- Strong free cash flow generation of MUSD 546 with an achieved oil price of
USD 38.07 per boe for the first nine months. - Third quarter production of 157.5 Mboepd and free cash flow of MUSD 164
- Full year production guidance increased from 157 Mboepd to 161 - 163 Mboepd and fourth quarter production targeting approximately 175 Mboepd
- Edvard Grieg reserves increased by 50 MMboe to 350 MMboe gross 2P ultimate recovery and plateau production extended by a further year to late 2023
- First nine months net carbon intensity for all assets of 2.7 kg CO2 per boe, below full year guidance of less than 4 kg CO2 per boe
- Acquired portfolio of interests in the
Barents Sea , including 10 percent working interest in high quality Wisting oil discovery and further interest in the Alta discovery fromIdemitsu Petroleum Norge AS (IPN) forUSD 1.80 per boe - High impact exploration programme commenced in
October 2020 , targeting more than 350 MMboe net unrisked resources from four wells Nick Walker , COO, appointed President and CEO andDaniel Fitzgerald appointed COO from1 January 2021
Financial summary
9 months | 3 months | 9 months | 3 months | 12 months | |
Production in Mboepd | 157.6 | 157.5 | 79.2 | 82.7 | 93.3 |
Revenue and other income in MUSD | 1,784.7 | 687.0 | 2,199.0 | 1,215.0 | 2,948.7 |
CFFO in MUSD | 1,251.3 | 353.2 | 985.3 | 230.8 | 1,378.2 |
Per share in USD | 4.40 | 1.24 | 3.02 | 0.76 | 4.36 |
EBITDA in MUSD1 | 1,431.8 | 515.6 | 1,222.9 | 411.3 | 1,918.4 |
Per share in USD1 | 5.04 | 1.81 | 3.75 | 1.36 | 6.07 |
Free cash flow in MUSD | 545.7 | 164.2 | 1,117.9 | 950.5 | 1,271.7 |
Per share in USD | 1.92 | 0.58 | 3.42 | 2.91 | 4.03 |
Net result in MUSD | 80.5 | 212.3 | 669.6 | 519.9 | 824.9 |
Per share in USD | 0.28 | 0.74 | 2.05 | 1.72 | 2.61 |
Adjusted net result in MUSD | 193.1 | 75.8 | 173.8 | 45.4 | 252.7 |
Per share in USD | 0.68 | 0.27 | 0.53 | 0.15 | 0.80 |
Net debt in MUSD | 3,706.8 | 3,706.8 | 4,054.9 | 4,054.9 | 4,006.7 |
1 Excludes the reported after tax accounting gain of MUSD 756.7 in 2019 on the divestment of a 2.6 percent working interest in the Johan Sverdrup project.
Comment from
“Following a volatile and unpredictable first half of 2020, the third quarter was one of financial and operational discipline and delivery, capitalising on our strict cost control and efficient production portfolio, driving free cashflow for the nine months period to MUSD 546 and further deleveraging of the Balance Sheet.
“Although production was curtailed from
“The Edvard Grieg field has exceeded expectations ever since it came on stream in 2015 and during the quarter we were able to reiterate its outperformance once again, with a significant reserves increase and a further extension of the plateau production. This really has been a Company making asset and I believe it will continue to surprise on the upside, especially when taking into account the extensive surrounding prospectivity, which will provide further organic growth opportunities well into the future. At Johan Sverdrup, performance has continued on or above expectations and we look forward to the results of the next Phase 1 oil capacity testing, which will occur during the fourth quarter of this year.
“I am also very pleased that we have restarted our 2020 exploration programme with the Polmak well in the
“On the decarbonisation strategy, we continue to progress the electrification of our key producing assets which will see over 95 percent of our production fully electrified by the time the Edvard Grieg platform is powered from shore by the end of 2022. We are also continuing to develop and invest in renewable projects with the aim to offset and replace all our net electricity consumption as well as continuing to invest in innovative solutions to further improve our overall production efficiency. Our ultimate objective is to be one of the first E&P companies to reach carbon neutrality from our operations. I’m pleased to say that we are well on track to achieve just that.
“On a personal note, I announced during the period, my intention to stand down as the President and CEO in
“I am standing down at a very exciting time for the Company; with its clear growth pathway, which is supported by one of the most efficient and lowest cost portfolios in the industry. One of my proudest achievements at
“The other vital factor I would like to highlight is the great team which has been created; this really is the highest quality team one can dream for, there is no better support network for Nick as he takes the helm in
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Forward-looking statements
Certain statements made and information contained herein constitute “forward-looking information” (within the meaning of applicable securities legislation). Such statements and information (together, “forward-looking statements”) relate to future events, including Lundin Energy’s future performance, business prospects or opportunities. Forward-looking statements include, but are not limited to, statements with respect to estimates of reserves and/or resources, future production levels, future capital expenditures and their allocation to exploration and development activities, future drilling and other exploration and development activities. Ultimate recovery of reserves or resources are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.
All statements other than statements of historical fact may be forward-looking statements. Statements concerning proven and probable reserves and resource estimates may also be deemed to constitute forward-looking statements and reflect conclusions that are based on certain assumptions that the reserves and resources can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions) are not statements of historical fact and may be “forward-looking statements”. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations and assumptions will prove to be correct and such forward-looking statements should not be relied upon. These statements speak only as on the date of the information and
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Lundin Energy - Q3 Report 2020 - V3 20201030en
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