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Completion of the combination of Lundin Energy’s E&P business with Aker BP

Completion of the combination of Lundin Energy’s E&P business with Aker BP

Completion of the combination of Lundin Energy’s E&P business with Aker BP

30 June 2022

Lundin Energy AB (“Lundin Energy” or “the Company”) is pleased to announce the completion of the combination (the “Combination”) of Lundin Energy’s E&P business with Aker BP ASA (“Aker BP”). The Combination creates the leading European independent E&P company with a world class asset base, industry leading low operating costs and low carbon emissions, with increased and sustainable dividends. Shareholders will also retain their existing holding in Lundin Energy’s renewables focussed growth business, which is changing its name to Orrön Energy AB (“Orrön Energy”) as of 1 July 2022. Due to the completion of the Combination, Lundin Energy will not, in accordance with the resolution at the Annual General Meeting 2022, pay any of the remaining quarterly cash dividends resolved upon at the Annual General Meeting.

In exchange for Lundin Energy’s E&P business portfolio, shareholders will be entitled to:

  • Cash totalling BUSD 2.22 (SEK 78.78 per share after conversion from USD)
  • 271,910,019 Aker BP shares (0.95098 Aker BP shares, represented by Swedish Depository Receipts, for each share in Lundin Energy)
  • Retain their existing shareholding in Lundin Energy, which will change its name to Orrön Energy as of 1 July 2022 and become a renewables focussed growth business

Accordingly, following the completion of the Combination, the shareholders of Lundin Energy will hold 43 percent of the total number of shares and votes of Aker BP (based on 632,022,210 shares and votes in Aker BP).

The Annual General Meeting of Lundin Energy resolved on 31 March 2022 on a quarterly cash dividend of USD 0.5625 per share, corresponding to USD 160 million (rounded off) per quarter. The payment of each quarterly cash dividend was made conditional upon that the Company owns all shares in Lundin Energy MergerCo AB (publ) on the record date for the relevant quarterly cash dividend. The first quarterly dividend was paid on 7 April 2022. Since the Combination now has been completed and the Company no longer owns any shares in Lundin Energy MergerCo AB (publ), the Company will not pay any of the remaining quarterly cash dividends.

More information for shareholders around the Combination, a timetable for the payment of the merger consideration and how Swedish Depositary Receipts received by the shareholders can be converted into a direct holding of Oslo Stock Exchange listed shares in Aker BP can be found on: https://www.lundin-energy.com

Ian Lundin, outgoing Chairman of Lundin Energy, commented:
“Since its inception a bit over two decades ago, Lundin Energy has grown into something none of us dared to dream of, with the per share value having grown around 150 times, providing a compound annual average return to shareholders of 28 percent per year for over 20 years. Through hard work and perseverance and above all a strong management team, the Company flourished into one of the leading E&P companies globally. A new page in the Company’s history is turning, with the combination of Aker BP with Lundin Energy’s Norwegian business ensuring continued strong production growth and thus sustainable dividend growth into the next decade. Value creation and long-term growth is at the heart of the Lundin Energy ethos and that is what this deal is all about.

“I am convinced that unique investment opportunities will be created in the global energy transition, and we will be involved in building continued shareholder value from this process, through the birth of Orrön Energy. I would like to thank all our fellow shareholders for your support over the years, and I very much look forward to a new era of value creation – both in Aker BP and Orrön Energy.”

Nick Walker, outgoing President and CEO of Lundin Energy, commented;
“I am very pleased to announce the completion of this landmark transaction with Aker BP. Value creation is at the heart of our business and this combination is a unique opportunity to create a world-leading E&P company, with significant scale, production growth and strong free cashflow generation into the next decade. Coupled with that is a business with industry leading low costs and low carbon emissions.

“I am convinced that the combination with Aker BP is a “win-win” outcome for both sets of shareholders, as it creates a business that is positioned to prosper through the energy transition and deliver increased and sustainable dividends. I am also excited to follow the progress of Orrön Energy, which has the right management team, governance and balance sheet to really take advantage of the huge opportunities presented by the energy transition.

“I would like to thank all our stakeholders for your tremendous support over many years, our employees for their outstanding efforts in creating such a great business and finally the Board of Directors who have consistently empowered and supported the management team in our endeavours.”

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.


Lundin Energy announces an update to the guidance for its renewables business

Lundin Energy announces an update to the guidance for its renewables business

Lundin Energy announces an update to the guidance for its renewables business

27 June 2022

Lundin Energy AB (“Lundin Energy”) announces an update to the guidance for its renewables business, expected to trade under the new name, Orrön Energy AB (“Orrön Energy”), from 1 July 2022.

