Completion of the sale of a 2.6 percent stake in the Johan Sverdrup development project

Completion of the sale of a 2.6 percent stake in the Johan Sverdrup development project

30 August 2019

Lundin Petroleum AB (Lundin Petroleum) announces that following regulatory approvals in Norway, the previously announced sale of a 2.6 percent stake in the Johan Sverdrup development project by Lundin Norway AS to Equinor Energy AS has now completed with an effective date of 1 January 2019. The cash consideration for the sale is USD 962 million, which includes a USD 52 million contingent payment on future reserve reclassification.

The completion of the sale, which follows the completion of the redemption of 16 percent of Lundin Petroleum shares in issue, as resolved at the extraordinary general meeting of the company on 31 July 2019 and registered with the Swedish Companies Registration Office in August 2019, concludes all aspects of the transactions agreed with Equinor ASA and Equinor Energy AS announced on 7 July 2019. Following completion of the sale, Lundin Norway AS has a 20 percent working interest in the Johan Sverdrup unit with economic effect as per 1 January 2019 and with the receipt of the cash consideration, the short term bridge facility of up to USD 500 million has been repaid in full and cancelled, and the balance from the sales proceeds will be used to partly repay outstanding amounts under Lundin Petroleum’s USD 5 billion reserve-based lending facility.

 

Reduced number of shares and votes in Lundin Petroleum AB

Reduced number of shares and votes in Lundin Petroleum AB

30 August 2019

Lundin Petroleum AB (Lundin Petroleum) announces that, following redemption of 16 percent of its shares in issue, the total number of shares in issue and votes in Lundin Petroleum as at 30 August 2019 is 285,924,614.

The total number of shares in issue and votes has changed as a result of the reduction of the share capital with retirement of 54,461,831 shares that was resolved upon at the extraordinary general meeting of the company on 31 July 2019 and registered with the Swedish Companies Registration Office in August 2019.

The reduction of shares in issue is pursuant to transactions agreed with Equinor ASA and Equinor Energy AS announced on 7 July 2019.

 

Oil discovery at the Goddo prospect on the Utsira High

Oil discovery at the Goddo prospect on the Utsira High

19 August 2019

Lundin Petroleum AB (Lundin Petroleum) announces that its wholly owned subsidiary Lundin Norway AS (Lundin Norway) has made an oil discovery at exploration well 16/5-8s, targeting the Goddo prospect in PL815 approximately 14 km South of the Edvard Grieg field in the Norwegian North Sea.

The main objective of the well was to prove oil in porous basement similar to what is found in the Rolvsnes discovery to the North West. The well encountered weathered and fractured basement in an estimated gross oil column of 20 meters. Extensive coring and data acquisition was performed and the reservoir displays similar characteristics as found in Rolvsnes, but the two discoveries are not connected.

The preliminary gross resources from this well are estimated to be between 1 and 10 million barrels of oil equivalent (MMboe), however there is clear upside potential in the larger Goddo area and surrounding prospective basement.

The forward appraisal and commercialisation strategy for the Utsira High basement play will be based on evaluation of the production performance from the Rolvsnes extended well test where production is set to commence in mid-2021, as well as the information collected at Goddo and surrounding well data. Two horizontal wells in the northern part of the Edvard Grieg field already have production contribution from basement, and the Tellus East discovery announced earlier this year has similar reservoir to Rolvsnes and Goddo and will be produced as part of a future Edvard Grieg infill programme.

The Goddo well was drilled by the Leiv Eiriksson semi-submersible drilling rig. Lundin Norway is the operator of PL815 with a 60 percent working interest, and the partners are Concedo and Petoro with 20 percent interest each. The Leiv Eiriksson rig will now be used by operator ConocoPhillips Skandinavia for a three well exploration campaign to the North of the Utsira High. Lundin Petroleum has a 20 percent working interest in two of these wells; Enniberg and Hasselbaink both located in PL917, due to spud in Q4 2019.

