Updated dividend policy and proposed 2018 dividend of USD 500 million

30 January 2019

Lundin Petroleum AB (Lundin Petroleum) announces an updated dividend policy and that the Board of Directors proposes a 2018 dividend of USD 1.48 per share, corresponding to USD 500 million.

Updated dividend policy
Lundin Petroleum’s objective is to create attractive shareholder returns by investing through the business cycle with capital investments allocated to exploration, development and production assets. The Company’s expectation is to create shareholder returns both through share price appreciation and by distributing a sustainable yearly dividend – paid in quarterly instalments and denominated in USD – with the plan of maintaining or increasing the dividend over time in line with the Company’s financial performance and being sustainable below an oil price of USD 50 per barrel. The dividend shall be sustainable in the context of allowing the Company to continue to pursue its organic growth strategy and to develop its contingent resources whilst maintaining a conservative gearing ratio and retaining an appropriate liquidity position within its available credit lines.

Proposed 2018 dividend of USD 500 million
In accordance with the updated dividend policy, the Board of Directors will propose to the 2019 Annual General Meeting a dividend for 2018 of USD 1.48 per share, corresponding to USD 500 million (rounded off), to be paid in quarterly instalments of USD 0.37 per share, corresponding to USD 125 million (rounded off). Before payment, each quarterly dividend of USD 0.37 per share shall be converted into a SEK amount, and paid out in SEK, 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). The final USD equivalent amount received by the shareholders may therefore slightly differ depending on what the USD to SEK exchange rate is on the date of the dividend payment. The SEK amount per share to be distributed each quarter will be announced in a press release four business days prior to each record date.

The first dividend payment is expected to be paid around 5 April 2019, with an expected record date of 2 April 2019 and expected ex-dividend date of 1 April 2019. The second dividend payment is expected to be paid around 8 July 2019, with an expected record date of 3 July 2019 and expected ex-dividend date of 2 July 2019. The third dividend payment is expected to be paid around 7 October 2019, with an expected record date of 2 October 2019 and an expected ex-dividend date of 1 October 2019. The fourth dividend payment is expected to be paid around 9 January 2020, with an expected record date of 3 January 2020 and an expected ex-dividend date of 2 January 2020.

In order to comply with Swedish company law, a maximum total SEK amount shall be pre-determined to ensure that the dividend distributed does not exceed the available distributable reserves of the Company and such maximum amount for the 2018 dividend has been set to a cap of SEK 7.665 billion (i.e., SEK 1.916 billion per quarter). If the total dividend would exceed the cap of SEK 7.665 billion, the dividend will be automatically adjusted downwards so that the total dividend corresponds to the cap of SEK 7.665 billion.

Ian H. Lundin, Chairman of Lundin Petroleum, commented:
“I am very pleased to be able to announce this updated dividend policy, which reflects the reality that with the continuing strong performance from Edvard Grieg and the expected start-up of Johan Sverdrup in November 2019, the Company has transitioned its financial performance into producing material free cash flow well beyond the next decade. I remain confident that we will continue to create shareholder value through our long-held strategy of organic growth in Norway and that the Company’s strong financial position will allow us to continue pursuing this strategy, in parallel with developing our contingent resources into reserves, gradually deleveraging debt and distributing a sustainable dividend even down to low oil prices. The proposed dividend of USD 500 million for 2018 is set at a level which is sustainable and which we aim to grow over time.”

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