January 28, 2016 - 4:28 PM EST
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Lundin Petroleum announces its 2016 budget and updated reserves and contingent resources

Stockholm
, 2016-01-29 08:07 CET (GLOBE NEWSWIRE) --


Lundin Petroleum AB (Lundin Petroleum) is pleased to announce its 2016
development, appraisal and exploration budget which totals USD 1.08 billion and
represents a 26 percent decrease on 2015 capital expenditure. Lundin Petroleum
is also pleased to announce that as at 31 December 2015 its proven and probable
working interest reserves ("reserves") are 685 million barrels of oil
equivalents (MMboe) and its best estimate contingent resources ("contingent
resources") are 386 MMboe. The production guidance for 2016 is between 60,000
to 70,000 barrels of oil equivalents per day (boepd). 

Reserves, contingent resources and 2016 production guidance
Lundin Petroleum's reserves as at 31 December 2015 are 685 MMboe 12  and
represent an increase of 292 percent compared to the reserves position a year
earlier. 

End 2014                  187.5 
- Produced                -11.8 
- Sales / + Acquisitions  -0.8  
+ revisions               +510.4
End 2015                  685.3 
                                
Reserves increase         292%  
Reserves replacement      4329% 


The main reason for the increase in reserves as at year end 2015 relates to
Johan Sverdrup resources being included as reserves for the first time. There
are further reserves increases from the successful appraisal of the Edvard
Grieg field during 2015 as well as positive reserves revisions to the Volund
field partially offset by a negative reserves revision on the Brynhild field.
Reserves as at 31 December 2015 assume closure of the Singa sale in 
Indonesia
.
95 percent of the reserves relate to 
Norway
 and oil accounts for 96 percent of
Lundin Petroleum's reserves. 

The reserves are based upon a third party independent audit conducted by ERCE.
The reserves have been calculated using 2007 Petroleum Resources Management
System (SPE PRMS), Guidelines of the Society of Petroleum Engineers (SPE),
World Petroleum Congress (WPC), American Association of Petroleum Geologists
(AAPG) and Society of Petroleum Evaluation Engineers (SPEE). 

Lundin Petroleum's production guidance for 2016 is between 60,000 to 70,000
boepd with approximately 80 percent of the production contribution relating to
production from 
Norway
. 

The contingent resources as at 31 December 2015 are 386 MMboe. The contingent
resource additions during 2015 relate to the Luno II North and Rolvsnes in the
Utsira High in the Norwegian North Sea. Lundin Petroleum divested certain of
its contingent resources during 2015 with the farm-out of a 20 percent working
interest in the gas discoveries in SB303 offshore east 
Malaysia
, the farm-out
of a 75 percent working interest in SE Tor gas discovery offshore 
Norway
 and
the sale of the 
Indonesia
 business. 

Development Budget

The 2016 expenditure on development projects is budgeted at USD 935 million
which represents a 12 percent decrease on 2015 development expenditure. 

In excess of 95 percent of the 2016 budgeted development expenditure,
corresponding to USD 905 million, relates to development projects in 
Norway
with the majority of the balance being spent on the Bertam development in
Malaysia
. Most of the expenditure in 
Norway
 relates to the ongoing development
activity on Phase 1 for Johan Sverdrup and continued development drilling at
Edvard Grieg with further infill wells on Alvheim also budgeted for. The
development budget in 
Malaysia
 relates to one additional development well being
drilled on the Bertam oil field. 

1. The Edvard Grieg field (WI 50% and operated by Lundin Petroleum) commenced
production on 28 November 2015 and is currently producing ahead of expectations
from three wells with well productivity potential in excess of 85,000 boepd
achieved at the time the third well was brought onstream. The 2016 net
expenditure is budgeted at USD 130 million and relates substantially to the
drilling of producing and water injection wells. The development drilling
programme includes 14 production and water injection wells and is expected to
be completed in early 2018. 

2. The 2016 net expenditure for the non-operated Johan Sverdrup field (WI
22.6%) is budgeted at USD 705 million. Construction of the steel jacket for the
riser platform and the topside for the drilling platform commenced last year.
The construction of the other three steel jackets and the three remaining
topsides will commence during 2016. The riser and drilling platforms are
scheduled to be installed in 2018 and the processing and living quarter
platforms are scheduled to be installed in 2019. The pre-drilling of
development wells will commence during the second quarter 2016 and is expected
to continue until 2019 when 17 production and water injection wells will have
been completed. The project is on schedule for first oil in the fourth quarter
of 2019 and given the current market environment and optimisation efforts, the
project is achieving significant cost reductions compared to the PDO estimate. 

3. Net budgeted expenditure for 2016 on the non-operated Alvheim and Volund
fields (WI 15% and WI 35% respectively) is USD 55 million which involves the
completion of one currently drilling infill well on Alvheim and the drilling of
two further infill wells in relation to the Viper/Kobra development within the
Alvheim field. 

4. The 2016 net expenditure for the non-operated Ivar Aasen field (WI 1.385%)
is budgeted at approximately USD 15 million and involves the completion and
installation of the Ivar Aasen topside as well as continued development
drilling. 

5. The Bertam oil field in 
Malaysia
 (WI 75% and operated by Lundin Petroleum)
commenced production on 5 April 2015 and is currently producing from 11
production wells. The 2016 net expenditure is budgeted at USD 30 million and
involves the drilling of a long-reach horizontal production well from the
Bertam wellhead platform targeting additional resources in the northeast of the
field as identified by the Bertam-3 appraisal well which was drilled late in
2015. 

