RNS No 3190q
SODRA PETROLEUM AB
20 August 1999
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 first 6 months 1 January 1999 - 30 June 1999
RESULT AND CASH FLOW
The Group
The Lundin Oil AB Group (Lundin Oil) reports a loss after taxes of MSEK 17.5
(MSEK 31.0) corresponding to -0.22 (-0.38) SEK per share for the first six
months of 1999. The loss before taxes was MSEK 1.3 (profit of MSEK 3.7). The
comparative numbers have been restated to reflect the change in accounting
principle as mentioned below. The continued depressed world oil prices
throughout the majority of the period were primarily responsible for the
reported loss. It is expected that the recent recovery in oil prices will
result in a return to profitability for the company in the third quarter.
Operating cash flow was MSEK 145.1 (MSEK 140.6) corresponding to 1.8 (1.7) SEK
per share. The operating cash flow has remained consistent with the same
period in the prior year due to similar production levels and prices.
Lundin Oil received an average price on its crude oil sales of USD 13.54 (USD
13.73) per barrel for the first six months. The average price for 1998 was USD
12.89 per barrel. The average price received for July 1999 was USD 18.75.
Oil and gas related income amounted to MSEK 280.8 (MSEK 316.7) and relates to
Lundin Oil's assets in the UK North Sea and Malaysia which generated operating
income of MSEK 202.7 (MSEK 236.2) and MSEK 74.8 (MSEK 71.4) respectively.
Depletion charge on oil and gas assets was MSEK 115.3 (MSEK 127.0).
Net financial income and expenses were MSEK -10.4 (MSEK 11.0). Included within
the period were gains of MSEK 11.8 resulting from the sale of 719,480 shares
in Talisman Energy Corporation for proceeds of MSEK 112.3. Also included were
interest expenses amounting to MSEK 21.0 (MSEK 21.0) and net currency exchange
gains of MSEK 2.2 (MSEK 24.3). The latter arose primarily as a result of
translating loans from USD to SEK.
Taxes were MSEK 16.3 (MSEK 32.4). The current corporation tax charge has
increased from the previous period to MSEK 15.4 (MSEK 13.3) but was offset by
a refund in the United Kingdom of MSEK 10.1 relating to prior years, giving a
net current tax charge of MSEK 5.3. Petroleum Revenue Tax, PRT, was lower
than the previous period primarily due to a 1998 accounting adjustment and a
tax refund received.
The net loss for the financial year ended 31 December 1998 was MSEK 378.3.
Parent Company
The net loss for the parent company for the first six months of 1999 amounted
to MSEK 4.5 (net profit of MSEK 2.8). The loss resulted from administration
charges of MSEK 7.8 (MSEK 9.6) and interest charge of MSEK 9.8 (MSEK 8.3)
offset by a gain on sale of the company's shares in Talisman of MSEK 7.2.
PRODUCTION
Production for the first six months on a working interest basis amounted to
2,441,295 (2,496,818) barrels of oil equivalents of which 2,119,720
(2,183,682) were barrels of oil. This corresponds to a production of 13,488
(13,795) barrels of oil equivalents per day (boepd) for the half year
including production from the UK North Sea and Malaysia of 8,322 (9,101) boepd
and 5,165 (4,694) boepd respectively. Production for the first six months from
Malaysia on an entitlement basis after government share amounted to 660,448
(691,400) barrels.
FINANCING AND LIQUIDITY
The Group
Liquid assets at 30 June 1999 amounted to MSEK 283.3 (MSEK 433.3) and relates
primarily to funds generated from UK North Sea production and the net proceeds
of the Red Sea Oil Corporation rights issue.
Parent Company
Liquid assets at 30 June 1999 amounted to MSEK 1.4 (MSEK 9.9). 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 to a subsidiary
company for MSEK 22.8.
INVESTMENTS
During the period, investments in oil and gas assets have been made in an
amount of MSEK 137.7 (MSEK 410.9). These primarily relate to ongoing
exploration / appraisal costs in Libya and drilling in Sudan.
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 17.3 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 is due to be
completed during the second half of 1999 when management will assess whether a
further write-off will be required.
FINANCIAL INSTRUMENTS
The Group has entered into interest rate hedging contracts commencing on 1
January 1999 for part of Lundin Oil's US$ borrowings to a fixed rate of
interest for a period of three years. The contracts are in the amount of
US$50.0 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 has been
fixed at a dated Brent price of USD 18.40 per barrel. From 1 January 2000 to
31 December 2000 approximately 30% of Lundin's Oil's estimated UK crude oil
production has been fixed at a dated Brent price of USD 17.15 per barrel.
