Update on fourth quarter 2017 financial results

Update on fourth quarter 2017 financial results

17 January 2018

Lundin Petroleum AB (Lundin Petroleum) will expense pre-tax exploration costs of approximately MUSD 31 and recognise a net foreign exchange loss of approximately MUSD 69 as well as an after tax loss on sale of assets of MUSD 15 for the fourth quarter of 2017.

The profitability for the fourth quarter of 2017 will be impacted by certain expensed exploration costs, a loss on sale of assets, as well as a net foreign currency exchange loss mainly related to the revaluation of loan balances. These items are largely non-cash and will have no impact on operating cash flow or EBITDA.

Exploration Costs
During the fourth quarter of 2017, Lundin Petroleum will incur pre-tax exploration costs of approximately MUSD 31 which will be charged to the income statement and offset by a tax credit of approximately MUSD 24. The exploration costs are mainly related to the non-commercial gas discovery on the Hufsa prospect and the dry well on the Hurri prospect, both located in PL533.

Loss on Sale of Assets
The previously announced transaction in relation to the divestment of a 39 percent working interest in the Brynhild field to CapeOmega was completed on 30 November 2017. Lundin Petroleum has previously announced that on completion of the transaction a net loss on sale of assets would be recorded as a result of the accounting for income taxes in accordance with IFRS. Consequently an after tax loss of MUSD 15 will be charged to the income statement for the fourth quarter 2017.

Net debt and Foreign Exchange Loss
The net debt position of Lundin Petroleum at 31 December 2017 amounted to USD 3.9 billion resulting in available liquidity of USD 1.1 billion within its USD 5.0 billion reserve-based lending facility.

Lundin Petroleum will recognise a net foreign exchange loss of approximately MUSD 69 for the fourth quarter of 2017. The Norwegian Krone weakened against the US Dollar by approximately 3 percent and the Euro strengthened against the US Dollar by approximately 2 percent during the fourth quarter of 2017. The foreign exchange loss mainly relates to the revaluation of loan balances at the prevailing exchange rates at the balance sheet date.

 

APA 2017 – 14 licences awarded in the Norwegian licensing round

APA 2017 – 14 licences awarded in the Norwegian licensing round

16 January 2018

Lundin Petroleum AB (Lundin Petroleum) is pleased to announce that its wholly owned subsidiary Lundin Norway AS (Lundin Norway) has been awarded a total of 14 exploration licence interests in the 2017 Norwegian licensing round (Awards in Predefined Areas, APA).

The record-high award includes six licences in the North Sea, four licences in the Norwegian Sea and four licences in the southern Barents Sea. Six of the awarded licences will be operated by Lundin Norway.

The licence interests are detailed below and a map is included in the attachment.

Licence Lundin Norway licence interest
PL904 (Blocks 2/9, 3/7):20% – North Sea
PL167C (Block 16/1):20% – North Sea
PL914S (Ivar Aasen unit)(Block 16/1):1.385% – North Sea
PL916 (Blocks 16/2, 25/11):20% – North Sea
PL917 (Blocks 25/7, 10):20% – North Sea
PL919 (Block 25/4):15% – North Sea
PL934 (Blocks 6307/2, 5)*:40% – Norwegian Sea
PL935 (Block 6306/3):20% – Norwegian Sea
PL936 (Blocks 6306/2, 5):30% – Norwegian Sea
PL886B (Blocks 6307/1, 4)*:40% – Norwegian Sea
PL950 (Blocks 7020/1, 2, 7120/11)*:50% – Southern Barents Sea
PL952 (Blocks 7124/5,6,8,9, 7125/4,5,6,7)*:60% – Southern Barents Sea
PL954 (Blocks 7121/1,2,3, 7221/10, 11)*:40% – Southern Barents Sea
PL533B (Block 7219/11)*:35% – Southern Barents Sea
*operator Lundin Norway

 

Exploration well completed on the Hurri prospect in the southern Barents Sea

Exploration well completed on the Hurri prospect in the southern Barents Sea

10 January 2018

Lundin Petroleum AB (Lundin Petroleum) announces that its wholly owned subsidiary Lundin Norway AS (Lundin Norway) has completed the drilling of the Hurri exploration well 7219/12-3S located in PL533 in the southern Barents Sea. The well was dry.

The main objectives of the well were to test the reservoir properties and hydrocarbon potential of the Upper Jurassic Hekkingen formation and Middle Jurassic Stø formation.

The well encountered no reservoir development in the Hekkingen formation and good reservoir in the Stø formation but with no indications of hydrocarbons. Extensive data acquisition and sampling were carried out.

The well was drilled using the semi-submersible drilling rig Leiv Eiriksson which after completion of operations on the Hurri well will proceed to abandon the Filicudi discovery well, also located in PL533.

Lundin Norway is the operator of PL533 with a 35 percent working interest. The partners are Aker BP with 35 percent and DEA Norge with 30 percent.

