Lundin to spin off non-Norwegian assets into new O&G company

Swedish oil company Lundin Petroleum has proposed to spin-off its assets in Malaysia, France and the Netherlands into a newly formed company called International Petroleum Corporation (IPC).

Lundin will then distribute the IPC shares, on a pro-rata basis, to Lundin Petroleum shareholders.

The company informed on Monday that, subject to certain conditions, all of the shares of IPC will be distributed to existing Lundin Petroleum shareholders on the basis of one IPC share for every three shares held in Lundin Petroleum.

IPC has applied to the Toronto Stock Exchange (TSX) to list its shares following the distribution on such exchange under the ticker IPCO, and also intends to list its shares on the NASDAQ Stockholm stock exchange.

Focus on Norway

Lundin said its Board of Directors and management has decided that, given ongoing developments and successes with the company’s assets in Norway, the IPC Assets, held within a separate and independent entity, would benefit from enhanced strategic flexibility and management focus, as well as be ascribed increased focus, visibility, and value from investors.

The Swedish operator’s management said that, with a renewed strategy and focus, IPC can be built into “a leading international independent oil and gas company, focused on the production and development of high quality assets around the world.”

Lundin stated that the management believes an independent IPC will be well positioned to pursue both organic and inorganic growth opportunities over time.

The significant cash flows generated from IPC’s long-lived assets will provide financial capacity to pursue this strategy, the company said.

The proposed spin-off of the IPC Assets will allow Lundin Petroleum’s management to solely focus on maximizing shareholder value from its Norwegian portfolio which has continuously grown in size and value since Lundin Petroleum entered Norway in 2004, with the Norwegian assets now accounting for 96 percent of Lundin Petroleum’s reserves and 88 percent of Lundin Petroleum’s 2017 production guidance.

Ian H. Lundin, Chairman of the Board of Lundin Petroleum, comments: “The spin-off of our international assets into IPC creates an exciting new company with a strong balance sheet and a proven Board and management team. Their focus will be to create value at a time in the cycle when the industry remains under-capitalised and multiple opportunities are available as companies rationalise their portfolios. With the spin-off, Lundin Petroleum will become fully focused on Norway, which I am convinced will serve to further crystallise the value of our high-growth asset portfolio in the North Sea and the southern Barents Sea.”

IPC will be led and directed primarily by current members of the Lundin Petroleum management team and Board of Directors. Mike Nicholson, current Chief Financial Officer of Lundin Petroleum, will serve as President and Chief Executive Officer and a Director of IPC.

Christophe Nerguararian, current Vice President Corporate Finance of Lundin Petroleum, will serve as Chief Financial Officer of IPC. Jeffrey Fountain, current Vice President Legal at Lundin Petroleum, will serve as General Counsel of IPC. Lukas H. Lundin, who is a director of Lundin Petroleum, will serve as Chairman of the Board of Directors of IPC. IPC’s other Directors will include Ashley Heppenstall, Chris Bruijnzeels, Torstein Sanness and Donald Charter.

Management changes at Lundin Petroleum

Teitur Poulsen, current Vice President Corporate Planning and Investor Relations at Lundin Petroleum will replace Mike Nicholson as Chief Financial Officer of Lundin Petroleum. Alex Budden will assume the role of Vice President Communications and Investor Relations for Lundin Petroleum. Alex Budden is joining Lundin Petroleum from Africa Oil where he held the position of Vice President External Relations. Henrika Frykman, current Senior Legal Counsel at Lundin Petroleum, will assume the role of Vice President Legal at Lundin Petroleum replacing Jeffrey Fountain. The other senior positions within Lundin Petroleum will remain unchanged.