6. Net budgeted expenditure for 2016 on the continental European business units
in 
France
 and 
the Netherlands
 amounts to approximately USD 5 million which
involves the drilling of two offshore development wells in 
the Netherlands
 as
well as certain investment in facilities and pipelines in 
France
 and 
the Netherlands
. 

Exploration Activity

The 2016 budgeted expenditure on exploration and appraisal activity is USD 145
million which is a 64 percent decrease on 2015 exploration and appraisal
expenditure. 

The pre-tax exploration budget for 2016 is USD 105 million with a focus on
Norway
, which accounts for approximately 70 percent of the budget. The
exploration programme involves the drilling of four exploration wells in 
Norway
and 
Malaysia
 in addition to re-entering the Neiden exploration well in the
southern Barents Sea. Two non-operated onshore wells in 
the Netherlands
 will
also be drilled during 2016. 

1. 
Norway

The pre-tax budgeted net exploration expenditure for 2016 is approximately USD
75 million. Two wells will be drilled in 
Norway
 during 2016. The Fosen prospect
in PL544 (WI 40%), which is currently drilling, and the Filicudi prospect in
PL533 (WI 35%) which is still being considered by the partnership and would be
drilled during the second half of 2016. The 2016 budget also includes
re-entering the Neiden well drilled in PL609 (WI 40%) where, due to
time-constraints, the main reservoir target was not reached during the 2015
drilling operations. Including the Neiden re-entry the 2016 drilling campaign
is targeting net unrisked prospective resources of 250 MMboe. Lundin Petroleum
has limited remaining exploration and appraisal drilling rig commitments and is
therefore able to take advantage of the current favourable market conditions
for drilling rigs. The Company is currently tendering for a rig for its
southern Barents Sea drilling programme, with an anticipated start of drilling
operations mid-year 2016. 

2. 
Malaysia

The budgeted net exploration expenditure for 2016 is USD 30 million involving
the drilling of two operated exploration wells on SB307/308 (WI 85%) targeting
the Bambazon and Maligan prospects. The Bambazon well has already been
completed and the Maligan well is ongoing targeting net unrisked prospective
resources of 94 MMboe. 

Appraisal Activity

The pre-tax appraisal budget for 2016 is approximately USD 40 million, entirely
allocated to 
Norway
. The appraisal programme involves the re-entry of the
successful 2015 Alta-3 appraisal well in PL609 (WI 40%) in the southern Barents
Sea to deepen the well and to perform a production test. 

The 2016 appraisal budget also includes expenditure on field development
studies for Phase 2 of the Johan Sverdrup field (WI 22.6%), development studies
for the Luno II discovery in PL359 (WI 50%) and a development feasibility study
for Alta and Gohta in PL609. 

Alex Schneiter, President & CEO of Lundin Petroleum comments:
"2016 will be a transformational year for Lundin Petroleum with production
guidance being between 60,000 and 70,000 boepd. Our capital expenditure will
focus on continued development drilling on Edvard Grieg and on the execution of
Phase 1 of Johan Sverdrup. Both projects will drive significant production
growth in the coming years. I am particularly pleased with the Edvard Grieg
performance to date and with the cost reductions we have seen on the Johan
Sverdrup project which I expect to continue through 2016 as we finalise the
concept selection for Phase 2. 

Our 2016 production guidance is about double the average rate achieved in 2015
and will be dominated by the Edvard Grieg performance which so far, I am
pleased to say, has outperformed both in terms of facility uptime and well
productivity potential. Gross rates achieved have been in excess of 85,000
boepd with three wells at 100 percent facility uptime and this excellent rate
provides us with a good indication of the field's potential in terms of
production capacity and gives me confidence in reaching the plateau rate of
100,000 boepd by the time the first two water injection wells are completed and
the fourth production well comes onstream in the second half of 2016. 

Our exploration and appraisal budget will remain focused on our three key
growth areas: the southern Barents Sea and the Utsira High in 
Norway
 and the
Sabah
 area in 
Malaysia
. Lundin Petroleum is well positioned to take full
advantage of significantly reduced rig rates. More than ever in this
challenging oil price environment, a strong focus on operational efficiency,
production performance and cost discipline will be in the forefront of our
minds. This will be key in maintaining a healthy balance sheet. I am convinced
that Lundin Petroleum will come out of this latest cycle with a growth story
stronger than ever." 



1 BOEs may be misleading, particularly if used in isolation. A BOE conversion
ratio of 6 Mcf : 1 Bbl is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead. 

2 The reserves were calculated using a Brent oil price in real 2016 terms of
USD 50 per barrel in 2016, 62 in 2017, 66 in 2018, 72 in 2019, and 75
thereafter. 



Lundin Petroleum is a Swedish independent oil and gas exploration and
production company with a well balanced portfolio of world-class assets
primarily located in 
Europe
 and 
South East Asia
. The Company is listed on
NASDAQ Stockholm (ticker "LUPE"). Lundin Petroleum has proven and probable
reserves of 685 million barrels of oil equivalents (MMboe) as at 31 December
2015. 


For further information, please contact:

Maria Hamilton                    Teitur Poulsen                                
Head of Corporate Communications  VP Corporate Planning & Investor Relations
E-mail: [email protected]  Tel: + 41 22 595 10 00                        
Tel: +41 22 595 10 00                                                           
Tel: +46 8 440 54 50                                                            

This information has been made public in accordance with the Securities Market
Act (SFS 2007:528) and/or the Financial Instruments Trading Act (SFS 1991:980). 

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 the Company'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
the Company 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 "Risks and Risk Management" and elsewhere in the Company'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.

Copyright © 2016 OMX AB (publ).

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