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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden)
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To: Timelord who wrote (726)9/16/1998 10:54:00 PM
From: Tomas   of 2742
 
How much is Lundin Oil worth today? How important is the Papua New Guinea project to Lundin Oil?

The Pandora gas reserves = 130 million barrels of oil equivalents net to Lundin Oil. At the beginning of this year the company's total official reserves were 160 MMBOE. Today this figure has grown to more than 260 MMBOE (drilling success in Libya and revision upwards in Malaysia, but NOT including the recently discovered oil and gas fields in Malaysia).

The 130 MMBOE in Papua New Guinea are NOT included, because there's no gas pipeline. Not yet. The formal decision to build the pipeline will be made by the Chevron consortium later this autumn, the probability is very high. The construction work is scheduled to start early next year. And as soon as they have decided to build the pipeline, Lundin Oil can add the 130 MMBOE in PNG to the existing reserves. A dramatic increase!

If we add the PNG gas and the new fields in Malaysia (and the appraisal wells in Libya), the company's oil and gas reserves will be close to half a billion barrels at the end of this year. That means TREBLING the reserves during 1998. Can you see this development reflected in the stock price? OK, I know, the oil price...

But 1/2 billion barrels and 81 million shares, and today's stock price is 2 7/8, that means 47 cents per barrel. What? Let me check that again. 47 cents per barrel! Are the reserves landlocked in Siberia, or on the moon, or what?

Tomas
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