RNS Number:3264G
Sodra Petroleum AB
28 February 2000
SODRA PETROLEUM AB
Sodra Petroleum AB announces that its parent company, Lundin Oil
AB ("Lundin") has today issued the following announcement:-
Lundin Oil AB (publ)
Report for the Financial Year ended 31 December 1999
FINANCIAL RESULTS
12 months 1999
* Operating cash flow MSEK 370.8, up 50% from MSEK 248.0 in 1998.
* Profit before taxes and minority interest MSEK 118.5 (loss of MSEK 451.1
in 1998).
* Profit after taxes MSEK 12.6 (loss of MSEK 378.3 in 1998).
* Average price received on crude oil sales was USD 17.42 (1998: USD 12.89)
per barrel.
4th Quarter 1999
* Operating cash flow MSEK 126.8, up 126% from MSEK 56.2 in fourth quarter
1998.
* Profit before taxes and minority interest MSEK 63.2 (loss of MSEK 389.9
in 1998).
* Profit after taxes MSEK 12.4 (loss of MSEK 293.1 in 1998).
* Average price received on crude oil sales was USD 22.11 (1998: USD 11.27)
per barrel.
OPERATIONS
* Gas Sales Agreement in Malaysia/Vietnam signed in February 2000. Phase 2
of the project to proceed with forecast net working interest production
to Lundin Oil of 35,000 boepd by 2003.
* Libya development approvals received in January 2000. Development project
to proceed with forecast net working interest production to Lundin Oil
of 15,000 bopd by 2001.
* Average 1999 production of 13,780 boepd (13,781 boepd). Average 4th
Quarter production of 13,965 boepd (14,025 boepd).
* Year end proven and probable reserves at 287 mmboe (275 mmboe).
AGM AND DIRECTORS
The Annual General Meeting of shareholders will take place in Stockholm on May
4, 2000. At the meeting all present directors will be proposed for re-election
and Carl Bildt will be proposed as new director.
COMMENT BY CEO
"1999 was an important year for the Company which led to the signing of the
gas sales agreement in Malaysia/Vietnam and the development plan approval in
Libya. We are off to a good start in the new millennium and look forward to
a very busy year, both in terms of development and exploration activities."
RESULT AND CASH FLOW
The Group
The Lundin Oil AB Group (Lundin Oil) reports a profit after tax for the year
ended 31 December 1999 of MSEK 12.6 (loss after tax of MSEK 378.3 for the
corresponding period during 1998) corresponding to 0.15 (-4.67) SEK per share.
The profit after tax arising from the fourth quarter only amounted to MSEK
12.4 (loss after taxes of MSEK 293.1). The profit before tax and minority
interest for the year ended 31 December 1999 was MSEK 118.5 (loss of MSEK
451.1) and for the fourth quarter only was MSEK 63.2 (loss of MSEK 389.9). The
fourth quarter result has benefited from continued high oil prices but has
been negatively impacted by a related increase in deferred PRT tax charge
following the year end revision of reserves and future economics.
Operating cash flow for the year ended 31 December 1999 was MSEK 370.8 (MSEK
248.0) corresponding to 4.34 (3.06) SEK per share and for the fourth quarter
only operating cash flow amounted to MSEK 126.8 (MSEK 56.2) corresponding to
1.48 (0.70) SEK per share. The operating cash flow for the fourth quarter has
increased from the same period in the prior year due to higher revenue as a
result of the higher oil prices partially offset by higher current taxes.
Lundin Oil received an average price on its crude oil sales of USD 17.42 (USD
12.89) per barrel for the year, achieving USD 22.11 (USD 11.27) during the
fourth quarter. These prices include the effects of the oil price hedge during
1999. The average price received for crude oil sales for the year without the
effects of the hedge was USD 18.02 and for the fourth quarter only was USD
23.89.
Oil and gas related income for the year ended 31 December 1999 amounted to
MSEK 738.7 (MSEK 559.0) and relates to Lundin Oil's assets in the UK North Sea
and Malaysia which generated operating income of MSEK 507.4 (MSEK 429.7) and
MSEK 226.1 (MSEK 120.6) respectively. Oil and gas related income for the
fourth quarter amounted to MSEK 236.5 (MSEK 113.8) and was generated from the
UK North Sea, MSEK 166.1 (MSEK 82.1) and Malaysia, MSEK 69.5 (MSEK 30.0). The
depletion charge on oil and gas assets for the year ended 31 December 1999 was
MSEK 237.0 (MSEK 234.7) and for the fourth quarter was MSEK 61.0 (MSEK 55.1).
