Capital Markets Day Lundin Petroleum - Lundin Group of ...
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Lundin Petroleum Capital Markets Day 30 January 2019
Lundin Petroleum 2019 Capital Markets Day
Agenda
1. Value creation - what we’ve achieved and where we’re going Who will be presenting today....
2. Industry leading cost efficient growth - it keeps on getting better
3. Production assets - maximising value for the long-term
4. Johan Sverdrup - the final countdown
Alex Schneiter Nick Walker
--------------------------------Break-------------------------------------
President & CEO COO
5. Organic growth - delivering on our strategy
6. Financial strength - we can do it all
7. Dividends - material and sustainable
8. Concluding remarks Kristin Færøvik
Teitur Poulsen
CFO Managing Director
--------------------------------Q&A--------------------------------------
WF12502 p01 02.19
Capital Markets Day 2019 Lundin Petroleum 2
Value creation
what we’ve achieved
and where we’re going
3
Lundin Petroleum
A Leading European Independent E&P Company
> 9.5 Bn USD >1 Bn boe
Market Cap Resource base 2018 Dividend Payment ~153 MUSD
340
320
300
>170 Mboepd
by 2023
Industry Leading 280
~20% CAGR Low Opex 260
240
IPC Spin-off
growth from 2018 ~4 USD/bbl ~410 MUSD 220
SEK/Share
200
Proposed
1.6 Bn USD 500 MUSD
180
160
Liquidity dividend 2019 140
UK Spin-off 120
~700 MUSD 100
Low Carbon footprint 80
60
quarter world average
40
CAGR ~25% 20
0
WF12502 p02 01.19
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Capital Markets Day 2019 Lundin Petroleum 4
Lundin Petroleum
2018 Highlights
Strong Production Low Operating Costs
81.1 Mboepd 3.66 USD/boe
upper end revised guidance 12% below original guidance
Record Free Cash Flow Johan Sverdrup
663 MUSD first oil on track for
Nov 2019
Proposed 500 MUSD Phase 1 ~85% complete
2019 dividend
Increased Reserves (1) Growth Opportunities
745 MMboe
Successful
E&A wells 6 out of 9
Reserve replacement 163%
7 potential new projects
WF12502 p12 01.19
(1)
Proved plus probable reserves
Capital Markets Day 2019 Lundin Petroleum 5
Lundin Petroleum
Key Metrics
Strong track record of organic growth and delivery
2P Reserves (2) Production Operating Costs Operating Cash Flow
75–95
726 745 86 1,890
714 81 10.7
654
1,530
59
Net Mboepd
Net MMboe
Million USD
6.8
USD/boe
860
4.25 3.66 4.25
550
21
2015 2016 2017 2018 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 (1)
guidance guidance
WF12502 p04 01.19
(1)
Oil price range 45 to 75 USD/bbl
(2)
Proved plus probable reserves
Capital Markets Day 2019 Lundin Petroleum 6
Southern Barents Sea Southeastern Trend
Lundin Petroleum 7.3 billion barrels(2)
Norway Pure Play Loppa High
Hammerfest
Organic growth strategy
NCS ranks in top 10 worldwide exploration areas(1) Harstad
Significant yet to find resources >16 billion barrels(2) Norwegian Sea
4.7 billion barrels(2)
Material acreage position - 7 core areas
Business development - opportunistic strategy
Frøya High/
Froan Basin
North Sea
4.6 billion barrels(2)
Norway
Nothern North Sea
Alvheim Area Oslo
Stavanger
Utsira High Area
0.7USD/boe Lundin Petroleum finding costs(3)
WF12502 p05 01.19
(1) Woodmac
Mandal High (2) NPD estimate January 2018
(3) Post tax
Capital Markets Day 2019 Lundin Petroleum 7
Lundin Petroleum
Portfolio Growth 2018
Licensing Rounds Acquisitions
32 awards 7 deals
Portfolio
82 exploration
licences
~70% increase
WF12502 p06 04.19
Capital Markets Day 2019 Lundin Petroleum 8
Lundin Petroleum
Industry Leading Low Carbon Intensity ESG Ratings 2018
Top 10 ESG in Europe
Top 5 on human rights globally
Emissions intensity (1) Prime Status
kgCO2e/boe
Outperformer
AA
20 A-
10 ~0.7
~5
Power from
shore 2022
World Norway Edvard Johan
Grieg Sverdrup
WF12502 p09 01.19
Sources NOROG/IOGP for world and Norway data (2016 averages). Edvard Grieg’s data
(1)
is from 2018. All data is in kgCO2 e/boe (incl. methane). Johan Sverdrup full field estimate data is in kgCO2 /boe,
data updated August 2018
Capital Markets Day 2019 Lundin Petroleum 9
Lundin Petroleum
Safe Operations
Total Recordable
Incident Rate (TRIR) (1)
2.7
1.0
Norway (2) Lundin (3)
Zero serious injuries (3)
Zero process safety incidents (3)
No material environmental incidents (3)
WF12502 p08 01.19
(1)
Per million manhours
(2)
Norway industry average 2017
(3)
2018
Capital Markets Day 2019 Lundin Petroleum 10Lundin Petroleum
What to Expect in 2019
Production Sustained Low OPEX
75–95 Mboepd 4.25 USD/boe
Johan Sverdrup
4 Project Sanctions
first oil Nov 2019 Luno II, Rolvsnes EWT,
Edvard Grieg infills, Frosk
Organic Growth Dividends
2 appraisal wells Proposed 500 MUSD
15 targeting >750 MMboe
exploration wells
(1) Sustainable below 50 USD/boe
WF12502 p10 01.19
(1) Net unrisked resources
Capital Markets Day 2019 Lundin Petroleum 11Long-term 500 MUSD
value creation dividend in 2019
Sustainable
~1 Bn USD dividends
average free cash flow below 50 USD/bbl
per year (1)
~4 USD/boe
industry leading low OPEX
>170 Mboepd Targeting
by 2023 >200 Mboepd
+ organic growth Low Carbon
upside footprint
(1)
From 2019–2026 at 60 USD/bbl 12Industry leading
cost efficient
growth
it keeps on getting better
