Lundin Petroleum Presentation

Transcription

1 Lundin Petroleum Presentation Lundin Petroleum Presentation WF11587 Swedbank First Securities, Nordic Energy Summit st March 2013

2 2 Apple WF11587 p

3 3 Lundin Petroleum and Apple 90 Monthly Average Closing Share Price (Rebased to 1, Sep 2001) Rebased Monthly Average Share Price LUPE Apple 0 Sep 2001 Sep 2002 Sep 2003 Sep 2004 Sep 2005 Sep 2006 Sep 2007 Sep 2008 Sep 2009 Sep 2010 Sep 2011 Sep 2012 WF11587 p Value increase > 50 times No cash equity raised since start-up

4 4 Company Overview and History History Introduction Initial listing in Stockholm Initial cash equity of ~ MUSD 50 Acquisition led growth strategy Coparex acquisition DNO acquisition An organic growth success story Raised cash equity ~USD 50 million in 2001 No cash equity raised since WF11541 p Organic growth Norwegian licensing rounds Active exploration programme Distribution of UK assets ~ MUSD 700 Strong financial position to fund further organic growth EBITDA 2012 > USD 1 billion Operating cash flow 2012 ~ MUSD 830 Market Cap ~USD 7.0 bn + Distribution (UK) ~ USD 0.7 bn Resource Base (2P + 2C) at YE 2012 > 1bn bbls

5 5 Resource Growth is the Key to Value Creation 1,100 1, Value creation through organic resources growth in Norway 700 MMboe Resources (2C) Norway Others WF11612 p (1) Reserves (2P) Norway Others Excludes divested assets (1) PL501 mid range of previously guided MMboe gross & PL265 mid range of Statoil estimate for Johan Sverdrup & Geitungen discovery

6 6 Lundin Petroleum - Asset Overview Norway represents 75 % of our business Norway - Reserves (1) : MMboe - 16 exploration/appraisal wells in 2013 Core Areas: Europe, SE Asia Russia - Reserves (1) : 6.9 MMboe Ireland - 1 exploration licence Netherlands - Reserves (1) : 3.6 MMboe - 2 exploration wells in 2013 France - Reserves (1) : 23.8 MMboe - 1 exploration well in 2013 TOTAL Malaysia - Reserves (1) : 12.7 MMboe - 7 exploration blocks - 3 exploration/appraisal wells in 2013 Indonesia - Reserves (1) : 2.7 MMboe - 2 exploration wells in exploration blocks WF11304 p P reserves: MMboe (1) Contingent resources: 923 MMboe (2) (1) End 2012 Reserves (2) Statoil estimate (120 MMboe net Lundin) for Johan Sverdrup PL265

7 7 Lundin Petroleum - A Snapshot of the Business Solid financial performance driven by Norwegian production 35,700 boepd. Predominently Brent based oil Operating cash flow USD 830 million in 2012 EBITDA >USD 1.1 billion in 2012 APPRAISAL DEVELOPMENT PRODUCTION EXPLORATION WF11693 p

8 8 Lundin Petroleum - A Snapshot of the Business USD 2.2 billion development capital programme through 2015 Edvard Grieg (50%) gross USD 4 billion operated development. First oil Ongoing Brynhild (90%) gross USD 890 million operated development. First oil Ongoing Bøyla (15%) gross USD 870 million non-operated development. First oil Ongoing APPRAISAL DEVELOPMENT PRODUCTION EXPLORATION Funding requirement USD ~1.5 billion Fully funded from new USD 2.5 billion reserve based lending facility WF11693 p Double production by 2016 Annual operating cash flow USD billion

9 9 Lundin Petroleum - A Snapshot of the Business Third largest contingent resource position in Norway >700 MMboe dominated by Johan Sverdrup Appraisal ongoing. 15 wells drilled to date DEVELOPMENT PRODUCTION PDO submission late First oil 2018 APPRAISAL Will take net production to >150,000 boepd at plateau EXPLORATION Low development costs Opearting cash flow USD billion per year when Johan Sverdrup at plateau production WF11693 p

10 10 Exploration Remains a Key Focus >USD 500 million exploration per year Norway key focus ~10 wells per year Utsira High Area, Barents Sea, new core area Rig capacity secured Objective to replicate exploration organic growth in SE Asia APPRAISAL DEVELOPMENT PRODUCTION EXPLORATION WF11693 p

