Lundin Petroleum secures line of credit

Company said credit facility necessary in weakened oil market.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   Updated March 21, 2016 at 10:39 AM
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STOCKHOLM, Sweden, March 21 (UPI) -- Swedish energy company Lundin Petroleum said it secured a line of credit to ensure smooth operations during an era of lower crude oil prices.

Lundin, which has headquarters in Stockholm, said it received a short-term revolving credit facility of $300 million, with additional options, from Nordic financiers.

Chief Financial Officer Mike Nicholson said securing additional capital allows the company to back up new commitments that should lead to a doubling of production in 2016.

"We consider it prudent to secure additional liquidity following continued oil price volatility," he said in a statement.

Crude oil prices have leveled off at around $40 per barrel in recent weeks, after twice dropping below $30 per barrel in early 2016. Oil prices for the year are up, though they remain well below peak levels from two years ago. The downturn has left energy companies struggling to generate capital necessary to fund exploration and production.

Lundin reported revenue for the fourth quarter at $135.2 million, against $136 million year-on-year. Full-year 2015 revenue of $569.3 million was lower than the previous year by roughly 27 percent. Lundin left 2014 with $758.2 million in revenue, 33 percent less than the previous year.

The company in January brought on Norwegian energy company Statoil as a minority partner. Statoil said it spent $538 million to acquire an 11.9 percent stake in Lundin, describing it as a way to add value to its position on the Norwegian continental shelf.

Production from two fields off the coast of Norway -- Edvard Grieg and Johan Sverdrup -- should stimulate Lundin's reserve portfolio long term.

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