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Report for the three months ended 31 March 2022

Report for the three months ended 31 March 2022

Report for the three months ended 31 March 2022

27 April 2022

·Combination of Lundin Energy’s E&P business with Aker BP, to create the leading European independent E&P company, approved by shareholders from both companies, with completion of the transaction anticipated on 30 June 2022 
·Johan Sverdrup Phase 2 processing platform successfully installed, with first oil firmly on track for the fourth quarter of 2022
·Record quarterly revenue of BUSD 1.98 with an achieved oil price of USD 104 per barrel 
·Strong free cash flow of MUSD 822, operating costs in line with guidance at USD 3.7 per boe and net debt reduced to BUSD 2.1
·Quarterly dividend increased by 25 percent to USD 0.5625 per share, payable until completion of the Aker BP transaction, approved by the 2022 AGM
·Strong production performance of 191 Mboepd, towards the top of the guidance range for the quarter
·Five new projects, including the large Wisting development, heading towards sanction by the end of 2022
·Delivering on Lundin Energy’s Decarbonisation Plan with the recent completion of the Company’s first wind farm and electrification of Edvard Grieg on track for end 2022
·Launch of Lundin Energy Renewables business, which is positioned for growth, with Daniel Fitzgerald as the proposed CEO
Financial summary11 Jan 2022-
31 Mar 2022
3 months
1 Jan 2021-
31 Mar 2021
3 months
1 Jan 2021-
31 Dec 2021
12 months
Production in Mboepd191.4182.9190.3
Revenue and other income in MUSD1,976.91,111.95,484.7
CFFO in MUSD
Per share in USD
1,009.6
3.55
750.2
2.64
3,058.0
10.75
EBITDAX in MUSD
Per share in USD
1,888.5
6.64
1,018.4
3.58
4,822.8
16.96
Free cash flow in MUSD
Per share in USD
822.3
2.89
526.2
1.85
1,645.5
5.79
Net result in MUSD
Per share in USD
468.5
1.65
68.9
0.24
493.8
1.74
Adjusted Net result in MUSD
Per share in USD
395.4
1.39
149.8
0.53
795.7
2.80
Net debt in MUSD2,062.23,464.02,747.9
1)All numbers in this table relate to continuing and discontinued operations combined. For a further breakdown between continuing and discontinued operations, reference is made to pages 29-30


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

“I’m pleased to report that the combination of Lundin Energy’s E&P business with Aker BP, to create the leading European Independent E&P company, has now received approval from the shareholders of both companies. The combination is a tremendous deal, drawing on the best of both companies; creating a Norway pure play E&P company of scale, with production growth, a complementary portfolio of industry leading low cost and low carbon emissions assets, delivering sustainable and growing dividends into the next decade.

“For the Lundin Energy shareholders, the transaction delivers a significant up-front cash consideration, the opportunity to be a shareholder in the leading European E&P company and a retained interest in an exciting new renewables business that is positioned for growth, which will be led by a tremendous team with the Lundin entrepreneurial spirit. We anticipate that the transaction will be completed on 30 June 2022.

“In the meantime, our business continues to deliver on all fronts, with strong production and financial performance in the first quarter of 2022. Our world class assets continue to outperform, with production during the quarter towards the top of the guidance range and with industry leading low costs and low carbon emissions.

“Johan Sverdrup continues to exceed expectations. The Phase 2 processing platform was successfully installed on schedule and the project is on target to achieve first oil in the fourth quarter of 2022, which will boost production to 755 Mbopd gross.

“At the Greater Edvard Grieg Area, we see excellent reservoir performance from the recently completed projects and we’re progressing a series of new projects towards sanction in this prolific area, which will further extend the production plateau.

“Our Decarbonisation Plan is making great progress, with the recent completion of our first wind farm in Finland and with everything now on track for the electrification of Edvard Grieg by the end of 2022.

“Financially we had a very strong quarter, with record revenue of BUSD 1.98, delivering significant free cash flow of MUSD 822, allowing us to further reduce net debt to BUSD 2.1, despite a significant build of working capital. This really shows the quality of our business, allowing us to provide an increased quarterly dividend, that will continue until completion of the Aker BP transaction.

“Our mission, in everything we do, is long-term value creation for shareholders and we’ve had a great start to the year. We continue to deliver very strong results and the transformation of our business with the combination with Aker BP and the establishment of an exciting new renewables energy business means we can look forward to many more years of value creation.”

