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Financial Results - First Nine Months 2007
C. Ashley Heppenstall, President & CEOGeoffrey Turbott, Vice President Finance & CFOWF9825
1
Disclaimer
DISCLAIMER Certain statements made in this presentation involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. Certain statements relating to Lundin Petroleum’s business and operations are based on management’s expectations, estimates and projections. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Certain statements are based upon assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such statements. Lundin Petroleum makes no commitment, and disclaims any duty, to update or revise any of these statements. This presentation is for informational purposes only and is not intended as a solicitation or offering of securities in any jurisdiction. The information contained in this presentation is not intended to qualify, supplement or amend information disclosed under corporate and securities legislation of any jurisdiction applicable to Lundin Petroleum and should not be relied upon for the purpose of making investment decisions concerning any securities of Lundin Petroleum.
WF8278
2
0
500
1000
1500
2000
2500
0
500
1000
1500
2000
2500
Financial Results - First Nine Months 2007
733 599
2,226 1,653
2,412 2,173
733 599
2,226 1,653
2,412 2,173
Net Profit first 9 months
2007
Net Profit first 9 months
2006
OperatingCash Flow
first 9 months 2007
OperatingCash Flow
first 9 months 2006
EBITDAfirst 9 months
2007
EBITDAfirst 9 months
2006
Mill
ion
SEK
WF9686 11.07
+22.5%
+35%
+11%
3
WF9608 11.07
Production 36,100 BOEPD
Cost of operations USD 16.56/bbl
Effective corporate tax rate 47%
Financial Performance - First Nine Months 2007
4
WF9608 11.07
Write offs
Foreign exchange gain
G & A costs
209.9
124.1
133.7
128.0
102.2
26.0
Financial Performance First Nine Months 2007
9 months Jan-Sep 07
MSEK
3 monthsJul-Sep 07
MSEK
5
WF9609 05.07
Production & Oil Price - Quarterly Comparison
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007
boepd
0
10
20
30
40
50
60
70
$/bbl Brent
6
2007 Cost of Operations
WF9834 11.07
2.5%
12
15
16
17
9 Months Budget (excl. Alvheim) vs Actual
2007 Budget (excl. Alvheim)
$/boe
Budget excl. Alvheim
Actual
7
WF9612 11.07
Margin Netback USD/boe - First Nine Months 2007
Brent oil price Revenue
Cost of operationsTariffsProduction & sales taxesStock movements
DepletionWrite off
Margin Netback
67.1158.93
-16.56-2.00-3.790.35
36.93
-11.89-3.04
22.00
55.0048.32
-16.28-1.66-3.63-0.29
26.46
-10.96-
15.50
First Nine Months2007 Actual
(USD/boe)
Original 2007 Forecastexcluding Alvheim
(USD/boe)
8
WF9610 08.07
Balance Sheet - 30 September 2007
Fixed Assets
Net Current Assets (excluding cash)
Net Bank Debt
Shareholder Equity
Net Debt/Equity Ratio
16,188
3
1,134
8,953
13%
17,611
(213)
1,566
9,541
16%
30 Sept 2007MSEK
31 DEC 2006MSEK
9
WF9827 11.07
Norway Tax Benefits
Tax bene�t of development expenditure
Forecast capital expenditure to end 2007 amounts to ~ NOK 2.2 bn (~$405 million)
Discounted (8%) future tax benefit from the historic capital expenditure is estimated at ~ NOK 1.65bn (~ $310 million)
Forecast E&A spend for 2007 is NOK 575 million (~$105 million)
Discounted (8%) tax credit receivable in December 2008 is estimated at ~ NOK 430 million (~ $80 million)
10
WF9835 11.07
Liquidity
New Finance Facility of $1bn
$850 million secured revolving reducing credit facility $150 million unsecured credit facility
Facility underwritten by BNP Paribas Royal Bank of Scotland Bank of Scotland
11
WF9618 08.07
36,100 boepd - in line with forecast
Outperformance in Oudna, Tunisia and Broom, United Kingdom
Underperformance in Heather, United Kingdom
