Lundin Petroleum Hits More Oil, Shares Surge

Norwegian Arctic discovery could be game changer; Lundin Petroleum shares rise 7 percent. Noreco, Det Norske shares also rise on news.

Swedish oil firm Lundin Petroleum has made a big oil and gas discovery in the Norwegian Arctic, sending its shares more than 7 percent higher and raising hopes that more oil could be found in the remote region.

Lundin Petroleum's find in the Alta prospect contains between 125 and 400 million barrels of oil equivalent, including 85 to 310 million barrels of oil, near Statoil's Snoehvit field and Lundin's own Gohta find, the firm said in a statement on Tuesday.

The discovery raises hopes that more oil could be found in a region where only a handful of oil fields have been discovered after several decades, and none have started production.

"(This) could be a game changer," Teodor Sveen Nilsen, an analyst at Swedbank, wrote in a note to clients.

"The volumes that are firmed up in the Alta discovery announced today could probably increase the commercial potential and impact the overall development of the Barents Sea positively."

Shares in Lundin Petroleum were up 7.2 percent at 0755 GMT, outperforming a European oil and gas index down 0.5 percent.

The news is also a rare exploration success this year, after Statoil found no oil at all this summer in the Norwegian Arctic, only gas, which is less profitable.

Italy's ENI is the closest to starting up an oil field in Norway's Arctic but its Goliat field, now seen starting next year, has been several times delayed and its budget has doubled.

"This discovery is another positive step in relation to proving up sufficient resources in the Loppa High area of the Barents Sea to enable the development of oil production infrastructure," Lundin CEO Ashley Heppenstall said.

The Alta and Gohta finds are near each other and together could contain close to half a billion barrels of oil equivalent, Swedbank's Nilsen said.

"Since the Alta discovery probably increases the commercial potential for the neighbouring Gohta discovery, the announcement of Alta should be positive for (Gohta partners) Det Norske and Noreco as well," he said.

Shares in Noreco were up 39 percent on Tuesday, while Det Norske's were up 1 percent.

Lundin Petroleum said it would drill three or four additional wells next year to find out if there is more oil and gas in the prospect.

The Alta well, lying in production license 609, is operated by Lundin Petroleum, which has a stake of 40 percent. Its partners are Japan's Idemitsu, with 30 percent, and RWE Dea, with 30 percent.

Reporting by Gwladys Fouche