Updated guidance on capital expenditure
Capital expenditure guidance for the second half of 2022 is updated to approximately MUSD 10 from MUSD 20 as previously announced, due to phasing of project activities at the Karskruv wind farm from the third quarter to the second quarter of 2022. Total future capital costs for the Karskruv project are now estimated at around MUSD 90, compared to MUSD 100 as previously announced. Orrön Energy confirms its cash position at 1 July 2022 will be 130 MUSD, as previously announced.


Lundin Energy presents guidance for its renewables business

Lundin Energy presents guidance for its renewables business

Lundin Energy presents guidance for its renewables business

20 June 2022

Lundin Energy AB (“Lundin Energy” or “the Company”) is pleased to present guidance for the second half of 2022, where the Company will be renamed to Orrön Energy and contain only the renewables assets of Lundin Energy. A webcast presentation with a question and answer session will be held today at 17.00 CEST to present the guidance and give a corporate overview for Orrön Energy.

Company Strategy and Market outlook
Orrön Energy will be a pure play renewables company with high quality and low-cost renewables assets in the Nordics. Orrön Energy will have a strong portfolio of cash flowing assets, no debt and up to MUSD 180 of financial capacity to fund further growth and M&A. The demand for renewables in Europe is expected to grow significantly in the coming years, while power pricing is expected to remain strong. Not only is there significant investment and growth required in power generation and transmission, the technology to decarbonise energy systems is still in its infancy. Orrön Energy intends to take advantage of these opportunities; aiming to create value through the energy transition, with an acquisition and organic growth led strategy.

Orrön Energy will start trading on Nasdaq Stockholm from 23 June 2022, initially under Lundin Energy’s ticker “LUNE” until the approved name change to Orrön Energy (ticker: ORRON) has been registered which is expected to occur on 1 July 2022.

Second Half 2022 Guidance

Guidance 2H 20221
Net power generation2150 GWh
Operating costsMUSD 2
G&A costs3MUSD 7
Capital expendituresMUSD 20

1) All numbers provided in this guidance are approximate
2) Assuming average meteorological conditions
3) Excludes non-cash items, includes MUSD 4 for Sudan legal costs

Fully funded with up to MUSD 180 financial capacity for acquisitions
Orrön Energy will have cash of MUSD 130 and no debt at inception on 1 July 2022, which will more than cover the expected future capital costs of around MUSD 100 for the Karskruv project. The Company intends to establish credit facilities which could add MUSD 100 to 150 of extra capacity, allowing up to MUSD 180 of liquidity for acquisitions.

Power generation and operating costs
Net power generation for the second half of 2022 is estimated to be approximately 150 gigawatt hours (“GWh”) assuming average meteorological conditions, increasing to approximately 600 GWh per annum from 2024 onwards when all committed projects are expected to be fully operational. Operating costs are budgeted at approximately MUSD 2 for the second half of 2022, and long-term operating costs from 2024 onwards are expected to remain at around EUR 10 per megawatt hour.

Capital expenditure
Capital expenditure guidance for the second half of 2022 is approximately MUSD 20 and mainly relates to the Karskruv windfarm project in Sweden. Karskruv is planned to be operational in late 2023 and will add 290 GWh to Orrön Energy’s annual net power generation. With the asset situated in the SE4 price region in southern Sweden, it constitutes an important contribution to the Company’s growth plans.

G&A and Sudan legal costs
General and administrative costs are expected to be around MUSD 3 for the second half of 2022, excluding non-cash items. The management team has been retained mostly from Lundin Energy, and is set up to manage future growth and pursue M&A opportunities from inception.

The Sudan legal case will remain with Orrön Energy and the Company refutes that there are any grounds for allegations of wrongdoing by any of its representatives and will continue to vigorously defend itself. Legal costs in relation to the defence of the Company, and its representatives, are expected to be approximately MUSD 4 for the second half of 2022.

Webcast presentation
There is a webcast presentation today at 17.00 CEST where the future CEO Daniel Fitzgerald, and future CFO Espen Hennie, will present guidance and give a corporate overview for Orrön Energy followed by a question and answer session. Registration for the webcast presentation is available on the below link:
https://us06web.zoom.us/webinar/register/WN_v-UIlEy_RTKP-wDA9RezHw

Webcast playback available here.


Lundin Energy to present guidance for its renewables business on 20 June 2022

Lundin Energy to present guidance for its renewables business on 20 June 2022

Lundin Energy to present guidance for its renewables business on 20 June 2022

14 June 2022

Lundin Energy AB (“Lundin Energy”) will be hosting a webcast presentation for analysts and investors to present guidance and give a corporate update for the renewables focused business, Orrön Energy AB, on 20 June 2022.