OPERATIONS
UK North Sea
The UK North Sea remains the main cash flow generating area for Lundin Oil.
Production remains steady and ongoing investments have been of a going concern
basis with no new ventures or exploration activity undertaken in the area
during the period.
Libya
The Company has a 40% interest in the Area NC177 located in the southeastern
portion of the prolific Sirte basin, in partnership with its 58% owned
subsidiary Red Sea Oil Corporation which is the operator with a 60% interest.
Development Activity:
Sproule International Limited of Calgary estimates the proven and probable oil
reserves for the En Naga North and West oil field at 71 million barrels of
recoverable oil.
A field development plan for the En Naga North and West oil field has been
submitted for the approval of the Management Committee (which committee is
controlled by the Libyan National Oil Company). It is estimated that first
production will commence within 12 months of the approval of the development
plan having been obtained. The forecast peak production rate from the En Naga
North and West field is estimated at 22,000 bpd (24 months after start-up).
The Company is currently in discussions with various financial institutions
regarding a project financing for the development. The discussions with
financial institutions are well advanced and the Company is confident that the
funding of the development costs associated with the En Naga North and West
field will be successfully completed.
The economic sanctions imposed upon Libya by the UN have been suspended
resulting in an improved climate for investment and operations in the Libyan
oil industry. This has been followed by the re-establishment of full
diplomatic ties between Libya and the United Kingdom.
Exploration Activity:
Libya
The C1-NC177 oil exploration well was spudded on 8 August 1999 on the Haruj A
prospect in Area NC177. It is anticipated that drilling will take
approximately 56 days to complete. The well will be drilled to a depth of
approximately 12,500 feet testing several Eocene, Paleocene and Cretaceous
targets.
The Haruj A prospect is one of many prospects and leads found as a result of
the extensive 1998 regional seismic campaign. It is parallel to the En Naga
structural trend responsible for the Company's En Naga North & West
discoveries and the En Naga A & B discoveries made by Veba Oil in the mid
1990's. The style of the prospect is a four-way dip closed structure 33-km2 in
size and very similar to En Naga North's 10-km2 four-way dip closed structure;
it is also analogous to the En Naga trend discoveries in terms of structural
timing and depositional environment.
A small 80 km 2D seismic campaign has also been acquired on NC177 over leads
discovered during the 1998 seismic campaign. This acquisition campaign will
help to potentially upgrade the leads to drillable prospects.
Following the drilling of the Haruj A prospect the Company will continue to
pursue an aggressive exploration program. A number of additional prospects
have clearly been identified and we remain extremely positive regarding the
prospects for discovering additional reserves in area NC177.
Sudan
Lundin Oil has a 40.375% interest in Block 5A in the Sudan. The Block adjoins
the Greater Nile Petroleum Operating Company ("GNPOC") blocks on which the oil
reserves discovered to date are reported to be in the order of 800 million
barrels recoverable. The GNPOC consortium has also reportedly commenced oil
production through the 1,540 kilometres export pipeline to Port Sudan and
first export sales are imminent. The initial capacity of the pipeline is
250,000 barrels per day, of which 100,000 barrels per day is reserved for
third party users such as Lundin Oil.
The successful completion of the pipeline is a major milestone for Lundin Oil
in that it provides an export route for any oil developed from Block 5A
thereby removing a major risk for our investment in Sudan.
In April 1999 Lundin spudded its first exploration well on the Thar Jath
prospect. The exploration well has established a significant new oil discovery
following the completion and logging of the well. The well has drilled to a
depth of 1,820 metres. Due to the rainy season and associated logistical
difficulties, the testing of the well has been postponed until the
commencement of next year's dry season at the end of 1999. Petrophysical
analysis of the primary Bentiu and Aradeiba sandstone reservoirs indicates a
substantial net pay interval which is further supported by excellent oil and
gas shows and an oil gradient from RFT pressure samples. Reservoir quality
appears to be excellent from both electric log and sample analysis.
The Company is currently finalising next years work program for Block 5A. The
plan is to pursue an aggressive exploration program by drilling one or more
additional prospects, in addition to the appraisal of the Thar Jath discovery
with 3D seismic and appraisal drilling.
