Report for the period 15 December 1997 - 30 June 1998
RESULT AND CASH FLOW
The Group
Sodra Petroleum AB (Sodra) reports a group net result of MSEK 7.9 corresponding to SEK 0.1 per share for the period ended 30 June 1998.
Sodra incurred administration expenses of MSEK 1.6 during the period. Part of these costs related to the listing of the company on the Alternative Investment
Market (AIM) in London.
Net financial income and expenses were MSEK 9.5. Included was interest received of MSEK 1.4 and net currency exchange gains of MSEK 8.1. The latter
arose primarily as a result of translating loans receivable from USD to SEK.
Parent Company
The parent company reported a net result for the period from incorporation until 30 June 1998 of MSEK -2.5. The loss was the result of share issue costs of
MSEK 11.0 being charged to income during the period netted off against unrealised currency exchange gain on loans receivable of MSEK 8.1.
GROUP STRUCTURE
Sodra is the parent company of the group also consisting of Sodra's 100%-owned subsidiary IPC Falklands Ltd.
FINANCING AND LIQUIDITY
On 27 February the Board of Directors of Lundin Oil AB decided to offer 50% of the interest offshore the Falkland Islands, to Lundin Oil's shareholders
through a share issue in Sodra, the single purpose subsidiary holding the Falkland interest, comprising 100% of Tranche F. Shareholders were offered one
new convertible share of Sodra for every two shares held in Lundin Oil, 40,506,476 convertible share sin aggregate, at a price of SEK 7.50 per share. An
EGM in Lundin Oil on 17 March approved the issue of a maximum of 3,400,000 warrants to be transferred to Sodra to allow Sodra shares to be converted
back into shares of Lundin Oil, at the holder's option, in November 2001 at the ratio 12 Sodra shares for one new share of Lundin Oil.
The Sodra share issue was completed in May 1998 and all 40,506,476 convertible shares were placed, including 3,000,000 shares taken up by Lundin Oil.
Through the new share issue Sodra raised approximately MSEK 304 before issue costs. In connection with a listing of the Sodra convertible shares on the
Alternative Investment Market (AIM) in London, Lundin Oil placed 3,000,000 shares in Sodra originally taken up by Lundin Oil. The convertible shares are
traded on the New Market of the Stockholm Stock Exchange and as of 17 July 1998 the Alternative Investment Market (AIM) in London. Greig Middleton &
Co. Ltd acted as Nominated Broker and Advisor to Sodra for the AIM-listing.
Liquid assets at 30 June 1998 amounted to MSEK 220.3. This amount represents the balance of share issue proceeds after the acquisition of the Falkland
Islands concession and the subsequent funding of expenditures.
INVESTMENTS
During the period, investment in oil and gas assets have been made to an amount of MSEK 108.9. Of this amount, MSEK 18.6 was for the acquisition of
Lundin Oils' interest in the Falklands concession. The balance of the costs were rig mobilisation and support costs incurred under the FOSA collaboration.
OPERATIONS
Sodra is the 100% interest holder of Tranche F. The Borgny Dolphin semi-submersible drilling ship arrived in the Falklands in early May and has since drilled
one well for Amerada Hess on Tranche A and one well for LASMO on Tranche C. It is currently drilling a well for Shell on Tranche B and will immediately
thereafter be mobilised to Tranche F in order to drill the first well for Sodra Petroleum AB.
The well completed on Tranche A, located north of Tranche F, by the American oil company Amerada Hess encountered minor oil and gas shows although
not of commercial significance. The fact that hydrocarbons have been shown to be present in the basin is however very encouraging for the continuing
exploration. In July the English oil company Lasmo drilled a well on Trance C, which penetrated potential reservoir formations, but did not encounter
hydrocarbons.
SHARE DATA AND OWNERSHIP
The total number of shares in Sodra amount to 81,012,976 divided into two classes of shares, ordinary shares and convertible shares. There are 40,506,500
ordinary shares outstanding and 40,506,476 convertible shares outstanding. The convertible shares can be exchanged for shares in the parent company
Lundin Oil according to the ratio 12 convertible shares of Sodra for one new share of Lundin Oil at the nominal price of SEK 0.50. The exchange may take
place in November 2001. All ordinary shares are owned by Lundin Oil corresponding to 50.01% of the share capital.
Sodra's second largest shareholder is its Chairman Adolf H. Lundin holding 10,214,834 convertible shares, corresponding to 12.6% of the share capital.
INCORPORATION AND HISTORY
Sodra was incorporated, on 15 December 1997. The initial financial year of the company ends on 31 December 1998. Prior to the commencement of its
current trading activities, the company had not carried out any activities. The company name was changed to Sodra Petroleum AB on 24 February 1998.
BOARD OF DIRECTORS
At an Extraordinary General Meeting of Shareholders on 13 March, 1998 Adolf H. Lundin, Ian H. Lundin, Bo Hjelt and Magnus Nordin were elected to the
Board of Directors.
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