Lundin Energy Q4 Beats Forecast as Oil and Gas Prices Soar

February 2, 2022

Lundin Energy's platform in the North Sea, offshore Norway - File Photo: Lundin Energy
Lundin Energy's platform in the North Sea, offshore Norway - File Photo: Lundin Energy

Sweden's Lundin Energy reported on Tuesday a bigger-than-expected rise in operating profit for the final quarter of 2021 amid a surge in the price of crude oil and natural gas.

Lundin's earnings before interest and tax (EBIT) for October-December rose to $1.27 billion from $491.8 million a year earlier, beating the $1.22 billion seen in a Refinitiv poll of analysts.

Lundin agreed in December to sell its Norwegian oil and gas assets, which include a 20% stake in Norway's giant Johan Sverdrup oilfield, to Aker BP in a cash and share deal, valuing the assets at about $13.9 billion.

"We are anticipating that the proposed combination will be completed around the middle of the year," Lundin Chief Executive Nick Walker said in a statement.

Lundin plans to focus on its renewables business, which comprises of one hydropower and two wind power plants in the Nordics and is expected to generate around 600 gigawatt-hours (GWh) of electricity per year from late 2023.

The company produced 194,800 barrels of oil equivalent per day (boepd) in the fourth quarter, putting its 2021 output at 190,300 boepd.

It had previously said it expected full-year output towards the upper end of its guidance of 180,000-195,000 boepd.

In 2022 the oil and gas business is expected to produce between 180,000 and 200,000 boepd, the company said.

Lundin's renewables business reported a loss of $3.6 million in the fourth quarter.

Following completion of the Aker BP deal, the renewables business will have a cash balance of $130 million, enough to cover all capital needs until late 2023, Lundin has said previously.

As a result of the sale, Lundin reported its exploration and production (E&P) business as discontinued operations in the quarterly report.

 (Reporting by Nerijus Adomaitis Editing by Terje Solsvik and Mark Potter)



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