Year End Report 2019
- Strong financial performance with record free cash flow generation of MUSD 1,271.7, of which MUSD 312.7 relates to organic free cash flow and MUSD 959.0 relates to the sale of 2.6 percent working interest in Johan Sverdrup
- Board of Directors propose 2019 dividend of USD 1.80 per share corresponding to MUSD 511
- 2019 production averaged 93.3 Mboepd above mid-point of upgraded guidance and, at year end production was over 150 Mboepd
- Operating cost of USD 4.03 per boe, below USD 4.25 per boe guidance for the year
- Johan Sverdrup producing around 350 Mbopd gross at year end 2019, 80 percent of Phase 1 plateau rate
- Completion of 2.6 percent sale of Johan Sverdrup and 16 percent share redemption with Equinor during 2019
- Launch of Decarbonisation Strategy targeting carbon neutrality in its exploration and production activities by 2030
- Board of Directors proposes to rename the Company to Lundin Energy
Financial summary
| 1 Jan 2019- 31 Dec 2019 12 months | 1 Oct 2019- 31 Dec 2019 3 months | 1 Jan 2018- 31 Dec 2018 12 months | 1 Oct 2018- 31 Dec 2018 3 months | |
| Production in Mboepd | 93.3 | 135.1 | 81.1 | 82.1 |
| Revenue and other income in MUSD | 2,948.7 | 749.7 | 2,640.7 | 652.2 |
| EBITDA in MUSD1 | 1,918.4 | 695.5 | 1,932.5 | 480.7 |
| Per share in USD1 | 6.07 | 2.45 | 5.71 | 1.42 |
| Free cash flow in MUSD | 1,271.7 | 153.8 | 663.0 | 173.3 |
| Per share in USD | 4.03 | 0.54 | 1.96 | 0.51 |
| Net result in MUSD | 824.9 | 155.3 | 225.7 | -98.2 |
| Per share in USD | 2.61 | 0.56 | 0.67 | -0.29 |
| Adjusted net result in MUSD | 252.7 | 78.9 | 295.3 | 75.2 |
| Per share in USD | 0.80 | 0.28 | 0.87 | 0.22 |
| Net debt in MUSD | 4,006.7 | 4,006.7 | 3,398.2 | 3,398.2 |
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.
Comment from Alex Schneiter, President and CEO of Lundin Petroleum:
“2019 has been one of the most transformational periods in the Company’s development, which ended with a record high exit production rate at over 150 Mboepd. Alongside this we have not only transformed what we are producing, we have also focused on how we produce oil and gas in the most sustainable and efficient manner. Such ambition has been formalised through our Decarbonisation Strategy, which targets carbon neutrality by 2030.
“The early startup of Johan Sverdrup Phase 1 in October 2019, was a significant milestone for our business and has firmly laid the foundations for a period of sustainable and efficient production growth well into the next decade. The field has since ramped up quickly and ahead of expectations and at year end was producing around 350 Mbopd gross, which is about 80 percent of the Phase 1 facilities capacity of 440 Mbopd. I would like to thank our teams, as well as the operator Equinor, for executing such a good project; to be achieving first oil on a development of this scale, two months early and significantly under budget, adds real value to our shareholders and is a testament to the hard work of everyone involved.
“Our key Edvard Grieg field continued to exceed expectations with operating efficiency ahead of guidance at 98 percent. This achievement is underpinned by continued reservoir outperformance and limited water production, which alongside the infill drilling programme scheduled for 2020, has enabled us to lift gross ultimate reserves to 300 MMboe. This field has consistently delivered above expectations for us and I am confident this performance will continue in the future, especially as we see more near-field resources being derisked through our ongoing drilling programme.
“Financially we have had another very strong period of free cash flow generation, driven by the sale of 2.6% of Johan Sverdrup, higher production and a cost base which we have continued to maintain at industry leading low levels of USD 4.03 per boe. This coupled with the share redemption from Equinor during the year, has driven our earnings per share and I am glad to note the Board is recommending a 22 percent increased dividend of USD 1.80 per share (in total MUSD 511), clearly demonstrating our focus on driving shareholder returns.
“With the sanction of the full electrification of Edvard Grieg, being developed together with the Johan Sverdrup Phase 2 project, our ambition to produce some of the lowest carbon intensity barrels in the world is closer to being realised. This will result in a significant reduction in CO2 emissions from the Edvard Grieg Area to below 1 kg per boe by the end of 2022. During the year and in line with the Decarbonisation Strategy, we also started to execute the plan to fully replace all Lundin Petroleum net power usage on both the Edvard Grieg and Johan Sverdrup fields by 2022, through direct investment in profitable renewable projects. These projects will also provide a natural hedge to the electricity price fluctuation, which will represent a significant element of field operating costs. Also announced in January 2020, the Board proposed to change the name of the Company to Lundin Energy in accordance with our Decarbonisation Strategy and our aim to continue to play an important part in the future energy mix.
“2020 is set to be another busy year for Lundin Petroleum across the full spectrum of our operations and we have another very active exploration and appraisal programme with ten wells across our portfolio in Norway, targeting over 650 MMboe of net unrisked resources. I would like to thank all stakeholders for their support during the year and I very much look forward to reporting our progress in 2020.”
2020 Capital Markets Day information
Lundin Petroleum will be hosting its 2020 Capital Markets Day on 31 January 2020 at 11.00 CET (10.00 GMT) at the London Stock Exchange. The Capital Markets Day will include presentations by the Company’s management team on its fourth quarter 2019 financial results, the business strategy, the 2020 budgeted development campaign and its exploration and appraisal programme. Details for the live webcast:
Sweden
UK
United States
Norway
Access Pin : 58812582
Link :
Lundin Petroleum is one of Europe’s leading independent oil and gas exploration and production companies with operations focused on Norway and listed on Nasdaq Stockholm (ticker LUPE). Read more about Lundin Petroleum’s business and operations at -petroleum.com
For further information, please contact:
| Edward Westropp VP Investor Relations Tel: 4 | Sofia Antunes Investor Relations Officer Tel: 5 | Robert Eriksson Manager, Media Communications Tel: 5 |
This information is information that Lundin Petroleum AB is required to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the contact persons set out above, at 07.30 CET on 31 January 2020.
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 Lundin Petroleum'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 Lundin Petroleum 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 Lundin Petroleum’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.
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