 

Lundin Petroleum spuds exploration well on the Hurri prospect in the southern Barents Sea

Lundin Petroleum spuds exploration well on the Hurri prospect in the southern Barents Sea

4 December 2017

Lundin Petroleum AB (Lundin Petroleum) is pleased to announce that its wholly owned subsidiary Lundin Norway AS (Lundin Norway) has commenced drilling of exploration well 7219/12-3 on the Hurri prospect in PL533 in the southern Barents Sea.

The well is located in PL533, approximately 2 km southwest of the Filicudi oil discovery and south of the Statoil operated Johan Castberg oil discovery.

The main objective of the well is to test the reservoir properties and hydrocarbon potential of the Jurassic Hekkingen and Stø formations. The Hurri prospect is estimated to contain gross unrisked prospective resources of 218 MMboe.

The well will be drilled with the semi-submersible drilling rig Leiv Eiriksson and is expected to take approximately 50 days.

Lundin Norway is the operator of PL533 with a 35 percent working interest. The partners are Aker BP with 35 percent and DEA Norge with 30 percent.

Non-commercial gas discovery on the Hufsa prospect in the southern Barents Sea

Non-commercial gas discovery on the Hufsa prospect in the southern Barents Sea

22 November 2017

Lundin Petroleum AB (Lundin Petroleum) announces that its wholly owned subsidiary Lundin Norway AS (Lundin Norway) has completed the drilling of exploration well 7219/12-2 on the Hufsa prospect in PL533 in the southern Barents Sea. A non-commercial gas discovery was made in the main well while the sidetrack was dry.

The main objective of the well was to prove oil in Jurassic and Triassic sandstone reservoirs.

The main well 7219/12-2S encountered a gross 22 metres gas column while no hydrocarbons were encountered in the sidetrack 7219/12-2A. Extensive data acquisition and sampling have been carried out, including coring, logging and sampling of gas from the wireline tools.

The well was drilled with the semi-submersible drilling rig Leiv Eiriksson which after completion will proceed to drill the Hurri prospect, also located in PL533.

Lundin Norway is the operator of PL533 with a 35 percent working interest. The partners are Aker BP with 35 percent and DEA Norge with 30 percent.

Report for the nine months ended 30 September 2017

Report for the nine months ended 30 September 2017

1 November 2017

Lundin Petroleum delivers strong results for the first nine months 2017. High production levels at continuing low cash operating costs and a higher realised oil price resulted in a significant increase in revenue, EBITDA and operating cash flow compared to the same period in 2016.

Third quarter highlights
·   Record quarter EBITDA and operating cash flow driven by high production, low costs and higher oil price.
·   Quarter production above guidance with full year production expected at or above the higher end of the 80-85 Mboepd guidance range.
·   Continued low cash operating costs, forecast to be below the full year guidance of USD 4.60 per barrel.
·   Positive update for the Johan Sverdrup project with 60 percent of Phase 1 complete and further cost reductions.
·   2017 full year development expenditure guidance reduced from MUSD 1,085 to MUSD 980.

Financial summary

Continuing operations
——————————–
Jan 2017-
30 Sep 2017
9 months

—————-
1 Jul 2017-
30 Sep 2017
3 months
—————-
1 Jan 2016-
30 Sep 2016
9 months
————–
1 Jul 2016-
30 Sep 2016
3 months
————–
1 Jan 2016-
31 Dec 2016
12 months
————–
Production in Mboepd87.189.255.367.559.3
Revenue in MUSD1,403.3  517.2623.8269.0950.0
EBITDA in MUSD1,071.7  382.4475.8215.3  752.5
Operating cash flow in MUSD1,095.5  389.6557.0243.0857.9
Net result in MUSD431.8227.0263.4  169.8-399.3
Earnings/share in USD1   1.280.670.830.52-0.79
Earnings/share fully diluted in USD11.280.670.82  0.51-0.79
Net debt4,024.04,024.04,307.14,307.14,075.5

The numbers included in the table above are based on continuing operations (including 2016 comparatives)
1 Based on net result attributable to shareholders of the Parent Company

Comments from Alex Schneiter, President and CEO of Lundin Petroleum:
“Lundin Petroleum has delivered another great quarter with record operating cash flow and EBITDA, driven by continued strong production performance from our core assets. With these excellent results we are firmly on track to meet or exceed the higher end of the full year production guidance and our total cash operating cost is forecast to be below the full year guidance of USD 4.60 per barrel.

The Johan Sverdrup development continues to improve both in terms of project completion and further cost reductions. Phase 1 is now 60 percent complete with over 40 million man-hours worked to date. Costs are about 25 percent lower for Phase 1 and 50 percent lower for Phase 2 compared to PDO submission and I believe we will see further savings as the project progresses.

We remain optimistic about the significant exploration potential in the southern Barents Sea, despite recent disappointing results. This is a new frontier area where more exploration is needed to understand and unlock its full potential. We are drilling two further exploration wells on the Filicudi trend before the end of this year (Hufsa and Hurri) and we will soon announce our 2018 drilling programme, targeting more prospects in the southern Barents Sea, the Utsira High and the Mandal High.

