Oct. 18 (UPI) -- Norwegian energy player Lundin Petroleum said Wednesday its third quarter results would be hit by exploration costs tied to the lack of success.
"The profitability for the third quarter of 2017 will be impacted by certain expensed exploration costs and impairment charges, as well as a net foreign currency exchange gain mainly related to the revaluation of loan balances," the company said in a statement.
The company struggled through the market downturn that began in 2015, trimming its production guidance as a result of less than expected output from the Brynhild field off the coast of Norway. Lundin said Wednesday operations at the field have been shut down because of restrictions to flow to a floating production platform. Spending to reopen the spigot will result in a negative impact on third quarter results of $3 million.
Additional costs came from spending on one gas well that proved reserves, but not enough to be considered a commercial prospect. Another well was dry.
Last year, Norwegian energy giant Statoil spent $538 million to acquire an 11.9 percent stake in Lundin, and the company this year spun off its non-Norwegian production assets into a company called International Petroleum Corp.
Lundin's subsidiary in Norway said last week it started drilling an exploration in the Hufsa prospect in the southern waters of the Barents Sea. The prospect is estimated to contain gross unrisked prospective resources of 285 million barrels of oil equivalent.
Production this year for Lundin should average between 80 million and 85 million barrels of oil equivalent per day.
Apart from Russia, Norway is the lead oil and natural gas exporter to the European market, designating nearly all of its offshore production for European Union demand.