Write-off of oil and gas properties amounted to MSEK 3.9 (MSEK 242.5) as a
result of the write-off of expenditures on various new venture areas. During
the year 1998 Lundin Oil, through its 50% owned subsidiary Sodra Petroleum AB,
wrote-off of the exploration costs of MSEK 206.1 incurred in the Falkland
Islands because management felt that given the disappointing drilling results,
the high level of costs and the prevailing oil price environment, it was
deemed prudent to write-off the costs incurred during the year.
Net financial income and expenses for the year ended 31 December 1999 were
MSEK -23.9 (MSEK -183.1). Included within the year ended 31 December 1999 were
gains of MSEK 18.4 resulting from the sale of short term investments.
Offsetting the gain were interest expenses amounting to MSEK 46.2 (MSEK 46.9)
arising primarily from bank debt. Net financial income and expenses for the
fourth quarter were MSEK -9.5 (MSEK -173.7). Included within the fourth
quarter were gains of MSEK 2.1 resulting from the sale of short term
investments offset by interest costs of MSEK 10.6. The fourth quarter for 1998
included the write down and the realised losses incurred on shares sold and
held in Talisman Energy Corporation.
Tax for the year ended 31 December 1999 were MSEK 104.4 (MSEK 40.8). The
current corporation tax charge for the year ended 31 December 1999 was MSEK
38.6 (MSEK 18.0) and current Petroleum Revenue Tax, PRT, was MSEK 29.9 (MSEK
19.0). The increase in current tax charges was primarily due the higher
revenues generated in the UK during the current period. The deferred
corporation tax charge for the year ended 31 December 1999 was MSEK 24.5 (MSEK
5.0) relating primarily to the Malaysian operation. The increase in the
deferred PRT results from the annual revision of future economics in the UK
where higher future oil price predictions have resulted in higher forecast
taxes. The revisions have occurred during the fourth quarter resulting in the
higher charge for the period only. The tax charge for the fourth quarter
amounts to MSEK 49.8 (MSEK 14.3).
Parent Company
The net loss for the parent company for the year ended 31 December 1999
amounted to MSEK 19.5 (net loss of MSEK 167.8). The loss resulted mainly from
administration charges of MSEK 14.4 (MSEK 22.1) and interest expense of MSEK
18.7 (MSEK 16.5) offset by a gain on sale of short term investments of MSEK
10.6.
PRODUCTION
Production for the year ended 31 December 1999 on a working interest basis
amounted to 5,029,568 (5,030,141) barrels of oil equivalents of which
4,538,033 (4,486,290) were barrels of oil. This corresponds to a production
of 13,780 (13,781) barrels of oil equivalents per day (boepd) for the year
ended 31 December 1999 including production from the UK North Sea and Malaysia
of 8,454 (9,128) boepd and 5,326 (4,653) boepd respectively. Production
allocated for the year ended 31 December 1999 from Malaysia on an entitlement
basis after government share amounted to 1,355,644 (1,242,477) barrels.
Production for the fourth quarter on a working interest basis amounted to
1,284,760 (1,290,262) barrels of oil equivalents of which 1,168,438
(1,169,040) were barrels of oil. This corresponds to a production of 13,965
(14,025) barrels of oil equivalents per day (boepd) for the fourth quarter
including production from the UK North Sea and Malaysia of 8,678 (9,021) boepd
and 5,286 (5,017) boepd respectively. Production allocated for the fourth
quarter from Malaysia on an entitlement basis after government share amounted
to 334,426 (421,925) barrels. The 1998 figure includes an adjustment due the
revision of pricing used for profit oil split.
FINANCING AND LIQUIDITY
Liquid assets at 31 December 1999 amounted to MSEK 293.5 (MSEK 258.8). During
the year a new share issue in Lundin Oil AB, as detailed under share data
below, raised MSEK 101.8. A share issue in a subsidiary company raised MSEK
105.7
Parent Company
Liquid assets at 31 December 1999 amounted to MSEK 107.9 (MSEK 68.3). During
the period the Company sold its 520,580 shares in Talisman Energy Corporation
for MSEK 73.5 and sold its shares in Red Sea Oil Corporation at market value
to a subsidiary company for MSEK 22.8.