Malaysia/Vietnam
Lundin Oil holds a 41.44% interest in, and operates, Block PM3, the Commercial
Arrangement Area between Malaysia and Vietnam (the "PM3 CAA") on behalf of its
partners; Petronas Carigali Sdn Bhd (46.06%) and PetroVietnam Exploration and
Production (12.5%).
Average production for the period was approximately 12,460 BOPD from Phase 1
of the Development Project. The Company plans to drill a further development
well on Bunga Kekwa which will increase production for Phase 1 and extend the
life of the project.
In the first quarter Lundin Oil announced the deferment of Phase 2 of the PM-3
CAA oil and gas development. Since then the Company has been in close
consultation with Petronas, PetroVietnam and its partners with a view to
finalising a gas sales agreement for PM3 gas which will provide a firm
timetable for Phase 2 of the Development Project. Phase 2 is estimated to
boost production from the area to 250 million cubic feet per day of gas and
40,000 barrels per day of liquids. The proven and probable reserves on PM3 CAA
stand at 155.3 million barrels of hydrocarbon liquids and 1.85 trillion cubic
feet of hydrocarbon sales gas, on a gross basis.
The Company has recently completed a three dimensional seismic survey in the
southern portion of Block PM-3. It is believed the Block still contains
excellent potential for further increases to existing oil and gas reserves.
Petronas and PetroVietnam continue to express strong support for Phase 2 of
the project including the offtake of sales gas under take or pay contracts.
The economic situation in South East Asia has improved and the Company
continues to pursue vigorously the finalisation of the gas sales agreement.
Papua New Guinea
In Papua New Guinea, the Chevron promoted pipeline from Papua New Guinea to
Queensland, Australia, got one step further when the Queensland Government
owned utility committed to purchase enough gas (130 pentajoule per day,
approximately equivalent to 150 mmcf per day) to underwrite the pipeline. If
the pipeline is built the chances for Lundin Oil to market its Papua New
Guinea gas discovery will increase substantially.
RED SEA OIL CORPORATION
Lundin Oil owns approximately 58% of the outstanding share capital of Red Sea
Oil Corporation ("RSO").
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 price of C$1.25 per unit resulting in gross proceeds to RSO in excess of C$
43.6 million. Each unit is comprised of one common share and one common share
purchase warrant. Every two warrants entitles 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.
The net proceeds of the rights offering are being used to fund the ongoing
exploration program in Area NC177 onshore Libya, including the drilling of the
C1-NC177 well which spudded on 8 August 1999 as well as funding the equity
requirement of the development costs of the En Naga North and West field and
to repay outstanding indebtedness to Lundin Oil.
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.
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.
SHARE LISTINGS
Effective 14 July 1999 Lundin Oils 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 30 June 1999 amounts to SEK 40,506,476.50
represented by 81,012,953 shares of nominal value SEK 0.50 each. The shares
are divided into 678,200 A shares with 10 votes each and 80,334,753 B shares
with one vote each.
On 15 May 1998, 3,400,000 warrants with an exercise price of SEK 0.50 expiring
in November 2001 were issued to Sodra Petroleum AB.
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
can 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. If all warrants are exercised the Company will
receive new issue proceeds of between MSEK 188.6-229.6 depending on the strike
price at which subscription occurred.
INCENTIVE PROGRAMMES
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 800 000 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 1,903,000 incentive options,
under a RSO Stock Incentive Option program. 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 exercised, these options would
contribute C$1.9 million to RSO and would dilute Lundin Oil AB Group's holding
in RSO by approximately 1.4 percentage points.
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 periods ended
30 June 1999, 30 June 1998 and 31 December 1998 of MSEK 3.0, MSEK 3.5 and MSEK
7.1 respectively. For the same periods the additional finance charges were
MSEK 2.7, MSEK 2.5 and MSEK 4.9 respectively. The balance of the adjustment
for the comparative periods was the reversal of the abandonment charge of MSEK
2.2 for the period ended 30 June 1998 and MSEK 4.2 for the period ended 31
December 1998.