Alex Schneiter Bloomberg TV interview

Alex Schneiter Bloomberg TV interview

5 August 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.

Extraordinary General Meeting of Lundin Petroleum AB 31 July 2019

Extraordinary General Meeting of Lundin Petroleum AB 31 July 2019

31 July 2019

An Extraordinary General Meeting of Shareholders of Lundin Petroleum AB (publ) (“Lundin Petroleum”) was held today, Wednesday 31 July 2019, in Stockholm.

The Extraordinary General Meeting was convened in connection with the proposal to, among other things, redeem 16 percent of the outstanding shares of Lundin Petroleum that are currently held by Equinor ASA and the sale of a 2.6 percent stake in the Johan Sverdrup development project for a cash consideration to Equinor Energy AS, as announced by Lundin Petroleum on 7 July 2019. The Extraordinary General Meeting resolved, in accordance with the Board of Directors’ proposals:

To approve the agreement entered into between Lundin Petroleum and SpareBank 1 Markets AS on 7 July 2019 regarding a share swap transaction in relation to 54,461,831 shares in Lundin Petroleum. Lundin Petroleum will settle the swap for a cash consideration to SpareBank 1 Markets AS of SEK 14.5 billion and will subsequently redeem the shares that Sparebank 1 Markets AS holds for no consideration.
To reduce the share capital by not more than SEK 556,594.14. The reduction of the share capital is to be effected with retirement of not more than 54,461,831 shares that will be held by SpareBank 1 Markets AS on the date of the implementation of the resolution. The amount by which the share capital is reduced will be allocated to unrestricted equity. Accordingly, SpareBank 1 Markets AS will not receive any payment for the retired shares. After the registration of the resolution with the Swedish Companies Registration Office, Lundin Petroleum will have 285,924,614 outstanding shares.
To increase the share capital by SEK 556,594.14 through a transfer from unrestricted equity (a so-called bonus issue). No new shares are to be issued in connection with the bonus issue. After the bonus issue, Lundin Petroleum’s share capital will be restored to the same amount as before the reduction of the share capital.
To approve the sale by Lundin Norway AS of 2.6 percent of the Johan Sverdrup unit to Equinor Energy AS. Lundin Norway AS and Equinor Energy AS entered into an asset transfer agreement regarding the sale on 7 July 2019. Pursuant to the agreement, the consideration payable by Equinor Energy AS is USD 962 million, with an economic date of 1 January 2019 which includes a USD 52 million contingent payment on future reserve classification. Completion of the sale remains subject to customary approvals from the Norwegian government authorities which are expected to be received during the third or fourth quarter 2019.


 

Ian H Lundin, Chairman of Lundin Petroleum, commented:
“I would like to thank our shareholders for their continued support for the business and in relation to our Extraordinary General Meeting, held earlier today. These transactions will enhance the leverage of all shareholders to our world class asset base and the future success of the business as we enter a high growth phase with first oil at Johan Sverdrup expected in November 2019. I look forward to reporting further achievements in the years ahead, as we continue to strive to deliver on our sustainable, organic growth strategy.”

 

Report for the six months ended 30 June 2019

Report for the six months ended 30 June 2019

31 July 2019

· Production above mid-point guidance for the first half of the year at 77.5 Mboepd and Q2 at 76.1 Mboepd
· Continued strong financial performance
· Out performance of Edvard Grieg has extended plateau production from previously guided mid-2020 and when coupled with the tie-back projects will take plateau to end of 2022
· Johan Sverdrup commissioning progressing to plan, on track for expected first oil in November 2019 and further capex reduction
· Significant exploration activity – 11 wells drilled and four discoveries announced
· Proposed transaction to redeem 16 percent of issued shares and sale of 2.6 percent of Johan Sverdrup announced July 2019
· Post transaction, near term production guidance maintained at over 150 Mboepd post Johan Sverdrup Phase 1 plateau (2020)
· Full year dividend of USD 1.48 per share, first quarterly payment of USD 0.37 per share (MUSD 125) paid in April, post transaction dividend policy remains unchanged.