INVESTMENTS
During the year ended 31 December 1999, investments in oil and gas assets have
been made in an amount of MSEK 308.8 (MSEK 777.9). These primarily relate to
ongoing exploration / appraisal costs in Libya of MSEK 136.1 and exploration
costs in Sudan of MSEK 51.5. The expenditure in the comparative period related
to ongoing exploration activities in the Falkland Islands, MSEK 172.7 and
Libya, MSEK 189.7 and the production areas of Malaysia, MSEK 160.4 and the UK
North Sea, MSEK 213.4.
Whilst the Group records exploration expenditure under the full cost method of
accounting whereby exploration costs would only be written-off when an area is
relinquished, management decided to write-off the costs incurred offshore the
Falkland Islands during 1998 given the disappointing drilling result and the
high level of costs incurred to that date. Expenditure of MSEK 19.7 has been
capitalised against the Falkland Islands concession during 1999. A study of
the North Falkland basin was commissioned to Robertson Research in the first
quarter of 1999 to analyse all the existing data. The report has been
completed and management believes that further write-offs in the Falklands are
not currently warranted.
FINANCIAL INSTRUMENTS
The Group has entered into interest rate hedging contracts commencing on 1
January 1999 to tie the LIBOR based floating rate for part of the Company's
USD borrowings to a fixed rate of interest for a period of three years. The
contracts are in the amount of USD50.0 million with an interest rate fixed at
5.87%.
The Group has also entered into an oil price hedge for part of its oil
production from the UK North Sea. From 1 August 1999 to 31 December 1999
approximately 50% of Lundin Oil's estimated UK crude oil production was fixed
at a dated Brent price of USD 18.40 per barrel. From 1 January 2000 to 31
December 2000 approximately 40% of Lundin Oil's estimated crude oil
entitlement production has been fixed at a dated Brent price of USD 18.58 per
barrel.
OPERATIONS
Overview
1999 will be remembered as a year when the Company's determination and resolve
were put to the test. Our two major development projects, namely PM3 CAA in
Malaysia/Vietnam and the En Naga field in Libya both underwent exhaustive
approval procedures and complex negotiations. Finally, on 20 January 2000,
after 10 months of discussions and lobbying, the En Naga North and West field,
on Area NC177 onshore Libya was declared a commercial discovery. The Field
Development Plan was approved simultaneously thereby laying the ground for the
project which will involve an initial production of 15,000 barrels of oil per
day ("bopd") in 2001 increasing to approximately 24,000 bopd two years later.
Then on 4 February 2000 the Gas Sales Agreement for the sale of 250 million
cubic feet of gas per day ("mmscfgpd") from PM3 CAA, offshore Malaysia/Vietnam
was signed by Petronas and PetroVietnam thereby sanctioning Phase 2 which will
also involve increasing the liquid production from the current 15,000 bopd to
40,000 bopd in the second half of 2003. This signature, together with the
approval of the Field Development Plan for Phase 2 of the PM3 CAA project,
marked the end of 4 years of negotiations.
1999 will also be remembered as a year when the oil price, after suffering one
of its worst beatings in history, recovered and almost tripled in value. This
phenomenal upward trend, which was mostly prompted by OPEC's renewed efforts
to restrict production, was still very much in effect at the start of the new
millennium with prices of Brent spot crude approaching US$30 per barrel (from
a low of less than US$10 per barrel in 1999).
The Company's production was steady at 13,780 barrels of oil equivalent per
day (versus 13,781 boepd in 1998). However, the average oil price obtained
was significantly higher at US$ 17.42 per barrel after accounting for the
effects of hedging (versus an average oil price of US$12.89 per barrel in
1998).
In Malaysia the successful completion of the Bunga Kekwa A7 well on Block
PM3 CAA has resulted in the production increasing to nearly 15,000 bopd
(approximately 6,000 bopd net to the Company), well in excess of the 1999
average production. Phase 2 is due on-stream in 2003 and will increase
Malaysia's net production to 35,000 boepd. In addition, the 3D seismic survey
which was shot in 1999 has revealed additional shallow channels which extend
south of the Kekwa/Raya complex which could add additional significant
quantities of hydrocarbons. A well is planned in the second half of 2000 to
test one of these new prospects.
