Financial Presentation First Nine Months 2014

Transcription

1 Financial Presentation First Nine Months 2014 C. Ashley Heppenstall, President & CEO Mike Nicholson, CFO 5 November 2014 WF

2 First Nine Months 2014 Financial Highlights Third Quarter 2014 First 9 Months 2014 Production (boepd) - including Russia - excluding Russia 21,700 21,400 25,900 24,400 Average Brent oil price (USD/boe) Cost of operations (USD/boe) EBITDA (MUSD) Operating cash flow (MUSD) Net result (MUSD) WF11981 p

3 First Nine Months 2014 Financial Results - EBITDA Million USD WF11981 p EBITDA First 9 Months First 9 Months 2013 (1) 2014 EBITDA Third Quarter Third Quarter 2013 (1) (1) Restated following adoption of IFRS11 Joint Arrangements 3

4 First Nine Months 2014 Financial Results - Operating Cash Flow Million USD Million USD WF11981 p Operating Cash Flow First 9 Months First 9 Months 2013 (1) 2014 Operating Cash Flow Third Quarter Third Quarter 2013 (1) (1) Restated following adoption of IFRS11 Joint Arrangements 4

5 First Nine Months 2014 Financial Results - Net Result Million USD WF11981 p Net Result First 9 Months First 9 Months 2013 (1) 2014 Net Result Third Quarter Third Quarter 2013 (1) (1) Restated following adoption of IFRS11 Joint Arrangements 5

6 First Nine Months 2014 Financial Results Revenue MUSD ,400 boepd USD 94.9/boe Operating Costs MUSD Cost of Operations USD 10.8/boe Depletion MUSD Cash Margin MUSD Exploration MUSD Million USD Million USD G&A + Financial MUSD Gross Profit MUSD Tax MUSD Effective rate 97% Share of Result of Onshore Russia MUSD WF11981 p Net Result MUSD

7 First Nine Months 2014 Netback (USD/boe) Average Brent oil price USD/boe Third Quarter First 9 Months Revenue Cost of operations Tariff & transportation Production taxes Inventory movements Other - Base - Projects Cash Margin Cash taxes Operating Cash Flow General and administration costs (1) WF11981 p EBITDA (1) Adjusted for depreciation

8 Forecast 2014 Cost of Operations (USD/boe) Including Projects Base USD/boe 14 Alvheim workovers Alvheim/Volund shutdown Brynhild start up 14 USD/boe Forecast 2014 Including Projects USD 11.00/boe (Q2 Guidance USD 12.20/boe) Base Forecast USD 8.50/boe (Q2 Guidance USD 9.70/boe) WF11981 p Q actual Q actual Q actual Q forecast 7 8

9 First Nine Months 2014 Exploration Costs First 9 Months 2014 MUSD First 9 Months 2014 after Tax MUSD PL501 - Torvastad, PL659 - Langlitinden Indonesia Baronang - Balqis/Boni, Cakalang Others Exploration Costs No significant exploration costs in the third quarter of 2014 WF11981 p PL631 Vollgrav South, and Gurita (Gobi-1), Indonesia wells and associated costs will be expensed in the fourth quarter of

10 First Nine Months 2014 G & A / Financial Items General & Administration Expenses General & administration Long Term Incentive Plan Net Financial Items Foreign exchange loss (1) Interest expense (2) Loan commitment fees Amortisation of loan fees Other Third Quarter 2014 MUSD First 9 Months 2014 MUSD WF11981 p (1) Includes MUSD 5.5 gain on settled currency hedges in 2014 (2) An additional amount of interest expense of MUSD 26.9 has been capitalised in

11 First Nine Months 2014 Tax Current tax credit Deferred tax charge Third Quarter 2014 USD/boe First 9 Months 2014 USD/boe Effective tax rate 97% Operational tax rate (1) 47% WF11981 p (1) Excluding exploration costs impact 11

12 First Nine Months 2014 Liquidity MUSD at 30 September 2014 Debt Outstanding 2,166 Cash Balances 112 Net Debt Position 2,054 Financing facility increased to USD 4 billion in Feb 2014 under similar terms Margin on Loan Facility: 2.75% Full access to USD 4 billion under low oil price sensitivity WF11981 p Conservative leverage on Johan Sverdrup 12

