Yahoo Finance Lundin Energy AB Report for the six months ended 30 June 2021
Record quarterly revenue of USD 1.3 billion with a realised oil price of USD 68 per barrel for the second quarter
Record free cash flow generation of MUSD 949 for the six month period, operating costs below guidance at USD 2.8 per boe and net debt reduced to below USD 3.2 billion
Completed USD 2 billion inaugural investment grade bond issuance
Record quarterly production above guidance at 190 Mboepd and full year production guidance increased to between 180 to 195 Mboepd
Johan Sverdrup Phase 2 planned offshore installations completed on schedule and full field production capacity increased to 755 Mbopd gross when Phase 2 comes on line in the fourth quarter of 2022
Key projects on track to deliver growth to over 200 Mboepd by 2023 and Kobra East/Gekko project sanctioned
Decarbonisation plans on track to achieve carbon neutrality from 2025, with around 60% of production already independently certified as carbon neutrally produced
1 Jan 2021- | 1 Apr 2021- | 1 Jan 2020- | 1 Apr 2020- | 1 Jan 2020- | |
Production in Mboepd | 186.4 | 189.8 | 157.7 | 162.9 | 164.5 |
Revenue and other income in MUSD | 2,384.7 | 1,272.8 | 1,097.7 | 402.5 | 2,564.4 |
CFFO in MUSD | 1,487.9 | 737.7 | 898.1 | 259.8 | 1,528.0 |
Per share in USD | 5.23 | 2.59 | 3.16 | 0.91 | 5.38 |
EBITDAX in MUSD | 2,078.0 | 1,059.6 | 916.2 | 335.1 | 2,140.2 |
Per share in USD | 7,31 | 3.73 | 3.23 | 1.18 | 7.53 |
Free cash flow in MUSD | 949.1 | 422.9 | 381.5 | -25.2 | 448.2 |
Per share in USD | 3.34 | 1.49 | 1.34 | -0.09 | 1.58 |
Net result in MUSD | 234.6 | 165.7 | -131.8 | 178.8 | 384.2 |
Per share in USD | 0.82 | 0.58 | -0.46 | 0.63 | 1.35 |
Adjusted net result in MUSD | 308.4 | 158.6 | 117.3 | 51.3 | 280.0 |
Per share in USD | 1.08 | 0.56 | 0.41 | 0.18 | 0.99 |
Net debt in MUSD | 3,189.4 | 3,189.4 | 3,796.1 | 3,796.1 | 3,911.5 |
Comment from Nick Walker, President and CEO of Lundin Energy:
“I’m pleased to report record production and financial results in the second quarter, backed by strong operating performance and the further strengthening of oil prices. Whilst certain challenges of the COVID-19 crisis will remain for the foreseeable future, we’ve normalised the management of these and continue to deliver on our main business priorities.
“Our world class producing assets continue to outperform with excellent production efficiency, along with industry leading low operating costs, delivering production in the quarter above the mid-point of the guidance range, leading us to increase our full year production guidance.
“Johan Sverdrup keeps on delivering above expectations. Phase 1 production ramped up to 535 Mbopd gross ahead of schedule and the full field production guidance has been lifted to 755 Mbopd. Phase 2 of the project is making good progress, with key offshore installations completed on schedule, and the project remains firmly on track for first oil in the fourth quarter of 2022.
“At the Greater Edvard Grieg Area we continue to deliver on the projects that support the long-term plateau extension, with excellent results so far from the Edvard Grieg infill well programme and the Solveig and Rolvsnes projects on track for first oil in the coming weeks. There’s lots more to come and we’ll see the results from two exciting exploration wells in the area in the second half of the year.
“Our key projects remain on track to deliver growth to over 200 Mboepd by 2023. We’ve a strong track record of growing resources and I’m confident that we can continue to sustain the business at these production levels. We have a pipeline of potential new projects, the first of which has just been sanctioned, and an exciting exploration programme, targeting material resources.
“The business delivered record financial results, with free cash flow of MUSD 949 for the first six months and net debt reduced to below USD 3.2 billion. This demonstrates the quality of our strong cash generative business, allowing us to fund growth, cover dividends and deleverage. On the back of attaining three investment grade credit ratings, the Company successfully completed a USD 2 billion inaugural bond issuance, the proceeds of which were used to pay down existing corporate credit facilities.
“We continue to make good progress on our decarbonisation plans, with around 60% of our production today carbon neutrally produced, and we’re on target for the business as a whole to be carbon neutral from 2025. We’ve already made several certified carbon neutrally produced crude sales, which I believe will become a key value differentiator for Lundin Energy.
“We’ve delivered record results in the first half of the year, our key business priorities are on track and looking forward I’m confident the business will continue to deliver resilient sustainable growth.”
Audiocast presentation
Listen to Nick Walker, President and CEO, and Teitur Poulsen, CFO, commenting on the report and the latest developments in Lundin Energy at a live audiocast held today, at 14:00 CEST. Follow the presentation live on www.lundin-energy.com or dial in using the following telephone numbers:
Sweden +46 8 56642651
UK +44 3333000804
United States +1 6319131422
Norway +47 23500243
Access Pin : 44982316
Link: https://edge.media-server.com/mmc/p/42amzuhx/ftagmax/aud
For further information, please contact:
Edward Westropp
VP Investor Relations
Tel: +41 22 595 10 14
edward.westropp@lundin-energy.com
Robert Eriksson
Head of Media Communications
Tel: +46 701 11 26 15
robert.eriksson@lundin-energy.com
This information is information that Lundin Energy AB is required to make public pursuant to the Securities Markets Act. The information was submitted for publication, through the contact persons set out above, at 07.30 CEST on 28 July 2021.
Lundin Energy is an experienced Nordic oil and gas company that explores for, develops and produces resources economically, efficiently and responsibly. We focus on value creation for our shareholders and wider stakeholders through three strategic pillars: Resilience, Sustainability and Growth. Our high quality, low cost assets mean we are resilient to oil price volatility, and our organic growth strategy, combined with our sustainable approach and commitment to decarbonisation, firmly establishes our leadership role in a lower carbon energy future. (Nasdaq Stockholm: LUNE). For more information, please visit us at www.lundin-energy.com or download our App www.myirapp.com/lundin
Forward-looking statements
Certain statements made and information contained herein constitute “forward-looking information” (within the meaning of applicable securities legislation). Such statements and information (together, “forward-looking statements”) relate to future events, including Lundin Energy’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 relied upon. These statements speak only as on the date of the information and Lundin Energy 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, reliance on key personnel, reserve estimates, health, safety and environmental issues, legal risks and regulatory changes, competition, geopolitical risk, and financial risks. These risks and uncertainties are described in more detail under the heading “Risk management” and elsewhere in Lundin Energy’s 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 are expressly qualified by this cautionary statement.
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