13Lundin Petroleum
2018 Production
2018 Production Efficiency
2018 production of 81.1 Mboepd
Upper end of updated guidance of 78–82 Mboepd (1)
Edvard Grieg
Reservoir and facilities outperformance
Annual guidance at CMD, 95%
2018 Net Production (Mboepd)
100 98%
83.1 81.2 82.1
78.2 2018 Average
80 81.1
60
Alvheim Area
Annual guidance at CMD, 95%
40
20
97%
0
Q1 Q2 Q3 Q4
WF12504 p01 01.19
2018 2018 2018 2018
(1)
Original guidance 74–82 Mboepd
Capital Markets Day 2019 Lundin Petroleum 14Lundin Petroleum
2019 Production Guidance
2019 production guidance: 75–95 Mboepd
Edvard Grieg – plateau production, no material planned shutdowns
Alvheim Area – decline arrested by new wells
Johan Sverdrup – expected first oil November 2019 (range October 2019 – early 2020)
2019 Net Production Forecast (Mboepd) 2019 Forecast
160
High Alvheim Area
140
Low
120
Johan Sverdrup
100
Jan to date (1)
80 Ivar Aasen
60
40
Edvard Grieg
20
WF12504 p02 01.19
0
Q1 Q2 Q3 Q4
(1)
to 23 January
Capital Markets Day 2019 Lundin Petroleum 15Lundin Petroleum
Industry Leading Low Operating Costs
2018 unit operating cost 12% below original guidance (2)
Improved Long-term Guidance
Opex (USD/boe)
16 3.2–4.2 USD/boe(4)
(previously 3.9-4.4)
8
4.25 3.2–4.2
3.66
UK (1) Norway (1) 2018 2019 2020
Average Average Guidance (3) Onwards (3)
WF12504 p06 01.19
(1)
Source WoodMac
(2)
Original 2018 guidance 4.15 USD/boe
Lundin Petroleum (3)
USD/NOK exchange rate 8.0
(4)
2020 onwards
Capital Markets Day 2019 Lundin Petroleum 16Lundin Petroleum
Year-end 2018 2P Reserves (1, 4) (net)
Alvheim Area
23.2
Ivar Aasen 2P Reserves Life Index 24 years(2)
1.7
Edvard Grieg
115.9
MMboe
End 2017 726.3
Total - 2018 Production
+ Revisions
-30.1
+49.2
745.4 End 2018 (4) 745.4
MMboe
Reserve replacement ratio (3) 163%
Johan Sverdrup
604.7
(1)
2P Reserves is Proved plus Probable remaining reserves.
(2)
Reserves life index is the ratio of remaining reserves and the current annual
production forecast.
WF12504 p03 01.19
(3)
As per industry standards the reserve replacement ratio is defined as the ratio
of reserve additions to production during the year, excluding acquisitions and sales.
(4)
Independently audited by ERC Equipoise Ltd (ERCE)
Capital Markets Day 2019 Lundin Petroleum 17Lundin Petroleum
Track Record of Growing Reserves
Reserve Replacement Ratio (%) (1, 2)
6754%
Johan Sverdrup
5th consecutive year of reserves growth
while growing production x 4
242% Reserves
Growth
163%
144%
133%
100%
2014 2015 2016 2017 2018
WF12504 p04 01.19
(1)
2P reserves
(2)
Relates to Lundin Petroleum portfolio in Norway
Capital Markets Day 2019 Lundin Petroleum 18Lundin Petroleum
Year-end 2018 2C Contingent Resources (net)
Edvard Grieg
Johan Sverdrup infill drilling
infill drilling 10
30
Alta/Gohta MMboe
Other 87 End 2017 203.4
26
Total + Discoveries +4.8
Alvheim Area
225.4 + Revisions +27.5
+ Acquisitions +7.9
9 MMboe
- Mature to Reserves -18.2
Rolvsnes End 2018 225.4
22 (1)
Luno II
WF12504 p08 01.19
42
(1)
Excludes impact of additional 30% equity from Lime Petroleum transaction
Capital Markets Day 2019 Lundin Petroleum 19Lundin Petroleum
Year-end 2018 Reserves and Resources Summary (MMboe net)
>1 billion barrels
resource base
What to look out for in 2019
Reserve Bookings
· Luno II
· Edvard Grieg upside
· Edvard Grieg infills
· Rolvsnes EWT
Exploration Programme
15 wells targeting
>750 MMboe net unrisked resources
WF12504 p09 01.19
(1)
2P Reserves is Proved plus Probable remaining reserves
(2)
3P Reserves is Proved plus Probable plus Possible remaining reserves
(3)
2C Contingent Resources
Capital Markets Day 2019 Lundin Petroleum 20Lundin Petroleum
Increased Long-term Production Guidance (Mboepd)
Target
>200 Mboepd
Upsides and
New Projects
>170
>150
Increased Production Guidance
Mboepd New Was
75–95 Johan Sverdrup
86 81 Phase 1 Plateau >150 >130
(2020)
59
Johan Sverdrup
Full Field Plateau
(2023)
>170 >160
21
2015 2016 2017 2018 2019 J. Sverdrup J. Sverdrup
Guidance Phase 1 Full Field
Plateau Plateau Committed Projects + Luno II
(2020) (2023)
WF12504 p05 01.19
Growth of ~20% CAGR
Capital Markets Day 2019 Lundin Petroleum 21Production
assets
maximising value
for the long-term
22Lundin Petroleum
Greater Edvard Grieg Area – Keeping the Facilities Full
Edvard Grieg
Reserves upside and
infill opportunities
Johan Sverdrup
Lille Prinsen
Edvard Grieg
Goddo
Rolvsnes
Tie-backs
Ivar Aasen
Luno II, Rolvsnes/Goddo,
Lille Prinsen and
WF12506 p01 01.19
Luno II exploration opportunities
Capital Markets Day 2019 Lundin Petroleum 23Edvard Grieg
Strong Operating Performance
Production efficiency: 98% 2018 (96% 2019 assumption)
Well capacity double available facilities capacity
Production outlook reflects contractual capacity allocation
- 90 Mbopd for Edvard Grieg out of 145 Mbopd (2)
2018 Gross Production (Mboepd)
120
100 2018 Average
98
80
60
40
20
OPEX 3.95 USD/boe (1)
0
WF12506 p02 01.19
Q1 Q2 Q3 Q4
(1)
2018 actual, includes tariff netting
(2)
Excludes gas and NGL’s
Capital Markets Day 2019 Lundin Petroleum 24Edvard Grieg
Reservoir Outperformance
Plateau extended six months to mid-2020
4D Seismic Response
Significantly slower build-up of water production than expected
