Lundin Reports Barents Duster

Swedish independent Lundin Petroleum reported a dry appraisal well inside the Arctic Circle on May 3 with its 1Q results.

Lundin's net 1Q profit from continuing operations declined to $59.2mn, down almost two-thirds from its 1Q2016 profit of $165.7mn. This follows its spin-off of non-Norwegian (mainly Malaysian) assets into International Petroleum Corporation (IPC), completed in April. 

The decline in Lundin's 1Q profit however was chiefly due to a largely non-cash foreign exchange gain in 1Q2016.

In contrast, net production from continuing Norway assets was up 72% year on year to 82,600 barrels of oil equivalent/day, of which 8,000 boe/d was gas, driven by a more than doubling year on year in Edvard Grieg oil and gas production where a fifth production well came onstream in 1Q 2017. As a result, Lundin Petroleum now has increased its full year 2017 production guidance to between 75,000 to 85,000 boe/d (from 70-80,000 boe/d).

Lundin though reported a Gohta disappointing appraisal well in the southern Barents Sea, 4 km to the north of the original discovery, with only "hydrocarbon shows observed". It acknowledged: “The resource estimate for the discovery will be reduced as a consequence of this well."

The original Gohta find was between 63mn and 132mn bbls of recoverable oil and between 5bn and 8bn m³ of recoverable gas, said the Norwegian Petroleum Directorate May 3, also confirming this will now be reduced. Gohta is in PL492 operated by Lundin with 40%; Aker BP holds the other 60%.

Lundin said it will next drill a further appraisal well 15km to the northeast, still on PL609 which it also operates, but near the Alta oil and gas discovery.

Mark Smedley