Oil prices strengthened in the third quarter on the back of healthy demand growth, decreasing oil inventories and the prospect of an extended OPEC quota. I believe we will see further upward pressure on the oil price as the supply market tightens following the significant under investments in our industry in the last few years. Lundin Petroleum has never been better positioned to benefit from the current oil market recovery with production due to double by late 2022 and with record low cash operating costs below USD 5 per barrel for the next decade. With a strong focus on cost discipline, operating efficiency and high HSE standards, Lundin Petroleum will continue to pursue an exciting organic growth strategy.”

Webcast presentation
Listen to Alex Schneiter, President and CEO, and Teitur Poulsen, CFO, commenting on the report at a live webcast held on Wednesday 1 November 2017 at 09.00 CET.

Follow the presentation live on www.lundin-petroleum.com or by dialling in on the following telephone numbers:
Sweden: +46 8 519 993 55
Norway: +47 23 500 211
UK/International: +44 203 194 05 50
International Toll Free: +1 855 269 26 05

Link to webcast

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9 month report 2017
01.11.2017, 747.61 KB

Lundin Petroleum to release third quarter report 2017 on 1 November 2017

Lundin Petroleum to release third quarter report 2017 on 1 November 2017

25 October 2017

Lundin Petroleum’s financial report for the third quarter 2017 will be published on Wednesday 1 November at 07.30 CET, followed by a live webcast at 9.00 CET.

Listen to Alex Schneiter, President and CEO, and Teitur Poulsen, CFO, commenting on the report and the latest developments in Lundin Petroleum.

Follow the presentation live on www.lundin-petroleum.com.

You can also dial in to listen to the presentation on the following telephone numbers:

Sweden:        +46 8 519 993 55
Norway:        +47 23 500 211
UK/International:     +44 203 194 05 50
International Toll Free:     +1 855 269 26 05

Link to webcast

Update on third quarter 2017 financial results

Update on third quarter 2017 financial results

18 October 2017

Lundin Petroleum AB (Lundin Petroleum) will expense pre-tax exploration costs and impairment charges of approximately MUSD 33 and recognise a net foreign exchange gain of approximately MUSD 185 for the third quarter of 2017.

The profitability for the third quarter of 2017 will be impacted by certain expensed exploration costs and impairment charges, as well as a net foreign currency exchange gain mainly related to the revaluation of loan balances. These items are largely non-cash and will have no impact on operating cash flow or EBITDA.

Exploration Costs
During the third quarter of 2017, Lundin Petroleum will incur pre-tax exploration costs of approximately MUSD 16 which will be charged to the income statement and offset by a tax credit of approximately MUSD 13. The exploration costs are mainly related to the non-commercial gas discovery on the Korpfjell well in PL859 and the dry well on the Børselv prospect in PL609.

Impairment
The Brynhild field has been shut-in for production since summer 2017 due to a restriction in the production flowline to the Haewene Brim FPSO. Specialised equipment has been ordered in an effort to clear the restriction in the production flowline and this operation is expected to take place during the fourth quarter of 2017. Consequently Lundin Petroleum will incur a non-cash impairment charge in relation to the Brynhild field in the third quarter of 2017 of approximately MUSD 17 with a corresponding tax credit of MUSD 14 resulting in a negative impact on the third quarter net results of MUSD 3.

Foreign Exchange Gain
Lundin Petroleum will recognise a net foreign exchange gain of approximately MUSD 185 for the third quarter of 2017. The Norwegian Krone and the Euro strengthened against the US Dollar by approximately 5 and 3 percent respectively during the third quarter of 2017 and the foreign exchange gain mainly relates to the revaluation of loan balances at the prevailing exchange rates at the balance sheet date.

Lundin Petroleum AB’s Nomination Committee

Lundin Petroleum AB’s Nomination Committee

10 October 2017

Lundin Petroleum AB (Lundin Petroleum) is pleased to announce the composition of the Nomination Committee for the 2018 Annual General Meeting (AGM) to be held on 3 May 2018 in Stockholm.

The Nomination Committee has been formed with the following members:

· Åsa Nisell (Swedbank Robur Fonder)
· Filippa Gerstädt (Nordea Asset Management)
· Hans Ek (SEB Investment Management)
· Ian H. Lundin (Nemesia S.à.r.l and Landor Participations Inc., as well as Chairman of the Board of Directors of Lundin Petroleum)

At the Nomination Committee’s first meeting, Ian H. Lundin was elected as Chairman of the Nomination Committee.

The Nomination Committee shall make recommendations to the 2018 AGM regarding:

· Election of the Chairman of the 2018 AGM
· Election of members of the Board of Directors, including number of members
· Election of the Chairman of the Board of Directors
· Remuneration of the members of the Board of Directors, distinguishing between the Chairman and other members, and remuneration for Board Committee work
· Election of the auditor and remuneration of the auditor
· Nomination Committee Process for the 2019 AGM, if any amendments are proposed to the Process for the 2018 AGM

Shareholders who wish to present a motion to the Nomination Committee regarding the above-mentioned issues should contact the Chairman of the Nomination Committee, Ian H. Lundin, at
nomcom@lundin-petroleum.com not later than 15 January 2018.