Acquisition of additional production interests in Paris Basin, France (included from 01Nov 2007)
Operational Highlights - First Nine Months 2007
Production
WF9618 11.07
12
WF9613 11.07
2006Actual
29,400 BOEPD
First Nine Months 2007Actual
36,100 BOEPD
2003Actual
16,100 BOEPD
2004Actual
28,900 BOEPD
2005Actual
33,100 BOEPD
Production History
2002Actual
14,010 BOEPD2001
NIL
13
WF9618 08.07
Alvheim, Norway - First oil Q1 2008
Volund, Norway - Development plan approved - First oil 2009
Singa, Indonesia - Gas sales agreement signed - First gas 2009
Thistle, UK - Redevelopment ongoing - 3D seismic completed
Operational Highlights - First Nine Months 2007
Development
WF9618 11.07
14
WF9066 11.07
Alvheim Status
First production first quarter 2008Topsides installation - power generation and control system commissioning delaysDevelopment drilling - 3 production wells completedSubsea installation completedPlateau production >90,000 (gross) in 2008Reserves 189 MMboe (gross)
Alvheim FPSO topsides installation in Norway
15
WF9586 11.07
2006Actual
29,400 BOEPD
2003Actual
16,100 BOEPD2002Actual
14,010 BOEPD2001
NIL
2004Actual
28,900 BOEPD
2005Actual
33,100 BOEPD
Production Growth
2007Forecast
34,000 BOEPD
2008 Onwards
Alvheimnet plateau production
14,000 bopd
16
WF9618 08.07
Norway - Luno discovery, PL338
UK - Scolty discovery, P1107
Norway/UK - Orange (PL335) and Lytham (P1129) both plugged and abandoned
Indonesia - Tengis well flowed high CO2 gas to surface and was plugged and abandoned
Operational Highlights - First Nine Months 2007
Exploration
WF9618 11.07
17
Norwegian & UK Continental Shelf Licences
WF9832 11.07
Major acreage position in UK and Norwegian North Seawith 50 licences
Lundin Petroleum non-operated assetsLundin Petroleum operated assets
0
200
400
600
800
1,000
Talis
man
Nex
enC
an N
atM
aers
k
LUND
IN P
ETRO
LEUM
*
Apa
che
BG
Cen
trica
RW
E D
ea
Vent
ure
Tullo
wH
ess
Petro
-Can
ada
Oile
xco
Pere
nco
Nau
tical
Pet
ATP
Antri
m E
ngy
BHP
Billi
ton
DO
NG
E.O
N R
uhrg
asD
ana
Net r
emai
ning
rese
rves
(mm
boe)
Operated Non-Operated
North Sea Operated Positions
Source: Wood Mackenzie Pathfinder – Includes probable developments and technical reserves
* 2P + contingent resources
18
009
0016
0025
016
008
0015015
0024
0026
0017
PL304
PL359
PL338
PL410
PL409
PL412
PL103B
PL363PL413
PL203
PL340
PL150
PL036c
PL088P090
PL167PL167B
0 20KM
Alvheim and Luno Acreage
Luno discovery
Jotun field
Alvheim field
Lundin Petroleum OperatorLundin Petroleum Partner
WF9832 11.07
Luno light oil discovery in PL338
Estimated recoverable reserves65 MMboe to 190 MMboe
Largest oil discovery in Norwegian North Sea in last 10 years
Luno area development...the next Alvheim?
UK
Norway
19
WF9828 11.07
16/1-4
16/1-5
16/1-8
Utsira high south
PL338
PL304
PL167
PL359
PL410
Luno discoverywell
0 KM 10
Luno Regional Setting
Lundin 70%(operator)
Lundin 100%(operator)
Lundin 20%
Lundin 50%(operator)
Lundin 60%(operator)
Lundin Petroleum operatorand has material equity interest in Luno discovery andadjoining acreage
Luno discovery new playconcept in Norway
20
WF9828 11.07
Luno Discovery
Luno discovery well 16/1-8
16/1-4
16/1-5
Jurassic reservoir
Triassic reservoir
Discovery well 16/1-8discovered oil in Jurassic reservoir with Triassic reservoir belowoil/water contact
21
WF9828 11.07
Luno discoverywell 16/1-8 16/1-4
16/1-5
Luno Discovery Upside
Jurassic reservoir
Triassic reservoir
Estimated 65 MMboe to 190 MMboeof recoverable reserves only in Jurassic reservoir
Additional potential upside reserves in Triassic reservoir
22
WF9828 11.07
Luno discoverywell 16/1-8 16/1-4
16/1-5
Luno discoverywell 16/1-8 16/1-4
16/1-5
Jurassic reservoir
Triassic reservoir
Appraisal 1
Appraisal 2
Luno Discovery Upside
