Lundin returns to profit as higher output boosts revenues
- Business & Finance
Swedish oil company Lundin Petroleum went from red to black ink for the second quarter 2017 after more than doubling its revenues helped by bigger output. Lundin also revised its full year production guidance for the second time.
According to its financial report on Wednesday, the company’s net result for the second quarter of the year amounted to $145.6 million, including a net foreign exchange gain of $118.8 million. This compares to a loss of $72.1 million and a net foreign exchange loss of $78.1 million in the prior-year second quarter.
During this year’s second quarter Lundin more than doubled its revenues which totaled $464.6 million compared to $209.7 million in the corresponding period of 2016.
Lundin’s production for the period exceeded its upper end guidance amounting to 89.5 Mboepd, versus 50.6 Mboepd in the prior-year period. According to Lundin CEO, Alex Schneiter, this was driven by strong performance from the company’s operated Edvard Grieg field as well as from the non-operated Alvheim field.
Schneiter further said: “Edvard Grieg in particular continues to outperform at both the subsurface and facilities levels and I expect a reserves increase by year end. This performance has led us to revise, for the second time this year, Lundin Petroleum’s full year guidance to a new increased production level of between 80 and 85 Mboepd and cash operating costs down to $4.60 per barrel from the previous guidance of $4.90 per barrel.”
It is worth noting that Lundin’s previous guidance from May was 75–85 Mboepd and the original guidance from January was 70–80 Mboepd.
Schneiter added that Lundin Petroleum is firmly on track to meet the production growth targets for 2017 and beyond.
“And even though the oil industry continues to face challenging times, marked by low oil prices and uncertainties, I am confident that we will continue to successfully steer the company through these stormy seas and remain as one of the leading independent oil and gas companies in Europe, with significant future growth potential,” the CEO said.
It is also worth noting that during the quarter, on April 24, Lundin Petroleum completed the spin-off of its assets in Malaysia, France and the Netherlands into International Petroleum Corporation (IPC) by distributing the IPC shares, on a pro-rata basis, to Lundin Petroleum shareholders.
The results of the IPC business are included in the Lundin Petroleum financial statements until the completion of the spin-off and are shown as discontinued operations.
At the end of the first half of the year, the oil company’s net debt was $4.081 billion compared to $4.075 at the end of 2016.
Offshore Energy Today Staff