Lundin Petroleum in 3Q net loss

Lundin Petroleum in 3Q net loss
Edvard Grieg bridge linked to Safe Boreas flotel

Swedish oil company Lundin Petroleum has reported a net loss of $201.6 million for the third quarter of 2015.

This is a drop from 4.3 million earned in the corresponding quarter of 2014. Revenue fell to $154 million, down from $189.2 million a year ago.

Production rose to an average of 36.000 boepd, up from 21.400 boepd a year ago. The company said it was on track to meet its key objective of achieving an exit rate of 75,000 barrels of oil equivalents per day (boepd) by the time Edvard Grieg comes on stream towards the year end. Also, Lundin said it remained on target of meeting its revised production forecast of 32,000 boepd for the full year.

In his first letter to shareholders as the new President and CEO, Alex Schneiter, said Lundin’s strategy of focusing on organic growth would remain unchanged.

“I firmly believe in our continued ability to find significant resources at low unit finding costs. In doing so I am confident that we will continue to generate significant value for all our stakeholders,” Schneiter said.

Schneiter said that there are some benefits for the oil companies when the commodities prices plunge — oilfield services sector lowers its prices too.

“We are embracing the low oil price environment as a time of opportunity when it comes to our operations. We will continue our efforts to improve our operational and capital efficiency and reduce costs. Cost levels are reducing and we see clear evidence of that on all fronts; exploration, appraisal, development and production costs.”

Schneiter highlighted the giant Johan Sverdrup development in the Norwegian sector of the North Sea as an example of the overall cost cutting in the supply sector. Namely, Statoil, the operator of the project recently announced cost reductions of seven percent for the field development.

The Lundin CEO said: “This is an opportune time to tender and award large contracts with the deflationary environment benefitting the Johan Sverdrup project at a time where all major contracts are or are about to be awarded, and I anticipate further cost reductions going forward.”

He added: “Furthermore, this is the perfect time to define our drilling strategy for the years ahead and capitalise on significantly lower rig rates. Lundin Petroleum is very well positioned to benefit from this from early next year as we will have no committed rigs on contract for our exploration and appraisal activities. “

He said the company’s offshore exploration efforts in the upcoming period would focus on the company’s core areas, Norway and Malaysia. In 2016, the company will be active in three areas; the Utsira High and the southern Barents Sea in Norway and the Sabah province offshore Malaysia.

Offshore Energy Today Staff