11 11 Strong Liquidity USD 2.5 billion bank facility 25 international banks Libor plus bps 7 year facility No value for Johan Sverdrup USD 2.5 Billion Facility Mandated Lead Arrangers BNP Paribas Citi Commonwealth Bank of Australia Crédit Agricole Corporate and Investment Bank Deutsche Bank DNB Bank HSBC ING J.P. Morgan Lloyds Banking Group Natixis Nedbank Nordea SEB Société Générale Lead Arrangers Bank of Merrill Lynch Bank of Nova Scotia Sumitomo Mitsui Banking Corporation The Bank of Tokyo-Mitsubishi UFJ, Ltd. Arrangers ABN AMRO Bank N.V. ANZ Goldman Sachs Mizuho Corporate Bank Sparebanken Rogaland Swedbank Lundin Petroleum delivering organic growth WF11587 p

12 12 Production to Quadruple from Ongoing Developments Johan Sverdrup Other contingent resources not included in production forecast exploration wells per year +100% increase in production Edvard Grieg Bøyla Brynhild +100% increase in production WF11545 p boepd 35, ,

13 13 Norway - Remains the Key Focus Barents Sea Area Barents Sea 2012 net production 27,200 boepd 2P reserves net MMboe 2C contingent resources net 715 (1) MMboe 61 licences operated acreage 11,600 km 2 (gross) 10 exploration wells in 2013 Utgard High Area Norwegian Sea Targeting 490 (2) MMboe unrisked net prospective resources in 2013 Møre Basin Area Norway North Sea Greater Alvheim Area Utsira High Area WF11666 p (1) PL501 mid range of previously guided MMboe gross & PL265 mid range of Statoil estimate for Johan Sverdrup & Geitungen discovery (2) excludes Torvastad & PL410 (dependent on Luno II), assumes mid-point prospective resource on PL330 Southern NCS Area

14 14 Norway - Successful Organic Growth Licences PRODUCTION boepd RESERVES MMboe CONTINGENT RESOURCES MMboe 715 (1) ,200 WF11443 p WF end 2003 end 2012 end 2003 end 2012 (1) PL501 mid range of previously guided MMboe gross & PL265 mid range of Statoil estimate for Johan Sverdrup & Geitungen discovery

15 15 The Million Dollar Question How could a small Swedish oil and gas company find a multibillion barrel recoverable oil field in the heart of the Norwegian North Sea 45 years after the area was opened up for exploration WF11507 p

16 16 Why Invest in Norway? Excellent exploration potential remains No independents until recently Lower drilling density than UK Close to existing infrastructure Stable and attractive fiscal regime 78% tax rate (effective rate ~73% with capital uplift) 93% tax deduction on development expenditures due to tax uplift UNDISCOVERED RESOURCES ON THE NCS 16.3 Bn bbls 0 KM 60 Wells drilled UK Norway Norwegian Sea 4.9 Bn bbls Barents Sea 6.0 Bn bbls WF11320 p North Sea 5.3 Bn bbls Source: NPD

17 17 Why Invest in Norway? Lundin Petroleum Finding Cost (Post Tax) 2P Reserves & Johan Sverdrup resources Finding Cost (1) (Post Tax) 0.34 USD/boe PL338 transaction value (Post Tax) (2) OMV Acquisition of PL338 (20%) PL338 (Edvard Grieg) Transaction value USD/bbl 8.7 USD/boe WF11320 p (1) Costs include cumulative exploration and appraisal costs since inception up to Discovered resources assume year end 2012 remaining 2P reserves for Edvard Greig, Volund, Gaupe, Bøyla and Brynhild. For Gaupe and Volund cumulative production up to is also included in reserves. Brynhild 2P reserves have been adjusted for 50% ownership at the time of making the discovery. Johan Sverdrup & Geitungen contingent resources are included at the operators guided mid-point resource estimate (2) based on consideration of million converted to USD based on 1.31:USD Barrels to scale

18 18 Changes to Fiscal Policy and Licensing Rounds APA rounds Cash refunds of exploration allowances Revitalized Norwegian Continetal Shelf Encouraged diversity New players Increased levels of exploration activity WF11507 p Success / Value Creation

19 19 People and Innovative Solutions Theories Best people to run our Norwegian business are Norwegians! Data Challenge Conventional Thinking Methods Tools WF11506 p Leverage the knowledge and learning capabilities of your organisation.

