CORP / Lundin Oil AB: 1999 Budget and Work Program
STOCKHOLM STOCK EXCHANGE SYMBOL: LOIL B
TSE SYMBOL: LOI
NASDAQ SYMBOL: LOILY
JANUARY 27, 1999
VANCOUVER, BRITISH COLUMBIA--Lundin Oil AB ("the Company") is
pleased to announce a 1999 capital budget of USD $40 million. This
compares with 1998 estimated capital expenditures of approximately
USD $112 million. A near 65 percent reduction, the 1999 budget
reflects tightened operations in view of lower oil prices as well
as the completion of the successful appraisal program for its new
oil field in Libya. In addition, the general and administration
budget has been reduced by 37 percent from USD $9.2 million to USD
$5.8 million as a result of a reorganisation of the Company.
The 1999 work programme will include:
- Seismic and one exploration well in Sudan in the second quarter
- Seismic and one exploration well in Libya in the second quarter
- Development planning of the En Naga fields in Libya with
submission of a development plan to the NOC in February 1999
- Lundin Oil's share of 11 development wells and one exploration
well in the UK North Sea
- Ongoing production operations from Phase I and further
development planning in Malaysia
Malaysia continues to be a key production asset of the Company
with gross oil production currently at 12,000 barrels per day.
Since acquiring Block PM-3, the Company has drilled 16 wells which
have resulted in the discovery of seven oil and gas fields. Phase
I of the development of the block has been operating smoothly
since July, 1997. Phase II, which would bring gross production up
to an estimated 40,000 barrels of liquids per day and 250 million
cubic feet of gas per day, is currently being optimised with a
view to cut capital costs and increase production efficiency
following the decision to defer the project as a result of the low
oil prices.
Libya and Sudan are two exploration and/or development assets with
enormous upside potential for the Company and will be the primary
focus of the 1999 work program.
Libya, where the Company has already made two significant
discoveries, En Naga North and En Naga West, will be the subject
of further exploration. The targets identified in both Sudan and
Libya have the potential to increase reserves by an order of
magnitude. The development plan for the En Naga fields in Libya
will be submitted in February 1999 to the National Oil Corporation
for approval. Peak production from the field is estimated at in
excess of 25,000 barrels per day. Startup can be achieved within
12 months of approval.
The Company's concession in Sudan is adjacent to and on the same
geological trend with two fields which have estimated oil reserves
in excess of 700 million barrels. Several important targets have
been identified on the Company's concession, one of which has the
potential to hold in excess of 250 million barrels of oil
recoverable. If drilled successfully, this target would be one of
the largest fields in the area.
Ian H. Lundin, President of Lundin Oil further adds: "We have
managed to minimize the impact of low oil prices by taking swift
action against costs and focusing our 1999 budget on top priority
projects. Lundin Oil is a growing company irrespective of oil
price with exciting exploration and development projects and a
continuous increasing reserve base which are expected to add
significantly to future growth."
Lundin Oil AB is an independent oil and gas exploration and
production company with assets in nine different countries. The
shares are listed on NASDAQ, the Toronto Stock Exchange and the
Stockholm Stock Exchange. |
