July 31, 2018 / 7:42 AM / 2 years ago

UPDATE 1-Lundin Petroleum Q2 core profit beats expectations, costs fall

(Adds quotes, details, share price)

OSLO, July 31 (Reuters) - Swedish independent oil firm Lundin Petroleum on Tuesday revised up its full-year production guidance after second-quarter results beat market expectations on strong output, record-low costs and higher oil prices.

Lundin, 20 percent owned by Norway’s Equinor, has confirmed its intention to pay at least $350 million in dividends in 2019, after an initial dividend of $153 million paid in May.

Its second-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) rose to $508 million, from $334 million a year earlier, topping the operating profit of $495 million expected by analysts in a Reuters survey.

Lundin shares were up 5 percent by 0709 GMT.

Quarterly production stood at 81,200 barrels of oil equivalent per day (boepd) compared with 82,100 boepd in the first quarter.

“This strong performance has led us to increase our production guidance for the full year to between 78,000 and 82,000 boepd and reduce the operating cost guidance to below $4 per barrel,” Lundin Chief Executive Alex Schneiter said.

Its previous full-year production and operating cost guidance was 74,000-82,000 boepd and $4.15 per boe, respectively.

The company kept its exploration spending guidance unchanged at $300 million, with the drilling programme including 11 exploration and four appraisal wells in 2018.

The initial results of an extended production test at its Arctic Alta discovery in the Barents Sea looked “promising”. Its recent Lille Prinsen discovery northeast of Ivar Aaasen field was expected to be economic to develop, with more drilling planned in 2019.

Alta, now estimated to hold 115-390 million boe, could become another Arctic development off Norway after Equinor’s Johan Castberg field.

Schneiter also said he saw the potential to double total resources produced through the facilities at its Edvard Grieg field in the North Sea, including additions from nearby developments.

In August, the company expects appraisal results from the nearby Rolvsnes discovery.

The company, a partner in Norway’s giant Johan Sverdrup oilfield development, said the project was “firmly on track” to deliver first oil in late 2019.

Lundin’s operating costs in the second quarter declined to a record-low $3.3 per barrel, partly as a result of a decision to terminate production at the Brynhild field, the company added. (Reporting by Nerijus Adomaitis and Ole Petter Skonnord; Editing by Dale Hudson)

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