Posts

Lundin Energy announces total resource additions of 200 percent of 2021 production

Lundin Energy announces total resource additions of 200 percent of 2021 production

Lundin Energy announces total resource additions of 200 percent of 2021 production

21 January 2022

Lundin Energy AB (Lundin Energy) is pleased to announce that as at 31 December 2021, its proved plus probable net reserves (2P reserves) are 639 million barrels of oil equivalent (MMboe1,2) and its proved plus probable plus possible net reserves (3P reserves) are 799 MMboe. 2P reserves plus best estimate net contingent resources (total resources) are 1,019 MMboe, with a total resource replacement ratio3 for 2021 of 202 percent.

Lundin Energy’s 2P reserves include a positive revision of 39 MMboe, and the 3P include a positive revision of 44 MMboe compared to year end 2020. The best estimate net contingent resources (2C resources) as at 31 December 2021 are 380 MMboe, which is an increase of 105 MMboe from year end 2020. The total resources as at 31 December 2021 are 1,019 MMboe, which reflects additions of 144 MMboe from year end 2020, including asset acquisitions.

 

2P Reserves3P ReservesTotal Resources
2P + 2C
End 2020670.9826.0946.4
  – Produced 471.071.071.0
  – Sales/+Acquisitions+136.9
  + Revisions/Discoveries+39.3+44.4+6.9
End 2021639.1799.41,019.2
Reserves replacement ratio 3,555%63%202%

 

The increase in 2P reserves relates primarily to the Edvard Grieg and Solveig fields. The Edvard Grieg reservoir continues to outperform and together with a successful infill well campaign, reserves have increased by 17 percent. The gross ultimate recovery for Edvard Grieg is now 379 MMboe, which is an increase of over 100 percent since the PDO. Drilling results and early production performance on the Solveig phase 1 development has resulted in an increase of 20 percent in 2P reserves. Overall, the Greater Edvard Grieg Area has a gross ultimate recovery of 450 MMboe with a 97 percent replacement ratio of its production in 2021.

The Johan Sverdrup field continues to exceed expectations, with high uptime, increased processing capacity, excellent reservoir performance and well productivities. The Company’s 2P reserves at year end 2021 includes for the first time a contribution from eight infill wells (previously contingent resources), extending the plateau production period. The Company recognises that there is upside reserve potential in several parts of the field which will be realised through further infill drilling, optimized reservoir management and increased facilities capacity. The technical work to define this upside will be completed by mid 2022.

In October 2021, Lundin Energy announced the acquisition of a further 25 percent working interest in the Wisting oil discovery located in the Southern Barents Sea, taking the total working interest to 35 percent. Equinor, the operator of Wisting, is targeting a PDO by end 2022, to benefit from the temporary tax incentives established by the Norwegian Government in June 2020. The transaction adds 2C resources of 131 MMboe.

Based on 2021 exploration results on Iving and further evaluation of the stranded assets in the Barents Sea, Lundin Energy has concluded that these should be excluded from the 2C contingent resources as of year end 2021.

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 with 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.

Daniel Fitzgerald, COO of Lundin Energy, commented:
“2021 has been another year of great performance with resource additions of over 140 MMboe representing a resource replacement ratio of over 200%. The Edvard Grieg area has continued to increase its reserves base and is now more than double the size compared to the original PDO estimates, and I am convinced that we will continue to grow in this area. We have many exciting opportunities and projects being worked through the course of 2022 and are planning to sanction three projects in the Edvard Grieg area in late 2022, as well as planning for the next phase of infill drilling on Edvard Grieg.

“Johan Sverdrup is truly a world class asset and we are only just starting to see the potential from this field. We have included infill wells into the 2P reserves base for the first time which extends the plateau production period and we still see significant opportunities to continue to not only grow the reserves, but to accelerate production and extend the plateau.”

1 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.
2 The reserves were calculated using a nominal Brent oil price of USD 75 in 2022, 71 in 2023, 69 in 2024, 70 in 2025, 71 in 2026, 73 in 2027, 74 in 2028, 76 in 2029, 77 in 2030, 79 in 2031 and increasing by 2 percent per year thereafter.
3 Total resource replacement ratio is the sum of 2P reserves revisions and 2C Contingent resources revisions including assets transactions divided by the yearly production.
4 Reserves are measured in saleable 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.

 

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.

Downloads

Lundin Petroleum announces increased reserves for sixth consecutive year (regulatory)