In Libya the Development Plan for the En Naga North and West field, submitted
to the National Oil Corporation in March 1999, was subsequently approved in
January 2000. In parallel, ongoing reservoir studies have increased certified
proven and probable reserves of the field by 41% to approximately 100 million
barrels due to the incorporation of new information and optimisation of the
development plan. First production from Libya is expected in 2001. Also in
Libya the C1-NC177 exploration well reached its total depth in mid-November
but was subsequently abandoned as a dry hole after extensive production
testing. Nevertheless, the Company still pursues an active exploration
campaign in Libya and are currently acquiring an additional 300 kms of 2D
seismic and expects to drill a further two exploration wells during 2000.
In Sudan the amount of work that can be carried out will very much depend upon
the length of the dry season and our ability to overcome the logistical
challenges. Sudan remains a tremendous opportunity for the Company and the
Thar Jath discovery alone, which was drilled last year, could materially
affect the Company's reserves profile.
Finally, the Company's year end certified recoverable reserves have increased
to 287 million barrels of oil equivalent from 275 million barrels of oil
equivalent in spite of the years low drilling activity.
RED SEA OIL CORPORATION
Lundin Oil owned approximately 58% of the outstanding share capital of Red Sea
Oil Corporation ("RSO") at 31 December 1999.
RSO announced the successful completion of a rights offering on 4 June 1999.
The rights offering was fully subscribed and 34,894,870 units were taken up at
a subscription price of C$1.25 per unit resulting in gross proceeds to RSO in
excess of C$ 43.6 million. Each unit comprised one common share and one common
share purchase warrant. Every two warrants entitled the holder to purchase an
additional common share at a price of C$1.50 at any time prior to 17.00 hours
(Alberta time) on 31 January 2000.
Lundin Oil subscribed for the 20,334,100 units to which it was entitled to
pursuant to the rights offering for an aggregate subscription price of
C$25,417,625.
Subsequent to the period end, 26,223,544 warrants were exercised at C$1.50 per
warrant resulting in the issuance of 13,111,772 shares for proceeds of
approximately C$ 19,667,658. Lundin Oil subscribed for 10,167,050 shares at a
price of C$ 15,250,575. This acquisition of shares took Lundin Oil's holding
in RSO to approximately 61%.
CHANGES IN THE BOARD OF DIRECTORS
At the AGM on 20 May 1999 all serving Directors were re-elected and the Chief
Financial Officer of the Company, Ashley Heppenstall was newly elected to the
Board. On 14 January 2000, John Craig stepped down as a director of the
Company.
SHARE LISTINGS
Effective 14 July 1999 Lundin Oil's Global Depository Receipts (GDR) were
delisted from the Toronto Stock Exchange. The delisting was requested by the
Company following the low levels of trading activity in the Company's GDRs on
the Toronto Stock Exchange. The Company's GDRs continue to be listed on NASDAQ
(LOILY). The Stockholm listing remains unaffected (LOILB).
SHARE DATA
The company's share capital at 31 December 1999 amounts to SEK 42,719,729
represented by 85,439,458 shares of nominal value SEK 0.50 each. The shares
are divided into 678,200 A shares with 10 votes each and 84,761,258 B shares
with one vote each.
On 15 May 1998, 3,400,000 warrants were issued to Sodra Petroleum AB to allow
Sodra shares to be converted back into shares of Lundin Oil in November 2001
at the ratio of 12 Sodra shares for one new B share of Lundin Oil plus the
subscription of SEK 0.50.
On 30 March 1999 an EGM decided to issue warrants free of charge to the
shareholders of the company as per the record date 12 April 1999. One warrant
was issued for ten shares held. A total of 8,102,000 warrants were issued. The
warrants run until 31 March 2000. One warrant entitles the holder to subscribe
for one newly issued share of series B of the company. Subscription could
take place during two periods: At a price of SEK 23 for each newly issued
share between 1 October and 15 October 1999 or at a price of SEK 28 between 10
January and 31 March 2000. Between 1 October and 15 October, 4,426,505
warrants were exercised resulting in new issue proceeds of MSEK 101.8. At 31
December 1999, 759 shares were still to be registered. If all the 3,675,495
warrants remaining outstanding from this outstanding warrants are exercised
at SEK 28 by 31 March 2000 the Company will receive additional new issue
proceeds of MSEK 102.9.