Recent 4D seismic - water flood front further from
producers than anticipated
Not reflected in current reservoir models
Edvard Grieg
Gross Reserves/Resources (MMboe)
357
282
+52%
186 Water flood front
3P Reserves
2C Contingent Resources
Cumulative Production
WF12506 p03 01.19
Remaining 2P Reserves
PDO 2018
Production well Water injection well
Capital Markets Day 2019 Lundin Petroleum 25Areas evaluated for infill wells
Edvard Grieg
Exploration /Appraisal wells
Water injector 2019 exploration targets
Oil producer
Infill and Step-out Opportunities Planned producer
Planned water injector PL338FS
Perforated Interval 0 KM 2
Fault
PL338BS PL338
Infill well campaign planned for 2020
Rig contracted – 3 firm slots
Jorvik/Tellus East
OP5 (A7) 23 MMboe (1)
Area exploration opportunities Tellus East
Jorvik/Tellus East (2019) C
OW
Troldhaugen/Flis (2020) WI1 (A02)
16/1-4
OP11 (A8)
OP1(A11AT2 )
OP4 (A12)
WI2 (A01)
Jorvik
OP2 (A06)
PL338B
Infill Programme
Initial 3 wells 16 MMboe(2) OP3 (A10A)
OP6 (A15)
Breakeven oil price 60% at 60 USD/bbl (3) OP12 (A13)
OP10 (A19)
WI-5 (A20)
OP9 (A18)
Troldhaugen/Flis PL338C
WF12506 p04 01.19
(1)
Gross unrisked prospective resources
Rolvsnes
(2)
Gross resources
(3)
Look forward
Capital Markets Day 2019 Lundin Petroleum 260 KM 4
338 338
16/1-14 (Apollo)
Luno II
16/1-15
16/1-4
16/1-13
Edvard Grieg
Developing Satellites to Edvard Grieg
16/1-10
16/1-18
16/1-17
16/1-8 265
16/1-23
16/1-12
Edv ard Grieg Sør
PL359 (Lundin 65% operated) 16/1-25
Aligned equities with Edvard Grieg
338 C 15 km
- acquired Equinor 15% interest
338 E
D 359
16/4-5
Segment D
Increased resources 40–100 MMboe gross Prospective
16/4-3 981 16/4-9
C 16/4-6 Luno II
Appraisal well - high quality sandstones
B
16/4-6 S (Luno I I)
16/4-8
A
Phased subsea tie-back to Edvard Grieg 16/4-1
Phase 1 - Segment B Outer Wedge + Segment C
Segment B
Phase 2 - upside plus prospectivity
Segment A
Segment C
Outer Wedge
WF12506 p13 01.19
Phase 1 producer
Phase 1 water injector
Capital Markets Day 2019 Lundin Petroleum 27Luno II
Development Project - Phase 1
PDO/sanction First oil
2019 2020 2021 Edvard Grieg
Facilities contracts
awarded Topsides
Synergies with Rolvsnes EWT modifications
Luno II Phase 1 Development
Contingent resources 57 MMboe gross (1)
Development costRolvsnes/Goddo
Developing Porous/Fractured Basement PL338C
Lundin (operator) 80%
WI
OMV 20%
PL338 PL265
Strategic acquisition of Lime Petroleum’s interests: Edvard
Grieg
PL338C / E Rolvsnes (Lundin now 80% operated) Rolvsnes
14–78 MMboe(1)
PL815 Goddo (Lundin now 60% operated) PL338C
Johan
338c
Sverdrup
Rolvsnes horizontal appraisal well (2018)
Good productivity – 7,000 bopd
Significant connected volume Klaff well 2019
Still need to confirm long-term productivity (Equinor)
Rolvsnes resources increased to 14–78 MMboe (1) PL359 PL338E
De-risks Goddo area
PL338E WI
Lundin (operator) 80%
OMV 20%
Area potential (Rolvsnes+Goddo) >250 MMboe (1)
Luno II Goddo Prospect
PL815
112 MMboe(2)
PL815 WI
WF12506 p07 01.19
Lundin (operator) 60%
Concedo 20%
Petoro 20%
(1)
Gross (2)
Gross unrisked prospective resources
Capital Markets Day 2019 Lundin Petroleum 29Rolvsnes/Goddo
Phased Approach
Phased approach
2018 Rolvsnes horizontal appraisal well and DST - completed
2019 Goddo prospect drilling
2021 Rolvsnes EWT tied in subsea to Edvard Grieg
- sanction Q1 2019
Phased full field development EWT sanction EWT first oil
Rolvsnes/Goddo
2019 2020 2021 2022
phased development
Goddo
Edvard Grieg exploration well
Goddo
Rolvsnes
WF12506 p08 01.19
Capital Markets Day 2019 Lundin Petroleum 30Greater Edvard Grieg Area
Extended Plateau Production
End Plateau Latest 2P Reserves Plateau
Original PDO revised to mid 2020
Plateau Extension
100
3P reserves - Edvard Grieg/Luno II upsides
80 Rolvsnes
- Rolvsnes/Goddo full
development
EWT - Exploration
60
Luno II
2P reserves
40 Infill
wells
20
0
2018 2019 2020 2021 2022 2023 2024
WF12506 p09 01.19
Capital Markets Day 2019 Lundin Petroleum 31Alvheim Area
Continuous Reserves Growth
Alvheim
Gross Reserves/Resources (MMboe)(1)
607
494
Strong reservoir performance
+92%
Portfolio of good infill drilling opportunities
257
Frosk area potential >200 MMboe (2)
Alvheim FPSO 3P Reserves
2C Contingent Resources
Cumulative Production
Remaining 2P Reserves
PDO 2018
Froskelår Main
exploration well 2019
Frosk Discovery
30–60 MMboe (2) Alvheim
Rumpetroll
Bøyla
exploration well 2019
Viper Gekko
28–52 MMboe (2)
WF12506 p10 01.19
Kobra
Volund
(1)
As at 31 December 2018 (2)
Gross resources
Capital Markets Day 2019 Lundin Petroleum 32Alvheim Area
Strong Performance
Continued strong facilities performance
2018 production efficiency 97%
Good results from 2017/2018 infill wells
3 wells on line in 2018
Largely arrests decline
2 wells online in 2019
Frosk test producer – via Boyla facilities
Volund infill
2 Boa 2018 Net Production (Mboepd)
20 wells Kameleon
well
2018 Average
15 16.5
10
5
OPEX 4.96 USD/boe (1)
WF12506 p11 01.19
0
Q1 Q2 Q3 Q4
(1)
2018 actual
Capital Markets Day 2019 Lundin Petroleum 33PL203b PL919
PL203 PL036c
0 KM 8 PL088BS
Alvheim
Alvheim Area
Frosk Upside - a New Alvheim?