20 20 Technology Has improved exploration success rates Widely available to all Differentiating factor is how we use the technology not the technology itself WF11510 p

21 21 Corporate Decision Process Risk assessment and corporate decision making processes are critical to investment Exploitation versus Exploration Too many people / commitees involved Reduced exploration activity Support the recommendations of the team on the ground WF11510 p

22 22 The Utsira High Balder Grane PL546 PL501 Edvard Grieg PL338 PL359 PL265 Utsira High Area PL502 PL410 Johan Sverdrup WF11507 p Sleipner

23 23 Edvard Grieg Development WF11585 p Lundin Petroleum interest: 50% (operator) OMV 20%, Wintershall 15% (1), Statoil 15% (1) 2P reserves: 186 MMboe gross Plateau production: 100,000 boepd gross Production startup Oct 2015 Capital costs: 24 NOK billion Drilling 15 wells from jack-up rig Major contracts awarded Jacket construction commenced (1) Subject to Government approval 0 KM 20 UK Jacket: Topsides: PL544 PL625 PL167 & PL167B PL673 Apollo Edvard Grieg Norway Lundin Petroleum Operator Lundin Petroleum Partner 13,000 tonnes 21,000 tonnes PL338 Luno South PL265 PL359 PL PL409 Ivar Aasen PL546 PL501 PL501B Johan Sverdrup Utsira High Area

24 24 Norway - Utsira High - Johan Sverdrup Located in the southern Utsira High In the heart of the North Sea Close to existing infrastructure Water depth: 115m Reservoir depth: ~1900m Excellent reservoir quality High porosity and permeability sands Normal pressure and temperature Norway Mapped area Sweden UK Snorre Statfjord Gullfaks Oseberg Troll Bergen " Easily producible oil Oil dripping out of the cores Highly mobile and low viscosity oil 28 API oil Low gas/oil ratio Sleipner Grane NORWAY Johan Sverdrup Utsira High 0 15 KM 60 WF11366 p

25 25 Norway - Johan Sverdrup 2013 Appraisal Programme Working Interest Lundin Petroleum Statoil Maersk Det norske Petoro PL501 40% (OP) 40% 20% PL265 10% 40% (OP) 20% 30% PL338 PL265 Edvard Grieg Cliffhanger Torvastad 16/2-9S 16/2-12 PL501 PL502 16/5-3 Fault Margin 16/2-15 proposed B 16/5-2 16/ / A 16/2-11 & 11A 7 7A 16/2-7 & 7A 16/3-5 16AT / /2-6 4A 4 16/2-16 & 16AT2 13S 13A 16/2-13S & 13A proposed C 16/3-4 & 4A WF11660 p drilling programme 2 appraisal wells on PL501 2 appraisal wells on PL265 1 exploration well Torvastad on PL501 1 appraisal well on PL502 16/3-2 (drilled 1976) J. Sverdrup PL265 J. Sverdrup PL501 drilling ongoing 2013 wells

26 26 Johan Sverdrup - Possible Topside Layout Schematic Example of Johan Sverdrup Topside Centre of Field Layout WF11676 p502.13

27 27 Lundin Petroleum Remains an Exploration Company WF11587 p

28 28 Continue to Increase Acreage Position in Norway Barents Sea Area Norway Norwegian Sea Area Møre Basin Area WF11587 p Utsira High Area Greater Alvheim Area Utsira High Area Southern NCS Area

29 29 Strong Licence Position in Norway Number of licences (Held by Lundin Petroleum) Operated licences (1) WF11693 p Statoil Lundin Det norske olj. Total E&P Wintershall Talisman Centrica Eni DONG E&P BP Marathon Oil Shelll BG ExxonMobil VNG Tullow Oil ConocoPhillips GDF SUEZ OMV E.ON E&P Faroe Pet. Maersk Oil RWE Dea Premier Oil Suncor En. Dana Pet. Rocksource Lotos Repsol Edison Int. Idemitsu Pet. (1) Source: NPD( ), Operators with more than 2 operated licences

30 30 Norway Exploration Drilling 1 exploration well 10 exploration wells 6 wells on the Utsira High Area 1 well in the Barents Sea 2 wells in the Southern NCS Area 1 well in the Utgard High Area Norway 1 exploration well Barents Sea Area Utgard High Area Møre Basin Area WF11383 p exploration wells 2 exploration wells Greater Alvheim Area Utsira High Area Southern NCS Area