INCENTIVE OPTIONS
On 8 May 1998, 1,250,000 incentive options, under the Group incentive program
for employees, with a strike price of SEK 49 expiring on 15 May 2001 were
issued.
On 12 March 1999 the Board of Directors decided and announced that under the
Group incentive program for employees a new series of warrants to qualified
employees would be issued. This new series of warrants was approved at the
AGM on 20 May 1999. Under the new series up to a total of 1,150,000 warrants
can be issued at a strike price of SEK 24.00. This series of warrants expire
on 11 March 2002.
Red Sea Oil Corporation
On 1 March 1999 Red Sea Oil Corporation issued 1,893,000 incentive options,
under a Red Sea Oil Corporation Stock Option program of which 1,533,000
currently remain unexercised. Among the recipients of these incentive options
are directors of RSO who are also directors of Lundin Oil AB and employees of
the Lundin Oil AB group. The strike price is C$1.00 and the options expire on
28 February 2001. If the remaining options are exercised, these options would
contribute C$1.59 million to RSO and would dilute Lundin Oil AB Group's
holding in RSO by approximately 1.02 percentage point.
SUBSEQUENT EVENT
On 17 January 2000, the Boards of Lundin Oil and Red Sea Oil announced that
they were in discussions regarding a business combination of the two
companies. The Boards of both companies have agreed to proceed in principle
with a business combination, subject to mutually agreeable terms, which will
most likely involve the offer to RSO shareholders of newly issued shares in
Lundin Oil. The transaction would constitute a "related party transaction" in
accordance with applicable Canadian securities legislation. Accordingly, an
independent committee of the Board of Directors of RSO has been formed in
order to assess the fairness of any offer to those shareholders other than
Lundin Oil and other insiders. The committee has appointed T. Hoare Canaccord
to act as an independent third party in order to assist it in reviewing any
potential offer and who will prepare appropriate valuations on Lundin Oil and
RSO as part of its mandate.
DIVIDEND
The Directors propose that no dividend be paid for the year.
CHANGE IN ACCOUNTING PRINCIPLE
During the period the Group has adopted the new accounting principle for the
valuation of provisions. In previous periods a provision has been created for
the abandonment liability that exists on the UK North Sea fields. This
provision has been calculated on a unit of production basis for the full
estimated amount of the future liability. Under the new accounting treatment
an asset is created to represent the discounted value of the anticipated
abandonment liability and depleted over the life of the field. The
corresponding accounting entry adjusts the existing abandonment provision to
equal the discounted value of the anticipated abandonment liability. The
discount applied to the anticipated abandonment liability is subsequently
released over the life of the field and is charged to financial expenses. The
comparative numbers have been restated to reflect the change in accounting
principle. The effect is an additional depletion charge for the year ended 31
December 1998 of MSEK 7.1. For the same period the additional finance charges
was MSEK 4.9 and the balance of the adjustment for the comparative period was
the reversal of the abandonment charge of MSEK 4.2.
KEY FINANCIAL RATIOS
1 Jan 1 Oct 1 Jan 1 Oct
1999- 1999- 1998- 1998-
31 Dec 31 Dec 31 Dec 31 Dec
1999 1999 1998 1998
12 3 12 3
months months months months
Key Financial Ratios
Return on capital employed1, % 0.9 0.9 (26.7) (20.6)
Return on total assets2, % 7.6 3.3 (23.4) (2.2)
Equity ratio3, % 63.0 63.0 58.4 58.4
Shareholders' equity SEK per 17.4 17.4 16.1 16.1
share4
Operating cash flow SEK per 4.5 1.5 3.1 0.7
share5
Earnings SEK per share6 0.2 0.21 (4.7) (3.6)
Earnings SEK per share fully 0.2 0.1 (4.7) (3.6)
diluted7
Number of shares at the period 85,439,458 85,439,458 81,012,953 81,012,953
end
Weighted average number of
shares for the period 81,801,235 84,140,375 81,012,953 81,012,953
Weighted average number of
shares for the period, fully 82,071,968 84,580,705 81,012,953 81,012,953
diluted
Definitions
1 Return on capital employed is defined as the Group's net result divided by
the average capital employed (the average of the net assets for the
financial period).
