Lundin earnings surge in Q1 on higher output, prices
Core earnings at Sweden's Lundin Energy surged to $1.02bn in the three months ending March 31, up from $581mn a year earlier, the company said in financial results posted on April 29.
The company also enjoyed a growth in free cash flow to $526mn from $406.7mn a year earlier, while its net income for the period came to $68.9mn, marking a reversal from a $310.6mn loss in Q1 2020. Lundin also reduced its net debt to $3.46bn by the end of March, compared with $3.91bn three months earlier.
Production surpassed the upper end of Lundin's guidance by 2%, averaging 182,900 barrels of oil equivalent/day in the three months, up from 140.7mn boe/d in the first quarter of 2020. Growth came on the back of higher contributions at the Equinor-led Johan Sverdrup oil project off Norway, in which Lundin holds a 20% interest. Gross output at the North Sea field is set to reach 535,000 barrels/day of oil in early May, sooner than expected, Lundin CEO Nick Walker said, adding that full-field capacity could exceed the current guidance of 720,000 boe/d.
Lundin also gained from increased flows at its operated Edvard Grieg field off Norway. The company announced earlier this week it had sold the first batch of oil to be certified by a third party as carbon neutral from Grieg. It aims to make all the oil it sells carbon neutral by 2025.
Lundin benefited further from a growth realised oil and gas prices to $59.94/boe in the first quarter, up from $38.35/boe a year earlier.
"I am pleased to note that performance in the first quarter of 2021 has been about delivery on all fronts, which combined with the oil price recovery, yielded record financial results," Walker commented. "And whilst the challenges of COVID-19 are still with us, we've continued to keep our main business activities on track."