Alex Schneiter Bloomberg TV interview

Alex Schneiter Bloomberg TV interview

31 October 2019

Listen to Bloomberg TV interview with Alex Schneiter, President and CEO, delivering strong quarterly results and sharing his thoughts on Lundin Petroleum’s future developments.

 

Lundin Petroleum audiocast – Q3 report 2019 presentation

Lundin Petroleum audiocast - Q3 report 2019 presentation

Lundin Petroleum audiocast – Q3 report 2019 presentation

31 October 2019

Listen to Alex Schneiter, President and CEO, and Teitur Poulsen, CFO, commenting on the report at an audiocast held on Thursday 31 October 2019 at 09.00 CET.

Follow the presentation live on www.lundin-petroleum.com or dial in using the following telephone numbers:
Sweden: +46 8 519 993 55
Norway: +47 23 500 211
UK: +44 203 194 05 50
International Toll Free: +1 855 269 26 05

Audiocast link

 


Report for the nine months ended 30 September 2019

Report for the nine months ended 30 September 2019

Report for the nine months ended 30 September 2019

31 October 2019

· Production above mid-point guidance for the nine months at 79.2 Mboepd and Q3 at 82.7 Mboepd
· Production ramp up from Johan Sverdrup Phase 1 above 200 Mboepd gross as at end of October 2019, following first oil on 5 October 2019, ahead of schedule and under budget
· 2019 production guidance raised to 90 to 95 Mboepd from 75 to 95 Mboepd, following early start up from Johan Sverdrup and continued outperformance from Edvard Grieg
· Strong financial performance for the reporting period and third quarter
· Completion of 2.6 percent sale of Johan Sverdrup and 16 percent shares redemption with Equinor in August 2019
· Plan to fully electrify Edvard Grieg as part of the Utsira High Area power grid finalised, increasing uptime efficiency further and continuing our emissions trajectory to below 1kg CO2 per boe from the Johan Sverdrup and Edvard Grieg fields

 

Financial summary1 Jan 2019-
30 Sep 2019
9 months
1 Jul 2019-
30 Sep 2019
3 months
1 Jan 2018-
30 Sep 2018
9 months
1  Jul 2018-
30 Sep 2018
3 months
1 Jan 2018-
31 Dec 2018
12 months
Production in Mboepd79.282.780.878.281.1
Revenue and other income in MUSD2,199.01,215.01988.5604.62,640.7
Operating cash flow in MUSD11,158.9380.01,412.8434.41,864.1
EBITDA in MUSD11,222.9411.31,451.8476.81,932.5
Free cash flow in MUSD1,117.9950.5489.7228.7663.0
Net result in MUSD669.6519.9323.956.7225.7
Adjusted net result in MUSD173.845.4220.175.1295.3
Earnings/share in USD2.051.720.960.170.67
Adjusted earnings/share in USD0.530.150.650.220.87
Net debt in MUSD4,054.94,054.93,569.93,569.93,398.2
1 Excludes the reported after tax accounting gain of MUSD 756.7 on the divestment of a 2.6 percent working interest in the Johan Sverdrup project.


Comments from Alex Schneiter, President and CEO of Lundin Petroleum:

“I am pleased to announce another very good quarter of operational and financial performance. The Company’s production currently stands at over 120 Mboepd and as a result of continued outperformance from Edvard Grieg and an earlier startup and quicker ramp up of the pre-drilled wells at Johan Sverdrup, we are raising the production guidance for the year to between 90 and 95 Mboepd.

“A stand out moment for us was first oil from the world class Johan Sverdrup Phase 1 project, which was achieved on 5 October 2019, ahead of schedule and significantly below budget. Since then production has been ramping up ahead of expectations, as the eight pre-drilled wells are progressively commissioned and as at the end of October 2019, the field was producing above 200 Mboepd gross from five wells. It is now anticipated that all of the eight pre-drilled wells will be on production during November 2019. We will then drill the remaining two to four new wells required to achieve Phase 1 plateau production of 440 Mbopd, which is expected by summer 2020.

