Jan. 22 (UPI) -- An estimate of the reserves in the Edvard Grieg oil field off the coast of Norway boosted the recovery outlook by almost 50 percent, Lundin Petroleum said.
Lundin said Monday its total proved plus probable -- known in the industry as 2P reserves -- were 726 million barrels of oil equivalent as of Dec. 31. Total 2P reserves as of Dec. 31 reflected an increase of 45.8 million boe, or about 7 percent.
The Edvard Grieg field in the North Sea, already in production, accounted for less than 10 percent of the total, but its 51 million barrel increase, excluding production, represented a 47 percent increase in best estimate ultimate recovery from the original forecast.
"The best estimate gross ultimate recovery from Edvard Grieg as at end 2017 is 274 million boe," the company stated.
It's at least the second time for an upward revision for the field.
In early January, the Norwegian Petroleum Directorate, the nation's energy regulator, said exploration and production activity needs to increase, both from frontier and mature basins, in order for Norway to maintain its reputation as a major producer.
There were 85 fields in production on the Norwegian continental shelf last year and, while oil production was slightly lower, total output increased for the fourth straight year. Lundin took 14 of the 75 production licenses offered by the Norwegian government in its annual offshore auction earlier this month.
The company struggled through the market downturn that began in 2015, trimming its production guidance lower as a result of less than expected output from the Brynhild field off the coast of Norway and infrastructure delays for its Edvard Grieg rig.
In a notice on fourth quarter earnings, which will be released Feb. 1, the company said it would expense $31 million on exploration costs, $69 million on foreign exchange losses and $15 million in tax losses from the sale of some of its assets last year. Lundin said the charges wouldn't impact cash flow or earnings before interest, tax, depreciation and amortization, which measures a company's operating performance.
The company also holds minor shares in the Johan Sverdrup oil field, one of the largest finds in the North Sea in recent years with an estimated 3 billion barrels of oil. Phase 1 of the field's development is currently underway, with the first deliveries expected to begin in late 2019.
Oil accounts for nearly all of Lundin's 2P reserves. Norway is a main oil and gas supplier to Europe.