Lundin Petroleum AB

Lundin Petroleum AB

November 05, 2014 01:39 ET

Lundin Petroleum AB: Report for the Nine Months Ended 30 September 2014

STOCKHOLM, SWEDEN--(Marketwired - Nov. 5, 2014) - Lundin Petroleum AB (TSX:LUP)(OMX:LUPE) -

Nine months ended 30 September 2014 (30 September 2013)

  • Production of 25.9 Mboepd (33.3 Mboepd)(1)
  • Revenue of MUSD 650.0 (MUSD 857.9)
  • EBITDA of MUSD 506.9 (MUSD 737.7)
  • Operating cash flow of MUSD 804.0 (MUSD 764.6)
  • Net result of MUSD 5.1 (MUSD 49.9)
  • Net debt of MUSD 2,054 (31 December 2013: MUSD 1,192)
  • Alta oil discovery in the Barents Sea - gross recoverable resources estimated at between 125 and 400 million barrels of oil equivalent
  • Gohta appraisal well successfully completed in the Barents Increased credit facility from USD 2.5 billion to USD 4.0 billion
  • Johan Sverdrup Phase 1 conceptual development plan was approved by the licence partners
  • Nine exploration licences awarded in the Norwegian 2013 APA licensing round, four as operator

Third quarter ended 30 September 2014 (30 September 2013)

  • Production of 21.7 Mboepd (29.4 Mboepd)(1)
  • Revenue of MUSD 189.2 (MUSD 263.8)
  • EBITDA of MUSD 157.6 (MUSD 220.1)
  • Operating cash flow of MUSD 307.0 (MUSD 266.0)
  • Net result of MUSD 4.3 (MUSD 1.7)

Comments from C. Ashley Heppenstall, President and CEO

Lundin Petroleum is impacted by commodity prices and cost levels like all other oil and gas companies. However it is important for you, our shareholders, to understand that our business model and the continued success of our Company will be driven by our ability to increase our resource base much more than by oil prices. We have a strong balance sheet with access to multiple sources of liquidity and can withstand lower oil prices for long periods. We will manage our balance sheet prudently during times of uncertainty such as we are experiencing today but we will continue to spend money developing our discoveries as well as maintaining our exploration focus. We are in an industry which requires us to take a long term perspective and to do that, we need to invest.

I am pleased to report that following the frustrating delays to Brynhild first oil we are now close to production. The news with regard to our other development projects, Bøyla, Bertam and Edvard Grieg is positive and I remain confident that all fields will commence production as forecast during 2015.

Our production for the first nine months of 2014 was 25,900 boepd. The third quarter production was in line with our forecasts but lower than previous quarters due to the planned maintenance on the Alvheim FPSO during the summer. Our 2014 production forecast is retained at 24,000 to 29,000 boepd.

Our recent Alta discovery in the Barents Sea is excellent news for us all and it is very important that we continue to invest in this very prospective area to realise its full potential. The Alta discovery is our largest discovery in the Barents Sea to date containing between 125 and 400 million barrels of oil equivalent. Between now and the end of 2014 we will drill six exploration wells including high impact wells such as Kopervik in the Utsira High area. In 2015 we will drill eight exploration wells targeting net unrisked resources of 490 MMboe. I am confident that this will lead to further exploration success.

(1) Including production from Russian onshore assets accounted for using the equity method under IFRS 11 Joint Arrangements up to completion of the sale of these assets in mid-July 2014.

Lundin Petroleum is a Swedish independent oil and gas exploration and production company with a well balanced portfolio of world-class assets primarily located in Europe and South East Asia. The Company is listed at the Nasdaq, Stockholm (ticker "LUPE") and at the Toronto Stock Exchange (TSX) (Ticker "LUP"). Lundin Petroleum has proven and probable reserves of 194 million barrels of oil equivalent (MMboe).

This information has been made public in accordance with the Securities Market Act (SFS 2007:528) and/or the Financial Instruments Trading Act (SFS 1991:980).

Forward-Looking Statements

Certain statements made and information contained herein constitute "forward-looking information" (within the meaning of applicable securities legislation). Such statements and information (together, "forward-looking statements") relate to future events, including the Company's future performance, business prospects or opportunities. Forward-looking statements include, but are not limited to, statements with respect to estimates of reserves and/or resources, future production levels, future capital expenditures and their allocation to exploration and development activities, future drilling and other exploration and development activities. Ultimate recovery of reserves or resources are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

All statements other than statements of historical fact may be forward-looking statements. Statements concerning proven and probable reserves and resource estimates may also be deemed to constitute forward-looking statements and reflect conclusions that are based on certain assumptions that the reserves and resources can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions) are not statements of historical fact and may be "forward-looking statements". Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations and assumptions will prove to be correct and such forward-looking statements should not be relied upon. These statements speak only as on the date of the information and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable laws. These forward-looking statements involve risks and uncertainties relating to, among other things, operational risks (including exploration and development risks), productions costs, availability of drilling equipment, reliance on key personnel, reserve estimates, health, safety and environmental issues, legal risks and regulatory changes, competition, geopolitical risk, and financial risks. These risks and uncertainties are described in more detail under the heading "Risks and Risk Management" and elsewhere in the Company's annual report. Readers are cautioned that the foregoing list of risk factors should not be construed as exhaustive. Actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements are expressly qualified by this cautionary statement.

Reserves and Resources

Unless otherwise stated, Lundin Petroleum's reserve and resource estimates are as at 31 December 2013, and have been prepared and audited in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook"). Unless otherwise stated, all reserves estimates contained herein are the aggregate of "Proved Reserves" and "Probable Reserves", together also known as "2P Reserves". For further information on reserve and resource classifications, see "Reserves, Resources and Production" in the Company's annual report.

Contingent Resources

Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political and regulatory matters or a lack of markets. There is no certainty that it will be commercially viable for the Company to produce any portion of the Contingent Resources. Unless otherwise stated, all contingent resource estimates contained herein are the best estimate ("2C") contingent resources.

Prospective Resources

Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective Resources have both a chance of discovery and a chance of development. There is no certainty that any portion of the Prospective Resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the Prospective Resources. Unless otherwise stated, all Prospective Resource estimates contained herein are reflecting a P50 Prospective Resource estimate. Risked Prospective Resources reported herein are partially risked. They have been risked for chance of discovery, but have not been risked for chance of development.


BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf : 1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

To view the Report for the Nine Months Ended 30 September 2014, please visit the following link:

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