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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

 

Year End Report 2019

Launch of the Decarbonisation Strategy targeting carbon neutrality by 2030 and proposed name change to Lundin Energy AB

Decarbonisation Strategy and proposed name change to Lundin Energy AB

Launch of the Decarbonisation Strategy targeting carbon neutrality by 2030 and proposed name change to Lundin Energy AB

27 January 2020

Lundin Petroleum AB (Lundin Petroleum) is pleased to announce the launch of its Decarbonisation Strategy, which targets carbon neutrality by 2030. In relation to this, and to better reflect the business today and the clear actions and targets towards a lower carbon future, the Board is proposing to change the name of the Company to Lundin Energy AB.

Decarbonisation Strategy
Lundin Petroleum recognise the challenges of climate change combined with the increasing energy needs linked to growing global population, the international community’s commitment to reduce global carbon emissions and the role that forward-thinking companies can play in this. With the Decarbonisation Strategy, the Company has formalised its ongoing commitment to reduce its carbon footprint to the lowest possible levels, through an effective combination of emissions reductions, energy efficiency, targeted research and development and carbon capture mechanisms. Also, as previously announced investment in renewable energy projects will be undertaken to replace net electricity consumption, providing these generate a good return to shareholders on a leveraged basis.

Roadmap to carbon neutrality by 2030:
• From 2020 limit average operated and non-operated portfolio carbon intensity to below 4kg CO2 per boe and from 2023 to below 2kg CO2 per boe
• In 2022 fully electrify Edvard Grieg and Johan Sverdrup Phase 2, to achieve carbon intensity for these assets of less than 1kg CO2 per boe
• From 2022 replace all net electricity usage from power from shore, through investments in renewable power generation
• To offset all business and operationally related air travel emissions through natural carbon capture, effective from 2018
• By 2030 achieve carbon neutrality across our operations as an oil and gas producer

Proposed name change to Lundin Energy AB
The Board of Lundin Petroleum is proposing to change the name of the Company to Lundin Energy AB. The proposed name change remains subject to shareholder approval at the Company’s Annual General Meeting on 31 March 2020.

The Board believes that with the production growth pathway set towards the target of 200 Mboepd, coupled with sustainable, industry leading low operating costs and a carbon intensity which will be below 2 kg CO2 per boe in 2023 versus the world average of 18 kg CO2 per boe, it is clear that the Company is transforming what it delivers as well as how it is delivered. Lundin Energy better reflects what the Company is doing as an explorer and producer today and its role in supplying the energy transition with the most sustainable oil and gas production possible as an essential part of the future energy mix.

Alex Schneiter, President and CEO of Lundin Petroleum commented:
“I am personally very proud to announce the launch of our Decarbonisation Strategy, through which we are seeking to formalise our commitment to reducing emissions and our carbon footprint, in order to supply the growing demand for all types of energy with the most sustainably produced product we can. We have a target of 2030 to reach carbon neutrality across our operations and we have set out a realistic and deliverable pathway towards this, which clearly differentiates us as an independent oil and gas producer in our industry.

“I am also pleased to announce that the Board is proposing to change the name of the Company to Lundin Energy. It represents our ambition to become carbon neutral, our position as a leading provider of oil and gas in the future and recognition of our role in the changing energy mix.”

 

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Decarbonisation Strategy
27.01.2020, 159.92 KB

Decarbonisation Strategy

Launch of the Decarbonisation Strategy targeting carbon neutrality by 2030 and proposed name change to Lundin Energy AB

Lundin Petroleum concession summary

Update on Q4 2019 financial results and webcast details for 31 January 2020

Q4 financial update

Update on fourth quarter 2019 financial results and
webcast details for 31 January 2020

15 January 2020

Lundin Petroleum AB (Lundin Petroleum) will publish its financial report for the fourth quarter 2019, on Friday 31 January 2020. For the fourth quarter 2019, Lundin Petroleum will expense pre-tax exploration costs of approximately MUSD 41, expense pre-tax decommissioning costs of approximately MUSD 19 and recognise a largely non-cash net foreign exchange gain of approximately MUSD 106.

