Lundin Petroleum, a European independent oil and gas exploration and production company, has declared annual revenue of $2.6 billion in 2018 giving a clue to what investors, shareholder’s and industry experts should expect from the company’s Nigerian counterparts.
With oil prices averaging at $71, Lundin Petroleum, one of the operator of OML 113 at the Benin Basin, offshore Nigeria and also technical advisor to Nigeria’s Yinka Folawiyo Petroleum Company (YFP) recorded a 30.5 per cent increase in revenue.
“2018 proved to be a standout year across all areas of our business, with excellent performance from our producing assets, strong financial results and success with the drill bit,” Alex Schneiter CEO of Lundin Petroleum said.
Due to strong facilities and reservoir performance at both its Edvard Grieg field and the Alvheim area, Lundin Petroleum recorded production of 81.1 thousand barrels of oil equivalent per day (Mboepd) in full year 2018 compared to 86.1 Mboepd for 2017 while operating cost, including netting off tariff income, was $3.66 per barrel which was below the revised full year guidance of less than $3.80 per barrel and 12 percent below the original guidance of $4.15 per barrel.
The company said the performance is due to a combination of reduced costs, increased production volumes and the termination of production from the Brynhild field during the year.
Operating profit from continuing operations was $1.4 billion compared to $812.4 million recorded in 2017 primarily driven by higher oil prices in combination with lower production cost.
Buoyed by stronger commodity prices, operating cost below guidance and very strong production efficiency, CEO of Lundin Petroleum noted the firm has delivered EBITDA in excess of $1.9 billion and also record high free cash flow of $663 million for the year 2018.
BusinessDay analysis showed the firms Earnings before interest, tax, depletion and amortization (EBITDA) from continuing operations in 2018 increased to $1.9 billion compared to $1.5 billion in 2017 representing EBITDA per share of $5.65 which was higher than $4.41 in 2017.
With operations focused in Norway which have an average daily production of 1.6 million bpd relatively similar to Nigeria; Lundin Petroleum achieved average price for a barrel of oil equivalent from own production amounted to $67.89 in 2018 compared to $51.63 in 2017.
Lundin Petroleum’s total cost of operations amounted to $102.5 million in 2018 compared to $117.3 million in 2017 while the total cost of operations excluding operational projects amounted to $93 million compared to $105.9 million.
The financial performance of Lundin Petroleum will be an insight for investors and shareholders on what to expect from financials of major oil exploration companies like Oando, Waltersmith, Shoreline Energy, Seplat, Sahara Petroleum who are all expected to declare improve profits margins as a result of 2018 higher crude oil prices.