The renewables growth business will be separated as a standalone business, following completion of the combination of Lundin Energy’s E&P assets with Aker BP, which is set to occur on 30 June 2022. In light of the new business focus, the Company has also proposed to change its name to Orrön Energy AB, which is subject to shareholder approval at the Extraordinary General Meeting on 16 June 2022. A webcast presentation will be held on 20 June at 17.00 CEST by the proposed CEO Daniel Fitzgerald, and the proposed CFO Espen Hennie, to present guidance and give a corporate update for the renewables business, followed by a question and answer session.

Registration for the webcast presentation on 20 June 2022 at 17.00 CEST is available on the below link:
https://us06web.zoom.us/webinar/register/WN_v-UIlEy_RTKP-wDA9RezHw

A copy of the presentation will be published on Lundin Energy’s website.


Commercial handover of the MLK wind farm in Finland

TFinland's third largest wind farm completed – OX2 hands over Metsälamminkangas wind farm to Lundin Energy and Sval Energi

Commercial handover of the MLK wind farm in Finland

04 April 2022

Lundin Energy AB (”Lundin Energy” or “the Company”) is pleased to announce the completion and commercial handover of the Metsälamminkangas (”MLK”) wind farm, the third largest in Finland to Lundin Energy and Sval Energi AS (“Sval”). MLK is estimated to produce around 400 GWh per annum gross, from 24 turbines with a total capacity of 132 MW. Lundin Energy holds a 50 percent interest in MLK, with the remaining 50 percent held by Sval.

Lundin Energy and Sval have now taken over the ownership of the wind farm, which includes overall responsibility for the operations. OX2 AB has constructed the wind farm on budget under an engineering, procurement and construction contract and will remain responsible for the operations, maintenance and technical management of the wind farm. Commercial handover of the wind farm was originally planned for late Q4 2021, with final commissioning taking longer than anticipated. Lundin Energy is financially compensated for the delay through liquidated damages in the period up to commercial handover.

The newly constructed wind farm is equipped with the latest technology to ensure low cost and efficient operations. The 5.5 MW wind turbines have been purchased from, installed by and will be maintained by General Electric, with an availability warranty guaranteeing the availability and power production levels from the turbines through their operational life, giving the Company significant protection against downtime and outages. MLK will produce around 400 GWh per annum gross, which is equivalent to the annual electricity consumption of around 100,000 European households.

Daniel Fitzgerald, COO for Lundin Energy commented:
“We are very pleased that the MLK wind farm has now been completed and commissioned. This asset has been a key enabler in the Decarbonisation Plan for Lundin Energy and is now even more important as we become a renewables focused Company post completion of the proposed transaction with Aker BP. MLK is a state-of-the-art wind farm and is situated in a region with historically high spot electricity prices. It will be a key component of our future business and our mission of supplying sustainably produced energy while contributing to a lower carbon energy future.”

 

Lundin Energy presents its renewables business

Lundin Energy presents its renewables business

Lundin Energy presents its renewables business

07 March 2022

Lundin Energy AB (“Lundin Energy” or “the Company”) is pleased to announce the publication of a company description for the new, renewables-focussed business which includes the business overview, strategy, Board of Directors and management team. After completion of the proposed Combination of Lundin Energy’s E&P business with Aker BP, the renewables business will remain as a standalone Company with three high quality assets in the Nordics. The business will be debt free, focussed on cash generation and well positioned to build on its proven track record of creating shareholder value, while contributing to a sustainable energy future. A webcast presentation will be held today at 16.00 CET.

Renewables Company highlights:

  • Three high quality renewables assets in the Nordics, generating around 600 GWh per annum when fully operational
  • Fully funded with 130 MUSD of cash to build out the Karskruv project in southern Sweden
  • Generating free cash flow from late 2023 onwards, when all projects will be fully operational
  • Initially debt free, with the capacity to raise capital for growth and acquisitions
  • The Company will remain listed on Nasdaq Stockholm, and maintain its headquarters in Sweden

Lundin Energy’s renewable business will become the new renewables company within the Lundin Group of Companies, with full support from the Lundin family and building on its proven track record of value creation for shareholders. The current renewables portfolio consists of three high quality and newly constructed assets in the Nordics; a 50 percent interest in the 132 MW Metsälamminkangas wind farm in Finland, which is planned for commercial handover in March 2022, 100 percent ownership of the 86 MW Karskruv wind farm in Sweden, which is under development, and a 50 percent interest in the 77 MW Leikanger hydropower plant in Norway, which is fully operational. The business will be fully funded from the start, with a cash balance of 130 MUSD to build out the Karskruv project and is expected to generate free cash flow from late 2023, when all projects are fully operational. The Sudan legal case will remain with Lundin Energy; the Company refutes that there are any grounds for allegations of wrongdoing by any of its representatives and will continue to vigorously defend itself.