Exploration costs
For the fourth quarter of 2019, Lundin Petroleum will incur pre-tax exploration costs of approximately MUSD 41 which will be charged to the income statement and offset by a tax credit of approximately MUSD 32. The exploration costs are mainly related to the dry or non-commercial wells on the Toutatis prospect (PL896), the Gladsheim prospect (PL921) and the Enniberg prospect (PL917).

Decommissioning costs
For the fourth quarter of 2019, Lundin Petroleum will incur pre-tax decommissioning costs of approximately MUSD 19, which will be charged to the income statement and offset by a tax credit of approximately MUSD 15. The decommissioning costs are related to expected increases in site restoration costs for the Brynhild and Gaupe fields.

Net debt and foreign exchange gain
The net debt position of Lundin Petroleum at 31 December 2019 amounted to USD 4.0 billion resulting in available liquidity of USD 1.0 billion within its USD 5.0 billion reserve-based lending facility.

Lundin Petroleum will recognise a net foreign exchange gain of approximately MUSD 106 for the fourth quarter of 2019. Both the Norwegian Krone and Euro strengthened against the US Dollar by approximately 3 percent during the fourth 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.

Change in under/overlift balances
Lundin Petroleum recognises income based on its sold volume (sales method). Consequently, changes in inventory and under/overlift balances are reported as an adjustment to cost valued at production cost, including depletion. During the fourth quarter of 2019, Lundin Petroleum was overlifted by 0.1 Mboepd offset by an increase in inventory balances, related to the filling of the Johan Sverdrup pipeline, of 2.7 Mboepd.

Fourth Quarter 2019 results and Capital Markets Day 2020
Lundin Petroleum’s financial report for the fourth quarter 2019, will be published on Friday 31 January at 07:30 CET.

Lundin Petroleum management team will present its financial results for the fourth quarter 2019 and capital markets day presentation by webcast at 11:00 CET (10:00 GMT) on the 31 January. Please follow the event live at www.lundin-petroleum.com or dial in using the following telephone numbers with the pin code shown below:

Sweden +46 8 56642651
UK +44 3333000804
United States +1 6319131422
Norway +47 23500243

Access Pin : 58812582

Link : https://lundinpetroleum.videosync.fi/2020-01-31-q4_cmd

 

12 licences awarded in the Norwegian licensing round

12 licences awarded in the Norwegian licensing round

APA 2019 licence awards

12 licences awarded in the Norwegian licensing round

14 January 2020

Lundin Petroleum AB (Lundin Petroleum) is pleased to announce that its wholly owned subsidiary Lundin Norway AS (Lundin Norway) has been awarded a total of 12 exploration licence interests in the 2019 Awards in Predefined Areas (APA) licensing round, in Norway.

The award includes 7 licences in the North Sea, 2 licences in the Norwegian Sea and 3 licences in the Southern Barents Sea, 7 of the awarded licences will be operated by Lundin Norway.

The awards from this licensing round continue to build on the Company’s seven core exploration areas and increases by 15 percent the number of licences held by the Company.

 The licence interests are detailed below and maps of their location are provided in the link below.

 

LicencesBlockWorking InterestLicence Area
PL1041Block 24/1230%North Sea
PL1051*Block 31/3, 32/1, 35/12, 36/1040%North Sea
PL1032*Block  2/7, 1040%North Sea
PL1045Block 25/415%North Sea
PL987B1Block 30/820%North Sea
PL917B1Block 25/1020%North Sea
PL1048*Block 30/1, 2, 34/1150%North Sea
PL1069*Block 6505/6,9, 6506/1,4,750%Norwegian Sea
PL1057Block 6302/2,3, 6303/1, 2,3, 6402/11,12, 6403/10,11,1230%Norwegian Sea
PL1082*Block 7225/6,8,9, 7226/4,5,6,7,8,9,11,12, 7227/4,5,7,850%Southern Barents Sea
PL1083*Block 7228/2,3,5,6, 7229/1,2,3,4,5,6, 7230/1,2,3,4,5,6, 7231/4, 7329/10,11,12, 7330/10,11,1240%Southern Barents Sea
PL609D1*Block 7120/240%Southern Barents Sea

*Operator Lundin Norway

1 Geographical extension of the licence area.

 

Downloads

12 licences awarded in the Norwegian licensing round

The fourth quarterly instalment of the dividend for 2018

Latest corporate presentation

Operations and financial update – Q3 2019

9 month report 2019