16/1-28) was completed, which flowed 7,000 bopd, demonstrating good reservoir productivity. The appraisal well has been converted to a development well and tied back the 3 km distance to the Edvard Grieg platform, with the project being completed on schedule and on the budget cost estimate. The resource estimate for the Rolvsnes field is between 14 and 78 million barrels of oil equivalent (MMboe) gross.

The objective of the EWT is to gain a better understanding of the reservoir properties, reservoir connectivity and long term production performance of the field and if successful, this test has the potential to unlock a full field development for Rolvsnes, further extending the plateau production period for Edvard Grieg. Once sufficient data and production experience has been gathered, a Plan for Development and Operation (PDO) could be submitted by the end of 2022, benefitting from the temporary tax regime in Norway. A successful test could also derisk significant additional resource potential in weathered and fractured granite basement reservoirs on the Utsira High.

Lundin Energy Norway AS, a wholly owned subsidiary of Lundin Energy, is the operator of PL338C with an 80 percent working interest, with the remaining interest held by OMV (Norge) AS.

Nick Walker, President and CEO of Lundin Energy, commented:
“One of our strategic priorities is to extend plateau production on Edvard Grieg keeping the facilities full in the long term. We have successfully managed to extend the Edvard Grieg plateau by over 5 years already, through successfully unlocking resources within the Edvard Grieg field and through near field tie-back developments. The Rolvsnes EWT is the first tie-back development into our operated Edvard Grieg hub and production data from the EWT will provide vital information to potentially unlock the full field development of the Rolvsnes field, as well as further weathered and fractured basement reservoir opportunities on the Utsira High.”


 

Lundin Energy audiocast – Q2 report 2021 presentation

Lundin Energy to present at a virtual town hall meeting for investors on 18 March 2021

Lundin Energy audiocast – Q2 report 2021 presentation

28 July 2021

Listen to Nick Walker, President and CEO, and Teitur Poulsen, CFO, commenting on the report and the latest developments in Lundin Energy in a live audiocast, held today, 28 July 2021 at 14:00 CEST.

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

Sweden +46 8 56642651
UK +44 3333000804
United States +1 6319131422
Norway +47 23500243
Access Pin : 44982316
Link : https://edge.media-server.com/mmc/p/42amzuhx/ftagmax/aud

 

 

 

Report for the six months ended 30 June 2021

Quarterly - Johan Sverdrup

Johan Sverdrup phase 2

Report for the six months ended 30 June 2021

28 July 2021

·Record quarterly revenue of USD 1.3 billion with a realised oil price of USD 68 per barrel for the second quarter
·Record free cash flow generation of MUSD 949 for the six month period, operating costs below guidance at USD 2.8 per boe and net debt reduced to below USD 3.2 billion
·Completed USD 2 billion inaugural investment grade bond issuance
·Record quarterly production above guidance at 190 Mboepd and full year production guidance increased to between 180 to 195 Mboepd
·Johan Sverdrup Phase 2 planned offshore installations completed on schedule and full field production capacity increased to 755 Mbopd gross when Phase 2 comes on line in the fourth quarter of 2022
·Key projects on track to deliver growth to over 200 Mboepd by 2023 and Kobra East/Gekko project sanctioned
·Decarbonisation plans on track to achieve carbon neutrality from 2025, with around 60% of production already independently certified as carbon neutrally produced
Financial summary1 Jan 2021-
30 Jun 2021
6 months
1 Apr 2021-
30 Jun 2021
3 months
1 Jan 2020-
30 Jun 2020
6 months
1 Apr 2020-
30 Jun 2020
3 months
1 Jan 2020-
31 Dec 2020
12 months
Production in Mboepd186.4189.8157.7162.9164.5
Revenue and other income in MUSD2,384.71,272.81,097.7402.52,564.4
CFFO in MUSD
Per share in USD
1,487.9
5.23
737.7
2.59
898.1
3.16
259.8
0.91
1,528.0
5.38
EBITDAX in MUSD
Per share in USD
2,078.0
7.31

1,059.6
3.73
916.2
3.23
335.1
1.18
2,140.2
7.53
Free cash flow in MUSD
Per share in USD
949.1
3.34
422.9
1.49
381.5
1.34
-25.2
-0.09
448.2
1.58
Net result in MUSD
Per share in USD
234.6
0.82
165.7
0.58
-131.8
-0.46
178.8
0.63
384.2
1.35
Adjusted Net result in MUSD
Per share in USD
308.4
1.08
158.6
0.56
117.3
0.41
51.3
0.18
280.0
0.99
Net debt in MUSD3,189.43,189.4 3,796.13,796.13,911.5


Comments from Nick Walker, President and CEO of Lundin Energy:

“I’m pleased to report record production and financial results in the second quarter, backed by strong operating performance and the further strengthening of oil prices. Whilst certain challenges of the COVID-19 crisis will remain for the foreseeable future, we’ve normalised the management of these and continue to deliver on our main business priorities.

“Our world class producing assets continue to outperform with excellent production efficiency, along with industry leading low operating costs, delivering production in the quarter above the mid-point of the guidance range, leading us to increase our full year production guidance.

