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12 licences awarded in the Norwegian licensing round

APA 2019 licence awards

12 licences awarded in the Norwegian licensing round

14 January 2020

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 12 exploration licence interests in the 2019 Awards in Predefined Areas (APA) licensing round, in Norway.

The award includes 7 licences in the North Sea, 2 licences in the Norwegian Sea and 3 licences in the Southern Barents Sea, 7 of the awarded licences will be operated by Lundin Norway.

The awards from this licensing round continue to build on the Company’s seven core exploration areas and increases by 15 percent the number of licences held by the Company.

 The licence interests are detailed below and maps of their location are provided in the link below.

 

LicencesBlockWorking InterestLicence Area
PL1041Block 24/1230%North Sea
PL1051*Block 31/3, 32/1, 35/12, 36/1040%North Sea
PL1032*Block  2/7, 1040%North Sea
PL1045Block 25/415%North Sea
PL987B1Block 30/820%North Sea
PL917B1Block 25/1020%North Sea
PL1048*Block 30/1, 2, 34/1150%North Sea
PL1069*Block 6505/6,9, 6506/1,4,750%Norwegian Sea
PL1057Block 6302/2,3, 6303/1, 2,3, 6402/11,12, 6403/10,11,1230%Norwegian Sea
PL1082*Block 7225/6,8,9, 7226/4,5,6,7,8,9,11,12, 7227/4,5,7,850%Southern Barents Sea
PL1083*Block 7228/2,3,5,6, 7229/1,2,3,4,5,6, 7230/1,2,3,4,5,6, 7231/4, 7329/10,11,12, 7330/10,11,1240%Southern Barents Sea
PL609D1*Block 7120/240%Southern Barents Sea

*Operator Lundin Norway

1 Geographical extension of the licence area.

 

Lundin Petroleum announces increased reserves for sixth consecutive year

Lundin Petroleum announces increased reserves for sixth consecutive year

Lundin Petroleum announces increased reserves and contingent resources

13 January 2020

Lundin Petroleum AB (Lundin Petroleum) is pleased to announce that as at 31 December 2019, its proved plus probable net reserves (2P reserves) are 693 million barrels of oil equivalent (MMboe), its proved plus probable plus possible net reserves (3P reserves) are 858 MMboe and its best estimate net contingent resources (contingent resources) are 185 MMboe. The 2P reserves replacement ratio for 2019 is 150 percent and this is the sixth consecutive year that Lundin Petroleum has more than replaced production.1

Lundin Petroleum’s 2P reserves as at 31 December 2019 are 693.3 MMboe and reflect a positive revision of 52.1 MMboe, excluding asset transactions. The 3P reserves as at 31 December 2019 are 857.5 MMboe and reflect a positive revision of 73.4 MMboe, excluding asset transactions 2,3

 

2P Reserves3P Reserves
End 2018 745.4900.9
– Disposal of 2.6% interest in Johan Sverdrup-69.6-82.0
End 2018 adjusted 675.9818.8
  – Produced4-34.7-34.7
  + Revisions+52.1+73.4
End 2019693.3857.5
Reserves replacement ratio5150%212%

 

The increase in reserves relates to project sanctions for Solveig Phase 1, the Rolvsnes Extended Well Test and the Edvard Grieg infill well programme, with the contingent resources associated with these projects being promoted to reserves. Oil accounts for 93 percent of Lundin Petroleum’s 2P reserves and the majority of the reserves are associated with fields in production.

Edvard Grieg production performance continues to exceed expectations with significantly slower build-up of water production than anticipated. With the sanction of the Edvard Grieg infill well programme, the best estimate gross ultimate recovery from Edvard Grieg as at 31 December 2019, which is cumulative production plus 2P reserves, is increased to 300 MMboe, representing a 60 percent increase from the original PDO. With the increased reserves at Edvard Grieg, combined with Solveig Phase 1 and the Rolvsnes Extended Well Test, which will be produced through the Edvard Grieg facilities, the production plateau will be maintained at the contractually available facilities capacity until at least the end of 2022, representing a four-year extension compared to the original Edvard Grieg PDO.

First oil from the Johan Sverdrup field occurred in October 2019 and production has ramped up quickly from the eight pre-drilled production wells, to reach around 350 Mbopd gross, which is about 80 percent of Phase 1 facilities capacity of 440 Mbopd. The drilling of two new production wells will be required to achieve Phase 1 plateau, which is expected in the summer of 2020. Initial Johan Sverdrup reservoir performance is excellent and well productivities are above expectations. Further production experience is needed to justify an update to the reserves estimate.

Lundin Petroleum’s contingent resources as at 31 December 2019 are 185 MMboe, a reduction of 40 MMboe from year end 2018, primarily due to the projects which were promoted to reserves. New discoveries on Jorvik and Tellus East, the addition of an improved recovery project at Edvard Greig involving water alternating gas injection (WAG), as well as the acquisition of an additional 30 percent interest in the Rolvsnes discovery have contributed to increases.

