Lundin deepens its loss in 4Q

Lundin Petroleum, a Swedish oil and gas exploration and production company, has seen its loss deepen in the fourth quarter of 2015 when compared to the fourth quarter of 2014. 

Lundin on Wednesday posted a net loss of $493.7 million for the 4Q 2015, including a net foreign exchange loss of $129.2 million and an after tax impairment charge of $296.3 million, as opposed to the net loss of $437 million in 4Q 2014.

Lundin’s revenues for the quarter were slightly higher when compared to the same period in 2014, and amounted to $136 million, versus $135.2 million in the 4Q 2014.

The company’s production for the quarter amounted to 38.3 Mboepd, versus 22.0 Mboepd in the 4Q 2014.

Alex Schneiter, Lundin President and CEO, said: “We continue to witness extreme volatility in oil prices with falls to levels not seen in over a decade and it is clear to me that the battle for market share is approaching its final conclusion.”

Schneiter continued: “Edvard Grieg commenced production on 28 November 2015 and since then has achieved a remarkable average uptime of 95 percent. This excellent performance has allowed us to achieve spot production rates in excess of 90,000 boepd when our third Edvard Grieg production well was brought on stream.

“For 2016 our production guidance is between 60,000 and 70,000 boepd. This equates to a doubling of 2015 levels.”

On Tuesday, Lundin entered into a committed seven-year senior secured revolving credit facility of up to $5 billion, with an initial committed amount of $4.3 billion. Lundin noted that the facility would provide the financial flexibility to fund the company’s interest in the Johan Sverdrup project in Norway.

Regarding the Johan Sverdrup project, Schneiter said: “The execution of the Johan Sverdrup Phase 1 development is going according to plan. Johan Sverdrup is ideally positioned to take the full benefit of this challenging environment and corresponding low oil price. I anticipate we will see further cost savings in Johan Sverdrup which will further improve the economics of this world class project.”

Focus on Barents Sea

As for the 2016 outlook, Schneiter said: “In 2016 our strategy remains unchanged and our main focus will be the southern Barents Sea where we will be active on both fronts; exploration and appraisal with a particular focus on the existing Alta discovery area. Further exploration drilling will also be taking place on the Utsira High and in the Sabah area in Malaysia.

“Our 2016 objectives are very clear. We will maximise our existing operational efficiency to establish a solid foundation of strong cash flow for the next growth phase of the Company. We will continue to work very hard to maintain a robust balance sheet and strong access to liquidity. We will continue to play a proactive role towards the execution of the Johan Sverdrup field. Finally, our organic growth strategy remains intact and we will continue to explore for new resources.”

Offshore Energy Today Staff