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Lundin Petroleum announces its 2017 budget, updated reserves and contingent resources

JAKARTA ( – Lundin Petroleum AB, a Swedish independent oil and gas exploration and production company, has announced its 2017 development, appraisal and exploration budget which totals USD 1.3 billion.

The company also said as at Dec. 31, 2016 its proved plus probable working interest reserves (reserves) are 743.5 million barrels of oil equivalents (MMboe) and its best estimate contingent resources (contingent resources) are 267 MMboe.

The average production in 2016 was 72,600 barrels of oil equivalent per day, in line with the mid-point of the 2016 revised production guidance.

The main reason for the increase in reserves as at year end 2016 relates to Lundin Petroleum’s two biggest assets, the Edvard Grieg and Johan Sverdrup fields, both located on the Utsira High in the Norwegian North Sea, it said.

The reserves upgrade on Edvard Grieg is driven by drilling results to date which indicate more oil-in-place in the western flank of the field than originally foreseen. Lundin Petroleum plans to drill a well to further appraise this part of the field in the first half of 2017.

The upgrade of reserves in the Johan Sverdrup field reflects better understanding of the reservoir, in particular the waterflood performance characteristics following the acquisition and evaluation of additional core data.

Further reserves increases have been attributed to the Alvheim field, offshore Norway, as the result of the identification of further infill drilling targets, and also at the Bertam field, offshore Malaysia, due to reservoir outperformance. It said 96% of the reserves relate to Norway and oil accounts for 93 percent of Lundin Petroleum’s reserves.

Development Budget
The 2017 development expenditure is budgeted at USD1.095 billion. With respect to committed development projects the 2017 capital budget represent the peak year of capital expenditure up to Johan Sverdrup first oil.

Approximately 99 percent of the 2017 budgeted development expenditure, corresponding to USD1.085 billion, relates to development projects in Norway with some minor expenditure items on the non-Norwegian assets.

Most of the expenditure in Norway relates to the ongoing development activity on Phase 1 for Johan Sverdrup, continued development drilling at Edvard Grieg and further infill wells on Alvheim and Volund.

Exploration Budget
The 2017 budgeted expenditure on exploration activity is USD 85 million.

Substantially all of the exploration budget for 2017 relates to activity in Norway with a total of five exploration wells planned. The operated Filicudi well in PL533 (WI 35%) in the southern Barents Sea is currently drilling ahead.

One further operated exploration well is planned in the southern Barents Sea on PL609 (WI 40%) on the Loppa High targeting the Børselv prospect and the well is subject to partner approval. One non-operated exploration well is planned in the Barents Sea targeting the multi-billion barrel Korpfjell prospect on PL859 (15% WI).

Two non-operated wells are planned to be drilled in the Norwegian North Sea with one well targeting the Volund West prospect and one well targeting the Tonjer prospect, exploring the northern extension of Johan Sverdrup. (*)

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