 

Financial summary1 Jan 2019-
30 Jun 2019
6 months
1 Apr 2019-
30 Jun 2019
3 months
1 Jan 2018-
30 Jun 2018
6 months
1 Apr 2018-
30 Jun 2018
3 months
1 Jan 2018-
31 Dec 2018
12 months
Production in Mboepd77.576.182.181.281.1
Revenue and other income in MUSD984.0499.91,383.9681.52,640.7
Operating cash flow in MUSD778.9400.2978.4510.41,864.1
EBITDA in MUSD811.6411.9975.0512.31,932.5
Free cash flow in MUSD167.471.6261.089.2663.0
Net result in MUSD149.796.2267.237.0225.7
Earnings/share in USD0.440.280.790.110.67
Net debt in MUSD3,359.33,359.33,798.53,798.53,398.2

 

Comments from Alex Schneiter, President and CEO of Lundin Petroleum:
“The first half of 2019 has been one of the busiest to date in all areas of our business and I am pleased to report another period of sustained strong financial performance and operational delivery, driven by our portfolio of world class assets which continue to outperform quarter on quarter.

“We are now on the final countdown to first oil from Johan Sverdrup in November 2019. With the offshore installation having been completed at the front end of the weather window in March 2019, the hook up and commissioning of the installed facilities is progressing on plan. The project is now over 90 percent complete and the operator has further reduced Phase 1 gross capital expenditure guidance to NOK 83 billion from NOK 86 billion.

“Our key producing assets at Edvard Grieg and Alvheim continue to deliver, both in production performance and efficiency. At Edvard Grieg, the Solveig tie-back development project kicked off during the period, following PDO approval in June 2019, alongside the Rolvsnes EWT which was also approved in July 2019. With the two tie-back projects now sanctioned, plus a committed infill programme, the plateau production period through the Edvard Grieg facilities has now been extended to around the end of 2022, from mid-2020.

“We remain focussed on organic growth and the last six months have been a very active period in the Company from an exploration and appraisal perspective with 12 wells drilled to date, resulting in four discoveries and one appraisal success. Seven further exploration and appraisal wells will be drilled this year targeting approximately 200 MMboe of net unrisked resources; including the basement target at Goddo, near Edvard Grieg which has the opportunity to unlock a significant resource potential in this new geological play type to Norway.

“In terms of business development we announced a transaction post period end which, once complete, will see us redeem 16 percent of our shares in issue and sell of 2.6 percent of Johan Sverdrup to Equinor. This transaction rationalises our shareholder structure and increases all investors’ leverage to the continuing performance of our world class portfolio of assets, the soon to be producing Johan Sverdrup field and the Company’s organic growth strategy. As such we have also updated our guidance for the near and long term, which sees our capital expenditure coming down while production post the start-up of Johan Sverdrup remains above 150Mboepd.

“Looking towards the second half of the year, one of the stand out events will be first oil at Johan Sverdrup expected in November, which is a significant moment for our business since our first discovery well there. We will also continue to be busy with the exploration drill bit and I look forward to further progress from the new projects currently in the development phase. With our industry leading low operating cost base, production growth profile and high HSE track record, I remain very confident in our business’ ability to continue to outperform.”

Audiocast presentation
Listen to Alex Schneiter, President and CEO, and Teitur Poulsen, CFO, commenting on the report at an audiocast held on Wednesday 31 July 2019 at 08.30 CEST.

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

 

Lundin Petroleum audiocast – Q2 report 2019 presentation

Lundin Petroleum audiocast – Q2 report 2019 presentation

31 July 2019

Listen to Alex Schneiter, President and CEO, and Teitur Poulsen, CFO, commenting on the report at a live audiocast held on Wednesday 31 July 2019 at 08.30 CEST.

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

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6 month report 2019
31.07.2019, 444.15 KB


 

Update on second quarter 2019 financial results and audiocast details for 31 July 2019

Update on second quarter 2019 financial results and audiocast details for 31 July 2019

17 July 2019

Lundin Petroleum AB (Lundin Petroleum) will publish its financial report for the second quarter 2019 on Wednesday 31 July 2019. For the second quarter 2019, Lundin Petroleum will expense pre-tax exploration costs of approximately MUSD 34 and recognise a net foreign exchange gain of approximately MUSD 34.