31 31 Norway - Utsira High Exploration 2013 WF11593 p exploration wells to be drilled PL359 Luno II (40%) Gross Prospective Resources: 139MMboe Drilling ongoing PL625 Kopervik (40%) Gross Prospective Resources: 163MMboe (1) PL544 Biotitt (40%) Gross Prospective Resources: 124MMboe PL501 Torvastad (40%) Resources estimate available in early 2013 PL410 (70%) Location dependent on Luno II PL359 result 2 appraisal wells to be drilled PL338 Edvard Grieg SE Appraisal (50%) PL338 Apollo Appraisal (50%) PL673 Apollo Kopervik Luno II /1-16 (Asha) IVAR AASEN APOLLO EDVARD GRIEG LUNO SOUTH PL338 PL625 RAGNARROCK PL359 PL544 PL265 Biotitt PL ALDOUS MAJOR NORTH DISCOVERY Edvard Grieg SE Torvastad GEITUNGEN DISCOVERY PL KM 8 PL546 PL501 JOHAN SVERDRUP DISCOVERY PL501b Lundin Petroleum Operator Partner Fields/Discoveries Oil Gas Prospect Lead (1) includes prospective resources on PL167 (20% W.I.)

32 32 Utsira High 2013 Exploration - Luno II PL359 (Lundin 40% operated) Luno II prospect Johan Sverdrup or E. Grieg play type Reservoir: Upper Jurassic Gross unrisked prospective resources: 139 MMboe Drilling ongoing 0 4 KM PL673 Edvard Grieg Apollo discovery Lundin Petroleum Operator Lundin Petroleum Partner Aldous Major North discovery N Geitengun discovery Johan Sverdrup PL501discovery Edvard Grieg discovery PL338 Johan Sverdrup discovery Southern Utsira High Luno II prospect WF11381 p Luno South discovery 0015 PL544 Lundin (40%) 0016 PL501B Lundin (50%) Lundin (10%) Lundin (40%) PL338 PL265 PL359 PL410 Lundin (40%) Lundin (70%) Johan Sverdrup PL265 discovery PL409 Lundin (70%) Luno II prospect Lundin (40%) PL501 Upper Jurassic sandstone PL359

33 33 A New Oil Province in Norway 0 0'0" 10 0'0"E 0 KM 400 Longyearbyen 20 0'0"E Svalbard 30 0'0"E 40 0'0"E 50 0'0"E 60 0'0"E 0 KM 10 0'0"W '0"N Faroe Is. 0 0'0" 10 0'0"E Russia Norway 60 0'0"N Hammerfest Basin Barents Sea North Sea Denmark 70 0'0"N Hammerfest 70 0'0"N 10 0'0"E Norway Bodo Tromso Narvik Sweden 20 0'0"E Finland Vadso 30 0'0"E Murmansk Russia 40 0'0"E 10 0'0"W Ireland United Kingdom 0 0'0" Netherlands Germany 10 0'0"E PL659 Barents Sea Total Area 236,000 km 2 Under explored area 75 exploration wells April 2011 Skrugard Discovery MMboe Januray 2012 Havis Discovery MMboe PL609 Salina PL609B PL492 PL438 Skalle Juksa PL533 Gotha PL490 PL563 WF11421 p

34 34 Lundin Petroleum - Acreage Position in the Barents Sea Largest Independant Acreage Position in the Barents Sea 3 wells drilled 2 gas discoveries 1 exploration well to be drilled in 2013 PL492 (Lundin 40%, operated) Gotha prospect - Gross prospective resources: 226 MMboe - Drilling in Q April 2011 Skrugard Discovery MMboe 7 January Havis Discovery MMboe PL659 PL533 Salina discovery PL563 Gotha PL438 Skalle discovery ~25 km PL609B PL492 Juksa PL609 Barents Sea Snøhvit PL Area Goliat WF11597 p PL Hammerfest "

35 35 Norway - Norwegian Sea Exploration - Utgard High KM Leads/Prospects New area with large potential PL330 (Lundin 30% ) Sverdrup prospect Partners: RWE Dea 40% (OP), Marathon 30% Aasta Hansten PL653 PL330 Sverdrup prospect PL654 Drilling in 2013 Gross prospective resource MMboe (1) Cretaceous/Jurassic reservoir Under explored area Additional acreage position in PL653,PL654 & PL694 Potential new high impact area Utgard High is adjacent to, and an analog of the proven prolific Halten & Donna Terraces (5.5 BBOE) Multiple large prospects in Jurassic and Cretaceous targets, upside in Miocene Utgard High PL694 Skarv Halten & Donna Terraces 5.5 BBOE discovered Norwegian Sea Alve PL330 PL646 Norway WF11440 p (1) Partners estimate Heidrun

