Lundin Petroleum sees rosy future

STOCKHOLM, Sweden, Aug. 3 (UPI) -- Now part-owned by Norwegian energy giant Statoil, Sweden's Lundin Petroleum offered forward-looking optimism after reporting a second quarter loss.

Lundin reported a loss for the second quarter of $47.1 million, against a $61.1 million net profit year-on-year. President and CEO Alex Schneiter said that, after the Statoil acquisition of a minority stake, it now had an interest in the Edvard Grieg oil field and access to the giant Johan Sverdrup field in the North Sea that meant its production outlook was positive.

"On the operational side, we continue to deliver a strong performance with the second quarter average production for the company of 63,900 barrels of oil equivalent per day, exceeding our mid-point guidance by about 15 percent," he said in a statement.

Statoil in January spent $538 million to acquire an 11.9 percent stake in Lundin Petroleum. The Norwegian company said last week its adjusted operating profit for the second quarter was $913 million, down from the $2.9 billion reported one year ago. Spending plans for 2016 were revised lower by $1 billion to $12 billion.

Pointing to continued pressure from lower crude oil prices, Lundin said it was seeing signs of recovery on the horizon as markets start to show some balance return between supply and demand. That balance, Schneiter said, was a result of companies deferring major projects or scaling back on investments.

Nevertheless, he said energy companies must be prepared for an average oil price that's far below the $100 per barrel level common two years ago and therefore focus on controlling costs and efficiency to maintain sustainable growth.

Lundin said it was on pace to meet its production goal for the year and keep its operating costs low.

"At this point, suffice to say, it is mission accomplished in terms of major company developments during the first half of 2016," the president and CEO said.