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Lundin takes loss on dry hole, currencies

The company in January cut nearly half of its budget for exploration.

By Daniel J. Graeber

STOCKHOLM, Sweden, April 22 (UPI) -- Swedish energy company Lundin Petroleum said Wednesday it expected a $45 million loss in the first quarter after disappointing exploration results in Norway.

The company said it will take a pre-tax exploration cost of $45 million because its Gemini well was found to be dry and there were no commercial prospects in the Zulu discovery. Both exploration wells are off the coast of Norway.

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Lundin in February posted its full-year 2014 report, saying revenue of $758.2 million was 33 percent less than full-year 2013. The decline follows precedent established by the company's peers, who've announced staffing and spending cutbacks for 2015 because of low crude oil prices.

President and Chief Executive Officer C. Ashley Heppenstall said at the time the company was "well prepared to weather the storm" of a weak crude oil market and come out as a stronger and more durable company.

Lundin said Wednesday it expected a net foreign exchange loss of roughly $204 million because of the way in which currency rates are valued.

"The U.S. dollar strengthened significantly against the Euro during the first quarter of 2015 resulting in a foreign exchange loss on the U.S. dollar denominated external loan," borrowed by an unidentified subsidiary, the company said.

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The company trimmed most of its 2015 budget from appraisal programs, which at $150 million, represents a 48 percent decrease from its 2014 expenses.

Full-year production was down 23 percent from 2013.

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