13 First Nine Months 2014 Debt Position 2,100 2,000 1,900 G&A MUSD 31 Financial MUSD 57 Working Capital/Other MUSD 124 2,100 2,000 1,900 Closing Net Debt 30 Sep 2014 MUSD 2,054 1,800 1,700 Exploration & Appraisal MUSD 418 1,800 1,700 1,600 1,600 Million USD Opening Net Debt 1 Jan 2014 MUSD 1,192 1,500 1,400 Operating Cash Flow MUSD 804 1,300 1,200 1,100 1,000 1,500 1,400 1,300 1,200 1,100 1,000 Million USD Development MUSD 1, WF11981 p

14 Other Items Hedges as at 30 September 2014 BUY MNOK Currency SELL MUSD Average rate NOK : USD , , Borrowings MUSD Interest rate Floating LIBOR rate per annum Apr 2013 Mar % 2H , % , % Q , % Q2-Q , % , % WF11981 p , % 14

15 First Nine Months 2014 Highlights First nine months 2014 production 25,900 boepd (within guidance) Full year 2014 guidance 24,000 29,000 boepd Forecast 2015 at ~ 50,000 boepd Russian onshore production divested in July 2014 Developments : Edvard Grieg Jacket and gas pipeline installed, topside nearing completion, development drilling commenced, first oil Q Brynhild First oil Q Bøyla Pipeline installed, 2 wells completed, first oil Q Malaysia: Bertam Jacket and topside installed, FPSO upgrade nearing completion, first oil Q Appraisal : Edvard Grieg South East area of the structure successfully appraised and tested Gohta Western segment of structure appraised and tested Luno II Central South segment of structure appraised and tested Malaysia: Tembakau Tested at a combined rate of 31.7 MMscfd 2015 programme: 2/3 wells on Alta/Gohta, 1 well on Edvard Grieg WF p Exploration Alta discovery Major oil and gas discovery in the Barents Sea, MMboe of resources 2014 remaining wells 6 wells targetting 280 MMboe net unrisked 2015 wells 8 wells targeting 490 MMboe net unrisked 15

16 Lundin Petroleum Production First nine months 2014 production: 25,900 boepd Alvheim outperformed, Volund underperfomed Sold onshore Russian production July 2014 Third quarter production on forecast but negatively impacted by Alvheim FPSO planned shut-in Brynhild - first oil Q production guidance: 24,000 29,000 boepd Production (1) Netherlands, 7% Indonesia, 6% France, 11% 2014 First Nine Months Actual and Revised Production Guidance Nine months 2014 Actual (2) Russia, 7% 50, 70% WF11866 p Thousand boepd net Q1 Actual Q2 Actual Q3 Actual Alvheim FPSO planned 10shut-in (1) Excluding discontinued operations which include United Kingdom, Salawati Basin & Island in Indonesia (2) Not adding due to rounding Guidance high Guidance low Actual production 16

17 Production Forecast average approximately 50,000 boepd (1) Bøyla first oil Q Bertam field first oil in Q Edvard Grieg first oil Q To exceed 75,000 boepd by end 2015 Edvard Grieg start-up Brynhild start-up Bøyla start-up Bertam start-up 28,800 boepd 27,500 boepd WF11866 p ,700 boepd Q1 Actual 2014 Q2 Actual 2014 Q3 Actual 2014 Q (1) Guidance includes onshore Russian production of ~ 2,000 bopd Q Q Q Q

18 & Malaysia Development Projects United Kingdom Bøyla Ongoing Norwegian Developments Edvard Grieg (Lundin 50% operator) Ivar Aasen Unit Edvard Grieg Stavanger " Brynhild (Lundin 90% operator) North Sea Bøyla (Lundin 15%) Ivar Aasen Unit (Lundin 1.385%) Brynhild 0 KM 40 Ongoing Malaysian Development Malaysia 0 KM 100 Bertam (Lundin 75% operator) 2014 Budget USD 1.4 Billion Malaysia Bertam WF11383 p Kuala Lumpur Indonesia Singapore Indonesia Malaysia 18