“Our other production assets continue to perform well, with operating costs at industry leading levels and in line with our guidance for the year. Edvard Grieg continues to exceed expectations with uptime and production above forecast. With the approval of the new infill drilling programme in 2020, we are now anticipating the gross ultimate proved plus probable reserves will be over 300 MMboe as compared to the original PDO of 186 MMboe. This is a fantastic indictment to the quality of this field.

“As an important development we’ve now sanctioned the full electrification of the Edvard Grieg facility as part of the Utsira High Area power grid, which is being developed together with Johan Sverdrup Phase 2. This project will result in a significant reduction in CO2 emissions from the field, taking Edvard Grieg Area CO2 emissions below 1 kg per barrel. This will mean that our two key assets, Edvard Grieg and Johan Sverdrup, will have emissions of below 1kg CO2 per boe, about twenty times lower than the world average and one of the lowest for any offshore operator. This is in line with the Board endorsed Sustainable Energy Strategy, which will provide the Company with the roadmap to continue to be one of the most efficient offshore oil and gas producers in terms of low emissions per barrel produced, as well as increased operating efficiency. Our aim is to continue to further reduce our carbon footprint and increase overall efficiency through new investments and innovative approaches. In this regard, the investment in a hydro power project in Norway to offset the Company’s net non-renewable electricity usage for power from shore, is in line with this strategy.

“Looking ahead to the rest of the year; we remain in the intensive ramp up period at Johan Sverdrup and development operations at Solveig and Phase 2 of Johan Sverdrup are progressing on schedule. It will also be another busy period for us with the exploration drill bit, focussed north of the Utsira High and in the North Norwegian Sea, targeting net unrisked resources of 130 MMboe for the remainder of the year and a significant exploration drilling programme is taking shape for 2020 as we continue to drive our organic growth strategy. This is the 17th quarter of production delivery on or above expectations and I look forward to updating shareholders in January 2020 on the full year 2019 progress.”

Audiocast presentation
Listen to Alex Schneiter, President and CEO, and Teitur Poulsen, CFO, commenting on the report at an audiocast held on Thursday 31 October 2019 at 09.00 CET.

Follow the presentation live on www.lundin-petroleum.com or dial in using the following telephone numbers:
Sweden: +46 8 519 993 55
Norway: +47 23 500 211
UK: +44 203 194 05 50
International Toll Free: +1 855 269 26 05

Audiocast link

 

Plan finalised for full power from shore for the Edvard Grieg platform

Edvard Grieg Power from Shore

Plan finalised for full power from shore for the Edvard Grieg platform

28 October 2019

Lundin Petroleum AB (Lundin Petroleum) announces that its wholly owned subsidiary Lundin Norway AS (Lundin Norway) and the partners, have finalised the plan to fully electrify the Lundin Norway operated Edvard Grieg platform, in conjunction with the Utsira High Area power grid; which is being developed together with the Johan Sverdrup Phase 2 project.

The Utsira High Area power grid which will become operational in 2022, will provide power from shore to the Johan Sverdrup, Edvard Grieg, Ivar Aasen, Gina Krog and Sleipner fields. The Edvard Grieg power from shore project involves the retirement of the existing gas turbine power generation system on the platform, installation of electric boilers to provide process heat and installation of a power cable from Johan Sverdrup to Edvard Grieg. When the facilities are all operational, Lundin Norway’s net capital investment in power from shore facilities at Edvard Grieg and Johan Sverdrup will total approximately 500 MUSD, half of which has already been spent.

The Edvard Grieg power from shore project will result in a significant reduction in CO2 emissions from the Edvard Grieg Area of approximately 3.6 million tonnes from 2022 to end of field life, taking CO2 emissions for the area to below 1 kg per barrel, about twenty times lower than the world average. Additionally, the project will reduce operating costs, reduce carbon taxes and increase operating efficiency; which will be partially offset by electricity power purchases from the grid, generated mostly from renewable sources. Overall the project will enhance the economic return from the Edvard Grieg Area, while at the same time significantly reducing CO2 emissions.

