Additional Information
Market: TSX
Sector: Oil & Gas Exploration & Production
EPIC: LUP
Latest Price: 20.06  (-0.96% Descending)
52-week High: 22.97
52-week Low: 18.51
Market Cap: 6,238.52M
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Lundin Petroleum AB
www.lundin-petroleum.com/eng
Lundin Petroleum AB is a Sweden-based company active within the oil and gas industry. The Company, operating globally, is engaged in the production and exploration of oil and natural gas. It has operations in 11 countries focused on three core areas, including Europe, Russia and South East Asia.

Lundin Petroleum says Q4 profit to be hit by millions in special charges

21st Jan 2013, 9:45 am by Deborah Bacal
Poor performance from the Gaupe field in offshore Norway, from where the company started production last March, led to reserves being reduced based on the assumption that no further production wells will be drilled, resulting in an impairment charge of US$206 million. Poor performance from the Gaupe field in offshore Norway, from where the company started production last March, led to reserves being reduced based on the assumption that no further production wells will be drilled, resulting in an impairment charge of US$206 million.

Lundin Petroleum (TSE:LUP)(OMX:LUPE) warned Monday that its fourth quarter profit will be impacted by certain exploration costs and asset impairment charges. 

The Swedish oil and gas explorer and producer said that the non-cash charges, while biting into profitability, will not impact on operating cash flow or earnings before interest, taxes, depreciation and amortization (EBITDA). 

In the fourth quarter, the company will expense exploration costs of US$135 million, from costs of drilling the Albert prospect in Norway, along with the Juksa prospect. In Malaysia, costs of drilling the Merawan Batu prospect weighed, as well as associated license costs on PM308B. 

Meanwhile, poor performance from the Gaupe field in offshore Norway, from where the company started production last March, led to reserves being reduced based on the assumption that no further production wells will be drilled, resulting in an impairment charge of US$206 million. 

This charge, was however, somewhat offset by a release of deferred taxes of  US$161 million, resulting in a net charge to its income statement of US$45 million. 

Poor reservoir performance from Lundin's onshore Russian assets also led to an impairment charge of US$32 million, resulting in a net charge of US$28 million after deferred taxes, the company said. 

During the fourth quarter, the company saw a production rate of 35,900 barrels of oil equivalent per day (boepd) resulting in full year output of 35,700 boepd. The average Brent oil price for the quarter was US$111.67 per barrel.

Lundin's net debt at the end of the year stood at US$335 million, with the company saying that together with its US$2.5 billion credit facility, it is well placed to meet the funding requirements of its ongoing development and exploration program. 

The oil and gas producer's assets are mainly located in Europe and South East Asia. It has proven and probable reserves of 211 million barrels of oil equivalent (MMboe).

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