19 WF11585 p Lundin Edvard Grieg Development Lundin Petroleum interest: 50% (operator) OMV 20%, Wintershall 15%, Statoil 15% 2P reserves: 186 MMboe gross Plateau production: 100,000 boepd gross Production startup Q Capital costs: 25 NOK billion Drilling 15 wells from jack-up rig commenced drilling operation Jacket completed and installed Topside and oil pipelines construction ongoing One appraisal well in south east of the field completed and one further appraisal planned during 2015 Engineering/Procurement Construction/Assembly Load out/seafastning & Marine Operations Pipelaying Offshore Hook-up/Commissioning Drilling Contract Award Decision Gate / PDO Jacket Execution Topside Execution Installation Oil & Gas Export Pipeline Pre Drilling & Drilling First Oil Q Q2 Q3 Q4 Q Q2 Q3 PDO Approved by Authorities Q Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Gas Oil - Southern Utsira High UK 0015 Gas Export to SAGE Luno South PL544 PL625 PL167 & PL167B PL673 Apollo Edvard Grieg Luno South Luno II PL338 PL359 Edvard Grieg Schematic Edvard Grieg Platform PL546 PL501 Ivar Aasen Unit PL265 PL KM 20 Ivar Aasen Platform Ivar Aasen Oil Export to Grane Edvard Grieg PL674 PL501B Johan Sverdrup Lundin Petroleum Operator Lundin Petroleum Partner 19

20 Edvard Grieg Project Status Jacket Completed and Installed Jacket installed on location 15 April - Sail away from Verdal yard, Jacket launch 4 May - Jacket installation completed WF11888 p

21 Edvard Grieg Project Status Topsides Modules Living quarters and helideck transport to Stord Topsides modules in Stord Work on topsides modules in Stord Living quarters and helideck, process deck, Stord WF11888 p

22 Brynhild Development Lundin Petroleum interest 90% (operator) Talisman 10% Subsea tie-back to Pierce field, UK Subsea installations successfully completed two development wells successfully completed Longer reservoir section completed 2P Reserves 23.1 MMbo gross Plateau production: 12,000 boepd gross First oil in Q North Sea United Kingdom Bøyla Ivar Aasen Unit Edvard Grieg " Stavanger Brynhild Riser North Sea Pierce FPSO after Docking WF11383 p Brynhild 0 KM 40 22

23 Bøyla Development - North Sea Lundin Petroleum interest 15% Det Norske 65% (operator), Core Energy 20% Tie-back to Alvheim FPSO Production manifold and pipelines successfully installed Two development wells completed, third well United Kingdom Bøyla to be completed in P reserves: 22 MMboe gross Plateau production: 20,000 boepd gross First oil Q Manifold sail away Manifold on location Ivar Aasen Unit Edvard Grieg North Sea Stavanger " Brynhild 0 KM 40 WF11383 p

24 Ivar Aasen Ivar Aasen Development (Lundin 1.385%) Ivar Aasen unitised across PL338, PL001B, PL242 and PL457 2P reserves, excluding Hanz, 192 MMboe (1) gross First oil Q Plateau production: 65,000 boepd (1) gross Platform development with onward processing and export to Edvard Grieg platform UK PL Ivar Aasen development - Southern Utsira High PL625 PL001B Apollo Edvard Grieg Luno South Luno II PL544 PL338 PL359 Ivar Aasen platform PL546 PL501 PL167 & PL167B PL265 Ivar Aasen PL KM 20 PL501B Johan Sverdrup Lundin Petroleum Operator Lundin Petroleum Partner Edvard Grieg platform WF11939 p (1) Operator s estimate 24

25 Peninsular Malaysia Bertam Development Bertam Development Facilities PM307 - Lundin Petroleum 75% (operator), Petronas Carigali 25% PDO approved in October 2013 Gross 2P reserves: 18.2 MMbo Gross plateau production: 15,000 bopd First oil: Q Development plan Wellhead platform 14 horizontal wells with ESP s Utilise 100% owned FPSO Gross CAPEX MUSD 400 (1) Jacket and topsides installed FPSO upgrade to be completed by end 2014 Development drilling has commenced Bertam Location Map PM319 PM307 Sotong Field Mengkuang Prospect Tembakau Gas Discovery Malong Field Rengas Prospect Bertam Oil Field Malaysia 0 KM 20 Gurita WF11667 p (1) Excludes capex related to the FPSO PM308B PM308A Indonesia 25

26 Peninsular Malaysia Bertam Development August - FPSO towout from drydock October - Topside at field June - Jacket installation September - FPSO upgrade September - Development drilling October - Topside installed WF11667 p