“Johan Sverdrup keeps on delivering above expectations. Phase 1 production ramped up to 535 Mbopd gross ahead of schedule and the full field production guidance has been lifted to 755 Mbopd. Phase 2 of the project is making good progress, with key offshore installations completed on schedule, and the project remains firmly on track for first oil in the fourth quarter of 2022.

“At the Greater Edvard Grieg Area we continue to deliver on the projects that support the long-term plateau extension, with excellent results so far from the Edvard Grieg infill well programme and the Solveig and Rolvsnes projects on track for first oil in the coming weeks. There’s lots more to come and we’ll see the results from two exciting exploration wells in the area in the second half of the year.

“Our key projects remain on track to deliver growth to over 200 Mboepd by 2023. We’ve a strong track record of growing resources and I’m confident that we can continue to sustain the business at these production levels. We have  a pipeline of potential new projects, the first of which has just been sanctioned, and an exciting exploration programme, targeting material resources.

“The business delivered record financial results, with free cash flow of MUSD 949 for the first six months and net debt reduced to below USD 3.2 billion. This demonstrates  the quality of our strong cash generative business, allowing us to fund growth, cover dividends and deleverage. On the back of attaining three investment grade credit ratings, the Company successfully completed a USD 2 billion inaugural bond issuance, the proceeds of which were used to pay down existing corporate credit facilities.

“We continue to make good progress on our decarbonisation plans, with around 60% of our production today carbon neutrally produced, and we’re on target for the business as a whole to be carbon neutral from 2025. We’ve already made several certified carbon neutrally produced crude sales, which I believe will become a key value differentiator for Lundin Energy.

“We’ve delivered record results in the first half of the year, our key business priorities are on track and looking forward I’m confident the business will continue to deliver resilient sustainable growth.”

Audiocast Presentation
Listen to Nick Walker, President and CEO, and Teitur Poulsen, CFO, commenting on the report and the latest developments in Lundin Energy at a live audiocast held today, 28 July 2021 at 14:00 CEST.

Follow the presentation live on www.lundin-energy.com or dial in using the following telephone numbers:
Sweden +46 8 56642651
UK +44 3333000804
United States +1 6319131422
Norway +47 23500243
Access Pin :44982316
Link: https://edge.media-server.com/mmc/p/42amzuhx/ftagmax/aud 

 

Update on second quarter 2021 financial results and audiocast details for 28 July 2021

Update on second quarter 2021 financial results and audiocast details for 28 July 2021

14 July 2021

Lundin Energy AB (Lundin Energy) will publish its financial report for the second quarter 2021 on Wednesday, 28 July 2021. For the second quarter 2021, Lundin Energy will expense pre-tax exploration and appraisal costs of approximately MUSD 119 and recognise a net foreign exchange gain of approximately MUSD 45.

Exploration and appraisal costs
It is the Company’s policy to capitalise costs associated with its exploration and appraisal activities and if it is determined that a commercial discovery has not been achieved, the associated costs are charged to the income statement. For the second quarter of 2021, Lundin Energy will incur a pre-tax charge to the income statement of approximately MUSD 119 relating to exploration and appraisal costs. These costs will be offset by a tax credit of approximately MUSD 93. The costs are mainly related to the Shenzhou well in PL722, the Iving wells in PL820S and relinquished licences.

Notes issuance and foreign exchange gain
Lundin Energy issued USD 2 billion of Senior Notes (the Notes) during the second quarter of 2021 with a fixed interest rate. The Company used the gross proceeds of the Notes issuance, in combination with cash on hand, to repay USD 2 billion of the corporate credit facility term loans with a floating interest rate. As a result, part of the outstanding interest rate hedge contracts are no longer considered effective under hedge effectiveness testing. The mark-to-market fair value of these ineffective contracts of approximately MUSD -38 (loss) will be recognised as a non-cash item in the income statement during the second quarter of 2021. As a result of the USD 2 billion repayment of the corporate credit facility term loans, part of the unamortized capitalised financing fees were expensed during the second quarter.

Lundin Energy will recognise a net foreign exchange gain of approximately MUSD 45 for the second quarter of 2021. The Norwegian Krone was stable against the US Dollar and the Euro strengthened against the US Dollar by approximately 1 percent during the second quarter of 2021. 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 second quarter of 2021, Lundin Energy was underlifted by 10.1 Mboepd.

Revenue from 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 second quarter 2021, revenue from the sale of crude oil from third parties amounted to MUSD 171.8 offset by the purchase of crude oil from third parties of MUSD 170.4, resulting in a gross profit of MUSD 1.4 on third party activities for the second quarter 2021.

Release of report and audiocast on 28 July 2021
Lundin Energy’s financial report for the second quarter 2021 will be published on Wednesday 28 July at 07:30 CEST, followed by a live audiocast at 14:00 CEST where Nick Walker, 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:

Sweden +46 8 56642651
UK +44 3333000804
United States +1 6319131422
Norway +47 23500243
Access Pin : 44982316
Link : https://edge.media-server.com/mmc/p/42amzuhx/ftagmax/aud