Lundin to Take Advantage of Norwegian Taxes
Swedish explorer Lundin Energy reported a positive Q2 result July 29, despite the oil price crash. Production was up two and a half times, at 162,900 barrels of oil equivalent (boe)/day, from last year's 76,100 boe/d, as the Johan Sverdrup field off Norway hit its stride.
Net income was almost double last year's $96.2mn, at $178.8mn but revenue was down about a fifth, falling from $499.9,m to $402.5mn. Pretax earnings (Ebitda) of $335.1mn were not far short of last year's $411.9mn.
CEO Alex Schneiter said: “The resilience Lundin Energy has shown in the face of the sharpest downturn in the history of the oil industry is a testament to the quality of the asset base, flexibility of our financial resources and operational excellence of the business and our people."
Johan Sverdrup reached its increased plateau rate of 470,000 b/day in April and another production well has been completed. The capacity of the facilities will be tested for further upside in the second half of the year.Reservoir performance continues to exceed expectations at Edvard Grieg and the company's analysis of seismic shows "clear potential for a further increase in reserves and an extension of the plateau production."
He said also the Norwegian tax changes had opened new possibilities: "The company has identified up to eight potential new projects targeting over 120mn boe of net resources, which could benefit from these tax incentives. We will be aiming to accelerate appraisal activities and field development studies for all of these potential projects, with the objective of maturing them to sanction prior to the deadline at the end of 2022." But the Balderbra gas discovery in PL894 in the Norwegian Sea will not be among them: a commercial development of the discovery is not considered viable. The data collected from the well will be used in the assessment of further prospectivity in the area.
The eight are: Solveig Phase 2/Segment D, Rolvsnes Full Field, Iving, Alta and the Alvheim Area projects of Kobra East/Gekko and Frosk. The plan is to accelerate appraisal activities and field development studies for all of these potential projects, with the aim of maturing them to a plan for development and operation while the incentives apply.