27 Johan Sverdrup Development Working Interest PL501 PL265 PL502 Lundin 40% (OP) 10% 0% 22 wells + 7 sidetracks drilled to date on Johan Sverdrup Statoil Maersk 40% 20% 40% (OP) 44.44% (OP) Gross Contingent Resources: 1,800 2,900 MMboe (1) Det norske 20% 22.22% Appraisal drilling programme completed Petoro 30% 33.33% /2014 PL501 PL501 PL501 PL501 16/2-9S 16/2-19 &19A 16/ /2-6 & 6 T2 $ 16/ /2-8 $ 16/3-4 & 4A 16/ /2-11 & 11A $ 16/2-16S & 16A & 16 T2 16/2-13S & 13A 16/2-17S $ 16/3-8S 16/3-6 PL265 PL265 16/2-7 & 7A PL265 16/2-15 PL265 16/ /3-5 16/5-2 PL502 16/5-3 16/3-7 PL502 PL502 PL502 16/5-4 J. Sverdrup 0 KM 5 0 KM 5 0 KM 5 0 KM 5 Avaldsnes discovery Aldous Major South discovery Avaldsnes and Aldous MS 7 wells in 2013 WF11602 p well + 1 sidetrack 5 wells + 2 sidetracks renamed Johan Sverdrup 7 wells + 3 sidetracks 2 wells in sidetrack (1) Statoil working operator estimates Dec

28 - Johan Sverdrup Phase I Development Schematic Concept selection for Phase I agreed in February 2014 Phase I FEED ongoing Letter of intent awarded in Q for two steel jackets to be built in Impact assessment (first step of PDO process) submitted Phase I FEED Concept Selected PDO Approval - Phase I First Oil - Phase I Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Johan Sverdrup Phase I Topside Layout Phase I CAPEX NOK Bn Production Capacity: ,000 boepd Q1 Q2 Q3 Q Wellhead & Drilling platform Full field Gross Contingent Resources: 1,800-2,900 MMboe Plateau Production : ,000 boepd Processing platform WF11877 p Riser platform Living Quarter 28

29 Production Forecast From Ongoing Development Johan Sverdrup exploration wells per year Other existing contingent and prospective resources not included in production forecast Bertam Bøyla Brynhild Edvard Grieg Ivar Aasen 75,000 boepd WF11866 p boepd 35,700 32, ,000 ~ 50,000 (1) (1) Guidance includes onshore Russian production of ~ 2,000 bopd 29

30 Appraisal Programme 2014/ Wells - 5 wells 2014 Budget : 300 Million USD 2014 Appraisal Programme 2015 Appraisal Programme Malaysia - 1 well - 3/4 wells Utsira High 4 wells completed Barents Sea 1 well completed Peninsular Malaysia 1 well completed on Tembakau Utsira High 1 appraisal well on Edvard Grieg Barents Sea 2 appraisal wells on Alta 1 appraisal well on Gohta under review 0 KM 16 Ivar Aasen Unit PL167 PL501 0 KM 40 PL609 0 KM 80 PL673 North Sea 1 well on Edvard Grieg 1 well on Edvard Grieg Luno II Discovery PL338 PL359 Edvard Grieg PL265 PL410 1 well on Luno II PL674 2 wells on J. Sverdrup Johan Sverdrup Discovery PL501 B PL533 PL659 2 wells on Alta 1 well on Gohta PL492 PL438 Gohta Discovery PL490 Alta Discovery 1 well on Gohta PL767 Barents Sea PM319 Tembakau Discovery 1 well on Tembakau Bertam Discovery PM307 PM308B PM308A Malaysia Natuna Sea Gurita Indonesia WF11796 p Utsira High (1) Subject to Norwegian government approval - Barents Sea 2014 appraisal wells completed 2015 appraisal wells Malaysia - Peninsular Malaysia Lundin Petroleum Operator Lundin Petroleum Partner 30

31 Asset Overview 2014/2015 Exploration 3 exploration wells in exploration wells in 2015 France 1 exploration well in 2014 Malaysia 2 exploration wells in exploration well in exploration wells remaining in MMboe WF11433 p exploration wells scheduled in 2015 Targeting net unrisked resources 490 MMboe 770 MMboe 31