Appraisal programme to commence in 2008 to - appraise lateral extent and quality of Jurassic reservoir and - appraise Triassic potential
Revus has provided early rig slot to begin appraisal programme in 2008
23
021 022
015
FORTIES
NELSON
COOK
TWEEDSMUIR
KITTIWAKE
GLENN
PICT
MALLARD
ALBACALLANISH
GADWALL
WAGTAILGROUSE
GANNET COMPLEX
WHINCHAT
TEAL;TEAL SOUTH
CHRISTIAN
GOOSANDER
FINLAGGAN
BACCHUS
022/01 (Area 4)
021/19 (Area 2)
021/15 (Area 2)
SAXON021/24 (Area 4)
FORTIES
NELSON
COOK
TWEEDSMUIR
KITTIWAKE
GLENN
PICT
MALLARD
ALBACALLANISH
GADWALL
WAGTAILGROUSE
GANNET COMPLEX
WHINCHAT
TEAL;TEAL SOUTH
CHRISTIAN
GOOSANDER
FINLAGGAN
BACCHUS
022/01 (Area 4)
021/19 (Area 2)
021/15 (Area 2)
SAXON021/24 (Area 4)
BRODGAR
BRITANNIA
BLIGH
021/02 (Area 2)
BRODGAR
BRITANNIA
BLIGH
021/02 (Area 2)
P1109
P1107
P1176
P1421
8 9
19
1214
10
4b
7b
5b
22
16b
11b
17a
25
18b
1a
21
15a
13b
5a
6b
2b
23a
20c
6b
24a
3a1b
1c
13a
7
15b
17
6a 7a
1b
21
18a
11c
17b
16b
2aCR
3c
1aN
3b
6aN
30
3d
3e
6aS
16a
20d
11F1
28c
16a
23b
11d
4a
20f
6aF1
29b
22a
20e
2aJR
2b
1aS
27LW
2aS
12aS
20b
9F1
26b
11a
12aF1
20aF1
11a
29d
2a
7F1
29c
0 10KM
UK Exploration - Scolty Discovery (P1107)
WF9833 11.07
Scolty Discovery
Torphins Prospect
Lundin Petroleum acreage OperatorPartner
Scolty Discovery
24
WF9831 11.07
UK Exploration - Scolty Discovery (P1107)
Scolty discovery@ ~1700m
21/8-3
Middle Jurassic @ ~3000-4000m
Torphins ProspectProspective resources~30 MMbbls recoverable.Well planned in 2008
Torphins prospects @ ~1700m
Scolty discoveryPotential ~10 MMbbls recoverable
25
WF9171 11.07
Jong
lei C
anal
Km 200
Thar Jath
JarayanBlock 5B
Block 5A
Block B Central
Block B CentralThar Jath (Dev)
Lake Nuong
White Nile
Khawr Jurwel
Bahr El Zaraaf
Nuong DockSeismic Camp
Adok
Lundin PetroleumPetronas Carigali
ONGC Videsh LtdSudapet
24.5%39.0%
23.5%13.0%
Current Partners
Jointoperators(WNPOC)
5B interest
SUDAN
Port Sudan
Khartoum
Kosti
BLOCK 5BCENTRAL
AFRICAN REPUBLIC
CONGO
LIBYAEGYPT
CHAD
KENYA
ETHIOPIA
ERITREA
Red S
ea
Prolific Muglad Basin petroleum system
1500 km 2D seismic survey programmeOver ~1280 km of seismic acquired since 2006
Multi-well exploration programme to begin in 2007
Net unrisked resourcefrom targeted prospects > 500 million boe
Sudan - Block 5B
B
Umm Dandalo
Kasafa
Barada
Nyal
26
WF9171 10.07
Well Site Preparation
Equipment at well site
DB
SB
SBTB
PT
CB
DB – Drilling BargeCB – Crane BargeSB – Storage BargeTB – Transport BargeWT – Well Testing BargeAB – Accommodation BargePT – Pusher Tugs
AB
WT
110m110m
110m110m
18m18m
~ 2500m~ 2500m
Vegetation primarily consists of Vegetation primarily consists of papyrus and elephant grasspapyrus and elephant grass
Drilling AreaDrilling Area
Bahr El Bahr El ZarafZaraf
AccessAccessChannelChannel
DBDB
SB
SB
SB
SBTB
PT
TBTB
PTPT
CBCB
DB – Drilling BargeCB – Crane BargeSB – Storage BargeTB – Transport BargeWT – Well Testing BargeAB – Accommodation BargePT – Pusher Tugs
ABAB
WTWT
110m110m
110m110m
18m18m
~ 2500m~ 2500m
Vegetation primarily consists of Vegetation primarily consists of papyrus and elephant grasspapyrus and elephant grass
Drilling AreaDrilling Area
Bahr El Bahr El ZarafZaraf
AccessAccessChannelChannel
110m110m
110m110m
18m18m
~ 2500m~ 2500m
110m110m
110m110m
18m18m
~ 2500m~ 2500m
Vegetation primarily consists of Vegetation primarily consists of papyrus and elephant grasspapyrus and elephant grass
Drilling AreaDrilling Area
Bahr El Bahr El ZarafZaraf
AccessAccessChannelChannel
Well site preparation - 19 September 07
Equipment en route to well site
Well site layout
27
WF9171 10.07
Accomodation barge at KostiRig test at Kosti
Barges and drilling equipment at Kosti logistics base before transit to well location
Kosti Logistics Base
28
Sudan - Block 5B
National Petroleum Commission (NPC) has confirmed the legal validity of
the Block 5B partnership.