Volund
PL150
ay
NorwK
PL736 S
0 KM 4
U
way
UK
'
Frosk Discovery
PL869
869
Nor
24/9-3
PL869 (20% W.I.)
PL340 (Lundin 15%) & PL869 (Lundin 20%) '
Bøyla
Froskelår Main
Frosk oil discovery – 30–60 MMboe(1) drilling ongoing
PL340 Caterpillar
92 MMboe (2)
869Froskelår NE
'
PL869
Area potential > 200 MMboe (2) ' PL340 BS
14 MMboe (2)
Froskelår Main, Froskelår NE and
Rumpetroll drilling 2019 Frosk
Frosk Discovery
30-60 MMboe (1)
©
Bøyla PL340 (15% W.I.)
340 BS
' Caterpilar
Rumpetroll
93 MMboe (2)
WF12506 p12 01.19
(1)
Gross resources
Field/Discovery
(2)
Gross unrisked prospective resources
Prospect
Capital Markets Day 2019 Lundin Petroleum 34Johan
Sverdrup
the final countdown
35Lundin Petroleum
Johan Sverdrup – Key Numbers Improving
GROSS RESOURCES PRODUCTION CAPACITY BREAK EVEN PRICE GROSS CAPEX (1)
Phase 1 Full Field Phase 1 Phase 2
2.2–3.2 billion boe First oil Nov 2019 First oil Q4 2022 Full Field PDO 123 Bn NOK PDO 85 Bn NOK (2)
(PDO 1.7 – 3.0 billion boe)
440 Mbopd 660 MbopdJohan Sverdrup
Phase 1 – The Countdown to First Oil
On track for expected first oil November 2019
Ramp-up to Phase 1 plateau 440 Mbopd – expected summer 2020
Rapid ramp-up of 8 pre-drilled wells
Drilling of further 2 to 4 wells required to reach plateau
First Oil
Install November 2019
~85% Process Platform Topsides (expected)
complete Living Quarters Topsides [Range Oct 2019 – early 2020]
Hook-up and commissioning >>>
Tie-back pre-drilled wells >>> Drilling >>>
new wells
Q1 Q2 Q3 Q4
WF12505 p02 01.19
2019
Capital Markets Day 2019 Lundin Petroleum 37Johan Sverdrup
Reservoir Update
20 pre-drilled wells completed ahead of schedule Recovery ambition >70%
Gross resource range increased to 2.2–3.2 billion boe Permanent reservoir monitoring
Lundin 2P reserves (net): 605 MMboe (1) Infill wells
Results from pre-drilled wells included
Water Alternating Gas (WAG) injection included
8 Pre-drilled 4 Pre-drilled
Production Water injection
Wells Wells
4 Pre-drilled
Water injection
Wells
FIELD CENTRE
4 Pre-drilled
Water injection
WF12505 p03 01.19
Wells
(1)
Lundin Petroleum year end 2018 proved plus probable reserves estimate
Capital Markets Day 2019 Lundin Petroleum 38Johan Sverdrup
Phase 2
Phase 2 PDO submitted, First Oil Q4 2022
Development progressing on plan
New processing platform
Field centre modifications
Power from shore area solution
Five subsea templates
28 wells
WF12505 p04 01.19
WAG
Capital Markets Day 2019 Lundin Petroleum 39Johan Sverdrup
Driving Production Growth
Full field capacity
660 Mbopd
First oil Q4 2022
Phase 1 capacity
440 Mbopd
First oil Nov 2019
(expected)
WF12505 p05 01.19
Capital Markets Day 2019 Lundin Petroleum 40Organic growth
delivering on our strategy
41Lundin Petroleum
Organic Value Creation through Innovation
Subsurface expertise
Cutting-edge technology
Maximising recovery
New reservoirs and plays
0.7 USD/boe Lundin Petroleum finding costs (1)
WF12503 p01 01.19
(1) Post tax
Capital Markets Day 2019 Lundin Petroleum 42Lundin Petroleum
Organic Growth Strategy
Southeastern Trend
Loppa High
7 ~70%
core increase in number
exploration of licences from Hammerfest
areas Jan 2018
Harstad
7 15
potential exploration
new projects wells in 2019
~225 MMboe (1) >750 MMboe (2) Frøya High/
Froan Basin
Northern North Sea Area
Alvheim Area
Oslo
Stavanger
Utsira High Area
WF12503 p02 01.19
Mandal High
(1)
Net contingent resources
(2)
Net unrisked prospective resources Core areas
Capital Markets Day 2019 Lundin Petroleum 43Lundin Petroleum PL962 PL965
Barents Sea
Renewing and Diversifying the Exploration Portfolio PL1027
PL1029
PL533b PL954 PL850
PL952
PL902B
PL1023
PL950 PL767B
Actively managing and expanding the portfolio PL960
Licensing Rounds
APA 2017 – 14 licence awards
APA 2018 – record 15 licence awards
24th Round – 3 licence awards
Norwegian Sea
7 deals in 2018
PL1011
Northern North Sea emerging new core area PL935
PL936 PL934
PL886b
PL998
PL929
82 licences
PL991 PL989
PL926
PL924
PL988 PL921
Norway
~70%
PL919
PL987
increase Acquisition/swap
PL820S
PL917
PL916
from PL338FS PL914S
Licence rounds PL338C PL167c
Jan 2018 PL338E
PL976
PL359
WF12503 p03 01.19
PL815
PL981
North Sea PL539
PL904 PL860
Capital Markets Day 2019 Lundin Petroleum 44Lundin Petroleum Southern
Barents Sea
Pipeline of Potential New Projects 7potential new projects Loppa High
targeting 105–350 MMboe Alta/Gohta
net resources (2) 115–390 MMboe (1)