The European Union has unveiled ambitious plans to achieve a net zero emissions economy by 2050, which requires significant investment in renewable energy, as well as radical changes to the way energy is produced, consumed, stored and transported. The Company is in a strong position to take advantage of these opportunities with cash generative assets in some of the highest price regions in the Nordics, has the ability to raise capital for acquisitions and growth, and with a Board of Directors, management team and major shareholder fully aligned to grow the business. The business will be focussed on cash generation, fully exposed to spot market electricity prices and has already started to review acquisition and growth opportunities. Although initially focussed on the Nordics and renewable energy, the Company intends to screen further opportunities across Europe and in emerging and other technologies. The Company has retained SEB as strategic advisor to support in this growth phase.

The long-term vision is to grow the business into an industry-leading energy company, with scale and sufficient cash flow to be able to provide progressive shareholder returns, supporting the energy transition and contributing towards Europe’s goal for a sustainable energy future.

The Company will retain key members of the Lundin Energy Board of Directors and management team, with knowledge of the current asset base and a proven track record of building public companies which have delivered significant value for shareholders over many years. The intention is that the Board of Directors, post completion of the Combination with Aker BP at the end of the second quarter 2022, shall consist of Grace Reksten Skaugen (chair), Jakob Thomasen, Ashley Heppenstall, Aksel Azrac and Daniel Fitzgerald and that the senior management team shall consist of Daniel Fitzgerald as the CEO and Espen Hennie as CFO. More information including guidance for the renewables Company for 2022 will be published in the second quarter 2022.

Daniel Fitzgerald, intended CEO of the renewables Company commented:
“The energy transition is still in its infancy and with the EU’s ambitions to become carbon neutral, significant investments will be required across the whole energy system to meet these goals. Lundin Energy’s renewables business will start trading in a very strong position as a fully funded, cash generative, pure play Nordic renewables Company. Initially debt free and holding three high quality renewables assets in some of the highest priced regions in the Nordics, we have significant capacity to raise capital for acquisitions and growth. We see many opportunities across Europe, within both established and emerging technologies. With our track record in delivering shareholder value, we have all the building blocks needed to create an industry leading company which is well positioned to thrive through the energy transition.

“Lundin Energy has been a huge success story for shareholders over the last 20 years, culminating in the proposed Combination with Aker BP, allowing shareholders to remain invested in both the leading independent E&P Company in Europe and this new and exciting renewables Company. I believe that with the proposed Board and management team, the continued support of the Lundin family as a major shareholder and the Lundin entrepreneurial spirit, we will be able to grow this Company into an industry leading energy business.”

A webcast presentation will be held today (7 March 2022) at 16.00 CET, to present the renewables business including its strategy, Board of Directors and management team. Please click on the link below to view:

Renewables business webcast

A copy of the presentation will be published on Lundin Energy’s website ahead of the webcast going live.

The full company description outlining the details of the renewable business including its strategy, Board of Directors and management can be found on www.lundin-energy.com.

The proposed combination with Aker BP
According to a preliminary timetable, completion of the combination is planned to occur late in the second quarter 2022. Completion is conditional upon, among other things, the combination being approved at the Annual General Meetings of Lundin Energy and Aker BP, respectively, and receipt of necessary governmental clearances. The Annual General Meeting of Lundin Energy will be held on 31 March 2022. The notice of the Annual General Meeting, including the agenda and proposed resolutions, is available on the Company’s website, www.lundin-energy.com.

Press Release

Company Description

Lundin Energy’s Renewable Business outlook to be presented on 7 March 2022

Lundin Energy’s Renewable Business outlook to be presented on 7 March 2022

Lundin Energy’s Renewable Business outlook to be presented on 7 March 2022

24 February 2022

Lundin Energy AB (Lundin Energy) is pleased to announce that it will present the outlook for the Renewables Business, Board of Directors and management team, and future strategy, on 7 March 2022. The Renewables Business will be separated as a standalone business at the completion of the proposed combination of Lundin Energy’s E&P assets with Aker BP, as announced on 21 December 2021, which is expected to occur around the end of June 2022. A webcast presentation will be hosted on 7 March 2022 at 16.00 CET.

To attend the webcast presentation at 16.00 CET on 7 March 2022, please click on the below link to register: https://us06web.zoom.us/webinar/register/WN_XohxLNg5SkaHx2GYoyR7xA

A copy of the presentation will be published on Lundin Energy’s website ahead of the webcast going live.

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.