These items are largely non-cash and will have no impact on operating cash flow or EBITDA.

Exploration costs
For the second quarter of 2019, Lundin Petroleum will incur pre-tax exploration costs of approximately MUSD 34 which will be charged to the income statement and offset by a tax credit of approximately MUSD 26. The exploration costs are mainly related to the dry well on the Vinstra and Otta prospects located in PL539, the dry well on the Korpfjell Deep prospect located in PL859, the dry well on the JK prospect located in PL916 and the dry well on the Lynghaug prospect located in PL758.

Foreign exchange
Lundin Petroleum will recognise a net foreign exchange gain of approximately MUSD 34 for the second quarter of 2019. The Norwegian Krone strengthened against the US Dollar by approximately 1 percent and the Euro strengthened against the US Dollar by approximately 1 percent during the second quarter of 2019. The foreign exchange gain is largely non-cash and mainly relates to the revaluation of loan balances at the prevailing exchange rates at the balance sheet date.

Revenue from the crude oil sales from third parties
Lundin Petroleum markets its own crude oil production and at times markets crude oil from third parties. For the second quarter 2019, revenue from the sale of crude oil from third parties amounted to MUSD 44.2 offset by the purchase of crude oil from third parties of also MUSD 44.2, resulting in no gross profit on third party activities for the second quarter 2019.

Change in accounting principle for under/overlift balances
Lundin Petroleum previously recognised income based on its produced volume (entitlement method) for the period. Lundin Petroleum has decided to change the accounting treatment of such under/overlift so that from 1 April 2019 the income will reflect sold volume (sales method). This means that changes in under/overlift balances are no longer reported as other income valued at market price, but will instead be reported as an adjustment to cost valued at production cost including depletion. During the second quarter of 2019, Lundin Petroleum was underlifted by 1.0 Mboepd.

Release of report and audiocast on 31 July 2019
Lundin Petroleum’s financial report for the second quarter 2019 will be published on Wednesday 31 July at 07:30 CEST, followed by a live audiocast at 08:30 CEST 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/2019-07-31-q2

 

Notice of Extraordinary General Meeting of Lundin Petroleum AB

Notice of Extraordinary General Meeting of Lundin Petroleum AB

7 July 2019

Lundin Petroleum AB (publ), 556610-8055, holds an Extraordinary General Meeting of Shareholders on Wednesday 31 July 2019 at 10:00 a.m. (Swedish time). Location: Grand Hôtel, Södra Blasieholmshamnen 8 in Stockholm, Sweden.

Attendance at the Extraordinary General Meeting
Shareholders wishing to attend the Extraordinary General Meeting shall:
• be recorded as a shareholder in the share register maintained by Euroclear Sweden AB on Thursday 25 July 2019; and
• notify the company of their intention to attend no later than Thursday 25 July 2019 through the website www.lundin-petroleum.com (only applicable to individuals) or by post to Computershare AB, “Lundin Petroleum AB’s EGM 2019”, P.O. Box 610, SE 182 16 Danderyd, Sweden or by telephone +46 8-42 00 34 32 or by email info@computershare.se.

Shareholders whose shares are registered in the name of a nominee must, in addition to give notice of attendance, have their shares registered in their own name so that they are registered in the share register maintained by Euroclear Sweden AB on Thursday 25 July 2019 in order to be entitled to attend the Extraordinary General Meeting. Such registration may be temporary.

Shareholders who do not attend the Extraordinary General Meeting in person may exercise their rights at the Extraordinary General Meeting through a proxy in possession of a written, signed and dated proxy form. Proof of authority (through a certificate of registration or similar) shall be attached to proxy forms issued by legal entities. A template proxy form is available on www.lundin petroleum.com. To facilitate registration at the Extraordinary General Meeting, proxy forms, certificates of registration and other documents of authority should be submitted to the company at the address above in good time prior to the Extraordinary General Meeting.

