Year End Report 2021

Year End Report 2021

Year End Report 2021

01 February 2022

 

Board of Directors of Lundin Energy and Aker BP agreed on a combination to create the leading European independent E&P company, with completion of the transaction anticipated around mid 2022
Record financial performance in 2021, with free cash flow generation of USD 1.6 billion and net debt reduced to USD 2.7 billion
Board of Directors propose to increase 2021 quarterly dividend by 25 percent to USD 0.5625 per share until completion of the Aker BP transaction
Record quarterly production for the fourth quarter of 195 Mboepd and 2022 production guidance set between 180 and 200 Mboepd
Key projects progressing on schedule, with Johan Sverdrup Phase 2 set for first oil in the fourth quarter of 2022 and five new projects heading towards sanction within the temporary tax incentives
Delivering growth with resource additions of 200 percent of production in 2021
On track with Decarbonisation Plan to achieve carbon neutrality by 2023 from operational emissions

 

Financial summary11 Jan 2021-
31 Dec 2021
12 months
1 Oct 2021-
31 Dec 2021
3 months
1 Jan 2020-
31 Dec 2020
12 months
1 Oct 2020-
31 Dec 2020
3 months
Production in Mboepd190.3194.8164.5185.1
Revenue and other income in MUSD5,484.71,621.82,564.4779.7
CFFO in MUSD
Per share in USD
3,058.0
10.75
558.1
1.96
1,528.0
5.38
276.7
0.97
EBITDAX in MUSD
Per share in USD
4,822.8
16.96
1,462.2
5.14
2,140.2
7.53
708.4
2.49
Free cash flow in MUSD
Per share in USD
1,645.5
5.79
22.6
-0.08
448.2
1.58
-97.5
-0.34
Net result in MUSD
Per share in USD
493.8
1.74
121.7
0.43
384.2
1.35
303.7
1.07
Adjusted Net result in MUSD
Per share in USD
795.7
2.80
253.3
0.89
280.0
0.99
86.9
0.31
Net debt in MUSD2,747.92,747.93,911.53,911.5
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 32-33

Nick Walker, President and CEO of Lundin Energy AB, commented on the proposed combination of Lundin Energy’s E&P business with Aker BP:
“We were very pleased to announce at the end of 2021, that the Board of Directors of Lundin Energy and Aker BP reached an agreement to combine the businesses to create the leading European independent E&P company. Value creation is at the heart of our business and this deal is a unique opportunity to create a world class company, with significant scale, production growth and strong free cash flow 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 proposal 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. For Lundin Energy shareholders, this will deliver a significant up-front cash consideration, the opportunity to be a shareholder in the leading European E&P company and a retained interest in a renewables business that is positioned for growth. We are anticipating that the proposed combination will be completed around the middle of the year.”

Nick Walker, President and CEO of Lundin Energy AB, commented on the 2021 full year results:
“I’m pleased to report that in 2021 Lundin Energy delivered record production and financial results, underpinned by continued excellent operational performance and strong oil and gas prices.

“Our world class assets continue to outperform, with industry leading production efficiency and low operating costs. We exited the year with production at just under 200 Mboepd and full year production came in above the top of our original guidance range.

“Johan Sverdrup keeps on delivering above expectations. Phase 2 of the project, which will lift production to 755 Mbopd gross, is making excellent progress and is firmly on track for first oil in the fourth quarter of 2022.

“At the Greater Edvard Grieg Area the completion of the infill drilling programme and the Solveig and Rolvsnes tie-back projects, together with a number of new projects being planned, will keep the facilities full in the long term. This is a prolific area where I see great opportunity to further extend the production plateau.

“We completed the acquisition of a further interest in the major Wisting oil development project, taking our share to 35 percent, which will help sustain the production profile of the business long term with a significant addition of low carbon emissions barrels. The Wisting development concept has been decided upon and the project is heading towards sanction at the end of 2022.

“Our growth strategy continues to deliver results with total resource additions in 2021 of 200 percent of produced volumes, supported by further reserves growth in the Greater Edvard Grieg Area and the additional interest in Wisting. I see multiple opportunities to continue to grow the business with significant potential resource upside at Johan Sverdrup, a pipeline of new projects being progressed towards development and an active exploration programme.

“At the same time, we are making great progress on our industry leading Decarbonisation Plan and are set to become carbon neutral by 2023 from operational emissions, with around 60 percent of our production already being carbon neutral. I see this as a key value differentiator for Lundin Energy.

“Financially we had a very strong year, delivering free cash flow of USD 1.6 billion, covering our 2021 dividend three times and allowing us to reduce net debt to USD 2.7 billion. I’m pleased to note that the Board of Directors is recommending a 25 percent increase in the quarterly dividend until completion of the Aker BP transaction, clearly demonstrating our commitment to long-term growth of shareholder returns.

I would like to thank all our stakeholders for their continued support over the last year, and our employees for their tremendous efforts in delivering these record results.”

Webcast presentation
Listen to Nick Walker, President and CEO, Dan Fitzgerald, COO and Teitur Poulsen, CFO, commenting on the report and providing a 2022 business update at a live webcast held today, at 14:00 CET. 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 :17161382
Webcast link:https://edge.media-server.com/mmc/p/ifchzb4n

 

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