Requested by NPC to accommodate “Nile Pet” (Government of South Sudan oil company)
with a 10% interest in Block 5B. Limited progress on documentation
WF9693 11.07
29
WF9201 01.07
Russia Exploration - Lagansky Block
0 40KM
Lagansky Block
Tengutinskoye
Oleynikovskoye
Mezhevoye
Promyslovskoye
Sallkhinskaya
KurgannoyeKamyshanskoye S.
Kamyshanskoye V.
Ulan-Khol
Ermolinskoye
Kaspiiskoye
Oernoye
Stepnoye
Kumukhskoye Yu.
Kumukhskoye
Sarmatskoye
Yuri Korchagin
Rakushechnoye
Yubileinoye
TalovskoyeSolonchaskovoye
Dorozhnoye
Krasnokamysh
Naryn-Khuduk
Tyuleniy
Severny (Northern)
Severo-Rakushechny
Northern Caspian
45º
46º
47º 48º 49º
Viktor Filanovski
Russia
Laganskaya Prospect
Petroskaya Lead
Morskaya Prospect
Rakushechnoye-1, 2001Gas condensate discoveryFlow rate: 14 MMscf/d
Rakushechnoye-2, 2005Oil and gas discoveryFlow rates: 6,400 bopd 16.5 MMscf/d
Rak-1
Rak-2
Rak-4
2 exploration wells in 2007LundinConcessionOil Field
Gas Field
Gas Condensate
Prospects
30
Russia Lagansky Exploration - Alliance with Gazprom
Gazprom option to purchase 50% + one share in Laganskyduring exploration phase
Lundin Petroleum option to purchase 30% in Laganskyfrom minority partner during exploration phase
If options exercised Lundin Petroleum and Gazprom 50:50 partnership
Lundin Petroleum continue to operate in exploration phase
WF9691 08.07
31
Russia Lagansky Exploration - Permitting Status
WF9691 11.07
Permitting
Operationally ready to commence drilling
Licence amendments approved by RosnedraFinalising drilling permit from Rosprirodnadzor
First well to be drilled in first half 2008
32
WF9598 11.07
New Ventures - First Nine Months 2007
Congo (Brazzaville)
Ethiopia (3)
Kenya
Signed 7 PSCs
VietnamCambodia
Indonesia(2 study options)
Signed 2 Direct Study Options in Indonesia
0 200KM
ETHIOPIA
KENYA
SOMALIA
DJIBOUTI
BLOCKS 2 & 6
BLOCK 10A
BLOCKS 7 & 8
ADIGALACONGO
(Brazzaville)
GABON
ANGOLACONGO
(Kinshasa)
MARINE XI
0 KM 500 100KM
VIETNAM
CAMBODIA
BLOCK E
BLOCK 06/94
MALAYSIA
THAILAND
33
WF9192 05.07
2007 Proven & Probable Reserves
France (22.6) Netherlands (5.4)
Indonesia (17.6)
Tunisia (3.8)
UK (49.3)
Norway (47.2)
Russia (30.3)
Total 176.4 MMboe
01.01.2006 146.1mmboe
- Produced (excl Russia) -9.8- Venezuela Mixed Enterprise -4.4+ New reserves (excl Acquisitions) 12.0+ Acquisitions 32.5
01.01.2007 176.4
Reserves Replacement Ratio 122%
Increase in Reserves 29%
Oil 89.1%
Gas 10.9%
176.4
34
WF9688 11.07
0
20
40
60
80
100
120
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Mb
oep
d
2P as at 1.1.2007
Contingent Resources
Production Profile based upon 2007 Reserve Position
35
WF9829 11.07
Norway - Alvheim delay
Indonesia - Delay of Singa first gas from 2008 to 2009
United Kingdom Broom - 2007 outperformance of Broom. Non requirement for additional water injection well
Thistle - Deferment of gas lift facilities on platform - Shutdown in 2008 related to Thistle redevelopment
4,100 boepd
1,100 boepd
2,000 boepd
3,100 boepd
Comparison to original P50 Reserves Certi�cation2008 negative impact
on production
Factors Affecting 2008 Production
36