The contingent resource estimate for the Alta discovery has been adjusted downwards based on evaluation of the high specification 3D seismic survey (Topseis) acquired over the area, combined with the extensive data and analysis from the well drilled for the extended well test conducted in 2018. A standalone development of the Alta and nearby Gohta discoveries is no longer considered to be commercial, and a subsea tie-back development to either Johan Castberg or another future host development in the area is considered the most viable option. Lundin Petroleum is drilling several large prospects in the Loppa High area in 2020, which if successful could change the dynamic of commercial options for this area.

The reserves estimates have been audited by ERCE, a third party independent reserves auditor, and have been calculated using 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 contingent resource estimates associated to the Edvard Grieg, Alvheim area, Johan Sverdrup, Solveig and Rolvsnes assets have been audited by ERCE. For the other assets, the contingent resource volumes are based on management estimates.

Nick Walker, COO of Lundin Petroleum commented:
“This has been the sixth consecutive year in which we have more than replaced our produced barrels, whilst in the same period production has increased by four times; which is a testament to the quality of the asset base and organic growth model. In 2019, we increased reserves by moving three new projects in the Edvard Grieg area from the appraisal phase into development, adding high value barrels that significantly extend the Edvard Grieg production plateau. I am confident we will see further reserves and resources growth as we continue to mature the portfolio and kick off another busy year with the drill bit in 2020.”

1 Relates to Lundin Petroleum’s portfolio in Norway.
2 BOE’s may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf : 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent the value equivalency at the wellhead.
3 The reserves were calculated using ERCE’s forecasted nominal Brent oil price of USD 66 per barrel in 2020, 68 in 2021, 70 in 2022, 72 in 2023, 74 in 2024, 75 in 2025, 77 in 2026, 78 in 2027, 80 in 2028, 81 in 2029 and increasing by 2 percent per year thereafter.
4 Reserves are measured in salable quantities (saleable oil, natural gas liquids and dry gas converted to oil equivalents), which may differ from production volumes provided in corporate reports which are given in wellhead production quantities (oil and rich gas converted to oil equivalents).
5 As per industry standards the reserves replacement ratio is defined as the ratio of reserves additions to production during the year, excluding the effect of acquisitions and dispositions.

Plan finalised for full power from shore for the Edvard Grieg platform

Edvard Grieg Power from Shore

Plan finalised for full power from shore for the Edvard Grieg platform

28 October 2019

Lundin Petroleum AB (Lundin Petroleum) announces that its wholly owned subsidiary Lundin Norway AS (Lundin Norway) and the partners, have finalised the plan to fully electrify the Lundin Norway operated Edvard Grieg platform, in conjunction with the Utsira High Area power grid; which is being developed together with the Johan Sverdrup Phase 2 project.

The Utsira High Area power grid which will become operational in 2022, will provide power from shore to the Johan Sverdrup, Edvard Grieg, Ivar Aasen, Gina Krog and Sleipner fields. The Edvard Grieg power from shore project involves the retirement of the existing gas turbine power generation system on the platform, installation of electric boilers to provide process heat and installation of a power cable from Johan Sverdrup to Edvard Grieg. When the facilities are all operational, Lundin Norway’s net capital investment in power from shore facilities at Edvard Grieg and Johan Sverdrup will total approximately 500 MUSD, half of which has already been spent.

The Edvard Grieg power from shore project will result in a significant reduction in CO2 emissions from the Edvard Grieg Area of approximately 3.6 million tonnes from 2022 to end of field life, taking CO2 emissions for the area to below 1 kg per barrel, about twenty times lower than the world average. Additionally, the project will reduce operating costs, reduce carbon taxes and increase operating efficiency; which will be partially offset by electricity power purchases from the grid, generated mostly from renewable sources. Overall the project will enhance the economic return from the Edvard Grieg Area, while at the same time significantly reducing CO2 emissions.

Lundin Norway is the operator of the Edvard Grieg platform with a 65 percent working interest and the partners are OMV Norge and Wintershall DEA with 20 and 15 percent working interests respectively.

Comments from Alex Schneiter, President and CEO of Lundin Petroleum:
“Full power from shore for Edvard Grieg, as part of the Utsira High power grid, will not only significantly reduce the carbon emissions from the area to below 1kg of CO2 per barrel but will also allow us to drive further value from the asset base through higher production efficiency, reduced operating costs and less carbon tax. The CO2 saved from Edvard Grieg alone, will amount to approximately 200,000 tonnes per year from 2022, in addition to the emission savings as a result of power from shore to Johan Sverdrup. The Edvard Grieg project will further solidify Lundin Petroleum’s position as a world leading low carbon emissions oil producer, with its two key assets fully or becoming fully electrified, using power from shore mainly sourced from renewable energy.”

 

Downloads

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

Updated 2020 production guidance to reflect the Norwegian Government production restrictions and increased long-term production guidance