Report for the three months ended 31 March 2020

• Strong production performance of 152.4 Mboepd, above mid-point of guidance for the quarter
• Full year production guidance increased to 160 - 170 Mboepd from 145 - 165 Mboepd
• Increased plateau rates and accelerated ramp up at Johan Sverdrup –  470 Mbopd phase 1 plateau achieved in April 2020
• Operating cost guidance revised down to USD 2.80 per boe from USD 3.40 per boe
• Cost rationalisation exercise completed with over MUSD 300 reductions in 2020
• Strong free cash flow generation of over MUSD 400, net debt reduced to MUSD 3,694 and liquidity strengthened with additional MUSD 340 corporate facility
• Swift and coordinated action taken to mitigate any potential impact from coronavirus with no disruptions to production
• Dividend of USD 1.00 per share (approximately MUSD 284) for the financial year 2019 approved by the 2020 AGM
• Name change confirmed to Lundin Energy by 2020 AGM
  
  

Financial summary

¹ Excludes the reported after tax accounting gain of MUSD 756.7 in 2019 on the divestment of a 2.6 percent working interest in the Johan Sverdrup project.

Comment from Alex Schneiter, President and CEO of Lundin Energy:

"I am pleased to announce another period of strong operational and financial performance across the business in the first quarter of 2020. However, what we have witnessed from both an industry and global macro perspective since February is unprecedented, with the coronavirus crisis, its economic impact and the recent oil price collapse providing an exceptionally challenging market backdrop.

"In reaction to the potential threat from coronavirus, we have been focussed on reducing the risk to our operations and safeguarding the well-being of the Company’s employees and contractors, whilst at the same time minimising the potential impact on the business. To date, we have had no disruptions to production. A key decision has been to down-man offshore facilities while maintaining a minimum level of activity to allow production, and the most important project activities to continue. I am pleased to note that with the operational flexibility available within the business, we have not had to change our growing production guidance.

"It is in these times more than any other, where our high quality, low cost, low carbon assets, which are resilient to a low oil price environment, clearly differentiates our ability to weather the storm. Following the downturn in the oil market, the Company has taken decisive action to ensure we maintain our financial strength and flexibility. Total expenditure has been re-phased and reduced by MUSD 300 (more than a 20 percent reduction compared to the original CMD expenditure guidance), with further options available to defer or reduce expenditure, should low oil prices persist; we are also revising down our 2020 operating cost to USD 2.80 per boe from USD 3.40 per boe.

"Operationally, one of the stand out successes since the start of the year has been the performance at Johan Sverdrup. The accelerated ramp up was complemented by the higher established processing capacity, which has enabled the phase 1 plateau production rate to be increased from 440 Mbopd gross to 470 Mbopd (and as a result full field plateau to increase to 690 Mbopd), two months ahead of schedule and 7 percent above original plateau guidance. I would also like to mention that both Edvard Grieg and Alvheim again delivered above expectations during the quarter with a production efficiency of 99 and 98 percent respectively.

"Whilst the end of the quarter was marked by severe market uncertainty, we delivered a very robust financial performance with free cash flow of over MUSD 400 and ending the period with a net debt of MUSD 3,694. Our recently agreed MUSD 340 corporate facility, expenditure savings and dividend reduction, has improved the pre-tax liquidity position in 2020 by over MUSD 780 to date.

"As we head into the second quarter we will continue to apply very strict capital discipline across the Company, to preserve the liquidity position and provide financial flexibility should opportunities arise for us to capitalise on and I remain convinced, that we are in one of the best positions to trade through the current environment.”

Audiocast Presentation
Listen to Alex Schneiter, President and CEO, and Teitur Poulsen, CFO, commenting on the report at a live audiocast, held on Thursday 30 April at 09:00 CEST. Follow the presentation live on www.lundin-energy.com or dial in using the following telephone numbers:

Sweden          +46 8 56642651
UK                 +44 3333000804
United States  +1 6319131422
Norway          +47 23500243

Access Pin : 58812582

Link : https://lundinenergy.videosync.fi/2020-04-30-q1

Lundin Energy is one of Europe’s leading independent oil and gas exploration and production companies with operations focused on Norway and listed on Nasdaq Stockholm (ticker LUNE ). Read more about Lundin Energy’s business and operations at www.lundin-energy.com

For further information, please contact:

This is information that Lundin Energy AB is required to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the contact persons set out above, at 07:30h CEST on 30 April 2020.

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 Lundin Energy’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 Lundin Energy 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 "Risk management” and elsewhere in Lundin Energy’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.

Attachment

• Lundin_Petroleum_Q1 Report 2020-V2 - 20200430en