Lundin Ramps Reserves by 18% in 2010

Lundin reported its year end report for 2010.


Fourth Quarter 2010

  • Production of 32,600 boepd up 19% from fourth quarter 2009
  • Brent oil averaged USD 86.46 per barrel
  • Net result of MUSD 86.3
  • Operating cash flow of MUSD 156.9 - up 40% from fourth quarter 2009
  • EBITDA of MUSD 177.7 - up 43% from fourth quarter 2009
  • Distribution of shareholding in Etrion resulting in a MUSD 58 profit after tax
  • Completion of sale of Salawati Indonesian production assets


  • Exploration success with Avaldsnes and Apollo discoveries
  • Reserve increase of 18% and reserve replacement ratio of 237%
  • Strong production of 32,700 boepd driven by Alvheim and Volund fields
  • Net result of MUSD 498.5
  • Operating cash flow of MUSD 598.6 - up 27% from 2009
  • EBITDA of MUSD 635.6 - up 31% from 2009
  • Spin-off of UK assets with a reported MUSD 358 profit after tax

Comments from C . Ashley Heppenstall, President and CEO

2010 was a very successful year for Lundin Petroleum. The fundamental cornerstone of our strategy is to create shareholder value through exploration and this delivered positive results in 2010 with the Avaldsnes and Apollo discoveries in the Greater Luno Area offshore Norway. We have already commenced in 2011 an additional five well drilling program in the Greater Luno Area to appraise the Avaldsnes discovery as well as targeting additional exploration prospects. I believe that our Avaldsnes discovery has the potential to open up a new production hub on the Norwegian Continental Shelf and with Lundin Petroleum being one of the largest owners of acreage in this area, this will be extremely positive for us.

I am pleased that we continue to increase our reserves and production. In 2010 our reserves increased by 18 percent and we achieved a reserve replacement ratio of close to 240 percent. In my opinion our ability to grow our reserve base is the most important factor in increasing shareholder value. Lundin Petroleum reserves are expected to increase further in 2011 as we book the reserves from our exploration discoveries such as Avaldsnes and Apollo. The increase to our reserve base will subsequently lead to increases in our production and operating cash flow as these reserves are developed and brought into production. Our production from non-divested assets will increase in 2011 by approximately 10 percent and production will double from current levels to over 60,000 boepd in the next five years from various development projects in Norway.

Our production growth will come from five development projects in Norway which collectively will double our current production to over 60,000 boepd within the next five years. I am confident that the net capital cost of these projects estimated at USD 2 billion can be funded from a combination of internally generated cash flow and bank borrowings without the requirement for further equity funding.

Our exploration led growth strategy has yielded positive results particularly in Norway where we have been one of the most successful exploration companies in recent years. Following the successes in discovering Luno, Avaldsnes and Apollo we believe that our continued exploration driven strategy will lead to further discoveries. Lundin Petroleum's 2011 work program involves the drilling of a further ten appraisal and exploration wells in Norway including five wells in the Greater Luno Area.