For information on how we treat your personal data in connection with the Extraordinary General Meeting, see the privacy policy on Computershare’s website, https://www.computershare.com/se/gm-gdpr.

Proposed agenda
1. Opening of the Extraordinary General Meeting
2. Election of Chairman of the Extraordinary General Meeting
3. Preparation and approval of the voting register
4. Approval of the agenda
5. Election of one or two persons to approve the minutes
6. Determination as to whether the Extraordinary General Meeting has been duly convened
7. Resolution on:
a) Approval of share swap transaction in relation to 54,461,831 shares in the company
b) Reduction of the share capital with retirement of 54,461,831 shares
c) Bonus issue
8. Resolution on approval of Lundin Norway AS’ sale of 2.6 per cent of the Johan Sverdrup unit to Equinor Energy AS
9. Closing of the Extraordinary General Meeting

Proposed resolutions

Item 2: Election of Chairman of the Extraordinary General Meeting
The Board of Directors proposes that Klaes Edhall is elected chairman of the Extraordinary General Meeting.

Background to items 7 a)–7 c) and 8 on the agenda
On 7 July 2019, the company announced that it has entered into an agreement with Equinor ASA regarding certain transactions that result in a redemption of 16 per cent of the shares in the company that are currently held by Equinor ASA and a sale of 2.6 per cent of the Johan Sverdrup unit to Equinor Energy AS (see the press release at www.lundin petroleum.com). According to the agreement, completion of the transactions is conditional upon approval by a General Meeting of Shareholders of the company and certain other conditions.

The Extraordinary General Meeting has been convened for the purpose of approving the transactions and the measures required to implement the transactions.

Items 7 a)–c): Resolution on (a) approval of share swap transaction in relation to 54,461,831 shares in the company, (b) reduction of the share capital with retirement of 54,461,831 shares and (c) bonus issue

Item 7 a): Resolution on approval of share swap transaction in relation to 54,461,831 shares in the company
The Board of Directors proposes that the Extraordinary General Meeting resolves to approve an agreement entered into between the company and SpareBank 1 Markets AS on 7 July 2019 regarding a share swap transaction in relation to 54,461,831 shares in the company and the transactions set out in such agreement.

The share swap transaction, which is based on ISDA documentation, is a so-called total return swap that gives the company an economic exposure to 54,461,831 shares in the company (corresponding to 16 per cent of the total number of shares in the company). SpareBank 1 Markets AS will hedge its exposure under the total return swap by acquiring an equal number of shares in the company, and has separately agreed with Equinor ASA to acquire 54,461,831 shares in the company from Equinor ASA on the effective date of the total return swap at a price of SEK 266.43 per share, which corresponds to the closing price for the company’s share on Nasdaq Stockholm on 4 July 2019 of SEK 289.6 less eight per cent discount (the “Initial Price”).

The default settlement method under the total return swap is cash settlement. Upon cash settlement, the company would either be credited or debited an amount equal to the average proceeds received by SpareBank 1 Markets AS when selling the shares in the company acquired as a hedge for the total return swap. As an alternative to cash settlement, the company has the right– and the company’s current intention is– to request physical settlement and delivery of 54,461,831 shares for the purpose of retiring such shares on the terms and conditions set out in the proposed resolution under item 7 b) of the agenda. Upon physical settlement, the company would be debited an amount per share equal to the Initial Price.

Completion of the share swap transaction is conditional upon approval by the Extraordinary General Meeting and certain other conditions.

Item 7 b): Resolution on reduction of the share capital with retirement of 54,461,831 shares
The Board of Directors proposes that the Extraordinary General Meeting resolves on a reduction of the share capital with retirement of shares on the following terms.

The share capital is to be reduced by not more than SEK 556,594.14. The reduction of the share capital is to be effected with retirement of not more than 54,461,831 shares that will be held by SpareBank 1 Markets AS on the date of the implementation of the resolution. The purpose of the reduction is allocation to unrestricted equity. Accordingly, SpareBank 1 Markets AS will not receive any payment for the retired shares.