2 Return on total assets is defined as the Group's result after financial
items plus interest expenses plus/less exchange differences on
financial loans divided by the average total assets (the average total
assets less non-interest bearing liabilities for the period).
3 Equity ratio is defined as the Group's shareholders' equity including
minority interest in relation to total assets.
4 Shareholders' equity SEK per share is defined as the Group's shareholders'
equity divided by the number of shares at the period end.
5 Operating cash flow SEK per share is defined as the Group's operating
income less production costs and less current taxes divided by the
weighted average number of shares for the period.
6 Earnings SEK per share is defined as the Group's net result divided by the
weighted average number of shares for the period.
7 Earnings SEK per share fully diluted is defined as the Group's net result
divided by the fully diluted weighted average number of shares for
the period. (Some of the warrants to employees have an exercise price in
excess of the average share price for the period and have therefore not
diluted the weighted average number of shares).
GROUP INCOME STATEMENT IN SUMMARY
1 Jan 1 Oct 1 Jan 1 Oct
Expressed in TSEK Note 1999- 1999- 1998- 1998-
31 Dec 31 Dec 31 Dec 31 Dec
1999 1999 1998 1998
12 3 12 3
months months months months
Operating income
Net sales of oil and 683,551 221,235 488,255 100,329
gas
Tariff income 49,884 14,284 62,062 11,792
Service income 5,295 991 8,702 1,713
------------------------------------------
738,730 236,510 559,019 113,834
Cost of sales
Production costs 1 (299,499) (82,113) (274,006) (44,665)
Depletion of oil and (237,005) (61,047) (234,660) (55,093)
gas properties
Write-off of oil and 2 (3,866) (3,866) (242,540) (206,692)
gas properties ------------------------------------------
Gross profit/(loss) 198,360 89,484 (192,187) (192,616)
Other income 5,939 1,314 7,947 670
Administration expenses (61,885) (18,154) (83,738) (24,236)
------------------------------------------
Operating profit/(loss) 142,414 72,644 (267,978) (216,182)
Financial income and 3
expenses, net (23,890) (9,473) (183,166) (173,734)
------------------------------------------
Profit/(loss) before 118,524 63,171 (451,144) (389,916)
tax
Tax 4 (104,361) (49,802) (40,796) (14,356)
Minority interests (1,541) (981) 113,646 111,220
-----------------------------------------
Net result 12,622 12,388 (378,294) (293,052)
GROUP BALANCE SHEET IN SUMMARY
Expressed in TSEK Note 31 December 31 December
1999 1998
ASSETS
Tangible fixed assets
Oil and gas properties 5 2,219,360 2,041,071
Other fixed assets 12,188 9,693
---------------------------
Total tangible fixed assets 2,231,548 2,050,764
Financial fixed assets 6 63,121 50,666
---------------------------
Total fixed assets 2,294,669 2,101,430
Current Assets
Current receivables and 167,819 107,999
inventories
Cash and bank,
short term investments 293,543 258,803
---------------------------
Total current assets 461,362 366,802
---------------------------
Total assets 2,756,031 2,468,232
SHAREHOLDERS' EQUITY
AND LIABILITIES
Shareholders' equity
including net result for 1,483,288 1,302,703
the year
Minority interest 252,589 138,451
Provisions and long-term 709,753 757,727
liabilities
Current liabilities 310,401 269,351
---------------------------
Total shareholders' equity
and liabilities 2,756,031 2,468,232
Pledged assets 7 891,626 969,781
Contingent liabilities 639 378
GROUP CASH FLOW STATEMENT IN SUMMARY
Expressed in TSEK 1 Jan 1 Oct 1 Jan 1 Oct
1999- 1999- 1998- 1998-
31 Dec 31 Dec 31 Dec 31 Dec
1999 1999 1998 1998
12 months 3 months 12 months 3 months
Cash flow from operations
Net result 12,622 12,388 (378,294) (293,052)
Adjustment for depletion and
