Lundin Raises Output Guidance Despite Arctic Setback
Sweden's Lundin Petroleum lifted its full year production guidance on Wednesday and said it still expected to find more oil in the Barents Sea despite a recent setback.
Lundin, a partner in Norway's giant Johan Sverdrup field, reported $355.8 million in earnings before interest, tax, depreciation and amortisation (EBITDA), above the forecast of $325 million in a Reuters survey of analysts.
Lundin said it was able to increase production capacity at its Edvard Grieg platform to 145,000 barrels of oil equivalents per day (boepd) from its designed capacity of 126,000.
"This outstanding performance has led us to revise Lundin Petroleum's full year production guidance to between 75,000 and 85,000 boepd, and to reduce our cash operating cost guidance for the full year to $4.90 per barrel," it said in a statement.
The previous guidance was 70,000-80,000 boepd and $5.30 per barrel respectively, excluding output from Lundin's assets outside Norway that were spun off to International Petroleum Corporation (IPC) in April.
A recent appraisal well at Edvard Grieg's southwestern flank confirmed the resource upside of gross 10–30 million boe.
Lundin's Chief Executive Alex Schneiter said it was "fair to assume" that Edvard Grieg plateau production would be extended beyond the original two-year period due to better reservoir performance.
Lundin has a 65 percent stake in the Edvard Grieg field, Austria's OMV 20 percent and Germany's Wintershall , a unit of chemicals giant BASF, 15 percent.
ARCTIC SETBACK
Separately, Lundin said it would have to reduce its previous resource estimate of between 91 million and 184 million boe at the Gohta prospect in the Barents Sea after the latest appraisal well turned out to be dry.
The setback, however, would not jeopardise the development of the nearby Alta find, estimated to contain 125-400 million boe, added the firm.
"Clearly there will be a reduction on Gohta, but Alta is the main discovery where we have been focusing the development (plans)," Schneiter said.
Lundin plans to drill an appraisal well at its Alta prospect later this year, and Schneiter confirmed on Wednesday plans to drill two more exploration wells near the Filicudi 35-100 million boe discovery made in February.
It is also a partner in the Korpfjell prospect in the Barents Sea near the border with Russia, which Statoil (STO) plans to drill this summer.
Shares in Lundin were down 0.77 percent at 1048 GMT, roughly in line with a European oil and gas index down 0.41 percent.
Reporting by Gwladys Fouche and Nerijus Adomaitis