Hammerfest
2018 2019 2020 2021 2025
Harstad
Appraisal PDO First oil
Luno II
Appraisal EWT sanction EWT first oil
Norwegian Sea
Rolvsnes Phased
development
Sanction Start drilling
Edvard Grieg
Infills
North Sea Frosk
Discovery Appraisal well 30–60 MMboe(1)
Gekko Lille Prinsen
Lille Prinsen
28–52 MMboe(1) 15–35 MMboe(1)
Appraisal upside
Production Alvheim Area >100 MMboe Oslo
Discovery Appraisal test first oil Utsira High Area Stavanger
Frosk Edvard Grieg Infills
10–19 MMboe(1)
Luno II Rolvsnes
Appraisal 40–100 MMboe(1) 14–78 MMboe(1)
Appraisal upside >250 MMboe
Gekko Appraisal project
WF12503 p04 01.19
EWT Appraisal well First oil
Alta/Gohta (1)
Operator estimate of gross resources
(2)
Net contingent resources plus prospective resources
Capital Markets Day 2019 Lundin Petroleum 45Southern Barents Sea - Drill Out
Lundin Petroleum 4 wells in 2019
Exploration Programme >1.5 Bn boe (1)
Norwegian Sea - Drill Out
2 wells in 2019
>200 MMboe (1)
Alvheim Area – Sustain Production
3 wells in 2019
Northern North Sea – Building
>200 MMboe (1)
1 well in 2019
~100 MMboe (1)
Greater Utsira High – Sustain Production
4 wells in 2019
>500 MMboe (1) Mandal High – Drill Out
1 well in 2019
WF12503 p05 01.19
(1)
Gross unrisked prospective resources >500 MMboe (1)
Capital Markets Day 2019 Lundin Petroleum 46Southern Barents Sea
Large underexplored area
~120 wildcat wells drilled
7.3 Bn boe yet to find (1) Korpfjell Deep Prospect
Wisting 201 MMboe (2)
440 MMbo
5 significant discoveries to date
>2.5 Bn boe of commercial resources
Gjøkåsen Deep Prospect
Area producing 500 Mboepd by 2027 428 MMboe (2)
Exciting 2019 programme
Johan Castberg
550 MMbo Barents Sea
5 E&A wells Pointer/Setter Prospect drilling
312 MMboe (2)
Alta / Gohta Appraisal
Alta/Gohta
115–390 MMboe Gjøkåsen Shallow Prospect drilling
Snøhvit
768 MMboe (2)
1.7 Bn boe
2018 wells Goliat
195 MMbo
Fields
2019 wells
Hammerfest
Lundin Norway Licences
Vadso
WF12503 p06 01.19
(1)
NPD estimate Jan 2018 - yet to find resources Tromsø Norway
(2)
Lundin estimates of gross unrisked prospective resources 0 KM 100
Capital Markets Day 2019 Lundin Petroleum 47Lundin Petroleum
At the Forefront of Seismic Innovation
Broadband (Utsira High)
Topseis (Barents Sea & Utsira High)
Topseis >10x increase in data
TOPSEIS
WF12503 p07 01.19
Developed by Lundin and CGG
Capital Markets Day 2019 Lundin Petroleum 48Alta/Gohta
Pioneering Karstified Carbonate Reservoirs
First NCS karstified carbonate reservoir
Successful extended well test reduces uncertainty
Resource range 115–390 MMboe (1)
Unchanged – EWT & Topseis still being assessed
Further appraisal 2019
WF12503 p08 01.19
(1)
Gross
Capital Markets Day 2019 Lundin Petroleum 49Alta
Successful EWT Reduces Uncertainty
Produced 18,000 bopd EWT well
Total volumes 660,000 bbls
Limited water/gas
Excellent reservoir productivity
Large connected volume
No compartmentalisation
Proves drilling horizontal well in
karstified carbonates
Updated resources and appraisal
plan in 2019
WF12503 p09 01.19
Capital Markets Day 2019 Lundin Petroleum 50Alta/Gohta
Development Options
Operating environment and cost basis similar to Norwegian Sea
Development feasibility studies ongoing
Re-use/new build options
New technology solutions
Alta
Gohta
WF12503 p14 01.19
Capital Markets Day 2019 Lundin Petroleum 51North Sea Exploration
Significant Potential
Northern North Sea
Significant remaining prospectivity Bergen
Alvheim Area
4.6 Bn boe yet to find (2)
Froskelår Main Gladsheim
Continue to build position 92 MMboe (1) Evra/Iving 96 MMboe (1)
Froskelår NE 181 MMboe (1)
Lille Prinsen Appraisal
New exploration core area 14 MMboe (1)
15–35 MMboe (3)
– Northern North Sea Frosk Test Producer Appraisal upside >100 MMboe (1)
30–60 MMboe (3)
Stavanger
Rumpetroll
JK
93 MMboe (1)
243 MMboe (1)
Jorvik/Tellus East
23 MMboe (1) Goddo North Sea
112 MMboe (1)
Utsira High
11 E&A
wells
No
Mandal High Area
rw
UK
Lundin Norway Licences Vinstra/Otta
ay
2019 prospects 555 MMboe (1)
o r w ay
N
2019 appraisal wells
ark
WF12503 p10 01.19
(1)
Lundin estimates of gross unrisked prospective resources
De n m
(2)
NPD estimates Jan 2018 - yet to find resources
(3)
Operator estimates of gross resources
Capital Markets Day 2019 Lundin Petroleum 52Grane
Utsira High Area Svalin
Significant Remaining Potential
Hanz JK
243 MMboe (1)
Lille Prinsen Appraisal
