- Despite very low oil prices, free cash flow was positive from the oil and gas operations in second quarter and over MUSD 380 free cash flow for the six months period
- Record quarterly production of 162.9 Mboepd in the second quarter
- Accelerated ramp up and increased phase 1 plateau production at Johan Sverdrup; phase 1 capacity of 470 Mbopd to be tested for further upside, during second half of this year
- Significant increase in liquidity during the period from cost reductions and phasing, tax incentives and additional debt facilities
- Continued out performance at Edvard Grieg; increase in reserves and extension of plateau production anticipated
- Eight potential projects to be accelerated due to recent Norwegian tax incentives, targeting over 120 MMboe of net resources
- Awarded credit rating of ‘BBB-‘ with stable outlook by S&P Global, confirming strength of liquidity and credit position
Financial summary
6 months | 3 months | 6 months | 3 months | 12 months | |
Production in Mboepd | 157.7 | 162.9 | 77.5 | 76.1 | 93.3 |
Revenue and other income in MUSD | 1,097.7 | 402.5 | 984.0 | 499.9 | 2,948.7 |
CFFO in MUSD | 898.1 | 259.8 | 754.5 | 408.7 | 1,378.2 |
Per share in USD | 3.16 | 0.91 | 2.23 | 1.21 | 4.36 |
EBITDA in MUSD1 | 916.2 | 335.1 | 811.6 | 411.9 | 1,918.4 |
Per share in USD1 | 3.23 | 1.18 | 2.40 | 1.22 | 6.07 |
Free cash flow in MUSD2 | 381.5 | -25.2 | 167.4 | 71.6 | 1,271.7 |
Per share in USD2 | 1.34 | -0.09 | 0.49 | 0.21 | 4.03 |
Net result in MUSD | -131.8 | 178.8 | 149.7 | 96.2 | 824.9 |
Per share in USD | -0.46 | 0.63 | 0.44 | 0.28 | 2.61 |
Adjusted net result in MUSD | 117.3 | 51.3 | 128.4 | 69.5 | 252.7 |
Per share in USD | 0.41 | 0.18 | 0.38 | 0.21 | 0.80 |
Net debt in MUSD | 3,796.1 | 3,796.1 | 3,359.3 | 3,359.3 | 4,006.7 |
1 Excludes the reported after tax accounting gain of MUSD 756.7 in 2019 on the divestment of a 2.6 percent working interest in the Johan Sverdrup project.
2 Includes renewable energy business. Free cash flow for second quarter 2020 excluding renewable energy business was MUSD 19.5 positive.
Comment from
“The resilience
“The risk posed by coronavirus presented a unique challenge to the offshore industry and following swift and effective action, any potential threat was mitigated and all of our staff have come through the period safely and we saw no disruptions to production. As we enter the second half of the year, all offshore facilities have returned to normal manning levels and the projects are progressing on plan.
“Although faced with an uncertain market backdrop, operationally
“The Norwegian government also played an active role during the period; establishing a tax incentive package which as well as improving near term liquidity also significantly improves future project economics assuming plan of development(s) are submitted prior to end of 2022. The Company has identified up to eight potential new projects targeting over 120 MMboe 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.
“As well as maintaining a very low operating cost base during the period of
“The second half of the year will see us resuming exploration activities in the fourth quarter, as well as continuing to focus on maintaining strict capital discipline and opportunistically looking to take advantage of this low point in the cycle to complement our portfolio. It is times like these which show the true mettle of a business and I would like to take this opportunity to thank all staff for their hard work and determination, as we not only successfully traded through this difficult period but are indeed in a stronger and fitter position. As the founder of the
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This is information that
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
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Lundin Energy - Q2 Report 2020 - V3 20200729en
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