Lundin Petroleum AB - Financial report for the six month period ended 30 June 2011

Six months ended 30 June 2011

  • Production of 32,300 boepd up 13% from the first six months 2010
  • Profit after tax of MUSD 130.3 up 526% from the first six months 2010
  • EBITDA of MUSD 505.3 up 96% from the first six months 2010
  • Operating cash flow of MUSD 390.3 up 52% from the first six months 2010
  • Net debt down to below MUSD 120 from MUSD 410 at year end
  • Five exploration discoveries, four in Norway and one in Malaysia
  • Ten Norwegian licences awarded in the 2010 Norwegian licensing round, six
    as operator
  • Operated licence awarded in Barents Sea in the 21st Norwegian licensing
    round
  • Operated Gurita block awarded in the Natuna Sea, offshore Indonesia

 

Second Quarter ended 30 June 2011

  • Production of 31,100 boepd
  • Profit after tax of MUSD 76.9
  • EBITDA of MUSD 266.9
  • Operating cash flow of MUSD 196.7
  • Three exploration discoveries - Skalle and Earb South discoveries in Norway
    and Tarap discovery in Malaysia
  • Appraisal well confirmed extension of the Avaldsnes discovery
  • New operated block PM307 awarded in Malaysia
  • Brynhild field plan of development (formerly called Nemo) submitted


 

Comments from C. Ashley Heppenstall, President and CEO

Lundin Petroleum achieved excellent results in the second quarter of 2011 with
increased profitability and cash flow. What is extremely pleasing however, is
the continued exploration success. I have always highlighted that the major
valuation creation for our company will be achieved through increasing our oil
and gas resources, and the best way to do that is through exploration.

Lundin Petroleum produced a net result for the first six months of MUSD 130.3.
The strong production coupled with oil prices achieved of well over USD 100 per
barrel resulted in operating cash flow of MUSD 390.3 and EBITDA of MUSD 505.3.
Despite our significant exploration and development investment programme net
debt during the first half of the year has reduced from MUSD 410 to below MUSD
120.

The positive exploration news has continued during the second quarter with
further discoveries at Skalle in PL438 in the Barents Sea, Earb South in PL505
in the northern Norwegian north Sea and Tarap in Block SB303 offshore East
Malaysia. In addition the results of the first Avaldsnes appraisal well were
extremely encouraging confirming the extension of the Avaldsnes field to the
south east. We have now achieved five discoveries from our first five
exploration wells this year following the Tellus and Caterpillar discoveries
during the first quarter.

Our business is continuing to grow and I am confident we will continue to
increase shareholder value. We are generating strong cash flow and
profitability from our existing production which is outperforming, our
development projects are proceeding well and our exploration success continues.

 

Listen to President & CEO Ashley Heppenstall and CFO Geoffrey Turbott comment
on the report at the audio cast presentation 3 August at 14.00 CET.

The presentation and slides will be available on www.lundin-petroleum.com
following the presentation. Please dial in to listen to the presentation on the
following telephone number: + 44 (0) 203 043 24 36.

To view the whole report see attached document.

Visit our website: www.lundin-petroleum.com

 

For further information, please contact:

C. Ashley Heppenstall,

President and CEO

Tel: +41 22 595 10 00

or

Maria Hamilton,

Head of Corporate Communications

Tel: +46 8 440 54 50

Tel: +41 79 63 53 641

 

DISCLOSURE

The above information has been made public in accordance with the Securities
Market Act and/or the Financial Instruments Trading Act. The information was
published at 7.30 CET on 3 August 2011.

 

FORWARD-LOOKING STATEMENTS

Certain statements made and information contained herein constitute
"forward-looking information" (within the meaning of applicable Canadian
securities legislation). Such statements and information (together,
"forward-looking statements") relate to future events, including the Company'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
unduly relied upon.  These statements speak only as on the date of this news
release and the Company does not intend, and does not assume any obligation, to
update these forward-looking statements, except as required by applicable laws.
These forward-looking statements involve risks and uncertainties relating to,
among other things, operational risks (including exploration and development
risks), productions costs, availability of drilling equipment and access,
reliance on key personnel, reserve estimates, health, safety and environmental
issues, legal risks and regulatory changes, competition, geopolitical risk,
financial risks. These risks and uncertainties are described in more detail
under the heading “Risk Factors” and elsewhere in the Company's 2010 annual
report.  Readers are cautioned that the foregoing list of risk factors should
not be construed as exhaustive. Actual results may differ materially from those
expressed or implied by such forward-looking statements. Forward-looking
statements included in this new release are expressly qualified by this
cautionary statement.

 

Resources

The recovery and production estimates of the Company's resources provided
herein are only estimates and there is no guarantee that the estimated
resources will be recovered or produced. Actual resources may be greater than
or less than the estimates provided here. There is no certainty that it will be
commercially viable for the Company to produce any portion of these resources.