2019 E&A programme – 4 wells
Testing >400 MMboe (1)
Lille Prinsen appraisal Ivar Aasen
15–35 MMboe (1)
Jorvik/Tellus East
Appraisal upside >100 MMboe (2) 23 MMboe (1)
3 exploration wells
JK, Jorvik/Tellus East, Goddo Edvard Grieg Johan Sverdrup
Topseis II test (2018)
Rolvsnes
Topseis II area
Klaff (Equinor 2019)
Lundin Petroleum operator
Lundin Petroleum Partner
Oil field/discovery
Gas field
Luno II Goddo
WF12503 p11 01.19
Prospect
Lead
112 MMboe (1)
0 KM 10
(1)
Gross resources
(2)
Lundin estimates of gross unrisked prospective resources
Capital Markets Day 2019 Lundin Petroleum 53WF12503 p12 01.19
Net Unrisked Prospective Resources (MMboe)
0
100
200
300
400
500
600
700
800
900
Gjøkåsen Shallow
Capital Markets Day 2019
Pointer / Setter
Q1
Froskelår Main
Lundin Petroleum
Gjøkåsen Deep
Frosklår NE
Jorvik / Tellus East
2019 Prospective Resources
Rumpetroll
Q2
Vinstra / Otta
2019
15
JK
Expl
Korpfjell Deep
oratio
Goddo
n We
Lynghaug
lls
Q3
Evra / Iving
Gladsheim
Toutatis
Q4
Targeting
>750 MMboe
>150 MMboe
Lundin Petroleum
Net Risked Resources
Net Unrisked Resources
54Progressing resources
to reserves
Pipeline of
new projects
Significant
exploration programme
Building and diversifying
the portfolio Delivering on our
Organic Growth
Strategy
WF12503 p13 01.19
Capital Markets Day 2019 Lundin Petroleum 55Financial strength
we can do it all
56Lundin Petroleum
2018 Financial Highlights
Operating Cash Flow 1,848 1,916 EBITDA
(MUSD) 1,530 1,501 (MUSD)
2017 2018 2017 2018
Dividend
(MUSD) 410(1)
2018 663 Free Cash Flow
(MUSD)
Record
153 Breaking
Performance 204
2017 2018 2017 2018
Net Debt/EBITDA 5.4X 3.9 Net Debt
3.4 (Bn USD)
2.6X
1.8X
WF12509 p01 01.19
YE YE YE YE YE
2016 2017 2018 2017 2018
(1)
IPC shares in kind
Capital Markets Day 2019 Lundin Petroleum 57Lundin Petroleum
2018 CMD Guidance vs Delivery
CMD 2018 2018 Actual
55 USD/bbl 71 USD/bbl
Production 78 Mboepd 81.1 Mboepd
EBITDA 1.39 Bn USD 1.92 Bn USD
Operating Cash flow 1.41 Bn USD 1.85 Bn USD
Cash OPEX 4.15 USD/boe 3.66 USD/boe
CAPEX and E&A Spend 1.05 Bn USD 1.01 Bn USD
WF12509 p02 01.19
Capital Markets Day 2019 Lundin Petroleum 58Lundin Petroleum
2019 Highlights
Dividends Operating
Cash Flow
500 MUSD 1.25-1.8 Bn USD (1)
FCF CAPEX
Breakeven E&A
~55 USD/bbl (2)
1.23 Bn USD
WF12509 p12 01.19
(1)
BRENT price 45-75 USD/bbl (2)
Pre-dividends Note: Based on mid point of production guidance
Capital Markets Day 2019 Lundin Petroleum 592019 Forecast
Netback (USD/boe)
Forecast
2019
Average Brent oil price USD/boe 45.00 60.00 75.00
Revenue 43.96 57.64 71.33
Cash Operating Costs (1) -4.25 -4.25 -4.25
Other -0.15 -0.15 -0.15
Cash Margin Netback 39.56 53.24 66.92
General & Administration (2) -0.87 -0.87 -0.87
EBITDA Netback 38.69 52.37 66.05
Numbers may not add up due to rounding
All netback forecast for 2019 based on mid-point
of 2019 production guidance 75–95 Mboepd
WF12509 p04 01.19
(1)
Tariff income from Ivar Aasen netted (2)
Adjusted for depreciation
NOK/USD 8.00
Capital Markets Day 2019 Lundin Petroleum 602019 Forecast
Tax
Forecast
2019
Average Brent oil price USD/boe 45.00 60.00 75.00
Current Tax 0.92 -2.04 -9.20
Deferred Tax -16.86 -24.53 -27.99
Total Tax -15.94 -26.57 -37.19
Numbers may not add up due to rounding
Current Tax due as % of EBITDA Tax Credit ~4% ~14%
WF12509 p06 01.19
Assumed tax rate of 42% on interest costs in Norway
Capital Markets Day 2019 Lundin Petroleum 612019 Forecast
Operating Cash Flow Netback (USD/boe)
Forecast
2019
Average Brent oil price USD/boe 45.00 60.00 75.00
Cash Margin Netback 39.56 53.24 66.92
Current Tax 0.92 -2.04 -9.20
Operating Cash Flow Netback 40.48 51.20 57.72
Numbers may not add up due to rounding
WF12509 p07 01.19
Capital Markets Day 2019 Lundin Petroleum 622019 Forecast
Profit Netback (USD/boe)
Forecast
2019
Average Brent oil price USD/boe 45.00 60.00 75.00
Cash Margin Netback 39.56 53.24 66.92
Depletion/Depreciation -14.40 -14.40 -14.40
G&A -0.98 -0.98 -0.98
Financial Items, net -4.19 -4.00 -3.83
Profit Before Tax 19.98 33.85 47.71
Tax Charge -15.94 -26.57 -37.19
Profit After Tax 4.04 7.29 10.51
Tax Rate 80% 78% 78%
WF12509 p08 01.19
Numbers may not add up due to rounding
Capital Markets Day 2019 Lundin Petroleum 63Lundin Petroleum
Crude Oil Marketing
Established crude oil marketing department in 2015
Objective to maximise value of Lundin Petroleum’s produced crude
