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Report for the nine months ended 30 September 2021

Report for the nine months ended 30 September 2021

Report for the nine months ended 30 September 2021

29 October 2021

·Quarterly revenue of USD 1.5 billion with a realised oil price of USD 72 per barrel for the third quarter
·Record free cash flow generation of USD 1.6 billion for the first nine months, operating costs below guidance at USD 2.9 per boe and net debt reduced to USD 2.6 billion
·Board of Directors anticipates to propose to the Annual General Meeting 2022, a 2021 dividend of USD 2.25 per share, corresponding to MUSD 640, an increase of 25 percent from 2020 dividend
·Record production of 194 Mboepd for third quarter and full year production anticipated towards the upper end of the guidance range of 180 to 195 Mboepd
·Key projects on track and first oil achieved at the Rolvsnes and Solveig projects, on schedule and below budget
·Strategic acquisition of 25 percent working interest from OMV in the high quality Wisting oil development, taking the Company’s interest to 35 percent and adding 130 MMboe fully appraised net contingent resources for USD 2.5 per boe
·Further acceleration of decarbonisation plans to achieve carbon neutrality by 2023 from operational emissions

 

Financial summary1 Jan 2021-
30 Sep 2021
9 months
1 Jul 2021-
30 Sep 2021
3 months
1 Jan 2020-
30 Sep 2020
9 months
1 Jul 2020-
30 Sep 2020
3 months
1 Jan 2020-
31 Dec 2020
12 months
Production in Mboepd188.8193.6157.6157.5164.5
Revenue and other income in MUSD3,862.91,478.21,784.7687.02,564.4
CFFO in MUSD
Per share in USD
2,499.9
8.79
1,012.0
3.56
1,251.3
4.40
353.2
1.24
1,528.0
5.38
EBITDAX in MUSD
Per share in USD
3,360.6
11.82

1,282.6
4.51
1,431.8
5.04
515.6
1.81
2,140.2
7.53
Free cash flow in MUSD
Per share in USD
1,622.9
5.71
673.8
2.37
545.7
1.92
164.2
0.58
448.2
1.58
Net result in MUSD
Per share in USD
372.1
1.31
137.5
0.48
80.5
0.28
212.3
0.74
384.2
1.35
Adjusted Net result in MUSD
Per share in USD
542.4
1.91
234.0
0.83
193.1
0.68
75.8
0.27
280.0
0.99
Net debt in MUSD2,646.92,646.93,706.83,706.83,911.5


Comment from Nick Walker, President and CEO of Lundin Energy:
“I’m pleased to report another set of record production and financial results in the third quarter, underpinned by continued strong operational performance and further strengthening of oil and gas prices. Whilst certain challenges of the COVID-19 crisis remain, we’ve normalised the management of these and continue to deliver on our key business priorities.

“Our world class producing assets keep on outperforming, with excellent production efficiency and industry leading low operating costs, delivering record production in the third quarter. Full year production is anticipated to be towards the upper end of our guidance range.

“Johan Sverdrup continues to consistently perform at a high level and Phase 2 of the project, which will boost gross production to 755 Mbopd, is making great progress and remains firmly on track for first oil in the fourth quarter of 2022.

“At the Greater Edvard Grieg Area we’re delivering on our projects that support the long term plateau extension, with excellent results from the completed Edvard Grieg infill well programme, and first oil achieved at the Rolvsnes and Solveig projects; all these projects delivered on schedule and below budget. We are set to see reserves increases at year end due to the continued strong Edvard Grieg performance and the excellent drilling results at Solveig. There’s lots more upside in the area and we’re working hard to bring forward a number of new projects.

“I’m pleased to announce the purchase of a further 25 percent interest in the Wisting oil development, which adds resources of almost two times our 2021 production volumes. The deal takes the Company’s interest to 35 percent in this high quality, 500 MMbo development, which has strong economics and will be powered from shore. This strategic deal, done at a purchase price of USD 2.5 per boe, is very value accretive and fits with our ambition to sustain the business long term with low carbon emission barrels.

“We delivered free cash flow of USD 1.6 billion for the first nine months, enabling net debt to be reduced to USD 2.6 billion. Due to the strong financial outlook for the business, I’m pleased to note that the Board of Directors anticipates to propose to the AGM 2022, a 25 percent increased dividend for 2021 of USD 2.25 per share (in total MUSD 640), clearly demonstrating our commitment to grow shareholder returns.

“We continue to be firmly positioned as an industry leader on carbon emissions and during the third quarter we further accelerated our decarbonisation plans to become carbon neutral by 2023 from operational emissions. With around 60 percent of our production today produced as carbon neutral and with a clear deliverable pathway to carbon neutrality, I see this as a key value differentiator for Lundin Energy.

“The Company has again delivered excellent results, all our key business priorities are on track and we’ve made a strategic value accretive acquisition, which together positions us to keep delivering resilient sustainable growth.”

Audiocast presentation
Listen to Nick Walker, President and CEO, and Teitur Poulsen, CFO, commenting on the report and the latest developments 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:
Sweden +46 856 642 651
UK +44 3 333 000 804
United States +1 6 319 131 422
Norway +47 23 500 243
Access Pin :73770326
Link: https://edge.media-server.com/mmc/p/egyufnjf

 

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

 

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9 month report 2020

Rapport för niomånadersperioden som avslutades den 30 september 2020 (regulatorisk)