32 Lundin 2014/2015 Exploration Drilling Neiden Barents Sea Ørnen Barents Sea Area 10 exploration wells All operated Rigs secured for all wells Targeting ~700 MMboe net unrisked prospective resources Lindarormen Norwegian Sea Storm North Sea Morkel Greater Alvheim Area Kopervik Gemini Zulu Utsira High Area WF11796 p prospects 2015 prospects Luno II North UK Fosen 32

33 - Barents Sea Overview 0 KM 400 Svalbard 0 KM 400 Faroe Is. Barents Sea Underexplored ~ 100 wells 5 recent oil discoveries + 2 gas discoveries 70 0'0"N Barents Sea Sweden Finland Wisting Discovery (117 MMboe) Russia Lundin operator Ireland Lundin partner United Kingdom Discovery North Sea Netherlands Prospect Denmark Germany ~ 1 billion boe discovered over last 4 years Børselv (303 MMboe) PL609 LOPPA HIGH Neiden (204 MMboe) Skavl, Drivis Discoveries PL659 HAMMERFEST BASIN Alta Discovery ( MMboe) Gohta Discovery ( MMboe) PL767 Snhøvit Area Skalle Discovery (~28 MMboe) Johan Castberg Discoveries (550 MMboe) BJORNOYA BASIN PL492 PL438 PL490 WF11421 p PL533 Salina Discovery (~35 MMboe) 33

34 - Barents Sea Loppa High Exploration Lundin Petroleum Licences Operated Non Operated Fields Oil Gas Prospects Alta Discovery PL609 (Lundin 40%, operated) 46 metres gross oil column / 11 metres gross gas column tested ~3,300 bopd Gross recoverable oil and gas resource estimate range: MMboe ya Bassenget Kramsnø Johan Castberg Bjørnøyrenna Fault Complex Børselv KM 20 Neiden Prospect Alta Discovery Senilex well (1985) 2015 Exploration programme Neiden prospect Gross prospective resources ~200 MMboe Drivis Iskrystall Rauto 533 Skavl Polheim Sub-platform Lakselv North Loppa High 659 Formica Lakselv South WF11786 p Gohta Appraisal Gohta Discovery Alta total resources: MMboe Development options are being reviewed asin Salina Gohta Appraisal Ringvassøy-Loppa Fault Complex Komag B Lavvo 438 Rein Boazo Noaide Skalle 490 Trål Alta Discovery Gohta Discovery SNØHVIT 767 Hammerfest Basin 34

35 Exploration Barents Sea Neiden Prospect PL609 Lundin Petroleum Operator Lundin Petroleum Partner Map Area Barents Sea Prospect Lead 0 5 KM 20 Børselv Prospect PL609 (40%, Lundin operator) Idemitsu Petroleum 30%, RWE Dea 30% Neiden Prospect Gross Prospective Resources: 204 MMboe Drilling in 2015 Chance of geological success: 30% 712 Norwegian Sea North Sea JOHAN CASTBERG Neiden Prospect Børselv Neiden Barents Sea Alta 7119 Salina 492 Gohta 609 B Alta WF11978 p Gohta Skalle B 35

36 Exploration Barents Sea Ørnen Prospect PL708 Lundin Petroleum Operator Lundin Petroleum Partner Prospect Lead 0 5 KM 20 PL708 (40%, operator) Edison 20%, North Energy 20%, Lukoil 20% Ørnen North Prospect 708 Ørnen North prospect Drilling in 2015 Gross prospective resources: 354 MMboe Trap: 4 way closure + stratigraphic Reservoir: Permian spiculites & Ørn Carbonates Chance of geological success: 20% 7128/ Ørnen North Barents Sea Map Area Barents Sea 7029 Norwegian Sea 7030 WF11978 p North Sea 36

37 Exploration - Utsira High 2014/2015 Exploration Drilling Field Discovery Prospect Ongoing Drilling Zulu Significant remaining potential in the Utsira High Exploration 5 wells PL625 (40%): 25/10-12 Kopervik (1) 163 MMboe (2), ongoing 25/10-12 Kopervik PL359 (50%): Luno II North 24 MMboe (2) PL338 (80% (3) ): Gemini 93 MMboe (2) PL674 (35%): Zulu 153 MMboe (2) PL544 (40%): Fosen 192 MMboe (2) Hanz Ivar Aasen Apollo Edvard Grieg Rolvsnes Johan Sverdrup Gemini Targeting net unrisked resources of ~270 MMboe Luno II North Luno II WF11976 p (1) Includes prospective resources on PL167 (20% W.I.) (2) Gross unrisked prospective resources (3) Lundin carrying an 80% WI for the Gemini Propsect only Fosen 37