Marketing all of Lundin Petroleum’s crude oil + 3rd party (field partner) crude
Grane Blend (Edvard Grieg and Ivar Aasen) - ~25% LUPE
Alvheim Blend (Alvheim, Volund and Boyla) - ~17% LUPE
Johan Sverdrup also to be marketed - ~23% LUPE
Grane Norm Price diff vs Dated Brent 2016-2018
1
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2018
-1
2017
2016
-2
-3
WF12512 p01 01.19
-4
-5
Capital Markets Day 2019 Lundin Petroleum 64Lundin Petroleum
Crude Oil Marketing
E&A expenditure substantially discretionary
Lundin Petroleum’s crude blend well positionned for IMO 2020
Alvheim/Grane/JS crude yields comparison vs benchmark crudes
100%
90%
80%
70%
60%
50%
40% %S: 4.12
30% %S: 2.34
%S: 1.28
%S: 1.13
20% %S: 0.84
%S: 0.32
10%
0%
Alvheim Grane JS Brent Urals Arab Medium
API 34.9 API 27.5 API 27.3 API 37.5 API 30.9 API 30.6
%S: 0.17 %S: 0.65 %S: 0.82 %S: 0.40 %S: 1.42 %S: 2.45
WF12512 p04 01.19
Lights (IBP-175) Distillates (175-360) Atm Residue (360+)
Capital Markets Day 2019 Lundin Petroleum 65Lundin Petroleum Barents Sea
2019 Development Activity
2019 Budget 930 MUSD
Utsira High
Other
Johan Sverdrup Phase 1
Alvheim Area Installation/hook-up
Rolvsnes Start-up
Drilling
Johan Sverdrup Phase 2 Norwegian Sea
Luno II Facilities development
Edvard Grieg
Power from shore
Infill drilling
Edvard Grieg Ivar Aasen North Sea
2 infill wells
Norway
Luno II
Development Alvheim Area
Rolvsnes 1 infill well (Volund)
EWT Frosk test producer
Johan Sverdrup
WF12504 p11 01.19
Note: Includes CAPEX associated with the additional 30% interest in Rolvnes from Lime Petroleum
Capital Markets Day 2019 Lundin Petroleum 66PL859
Southern Barents Sea
Lundin Petroleum PL767 Pointer/Setter
Barents Sea
2019 Exploration and Appraisal Activity PL859 Korpfjell Deep
PL857 Gjøkåsen Shallow
PL857 Gjøkåsen Deep PL609/492
PL857
PL609/492 Alta/Gohta appraisal
PL767
2019 Budget 300 MUSD
Norwegian Sea
PL896 Toutatis
Appraisal PL758 Lynghaug
PL896
~25%
PL758
Norwegian Sea
Frøya High
Alvheim Area
PL869 Rumpetroll
Exploration PL869 Froskelår Main North Sea
~75% PL869 Froskelår NE
Northern North Sea
Norway
PL921 Gladsheim
Utsira High
Norway
PL815 Goddo
PL916 JK Alvheim Area
15 exploration wells PL338 Jorvik/Tellus East
Utsira High
PL820S Evra/Iring
2 appraisal wells PL167 Lille Prinsen appraisal
WF12504 p11 01.19
Mandal High
Note: Includes E&A associated with the additional 20% interest in Goddo from Lime Petroleum PL539 Vinstra/Otta Mandal High
Capital Markets Day 2019 Lundin Petroleum 672019 Forecast
Funding and Liquidity (USD/boe)
Forecast 2019
Average Brent oil price USD/boe 45.00 60.00 75.00
Operating Cash Flow Netback 40.48 51.20 57.72
Cash General & Administrative
/ Financial Items -5.87 -5.68 -5.52
Cash Flow Available for Investment and Dividends A 34.60 45.52 52.21
Development Capex -29.98 -29.98 -29.98
Exploration & Appraisal Capex -9.67 -9.67 -9.67
Lime Acquisition(1) -1.39 -1.39 -1.39
Cash Flow from Investing Activities B -41.03 -41.03 -41.03
Cash Flow available for Dividends A + B -6.43 4.49 11.18
Dividend 2018 C -16.12 -16.12 -16.12
Free Cash Flow after Dividends A + B + C -22.54 -11.63 -4.94
Available Liquidity at beginning of 2019 49.48 49.48 49.48
Available Liquidity at end of 2019(2) 26.93 37.85 44.54
WF12509 p09 01.19
Development 930 MUSD and E&A 300 MUSD Numbers may not add up due to rounding
(1)
Post-tax excludes contingent payment (2)
Excludes working capital movement
Capital Markets Day 2019 Lundin Petroleum 68Lundin Petroleum
Bank Debt
USD 5 billion RBL credit facility with 27 Banks
Borrowing Capacity comfortably above the USD 5 billion credit limit
No amortizing until mid-2020 with expiry at end 2022
Margin between 200 – 250 bps; currently paying 225 bps
Available Liquidity of USD 1.6 billion Net Debt and Liquidity (Bn USD)
5 1.6
3.4
0
Drawn Net
WF12514 p10 01.19
RBL Available
Debt
Facility Liquidity
End 2018
Capital Markets Day 2019 Lundin Petroleum 69Lundin Petroleum Total
2020-2026
CAPEX
CAPEX commitments for
CAPEX (Base) 2P + Luno II and Rolvsnes EWT
1,000
900
800
700
600
Million USD
500 8.24
400
7.97
300 7.82
200 7.59
100 8.04
0
2019 2020 2021 2022 2023 2024 2025 2026
Alvheim Hub Edvard Grieg Area Johan Sverdrup Luno II Other
Other currencies
NOK denominated }Total CAPEX from 2020 onwards Hedged NOK
WF12514 p01 01.19
Nominal with 2% inflation 8 NOK/USD
Capital Markets Day 2019 Lundin Petroleum 70Lundin Petroleum
Tax Value