other non cash related items 274,347 89,777 537,099 305,637
Changes in working capital (55,401) 2,118 (17,752) (7,390)
---------------------------------------
Total cash flow from 231,568 104,283 141,053 5,195
operations
Investment in oil and gas (298,239) (90,339)(777,984) (185,012)
properties
Investment in other fixed (7,603) (3,082) (6,664) (4,411)
assets
Sale of short term investments 123,991 1,948 36,113 36,113
Other - - (13,466) (13,466)
----------------------------------------
Total cash flow used for (181,851) (91,473)(762,001) (166,776)
investments
Change in long-term 249 124 (1,653) (790)
liabilities
Change in long term assets (15,108) (15,108) 31,820 -
Change in bank loan (110,018) (28,998) 167,069 (15,785)
Proceeds from share issues 101,810 101,810 3,141 -
Proceeds from share issues in 105,721 - 306,940 -
subsidiary
Total cash flow from financing 82,654 57,828 507,317 (16,575)
Change in cash and bank 132,371 70,638 (113,629) (178,156)
Cash and bank at the beginning 153,986 216,828 266,773 329,340
of the period
Currency exchange difference 7,186 6,077 842 2,802
in cash and bank
Cash and bank at the end of 293,543 293,543 153,986 153,986
the period
Note 1. Production costs, 1 Jan 1 Oct 1 Jan 1 Oct
TSEK 1999- 1999- 1998- 1998-
31 Dec 31 Dec 31 Dec 31 Dec
1999 1999 1998 1998
12 3 12 3
months months months months
Costs of operations 161,664 43,041 163,227 42,231
Tariff expenses 86,230 24,972 88,009 26,181
United Kingdom royalty 16,577 7,188 11,821 (2,316)
Changes in inventories and
underlift/overlift 35,028 6,912 10,949 (21,431)
position -------------------------------------
299,499 82,113 274,006 44,665
Note 2. Write-off of oil 1 Jan 1 Oct 1 Jan 1 Oct
and gas properties, TSEK 1999- 1999- 1998- 1998-
31 Dec 31 Dec 31 Dec 31 Dec
1999 1999 1998 1998
12 3 12 3
months months months months
Falkland Islands - - 206,114 206,114
Tanzania - - 33,148 33,148
Others 3,866 3,866 3,278 3,278
-----------------------------------
3,866 3,866 242,540 242,540
-----------------------------------
Note 3. Financial income 1 Jan 1 Oct 1 Jan 1 Oct
and expenses, net, TSEK 1999- 1999- 1998- 1998-
31 Dec 31 Dec 31 Dec 31 Dec
1999 1999 1998 1998
12 3 12 3
months months months months
Interest income 7,176 2,860 15,420 3,030
Interest expense (46,259) (10,629) (46,944) (10,209)
Write-down of short term (111) (111)(124,988)(124,988)
investments
Gain / (loss) on sale of
short term investments 18,534 2,138 (30,756) (30,756)
Exchange gains/(losses), 838 (2,141) 16,236 (7,246)
net
Other financial (4,068) (1,590) (12,134) (3,565)
income/expense, net ------------------------------------
(23,890) (9,473)(183,166)(173,734)
------------------------------------
Note 4. Tax, TSEK 1 Jan 1 Oct 1 Jan 1 Oct
1999- 1999- 1998- 1998-
31 Dec 31 Dec 31 Dec 31 Dec
1999 1999 1998 1998
12 3 12 3
months months months months
The tax charge comprises
Corporation tax
- current (38,552) (16,217) (17,992) (7,653)
- deferred (24,463) (11,028) (5,004) (4,932)
-------------------------------------
(63,015) (27,245) (22,996) (12,585)
PRT (Petroleum revenue
tax)
- current (29,916) (11,459) (18,976) (5,226)
- deferred (11,430) (11,098) 1,176 3,455
-------------------------------------
(41,346) (22,557) (17,800) (1,771)
-------------------------------------
Total charge to income (104,361) (49,802) (40,796) (14,356)
Note 5. Oil and gas Book value Book value
properties, TSEK 31 December 31 December
1999 1998
United Kingdom 891,626 969,781
Malaysia 477,407 471,506
Libya 553,118 392,086
Falkland Islands 19,725 -
Sudan 220,972 159,634
Papua New Guinea 36,352 33,231
Albania 19,309 11,457
Others 851 3,376
---------------------------
2,219,360 2,041,071
Note 6. Financial fixed assets includes shares in Khanty Mansiysk Oil
Corporation.
Note 7. Pledged assets represent the UK North Sea assets.
