Exploration Costs to Negatively Affect Lundin’s 4Q
During the fourth quarter of 2013 Lundin Petroleum achieved a production rate of 31,100 barrels of oil equivalent per day (boepd) resulting in production for the full year of 32,700 boepd. The average Brent oil price for the fourth quarter of 2013 was USD 109 per barrel.
The profitability of the fourth quarter of 2013 will be negatively impacted by certain expensed exploration costs. These items are non-cash charges which will impact profitability but will have no impact on operating cash flow or EBITDA.
During the fourth quarter of 2013, exploration costs of MUSD 135 will be expensed. In Norway, the costs of drilling the Sverdrup prospect on PL330 and the Luno II south well on PL410, with associated costs for each licence and costs on two other licences which are likely to be relinquished, have been expensed in the quarter resulting in an after tax charge to the income statement of MUSD 30.
Net Debt and Increased Credit Facility
The net debt position of Lundin Petroleum at 31 December 2013 amounted to MUSD 1,182. Lundin Petroleum has increased its existing USD 2.5 billion credit facility to USD 4.0 billion with its existing group of 25 banks. The increased credit facility, which is subject to final documentation, has been secured on similar terms to the existing facility. It will further strengthen Lundin Petroleum’s funding position complementing the existing strong operating cash flow expected to be close to USD 1 billion in 2013. The company says that the credit facility will provide the necessary financial flexibility to fund the ongoing development, exploration and appraisal programmes including the Johan Sverdrup development.
Ashley Heppenstall, President and CEO of Lundin Petroleum comments: “We are very pleased to announce this increased financing and the continued strong support from our group of 25 international banks. The new facility together with our strong operating cash flow will allow us to fund the development and appraisal costs of our existing discoveries as well as to continue to pursue our aggressive ongoing exploration programme. We will also now have additional funding capacity to carry out additional developments or other potential opportunities should they arise.”
Press Release, January 21, 2014