Tax Value from Historic CAPEX Spend as at 01.01.2019 2 Billion USD (1)
18,000
1,602 15,980
16,000
1,180
14,000 9,476
12,000
Million NOK
10,000
8,000
6,000
4,000 3,723
2,000
0
CT Historic SPT Historic SPT Uplift SPT Tax Loss CT Tax Loss Total Tax Value
CAPEX CAPEX Historic CAPEX Carry Forward Carry Forward
Depr. at 22% Depr. at 56% Depr. at 56%
WF12514 p05 01.19
(1)
8 NOK/USD
Capital Markets Day 2019 Lundin Petroleum 71Lundin Petroleum
Tax Depreciation
Special Petroleum Tax
9,000
8,000
7,000
6,000
Million NOK
5,000
4,000
3,000
2,000
1,000
0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Brent price 2019 2020-22 2023-26
Historic CAPEX incl. Uplift Future CAPEX incl. Uplift
at 60 USD/bbl
Cash Tax Due ~4% ~45-55% ~60-65%
Corporation Tax as % EBITDA
8,000
7,000
6,000
Million NOK
5,000
4,000
3,000
2,000
1,000
WF12514 p06 01.19
0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Historic CAPEX Future CAPEX
Capital Markets Day 2019 Lundin Petroleum 72Lundin Petroleum
Abandonment Spending
New facilities Age of facilities (years) (1) Time to abandonment (years) (1)
Low maintenance Capex
Low Opex 17 5 15 27
Low near term Abex
NCS Lundin NCS Lundin
Average Average Low Average Average
Abandonment
Cost
Abandonment expenditure up to 2026
~80 MUSD (2)
Mainly relates to Brynhild and Gaupe
WF12509 p11 01.19
(1)
Relates to surface facilties currently in service. Data from NPD Wood Mackenzie and Lundin Petroleum (2)
Nominal with 2% inflation
Capital Markets Day 2019 Lundin Petroleum 73Lundin Petroleum
Free Cash Flow
Average E&A spend
Brent (2)
Annual FCF per annum(4)
FCF (Pre-Dividend)(1) 60 USD/bbl(3) 1
~ Billion USD 250 MUSD
2,000
1,500
Average annual FCF at 75 USD/bbl(3)
Million USD
1,000
~1,250 MUSD (E&A spend 250 MUSD )
(4)
500 Average annual FCF at 45 USD/bbl(3)
~700 MUSD (E&A spend 150 MUSD )
(4)
0
2019 2020 2021 2022 2023 2024 2025 2026
60 USD/bbl(2) 45 USD/bbl(2) 75 USD/bbl(2)
(1)
Free Cash Flow before dividends and excluding working capital movement, except for cash taxes (50/50 in year N and N+1)
WF12514 p07 01.19
(2)
Brent 2019 with 2% inflation per annum
(3)
2P Reserves + Luno II + Rolvsnes EWT
(4)
Except for 2019 when E&A spend is MUSD 300
Capital Markets Day 2019 Lundin Petroleum 74Lundin Petroleum
FCF Breakeven
FCF (Pre-Dividend) Breakeven (USD/bbl)
55 20 10
2019 Average Average
2020-2022(1) 2023-2026(1)
WF12514 p01 01.19
(1)
Assumes E&A spend of 250 MUSD per annum
Capital Markets Day 2019 Lundin Petroleum 75Lundin Petroleum
Long-term Financial Outlook(1)
2P Reserves + Luno II + Rolvsnes EWT
Average annual FCF
~ 1 Bn USD(2) Sustainable dividends of
500 MUSD
to grow over time
FCF Breakeven
10-20 USD/bbl Net debt / EBITDA(2)
End 2019: ~2.3x
2020 onwards:Dividends
material and sustainable
77Lundin Petroleum
Updated Dividend Policy
2019 AGM proposal to pay a dividend of MUSD 500 for financial year 2018
Dividend Policy
Dividend to be paid quarterly and denominated in USD
Maintain or increase dividends over time in line with the Company’s financial performance
Dividend to be sustainable at a Brent price below 50 USD/bbl, in context of
· Affording the Company to continue its organic growth led strategy
· Affording the Company to continue progressing contingent resources into reserves and production
· Gradually deleveraging debt and retaining an appropriate liquidity position
WF12516 p01 01.19
Capital Markets Day 2019 Lundin Petroleum 78Concluding
remarks
Q&A
79Lundin Petroleum
in 2019
Production Sustained Low OPEX
75–95 Mboepd 4.25 USD/boe
Johan Sverdrup
4 Project Sanctions
first oil Nov 2019 Luno II, Rolvsnes EWT,
Edvard Grieg infills, Frosk
Organic Growth Dividends
2 appraisal wells Proposed 500 MUSD
15 targeting >750 MMboe
exploration wells
(1) Sustainable below 50 USD/boe
WF12502 p14 01.19
(1) Net unrisked resources
Capital Markets Day 2019 Lundin Petroleum 80Long-term 500 MUSD
value creation dividend in 2019
Sustainable
~1 Bn USD dividends
average free cash flow below 50 USD/bbl
per year (1)
~4 USD/boe
industry leading low OPEX
>170 Mboepd Targeting
by 2023 >200 Mboepd
+ organic growth Low Carbon
upside footprint
WF12502 p18 11.19
(1)
From 2019–2026 at 60 USD/bbl 81Disclaimer
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.
WF8278 p1 06.17
Capital Markets Day 2019 Lundin Petroleum 82www.lundin-petroleum.com
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