Lundin Norway is the operator of the Edvard Grieg platform with a 65 percent working interest and the partners are OMV Norge and Wintershall DEA with 20 and 15 percent working interests respectively.

Comments from Alex Schneiter, President and CEO of Lundin Petroleum:
“Full power from shore for Edvard Grieg, as part of the Utsira High power grid, will not only significantly reduce the carbon emissions from the area to below 1kg of CO2 per barrel but will also allow us to drive further value from the asset base through higher production efficiency, reduced operating costs and less carbon tax. The CO2 saved from Edvard Grieg alone, will amount to approximately 200,000 tonnes per year from 2022, in addition to the emission savings as a result of power from shore to Johan Sverdrup. The Edvard Grieg project will further solidify Lundin Petroleum’s position as a world leading low carbon emissions oil producer, with its two key assets fully or becoming fully electrified, using power from shore mainly sourced from renewable energy.”

 

Lundin Petroleum AB’s Nomination Committee

AMG-2019-Nom-Com

Lundin Petroleum AB’s Nomination Committee

16 October 2019

Lundin Petroleum AB (Lundin Petroleum) is pleased to announce the composition of the Nomination Committee for the 2020 Annual General Meeting (AGM) to be held on 31 March 2020 in Stockholm.

The Nomination Committee has been formed with the following members:

• Filippa Gerstädt (Nordea Funds)
• Aksel Azrac (Nemesia S.à.r.l.)
• Ian H. Lundin, Chairman of the Board of Directors of Lundin Petroleum

At the Nomination Committee’s first meeting, Aksel Azrac was elected as Chairman of the Nomination Committee.

The Nomination Committee shall make recommendations to the 2020 AGM regarding:

• Election of the Chairman of the 2020 AGM
• Election of members of the Board of Directors, including number of members
• Election of the Chairman of the Board of Directors
• Remuneration of the members of the Board of Directors, distinguishing between the Chairman and other members, and remuneration for Board Committee work
• Election of the auditor and remuneration of the auditor
• Nomination Committee Process for the 2021 AGM, if any amendments are proposed to the Process for the 2020 AGM

Shareholders who wish to present a motion to the Nomination Committee regarding the above-mentioned issues should contact the Chairman of the Nomination Committee, Aksel Azrac, at nomcom@lundin-petroleum.com not later than 20 December 2019.

 

Update on third quarter 2019 financial results and audiocast details for 31 October 2019


Update on third quarter 2019 financial results and audiocast details for 31 October 2019

16 October 2019

Lundin Petroleum AB (Lundin Petroleum) will publish its financial report for the third quarter 2019 on Thursday 31 October 2019. For the third quarter 2019, Lundin Petroleum will recognise a post-tax accounting gain of approximately MUSD 757 in relation to the sale of a 2.6 percent working interest in the Johan Sverdrup project. Lundin Petroleum will also expense pre-tax exploration costs of approximately MUSD 14 and recognise a largely non-cash net foreign exchange loss of approximately MUSD 272.

Exploration costs
For the third quarter of 2019, Lundin Petroleum will incur pre-tax exploration costs of approximately MUSD 14 which will be charged to the income statement and offset by a tax credit of approximately MUSD 11. The exploration costs are mainly related to the dry well on the Rumpetroll prospect located in PL869.

Foreign exchange
Lundin Petroleum will recognise a net foreign exchange loss of approximately MUSD 272 for the third quarter of 2019. The Norwegian Krone weakened against the US Dollar by approximately 7 percent and the Euro weakened against the US Dollar by approximately 4 percent during the third quarter of 2019. 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.

