Lundin Petroleum AB will incur pre-tax exploration costs of approximately $71 million in the first quarter of 2016, according to the company’s latest financial update.
The exploration costs mainly relate to the unsuccessful Lorry (PL700B) and Fosen (PL544) exploration wells in Norway and the Bambazon and Maligan exploration wells (Block SB307/308), offshore Sabah in Malaysia.
Lundin also revealed that it will recognize a net foreign exchange gain of approximately $159 million in its income statement for 1Q 2016. The gain mainly relates “to the revaluation of loan balances at the prevailing exchange rates at the end of the reporting period,” according to Lundin. The foreign exchange gain on the revaluation of loan balances was partly offset by settled foreign currency hedge losses in 1Q 2016 amounting to approximately $18 million.
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