Lundin Announces Report for the Nine Months Ended 30 September 2021

Source: 10/29/2021, Location: Europe

• Quarterly revenue of USD 1.5 billion with a realized oil price of USD 72 per barrel for the third quarter
• Record free cash flow generation of USD 1.6 billion for the first nine months, operating costs below guidance at USD 2.9 per boe and net debt reduced to USD 2.6 billion
• Board of Directors anticipates to propose to the Annual General Meeting 2022, a 2021 dividend of USD 2.25 per share, corresponding to MUSD 640, an increase of 25 percent from 2020 dividend
• Record production of 194 Mboepd for third quarter and full year production anticipated towards the upper end of the guidance range of 180 to 195 Mboepd
• Key projects on track and first oil achieved at the Rolvsnes and Solveig projects, on schedule and below budget
• Strategic acquisition of 25 percent working interest from OMV in the high quality Wisting oil development, taking the Company’s interest to 35 percent and adding 130 MMboe fully appraised net contingent resources for USD 2.5 per boe
• Further acceleration of decarbonization plans to achieve carbon neutrality by 2023 from operational emissions

Comment from Nick Walker, President and CEO of Lundin Energy:
“I’m pleased to report another set of record production and financial results in the third quarter, underpinned by continued strong operational performance and further strengthening of oil and gas prices. Whilst certain challenges of the COVID-19 crisis remain, we’ve normalized the management of these and continue to deliver on our key business priorities.

“Our world class producing assets keep on outperforming, with excellent production efficiency and industry leading low operating costs, delivering record production in the third quarter. Full year production is anticipated to be towards the upper end of our guidance range.

“Johan Sverdrup continues to consistently perform at a high level and Phase 2 of the project, which will boost gross production to 755 Mbopd, is making great progress and remains firmly on track for first oil in the fourth quarter of 2022.

“At the Greater Edvard Grieg Area we’re delivering on our projects that support the long term plateau extension, with excellent results from the completed Edvard Grieg infill well programme, and first oil achieved at the Rolvsnes and Solveig projects; all these projects delivered on schedule and below budget.

We are set to see reserves increases at year end due to the continued strong Edvard Grieg performance and the excellent drilling results at Solveig. There’s lots more upside in the area and we’re working hard to bring forward a number of new projects.

“I’m pleased to announce the purchase of a further 25 percent interest in the Wisting oil development, which adds resources of almost two times our 2021 production volumes. The deal takes the Company’s interest to 35 percent in this high quality, 500 MMbo development, which has strong economics and will be powered from shore. This strategic deal, done at a purchase price of USD 2.5 per boe, is very value accretive and fits with our ambition to sustain the business long term with low carbon emission barrels.

“We delivered free cash flow of USD 1.6 billion for the first nine months, enabling net debt to be reduced to USD 2.6 billion. Due to the strong financial outlook for the business, I’m pleased to note that the Board of Directors anticipates to propose to the AGM 2022, a 25 percent increased dividend for 2021 of USD 2.25 per share (in total MUSD 640), clearly demonstrating our commitment to grow shareholder returns.

“We continue to be firmly positioned as an industry leader on carbon emissions and during the third quarter we further accelerated our decarbonization plans to become carbon neutral by 2023 from operational emissions. With around 60 percent of our production today produced as carbon neutral and with a clear deliverable pathway to carbon neutrality, I see this as a key value differentiator for Lundin Energy.

“The Company has again delivered excellent results, all our key business priorities are on track and we’ve made a strategic value accretive acquisition, which together positions us to keep delivering resilient sustainable growth.”

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