36 36 Norway Exploration - Rig Capacity 2013 & Beyond 2013 Q1 Q2 Q3 Q Q1 Q2 Q3 Q Q1 Q2 Q3 Q Q1 Q2 Q3 Q4 Transocean Winner 1 Bredford Dolphin NORWAY Transocean Artic Maersk Guardian Island Innovator Rowan Drilling Rig 2 Total slots WF11576 p Excludes rigs for development drilling Contracted Rig Slots Optional Rig Slots

37 37 Norway 2013 Exploration & Appraisal Drilling Schedule Country Licence - Prospect Operator LUPE% (1) NUPR CoS % NRPR (2) 1 Norway PL501 - Johan Sverdrup 16/3-5 App. 6 Lundin Norway PL359 - Luno II 16/4-6S Lundin % 19 3 Norway PL501 - Johan Sverdrup App. 8 Lundin Norway PL501 - Johan Sverdrup App. 9 Lundin Norway PL544 - Biotitt Lundin % 14 6 Norway PL338 - Apollo Appraisal Lundin Norway PL492 - Gohta Lundin % 18 8 Norway PL501 - Torvastad Lundin Norway PL338 - E. Grieg SE App. Lundin Norway PL625 - Kopervik Lundin % Norway PL410 - Exploration well Lundin Norway PL501 - Johan Sverdrup 16/2-16 App. 7 Lundin Norway PL338 - Jorvik 16/1-17 Lundin Norway PL453 - Ogna Lundin Norway PL495 - Carlsberg Lundin % 9 16 Norway PL265 - Johan Sverdrup Fault Margin Statoil Norway PL265 - Johan Sverdrup Cliff Hanger Statoil Norway PL330 - Sverdrup prospect RWE Dea (3) operated non operated Q4 Q1 Q2 Q3 Q4 Discovery Ongoing Discovery Oil shows Dry WF11117 p (1) Net Unrisked Prospective Resources (MMboe) (2) Net Risked Prospective Resources (MMboe) (3) Partners estimate

38 38 Disclaimer This information has been made public in accordance with the Securities Market Act (SFS 2007:528) and/or the Financial Instruments Trading Act (SFS 1991:980). Forward-Looking Statements Certain statements made and information contained herein constitute "forward-looking information" (within the meaning of applicable securities legislation). Such statements and information (together, "forward-looking statements") relate to future events, including the Company's future performance, business prospects or opportunities. Forward-looking statements include, but are not limited to, statements with respect to estimates of reserves and/or resources, future production levels, future capital expenditures and their allocation to exploration and development activities, future drilling and other exploration and development activities. Ultimate recovery of reserves or resources are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. All statements other than statements of historical fact may be forward-looking statements. Statements concerning proven and probable reserves and resource estimates may also be deemed to constitute forward-looking statements and reflect conclusions that are based on certain assumptions that the reserves and resources can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions) are not statements of historical fact and may be "forward-looking statements". Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations and assumptions will prove to be correct and such forward-looking statements should not be relied upon. These statements speak only as on the date of the information and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable laws. These forward-looking statements involve risks and uncertainties relating to, among other things, operational risks (including exploration and development risks), productions costs, availability of drilling equipment, reliance on key personnel, reserve estimates, health, safety and environmental issues, legal risks and regulatory changes, competition, geopolitical risk, and financial risks. These risks and uncertainties are described in more detail under the heading Risks and Risk Management and elsewhere in the Company s annual report. Readers are cautioned that the foregoing list of risk factors should not be construed as exhaustive. Actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements are expressly qualified by this cautionary statement. Reserves and Resources Unless otherwise stated, Lundin Petroleum s reserve and resource estimates are as at 31 December 2011, and have been prepared and audited in accordance with National Instrument Standards of Disclosure for Oil and Gas Activities ("NI ") and the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook"). Unless otherwise stated, all reserves estimates contained herein are the aggregate of Proved Reserves and Probable Reserves, together also known as 2P Reserves. For further information on reserve and resource classifications, see Reserves and Resources in the Company s annual report. Contingent Resources Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political and regulatory matters or a lack of markets. There is no certainty that it will be commercially viable for the Company to produce any portion of the Contingent Resources. Prospective Resources Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective Resources have both a chance of discovery and a chance of development. There is no certainty that any portion of the Prospective Resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the Prospective Resources. BOEs BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf : 1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. WF8278

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