October 31, 2019 / 7:20 AM / 9 months ago

UPDATE 2-Oil firm Lundin Petroleum's Q3 beats forecast

* Lundin Q3 core earnings fall less than expected

* Raises 2019 production guidance, sees lower capex

* CEO: Sverdrup field output may ramp up faster

* Oil firm to invest in hydropower project in Norway

* Shares pull back from record high (Adds CEO, CFO, details)

By Nerijus Adomaitis

OSLO, Oct 31 (Reuters) - Swedish oil firm Lundin Petroleum , a partner in Norway’s giant Sverdrup oilfield, posted a smaller-than-expected decline in third-quarter earnings on Thursday, while raising output forecasts and cutting capital spending guidance.

Earnings before interest, tax, depreciation and amortisation (EBITDA) fell to $411 million in the third quarter from $504 million a year earlier as crude prices declined, beating a mean estimate of $378 million in a Refinitiv poll.

The company’s shares hit an all-time high in early trade but later pulled back to trade down 2.9% by 1000 GMT as investors pocketed recent gains amid a broad decline in energy stocks.

“It’s just profit taking,” Carnegie analyst Oddvar Bjoergan said of the share price decline, adding that the third-quarter report showed Lundin was doing well.

Thanks to the earlier than expected startup of the Sverdrup field, the company now predicts 2019 output to average 90,000-95,000 barrels of oil equivalents per day (boepd), the upper end of its previous range of 75,000-95,000 boepd.

Sverdrup output could also rise more quickly than initially predicted, potentially hitting the planned first-phase plateau of 440,000 boepd ahead of an official summer 2020 schedule, Lundin said.

“Yes, it is possible,” Chief Executive Alex Schneiter told analysts on a call, when asked about reaching the production target earlier.

Sverdrup, in which Lundin holds a 20% stake, started operating on Oct. 5, about a month earlier than previously expected, and is already producing more than 200,000 boepd.

Schneiter said he expected the field to reach 80% of its Phase 1 capacity by the end of November, with a new production well to be drilled towards the end of December.

Lundin also reduced its 2019 capital spending target to $730 million from $785 million after pushing some project development costs into 2020 and making savings from a weaker Norwegian crown.

The company lifted proven and probable reserve estimates for its Edvard Grieg field to over 300 million barrels of oil equivalent after approving a new infill drilling program in 2020, compared to original estimate of 186 million boe.

The oil company said it has decided to invest around $60 million in a hydropower project in Norway over 2019-2021, partly to hedge against price fluctuations in the Nordic power market.

Lundin reported free cash flow of $1.1 billion during the first nine months of this year or $3.4 per share, including the cash flow from the sale of a 2.6% stake in Sverdrup to Equinor.

Teitur Poulsen, Lundin’s Chief Financial Officer, said the free cash generation provided “ample room” to increase the dividend going forward, without elaborating. (Editing by Terje Solsvik; Editing by Kirsten Donovan)

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