Accounting gain on sale of 2.6 percent working interest in Johan Sverdrup
Lundin Petroleum completed the sale of a 2.6 percent working interest in the Johan Sverdrup development project during the third quarter and will recognise a post-tax accounting gain on the transaction of approximately MUSD 757.

Change in under/overlift balances
Lundin Petroleum recognises income based on its sold volume (sales method). Consequently, changes in under/overlift balances are reported as an adjustment to cost valued at production cost including depletion. During the third quarter of 2019, Lundin Petroleum was overlifted by 2.3 Mboepd.

Release of report and audiocast on 31 October 2019
Lundin Petroleum’s financial report for the third quarter 2019 will be published on Thursday 31 October at 07:30 CET, followed by a live audiocast at 09:00 CET where Alex Schneiter, President and CEO, and Teitur Poulsen, CFO, will be commenting on the report and the latest developments in Lundin Petroleum.

Follow the presentation live on www.lundin-petroleum.com or dial in using the following telephone numbers:

Sweden: +46 8 519 993 55
Norway: +47 23 500 211
UK: +44 203 194 05 50
International Toll Free: +1 855 269 26 05

Link : https://lundinpetroleum.videosync.fi/2019-10-31-q3

 

First oil from the Johan Sverdrup field

First oil from the Johan Sverdrup field

5 October 2019

Lundin Petroleum AB (Lundin Petroleum) is pleased to announce first oil from Phase 1 of the Johan Sverdrup field on the Utsira High in the Norwegian North Sea, ahead of schedule and below budget.

The field commenced production on 5 October 2019 and is expected to ramp up quickly as the eight pre-drilled production wells are progressively commissioned. Phase 1 plateau production is expected to be achieved by summer 2020 and will require two to four new wells to be drilled, with the first of these expected to come on stream around the end of 2019.

Phase 1 of the project has been developed as a field centre of four platforms – drilling, processing, living quarters and riser platform. The field has gross recoverable reserves of 2.7 billion barrels of oil equivalent and during Phase 1, Johan Sverdrup will produce 440,000 barrels of oil per day, increasing to 660,000 barrels of oil per day, after Phase 2 of the development commences production in the fourth quarter 2022. At its peak, the field will produce approximately 25 percent of all petroleum production on the Norwegian Continental Shelf.

Johan Sverdrup Phase 1 has been delivered below the original budget, saving to date approximately NOK 40 billion gross at project exchange rates. The field is being operated with power supplied from shore and will be one of the lowest CO2 emitting fields in the world, with CO2 emissions of below 1 kg per barrel, about 25 times less than the world average. Post Phase 1 plateau, operating costs will be below USD 2 per barrel and the full-field break-even oil price, including past investments, is less than USD 20 per barrel.

Equinor AS, is the operator of Johan Sverdrup with a 42.6 percent working interest. The partners are Lundin Norway AS with 20 percent, Petoro AS with 17.36 percent, AkerBP ASA with 11.5733 percent and Total S.A. with 8.44 percent.

Alex Schneiter, President and CEO of Lundin Petroleum comments:

“I am very pleased to announce first oil from Johan Sverdrup, which is truly a transformational moment for Lundin Petroleum. Since we made the discovery in 2010, this field has exceeded all expectations in terms of project execution, resources growth and cost reduction and it is a testament to the hard work from all stakeholders and regulatory authorities, to get the field up and running ahead of schedule and below budget. This is one of the largest industrial projects in Europe, and I would like to thank the operator Equinor, who have done a fantastic job in managing the development of this world class field.

“The genesis of Johan Sverdrup is a realisation of how much value can be generated from an organic growth strategy and with this significant moment in the history of the Company, I would also like to pay tribute to the hard work, dedication and inspired ideas from each business area of Lundin Petroleum and specifically the temerity and tenacity of what a technically driven exploration team can achieve, if they are given the right support and backing.”


