Report for the nine months ended 30 September 2017

1 November 2017

Lundin Petroleum delivers strong results for the first nine months 2017. High production levels at continuing low cash operating costs and a higher realised oil price resulted in a significant increase in revenue, EBITDA and operating cash flow compared to the same period in 2016.

Third quarter highlights
·   Record quarter EBITDA and operating cash flow driven by high production, low costs and higher oil price.
·   Quarter production above guidance with full year production expected at or above the higher end of the 80-85 Mboepd guidance range.
·   Continued low cash operating costs, forecast to be below the full year guidance of USD 4.60 per barrel.
·   Positive update for the Johan Sverdrup project with 60 percent of Phase 1 complete and further cost reductions.
·   2017 full year development expenditure guidance reduced from MUSD 1,085 to MUSD 980.

Financial summary

Continuing operations
——————————–
Jan 2017-
30 Sep 2017
9 months

—————-
1 Jul 2017-
30 Sep 2017
3 months
—————-
1 Jan 2016-
30 Sep 2016
9 months
————–
1 Jul 2016-
30 Sep 2016
3 months
————–
1 Jan 2016-
31 Dec 2016
12 months
————–
Production in Mboepd 87.1 89.2 55.3 67.5 59.3
Revenue in MUSD 1,403.3   517.2 623.8 269.0 950.0
EBITDA in MUSD 1,071.7   382.4 475.8 215.3   752.5
Operating cash flow in MUSD 1,095.5   389.6 557.0 243.0 857.9
Net result in MUSD 431.8 227.0 263.4   169.8 -399.3
Earnings/share in USD1   1.28 0.67 0.83 0.52 -0.79
Earnings/share fully diluted in USD1 1.28 0.67 0.82   0.51 -0.79
Net debt 4,024.0 4,024.0 4,307.1 4,307.1 4,075.5

The numbers included in the table above are based on continuing operations (including 2016 comparatives)
1 Based on net result attributable to shareholders of the Parent Company

Comments from Alex Schneiter, President and CEO of Lundin Petroleum:
“Lundin Petroleum has delivered another great quarter with record operating cash flow and EBITDA, driven by continued strong production performance from our core assets. With these excellent results we are firmly on track to meet or exceed the higher end of the full year production guidance and our total cash operating cost is forecast to be below the full year guidance of USD 4.60 per barrel.

The Johan Sverdrup development continues to improve both in terms of project completion and further cost reductions. Phase 1 is now 60 percent complete with over 40 million man-hours worked to date. Costs are about 25 percent lower for Phase 1 and 50 percent lower for Phase 2 compared to PDO submission and I believe we will see further savings as the project progresses.

We remain optimistic about the significant exploration potential in the southern Barents Sea, despite recent disappointing results. This is a new frontier area where more exploration is needed to understand and unlock its full potential. We are drilling two further exploration wells on the Filicudi trend before the end of this year (Hufsa and Hurri) and we will soon announce our 2018 drilling programme, targeting more prospects in the southern Barents Sea, the Utsira High and the Mandal High.

Oil prices strengthened in the third quarter on the back of healthy demand growth, decreasing oil inventories and the prospect of an extended OPEC quota. I believe we will see further upward pressure on the oil price as the supply market tightens following the significant under investments in our industry in the last few years. Lundin Petroleum has never been better positioned to benefit from the current oil market recovery with production due to double by late 2022 and with record low cash operating costs below USD 5 per barrel for the next decade. With a strong focus on cost discipline, operating efficiency and high HSE standards, Lundin Petroleum will continue to pursue an exciting organic growth strategy.”

Webcast presentation
Listen to Alex Schneiter, President and CEO, and Teitur Poulsen, CFO, commenting on the report at a live webcast held on Wednesday 1 November 2017 at 09.00 CET.

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

Link to webcast

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