The company may implement the resolution to reduce the share capital without authorisation from the Swedish Companies Registration Office since the company simultaneously carries out a bonus issue that increases the company’s restricted equity and share capital by SEK 556,594.14 (see item 7 c) of the agenda). Combined, the resolution under this item 7 b) and the bonus issue under item 7 c) of the agenda entail that neither the company’s restricted equity nor its share capital is reduced.

Item 7 c): Resolution on bonus issue
The Board of Directors proposes that the Extraordinary General Meeting resolves on a bonus issue on the following terms and conditions.

The share capital is to be increased by SEK 556,594.14. No new shares are to be issued in connection with the increase of the share capital. The amount by which the share capital is to be increased shall be transferred to the share capital from unrestricted equity.

The purpose of the bonus issue is to restore the company’s restricted equity and share capital after the proposed reduction of the share capital set out under item 7 b) of the agenda.

Authorisation
The Board of Directors proposes that the Extraordinary General Meeting authorises the Board of Directors to make such minor adjustments to the resolution that may be necessary in connection with the registration of the reduction of the share capital with retirement of shares and the bonus issue with the Swedish Companies Registration Office or Euroclear Sweden AB and to take such other measures that are required to execute the resolution.

Majority requirement, etc.
The Board of Directors proposes that the Extraordinary General Meeting resolves on the proposals under items 7 a)–7 c) as one joint resolution and that the resolution is conditional upon that the Extraordinary General Meeting resolves in accordance with the Board of Directors’ proposal under item 8 of the agenda. Accordingly, the resolution is only valid where supported by shareholders holding not less than two-thirds of the votes cast and the shares represented at the Extraordinary General Meeting.

Item 8: Resolution on approval of Lundin Norway AS’ sale of 2.6 per cent of the Johan Sverdrup unit to Equinor Energy AS
The Board of Directors proposes that the Extraordinary General Meeting resolves to approve Lundin Norway AS’ sale of 2.6 per cent of the Johan Sverdrup unit to Equinor Energy AS.

Lundin Norway AS and Equinor Energy AS entered into an asset transfer agreement regarding the sale on 7 July 2019. Pursuant to the agreement, the consideration payable by Equinor Energy AS shall be USD 962 million, with an economic date of 1 January 2019 which includes a USD 52 million contingent payment on future reserve classification. Completion of the sale is conditional upon approval by the Extraordinary General Meeting, customary approvals from Norwegian government authorities and certain other conditions (including that the Extraordinary General Meeting resolves in accordance with the Board of Directors’ proposals under items 7 a)–7 c) of the agenda).

Lundin Norway AS is a wholly-owned subsidiary of Lundin Petroleum AB (publ) and Equinor Energy AS is a wholly owned subsidiary of Equinor ASA. Equinor ASA currently owns 20.1 per cent of the total number of shares in Lundin Petroleum AB (publ). Equinor ASA has declared that it will not exercise its voting rights on this resolution.

Further information
On the date of this notice, the total number of shares and votes in the company is 340,386,445. The company holds 1,873,310 own shares, representing 1,873,310 votes. The company’s articles of association are available at the company’s website, www.lundin-petroleum.com.

The Board of Directors and the Chief Executive Officer shall, if a shareholder so request and the Board of Directors considers that it may do so without significant harm to the company, provide information at the Extraordinary General Meeting regarding circumstances that could affect the assessment of an item on the agenda.

Additional documents
The complete proposals and other documents that shall be made available prior to the Extraordinary General Meeting pursuant to the Swedish Companies Act will be available at the company (Hovslagargatan 5 in Stockholm) and at the company’s website, www.lundin-petroleum.com, not later than three weeks prior to the Extraordinary General Meeting. The documents will also be sent free of charge to shareholders who so request and provide their address to the company.

Stockholm in July 2019
LUNDIN PETROLEUM AB (publ)
The Board of Directors