KEY FINANCIAL RATIOS
1 Jan 1 Jan 1 Jan
1999- 1998- 1998-
30 Jun 30 Jun 31 Dec
1999 1998 1998
6 months 6 months 12 months
Key Financial Ratios
Return on capital employed1, % (1.3) (2.0) (26.7)
Return on total assets2, % 1.0 2.4 (20.9)
Equity ratio3, % 60.7 64.2 58.4
Shareholders' equity SEK per share4 16.6 20.4 16.1
Operating cash flow SEK per share5 1.8 1.7 3.1
Earnings SEK per share - (0.2) (0.4) (4.7)
Undiluted6
Number of shares at the period 81,012,953 81,012,953 81,012,953
end
Weighted average number of shares 81,012,953 81,012,953 81,012,953
for the period
No diluted earnings per share figures have been shown because a net loss
creates anti-dilution
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 - undiluted is defined as the Group's net result
divided by the weighted average number of shares for the period.
GROUP INCOME STATEMENT IN SUMMARY
1 Jan 1 Jan 1 Jan
Expressed in TSEK 1999- 1998- 1998-
Note 30 Jun 30 Jun 31 Dec
1999 1998 1998
6 months 6 months 12 months
Operating income
Net sales of oil and gas 253,564 272,507 488,255
Tariff income 23,994 35,061 62,062
Service income 3,251 9,152 8,702
--------------------------------
280,809 316,720 559,019
Operating expenses
Production costs 1 (124,843) (149,707) (274,006)
Depletion of oil and gas (115,265) (127,008) (234,660)
properties
Write-off of oil and gas - (3,222) (242,540)
properties --------------------------------
Gross profit (loss) 40,701 36,783 (192,187)
Other income 3,206 1,575 7,947
Administration expenses (34,733) (45,634) (83,738)
--------------------------------
Operating profit (loss) 9,174 (7,276) (267,978)
Financial income and
expenses, net (10,441) 11,001 (183,166)
--------------------------------
Profit (loss) before tax (1,267) 3,725 (451,144)
Tax 2 (16,321) (32,366) (40,796)
Minority interests 106 (2,391) 113,646
--------------------------------
Net result (17,482) (31,032) (378,294)
GROUP BALANCE SHEET IN SUMMARY
Expressed in TSEK Note 30 Jun 30 Jun 31 Dec
1999 1998 1998
ASSETS
Tangible fixed assets
Oil and gas properties 3 2,158,655 2,034,070 2,041,071
Other fixed assets 9,823 8,134 9,693
--------------------------------
Total tangible fixed assets 2,168,478 2,042,204 2,050,764
Financial fixed assets 4 49,315 334,305 50,666
--------------------------------
Total fixed assets 2,217,793 2,376,509 2,101,430
Current Assets
Current receivables and 116,966 143,405 107,999
inventories
Cash and bank,
short term investments 283,278 433,313 258,803
--------------------------------
Total current assets 400,244 576,718 366,802
--------------------------------
Total assets 2,618,037 2,953,227 2,468,232
SHAREHOLDERS' EQUITY
AND LIABILITIES
Shareholders' equity 1,340,793 1,650,656 1,302,703
including net result for the
financial period
Minority interests 249,475 246,096 138,451
Provisions and long-term 691,712 804,990 757,727
liabilities
Current liabilities 336,057 251,485 269,351
--------------------------------
Total shareholders' equity 2,618,037 2,953,227 2,468,232
and liabilities
Pledged assets 5 940,820 1,065,807 969,781
Contingent liabilities 639 378 378
GROUP CASH FLOW STATEMENT IN SUMMARY
1 Jan 1 Jan 1 Jan
Expressed in TSEK 1999- 1998- 1998-
30 Jun 30 Jun 31 Dec
1999 1998 1998
6 months 6 months 12 months
Cash flow from operations
Net result (17,482) (31,032) (378,294)
Adjustment for depletion and other 116,039 147,513 537,106
non cash related items
Changes in working capital (56,310) (39,716) (3,030)
-------------------------------
Total cash flow from operations 42,247 76,765 155,782
Investment in oil and gas (137,675) (410,873) (777,982)
properties
Investment in other fixed assets (2,997) (1,885) (6,664)
Investment in other shares - (4,049) -
Sale of other shares 112,344 - 36,109
Other - - (13,468)
-------------------------------
Total cash flow used for (28,329) (416,807) (762,005)
investments
Increase in long-term liabilities (926) 198,279 191,956
Proceeds from share issues 111,130 277,339 306,940
Decrease in long term assets - 31,496 -