38 Exploration - Northern North Sea / Møre Basin Storm & Morkel Prospects Norwegian Sea Barents Sea Map Area PL555 (60%, Operator) (Bayerngas Norge 40%) Lundin Petroleum Operator Lundin Petroleum Partner Prospect Lead North Sea Storm Prospect Drilling ongoing Trap: Stratigraphic Reservoir: Upper Jurassic Gross prospective resources: 89 MMboe (1) Secondary target: Mary Lead Chance of geological success: 20% PL579 (50%, Operator) (Bayerngas Norge 50%) K 0 KM 20 UK Storm Prospect PL639 PL519 Albert Morkel Prospect Drilling in 2015 Gross prospective resources: 74 MMboe Trap: Structural/Stratigraphic Reservoir: Jurassic Chance of geological success: 21% Tybalt Discovery PL555 PL579 Morkel Prospect Knarr Field Blåbær WF11902 p Magnus Penguin West Penguin Beta Beta Discovery 38

39 Malaysia 2014/15 Exploration Activity Sabah Area 0 KM 40 Cempulut Discovery SB303 Tarap Discovery Malaysia PM307 Lundin Petroleum 75% operator (Petronas Carigali 25%) Mengkuang prospect Drilling Q Gross prospective resources: 21 MMbbl Rengas prospect Drilling Q Gross prospective resources: 22 MMbbl SB307/308 Lundin Petroleum 42.5% operator (EnQuest 42.5%, Petronas Carigali 15%) Kitabu prospect Drilling ongoing Gross prospective resources: 71 MMbbl Peninsular Malaysia PM319 Mengkuang Prospect Rengas Prospect PM307 PM308B PM308A Kitabu St Joseph Titik-Terang SF30 SB307/308 " Kota Kinabalu Tembakau Discovery Bertam Discovery Shell fields Berangan Discovery Malaysia Borneo 0 KM 80 Malaysia Natuna Sea WF11897 p Gurita Indonesia 39

40 2014/2015 Exploration & Appraisal Drilling Schedule WF11117 p Country Licence - Prospect PL631 - Vollgrav South exp Lundin PL584 - Lindarormen exp Lundin % 27 PL359 - Luno II North exp Lundin % 4 PL579 - Morkel exp Lundin % 8 PL544 - Fosen exp Lundin % 17 PL609 - Alta exp Lundin PL625 - Kopervik exp Lundin % 23 PL674 - Zulu exp Lundin % 11 PL338 - Gemini exp Lundin (4) 74 24% 18 PL609 - Alta Appraisal 1 app Lundin PL609 - Neiden exp Lundin % 25 PL609 - Alta Appraisal 2 app Lundin PL555 - Storm exp Lundin % 10 PL708 - Ørnen exp Lundin % 28 PL338 - E.Grieg Appraisal SE app Lundin Indonesia Gurita - Gobi exp Lundin Malaysia SB307&308 - Kitabu exp Lundin % 9 Malaysia PM307 - Mengkuang exp Lundin % 6 Malaysia PM307 - Rengas exp Lundin % 5 France Est-Champagne - Hoplites-1 (Nettancourt) exp Lundin % 5 operated non operated (1) Net Unrisked Prospective Resources (MMboe) (4) Lundin carrying an 80% WI for the Gemini Propsect only Well type Operator (2) Chance of Geological Success LUPE WI % NUPR (1) CoGS (2) NRPR (3) (3) Net Risked Prospective Resources (MMboe) Q4 Q1 Q2 Q3 Q4 Dry Discovery Dry Ongoing Ongoing Ongoing Ongoing Ongoing Netherlands exploration wells not included 40

41 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 2013, 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, Resources and Production 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. Unless otherwise stated, all contingent resource estimates contained herein are the best estimate ( 2C ) 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. Unless otherwise stated, all Prospective Resource estimates contained herein are reflecting a P50 Prospective Resource estimate. Risked Prospective Resources reported herein are partially risked. They have been risked for chance of discovery, but have not been risked for chance of development. WF8278 p 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. 41

42