Audiocast presentation
Listen to Nick Walker, President and CEO and Teitur Poulsen, CFO, commenting on the report at a live audiocast held today, at 14:00 CEST. Follow the presentation on www.lundin-energy.com or dial in using the following telephone numbers:

UK/International: +44 3333000804
Sweden: +46 856642651
Norway:+47 23500243
USA:+1 6319131422
Access Pin :62505911
Webcast link:https://edge.media-server.com/mmc/p/y8c5e7kc

 


 

THESE MATERIALS DO NOT CONSTITUTE AN OFFER OF SECURITIES FOR SALE OR A SOLICITATION OF AN OFFER TO PURCHASE THE SECURITIES DESCRIBED IN SUCH MATERIALS IN THE UNITED STATES. IN PARTICULAR, ANY SECURITIES REFERRED TO IN THESE MATERIALS HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD OR DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THERE WILL BE NO PUBLIC OFFERING OF SECURITIES IN THE UNITED STATES.

Update on first quarter 2022 financial results and audiocast details for the presentation on 27 April 2022

Update on first quarter 2022 financial results and audiocast details for the presentation on 27 April 2022

Update on first quarter 2022 financial results and audiocast details for the presentation on 27 April 2022

14 April 2021

Lundin Energy AB (“Lundin Energy” or the “Company”) will publish its financial report for the first quarter 2022 on Wednesday, 27 April 2022. For the first quarter 2022, Lundin Energy will expense pre-tax exploration costs of approximately MUSD 22 and recognise a net foreign exchange loss of approximately MUSD 36.

Aker BP Combination
On 21 December 2021, Lundin Energy announced that it had entered into an agreement with Aker BP whereby Aker BP will absorb Lundin Energy’s E&P business through a cross-border merger in accordance with Norwegian and Swedish law (the “Combination”). Before the cross-border merger is effectuated, the shares in the company holding Lundin Energy’s E&P business (Lundin Energy MergerCo AB) will be distributed to Lundin Energy’s shareholders. Consequently Lundin Energy presents its E&P business as discontinued operations in the consolidated Income Statement and the asset and liabilities associated with the E&P business, are presented as assets and liabilities held for distribution.

Continuing operations
Once the Combination with Aker BP is completed, the remaining renewable focused business, which is reported as continuing operations, will be debt free and have a cash balance of MUSD 130, to cover capital expenditure and other costs. The renewables business is expected to be free cash flow positive from late 2023, when the renewables portfolio has been fully built out and all projects are operational.

Discontinued Operations

Exploration costs
It is the Company’s policy to capitalize costs associated with its exploration activities and when it is determined that a commercial discovery has not been achieved, the associated exploration costs are charged to the income statement. For the first quarter of 2022, Lundin Energy will incur pre-tax exploration costs of approximately MUSD 22, which will be charged to the income statement and offset by a tax credit of approximately MUSD 17. The exploration costs are mainly related to the Melstein well in PL886 and relinquished licenses.

Foreign exchange loss
Lundin Energy will recognise a net foreign exchange loss of approximately MUSD 36 for the first quarter of 2022. The foreign exchange loss mainly relates to the Euro weakening by approximately two percent against the US Dollar and somewhat offset by the Norwegian Krone strengthening against the US Dollar. 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.

Hedging effectiveness
As a result of the Aker BP transaction, part of the outstanding foreign currency contracts and interest rate swap contracts are no longer considered as effective hedges under hedge effectiveness testing. The mark-to-market fair value of these ineffective contracts are recognized as a non-cash item in the income statement for discontinued operations. Lundin Energy will recognize a gain on interest rate swap contracts of approximately MUSD 108 for the first quarter of 2022, as a result of rising interest rates during the quarter.

Change in inventory and 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 first quarter of 2022, Lundin Energy was overlifted by 9.1 Mboepd.

Depletion costs
Following the announcement of the Aker BP Combination on 21 December 2021 and the subsequent presentation of the asset and liabilities associated with the E&P business as assets and liabilities held for distribution, the Company ceased depletion as per IFRS5, resulting in no depletion costs recognized for the first quarter 2022.

Release of report and audiocast on 27 April 2022
Lundin Energy’s financial report for the first quarter 2022 will be published on Wednesday 27 April 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:
UK/International +44 3333000804
Sweden +46 856642651
Norway +47 23500243
United States +1 6319131422
Access Pin :62505911
Link : https://edge.media-server.com/mmc/p/y8c5e7kc

 

Lundin Energy audiocast – Q1 report 2020 presentation

Lundin Petroleum audiocast - Q3 report 2019 presentation

Lundin Energy audiocast – Q1 report 2020 presentation

30 April 2020

Listen to Alex Schneiter, President and CEO, and Teitur Poulsen, CFO, commenting on the report at a live audiocast, held on Thursday 30 April at 09:00 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 : 58812582

 

Link : https://lundinenergy.videosync.fi/2020-04-30-q1

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3 month report 2020
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