PARENT COMPANY INCOME STATEMENT IN SUMMARY
1 Jan 1 Oct 1 Jan 1 Oct
Expressed in TSEK Note 1999- 1999- 1998- 1998-
31 Dec 31 Dec 31 Dec 31 Dec
1999 1999 1998 1998
12 3 12 3
months months months months
Other income 1,026 477 1,245 213
Administration expenses (14,388) (4,404) (22,092) (6,997)
--------------------------------------
Operating loss (13,362) (3,927) (20,847) (6,784)
Financial income and 1 (6,069) (4,243) (146,495)(129,995)
expenses, net --------------------------------------
Loss before tax (19,431) (8,170) (167,342)(136,779)
Tax (40) - (425) (425)
--------------------------------------
Net result (19,471) (8,170) (167,767)(137,204)
PARENT COMPANY CASH FLOW STATEMENT IN SUMMARY
1 Jan 1 Oct 1 Jan 1 Oct
Expressed in TSEK 1999- 1999- 1998- 1998-
31 Dec 31 Dec 31 Dec 31 Dec
1999 1999 1998 1998
12 3 12 3
months months months months
Cash flow from operations
Net result (19,471) (8,170) (167,767) (137,204)
Adjustment for other non cash (10,115) (1,783) 125,923 125,559
related items
Changes in working capital (22,611) 2,375 23,676 (16,623)
--------------------------------------------
Total cash flow from (52,197) (7,578) (18,168) (28,268)
operations
Investment in other fixed (241) (195) (460) (57)
assets
Investment in shares in - - (44,365) (27,885)
subsidiaries
Loans to subsidiary companies (38,313) 23,292 - -
Sale of other shares 75,455 1,948 38,463 38,463
--------------------------------------------
Total cash flow used for 36,901 25,045 (6,362) 10,521
investments
Loans from subsidiary 19,556 (13,685) 13,948 (6,899)
companies
Proceeds from share issue 101,809 101,809 3,141 3,141
--------------------------------------------
Total cash flow from 121,365 88,124 17,089 (3,758)
financing
Change in cash and bank 106,069 105,591 (7,441) (21,505)
Cash and bank at the 1,866 2,344 9,307 23,371
beginning of the period -------------------------------------------
Cash and bank at the end of 107,935 107,935 1,866 1,866
the period
Note 1. Financial income and 1 Jan 1 Oct 1 Jan 1 Oct
expenses, net TSEK 1999- 1999- 1998- 1998-
31 Dec 31 Dec 31 Dec 31 Dec
1999 1999 1998 1998
12 3 12 3
months months months months
Interest income 6,508 2,938 289 145
Interest expense (18,743) (5,352) (16,507) (3,893)
Gain on sale of short term 10,612 1,901 - -
investments
Write-down of short term - - (125,434) (125,434)
investments
Exchange gains/(losses), net (3,573) (2,853) (5,086) (1,026)
Other financial (873) (873) 243 213
income/expense, net ------------------------------------
(6,069) (4,243)(146,495) (129,995)
Stockholm, 28 February 2000
Board of Directors
For additional information, please contact:
Ian H. Lundin, telephone: +41 22 319 66 00
Magnus Nordin, telephone: +46 8 440 5450
Ashley Heppenstall, telephone: +41 22 319 66 00
Simon Rothschild/Judith Parry - Millham Communications tel: 0171 256 5756
The Annual Report will be distributed to shareholders in April. The Annual
General Meeting of shareholders will be held on Thursday 4 May 2000. Report
for the first three months 2000 will be published on Thursday 20 May 2000.
Notes for editors:
1. Lundin is the parent company of Sodra by virtue of its
holding of 40,506,500 Ordinary Shares of SEK0.05 each. The
40,506,476 Convertible Shares of SEK0.05 each in Sodra listed
on the AIM market are effectively convertible into the right
to subscribe for B Shares in Lundin in November 2001. Upon
exercise of the conversion right, for every 12 Convertible
Shares, the holder will receive a warrant to subscribe for 1
new Lundin B Share at the nominal value of SEK0.50.
2. Convertible Shares in Sodra are also listed on the New Market
of the Stockholm Stock Exchange. Lundin B Shares are
currently quoted on the Stockholm Stock Exchange, Toronto
Stock Exchange and the Nasdaq National Market.
END
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