Lundin Boosts Production but Sees Increased Costs
Sweden's Lundin Petroleum reported Monday that its production for 2012 average 35,700 barrels of oil equivalent per day. This was a 7.2-percent increase on 2011's figure of 33,300 boepd.
Lundin said that its profitability during the fourth quarter of 2012 was negatively affected by exploration costs and asset impairment charges, but the firm stressed that these items are non-cash charges that will have no impact on operating cash flow or EBITDA profit.
For 4Q 2012, Lundin said it had expensed $135 million of exploration costs. It said the costs of drilling its Albert and Juksa prospects amounted to $37 million and $50 million. In Malaysia, the costs of drilling the Merawan Batu prospect was $36 million.
Meanwhile, following a poor performance from the Gaupe field, offshore Norway, Lundin said that 2P reserves there have been reduced based on the conservative assumption that no further production wells will be drilled there. This resulted in a net impairment charge of $45 million. Poor reservoir performance from onshore Russian assets has also led to an impairment charge of $32 million.
The firm added that its bet debt position at the end of 2012 stood at $335 million. The firm has a $2.5 billion credit facility, which it said means it is well placed to meet funding costs of its ongoing developments as well as exploration.
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