-------------------------------
Total cash flow from financing 110,204 507,114 498,896
Other (3,714) (2,451) (5,460)
-------------------------------
Change in cash and bank 120,408 164,621 (112,787)
Note 1. Production costs, TSEK 1 Jan 1 Jan 1 Jan
1999- 1998- 1998-
30 Jun 30 Jun 31 Dec
1999 1998 1998
6 months 6 months 12 months
Costs of operations 76,641 81,555 163,227
Tariff costs 37,475 41,771 88,009
United Kingdom royalty 4,450 6,245 11,821
Changes in inventories and
underlift/overlift
position 6,277 20,136 10,949
------------------------------
124,843 149,707 274,006
Note 2. Tax 1 Jan 1 Jan 1 Jan
TSEK 1999- 1998- 1998-
30 Jun 30 Jun 31 Dec
1999 1998 1998
6 months 6 months 12 months
The tax charge comprises
Corporation tax
- current 5,268 13,278 17,992
- deferred 5,364 182 5,004
-----------------------------
10,632 13,460 22,996
PRT (Petroleum revenue tax)
- current 5,554 13,094 18,976
- deferred 135 5,812 (1,176)
-----------------------------
5,689 18,906 17,800
-----------------------------
Total charge to income 16,321 32,366 40,796
Note 3. Oil and gas properties, Book Book Book
TSEK value value value
30 Jun 30 Jun 31 Dec
1999 1998 1998
United Kingdom 940,820 1,065,807 969,781
Malaysia 471,495 389,161 471,506
Libya 468,321 256,614 392,086
Falkland Islands 17,293 105,395 -
Sudan 203,332 146,781 159,633
Papua New Guinea 35,646 32,217 33,231
Others 4,115 4,715 3,377
Albania 17,633 - 11,457
Tanzania - 33,380 -
--------------------------------
2,158,655 2,034,070 2,041,071
Note 4. Financial fixed assets includes shares in Khanty Mansiysk Oil
Corporation and deferred financing fees.
Note 5. Pledged assets represent the UK North Sea assets.
PARENT COMPANY INCOME STATEMENT IN SUMMARY
1 Jan 1 Jan 1 Jan
Expressed in TSEK 1999- 1998- 1998-
30 Jun 30 Jun 31 Dec
1999 1998 1998
6 months 6 months 12 months
Other income 549 229 1,245
Administration expenses (7,798) (9,642) (22,092)
------------------------------
Operating loss (7,249) (9,413) (20,847)
Financial income and expenses, net 2,791 12,237 (146,495)
------------------------------
Result before tax (4,458) 2,824 (167,342)
Tax (40) - (425)
------------------------------
Net result (4,498) 2,824 (167,767)
PARENT COMPANY CASH FLOW STATEMENT IN SUMMARY
1 Jan 1 Jan 1 Jan
Expressed in TSEK 1999- 1998- 1998-
30 Jun 30 Jun 31 Dec
1999 1998 1998
6 months 6 months 12 months
Cash flow from operations
Net result (4,498) 2,824 (167,767)
Adjustment for other non cash (8,468) (21,620) 125,923
related items
Changes in working capital (60,934) (26,476) 37,624
-------------------------------
Total cash flow from operations (73,900) (45,272) (4,220)
Investment in other fixed assets (46) (320) (460)
Investment in shares in - (16,480) (44,365)
subsidiaries
Sale of other shares 73,519 62,640 38,463
-------------------------------
Total cash flow used for 73,473 45,840 (6,362)
investments
Proceeds from share issue - - 3,141
Total cash flow from financing - - 3,141
Change in cash and bank (427) 568 (7,441)
Stockholm, 20 August 1999
Ian H. Lundin
President
For further information, please contact:
Magnus Nordin
Managing Director - Sodra Petroleum AB
Tel: +46 705 766 555
Ashley Heppenstall
Tel: +41 22 319 66 00
Simon Rothschild / Nicholas Nelson
Millham Communications
Tel: 0171 256 5756
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.
AUDITORS' REPORT
We have performed a limited review of this six months interim report at 30
June 1999 of Lundin Oil AB in accordance with a recommendation issued by the
Swedish Institute of Authorised Public Accountants (FAR). This limited review
is considerably less in scope than a full audit. Nothing has come to our
attention that caused us to believe that this six months interim report at 30
June 1999 of Lundin Oil AB does not comply with the requirements of the
Swedish Annual Accounts Act.
Stockholm, 20 August 1999
Carl-Eric Bohlin Klas Brand
Authorised Public Accountant Authorised Public Accountant
PriceWaterhouseCoopers KB
END
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