Key Johan Sverdrup facts

• Field development project execution – engineering and construction was spread all over the world at 22 main sites.
• Field comprises an area of 200 km2, same size as the City of Stockholm.
• The first phase of the development has taken 70 million man-hours, and more than 12,000 people worldwide have worked every day during the main construction period 2016-2018.
• Total topside weight is ~94,000 tonnes which is comparable with the weight of more than 53,000 Volvo XC60’s.
• Total jacket weight is ~68,000 tonnes which is comparable with the weight of 7 Eiffel towers.
• The field will be operated by power from shore, which will reduce the emissions by more than 620,000 tons CO2 per year, compared to traditional gas turbines offshore, equivalent to more than 310,000 private cars.
• Peak production on Johan Sverdrup will be equivalent to 25% of all Norwegian petroleum production.

 

The third quarterly instalment of the dividend for 2018 of USD 0.37 per share will amount to SEK 3.61 per share

The third quarterly instalment of the dividend for 2018 of USD 0.37 per share will amount to SEK 3.61 per share

26 September 2019

Lundin Petroleum AB (Lundin Petroleum) announces that the third quarterly instalment of the dividend for 2018 of USD 0.37 per share will amount to SEK 3.61 per share, with a total amount of SEK 1.03 billion, corresponding to approximately USD 105 million. 1 The expected payment date for the third quarterly instalment is 7 October 2019.

Information about the third quarterly instalment of the dividend:

Amount per share
(SEK)
Total dividend amount
(SEK)
Ex-dividend dateRecord dateExpected payment date
3.611.03 billion1 October 20192 October 20197 October 2019

In accordance with the updated dividend policy announced by Lundin Petroleum on 30 January 2019, the Annual General Meeting held on 29 March 2019 resolved on a dividend for 2018 of USD 1.48 per share, to be paid in quarterly instalments of USD 0.37 per share.

According to the dividend resolution, before payment, each quarterly dividend of USD 0.37 per share shall be converted into a SEK amount based on the USD to SEK exchange rate published by Sweden’s central bank (Riksbanken) four business days prior to each record date (rounded off to the nearest whole SEK 0.01 per share) and the exchange rate used for the conversion is 9.7563.

Information about the approved dividend is available on www.lundin-petroleum.com.

1 The estimated total amount of the dividend as previously communicated has been reduced as a result of Lundin Petroleum completing the redemption of 16 percent of its shares in issue in August 2019.

 

Johan Sverdrup accelerated start-up schedule

Johan Sverdrup accelerated start-up schedule

5 September 2019

Lundin Petroleum AB (Lundin Petroleum) is pleased to announce an acceleration to the start-up schedule of the Johan Sverdrup development project. The operator now estimates first oil in October 2019 from the previously guided November 2019.

The Johan Sverdrup development project continues to progress well through the final stages of preparation for operations with most of the hook-up and commissioning work now completed. The current focus is on completing the testing of the equipment and systems required for the full-field centre to operate as one installation and as result, the partnership is updating the start-up of production to October 2019.

During phase 1, Johan Sverdrup will produce 440 Mbopd when plateau production is reached by summer of 2020, increasing to 660 Mbopd after phase 2 commences in the fourth quarter 2022. At phase 2 plateau, Johan Sverdrup will contribute up to 25 percent of Norway’s total production of oil and gas, while power from shore gives the field carbon emissions intensity of just below 1 kg CO2 per barrel, which is among the lowest in the world and 25 times lower than the oil and gas industry average.

Lundin Petroleum’s production guidance when Johan Sverdrup Phase 1 reaches plateau during the summer of 2020, is above 150 Mboepd and approximately 170 Mboepd when Johan Sverdrup Phase 2 reaches plateau in 2023. The operator has indicated that operating costs for Johan Sverdrup will be below USD 2 per barrel after reaching plateau for the first phase of the development, which corresponds to Lundin Petroleum’s industry leading low operating cost guidance of between USD 3.4 to USD 4.4 per boe for the portfolio.