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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden) -- Ignore unavailable to you. Want to Upgrade?

To: ISPYOIL who wrote (817)	11/5/1998 11:52:00 AM
From: Gunnar	Read Replies (1) \| Respond to of 2742

Why not skip the Falkland play and put the rest of the money into the En Naga concession? The share price would explode because of lower risk. Regards, Gunnar

To: ISPYOIL who wrote (817)	11/8/1998 9:54:00 PM
From: Tomas	Respond to of 2742

Crunch time for Falklands oil as Shell drills it's last well (A Report For Calling The Falklands by David Wood 06/11/98) Falkland Island News Network, 08 Nov 1998 Friday's edition of the Oil and Gas Weekly, "Upstream," features the headline "Shell Seen As Last Big Hope For Falklands Oil." According to the author of the piece, Chris Hobson, the results of the well being drilled by Shell are certainly going to make a difference to the large company active in the South Atlantic. However, he feels that some of the smaller companies are still optimistic about their chances and told me why the different size companies seem to have different attitudes. CH I think it is fair to say that maybe the bigger players have started to make their decisions but the smaller players and I include Desire, the local Falkland Islands company and also SODRA, part of London Oil and I know that they are still optimistic and hope that they might be able to return and put together a consortia to do dome more drilling and I think there are strong possibilities that will happen in the future. So, I don't think that all hope is lost by any means. DW Presumably, though, the idea that there will be some new Brent Field down there, that idea has kind of subsided and now we might be looking at a few smaller finds, perhaps a bit more scattered. CH Yes. That seems to be the general tone at the moment. A number of the oil company executives who I've spoken to have said that they never expected it to be a new North Sea in the first place, they now have had to completely reassess it. There hasn't been the big reservoirs they'd hoped for down there but however, there have been some shows and some of the smaller players think that there might still be reservoirs down there that could be productive. There could be a number of smaller fields in time but the oil industry is a high risk game and with low oil prices, we are talking about quite a few years. DW There does seem to be quite a split, certainly in terms of the opinions on the smaller players in the oil industry and the larger companies. Why, exactly, is that? Have the larger companies got more to loose or is something else going on? CH When you hit dry wells, everyone's got a lot to lose in the oil industry and drilling in the Falklands has proved to be quite an expensive business for some of them, even though the sharing of the rig has helped. I think the short answer to that is that a lot of the big players now have been hit pretty hard. We have low oil prices you only have to look at shell's results, down 56% on Friday morning. All of these what would be classed as non-core assets have to be looked at and a lot of the bigger companies are looking at those. Quite often what you find in the oil game is that the sharper perhaps smarter companies perhaps pick up where the big boys think that there's no immediate signs of success so, I do have a feeling that maybe we haven't heard the last of Falklands drilling and maybe we could see some interesting changes of assets in the next six to nine months. DW And what's the next big date to look for now that Shell is drilling its final well? CH I think the thing to watch out for is how we now kind of shape up with further optional wells that other operators might have. I think Desire obviously have started some seismic work and I know that Certainly London and Sodra haven't completely written off the basin so it's a bit difficult to tell at the moment and some people have suggested to me you might see a rig back next year but they have all got quite a long time and it may be further on than that. sartma.com

To: ISPYOIL who wrote (817)	11/9/1998 5:53:00 PM
From: Tomas	Read Replies (1) \| Respond to of 2742

If they can finally get a gas contract signed then the cash flow potential is tremendous, comments Morgan Stanley. Upstream, October 23 London calling Swedes look to set up shop in the UK, and perhaps go for a City listing, but analysts are sceptical over the risks of oil and gas projects gearing up in Malaysia and Libya STRATEGIC change has become a hallmark of Lundin Oil, which over the next few months is looking to shift its financial headquarters to London to be closer to the "centre of action" of the international oil business. "London seems to be the exploration and production capital of the world. More oil deals are being struck than in virtually any other city around the globe with the possible exception of Houston," claims managing director Magnus Nordin. Lundin, formed earlier this year through IPC's merger with Sands, also hopes to gain a London stock market listing. "If London shows an interest we will go for a listing but we want to make sure there is a reasonable amount of interest first," says Nordin. At the centre of the company's growth strategy is the further development of its Malaysian PM-3 assets. The project has two phases and the first is already producing using a floating production, storage and offloading vessel. The Malaysia scheme covers four oil and gas fields where Lundin holds a 41.44% stake (Bunga Orkid, Bunga Kekwa, Bunga Pakma and Bunga Raya). Phase one production from Bunga Kekwa began last year at a rate of 18,000 barrels per day, of which 7500 bpd is net to Lundin. Phase two should raise gross oil production to 50,000 bpd and 250 million cubic feet per day of gas. Additional gas reserves from the Bunga Seroja field are also a candidate for development. City worries persist over whether the project will get caught up in the general slowdown of the Malaysian economy, which has led to the deferment of several major new oil and gas schemes. "If they can finally get a gas contract signed in the Far East then the cash flow potential for the new company is tremendous," comments Morgan Stanley Dean Witter analyst Rob Arnott. Nordin appears confident the sales deal with Malaysian state company Petronas is "fairly well negotiated", allowing the production sharing agreement and development plan for phase two to be finalised by the end of this year with first gas to be brought on stream before the end of 2000. Libya is the other big interest for the new company. It hopes to submit a development plan to the National Oil Company later this year for the En Naga North oilfield, incorporating En Naga West. Nordin does not anticipate any political difficulties despite the sanctions against the country. "It would involve a pipeline and a number of production and water injection wells. The time scale would depend on the authorities but our aim is to have production before the end of 1999," says Nordin. Lundin is drilling a second appraisal well on En Naga North on block NC177 and is about a third of the way through shooting a 1600-kilometre seismic survey over the southern portion of the tract. Nordin calculates preliminary work on En Naga will cost the company around $100 million, although he declines to discuss recoverable reserves or eventual production rates. Analysts again remain sceptical over the eventual profitability of the Libya enterprise given the absence of hard reserves numbers. "I would like to think Libya would be very positive for them but it is difficult to know as the company is reticent to talk about the terms of any deal. If they end up like Lasmo in Libya, with high margin oil but with low production volumes, they will not be going anywhere," predicts Arnott. Elsewhere, Lundin has recently completed a seismic survey of block 5A in the Muglad basin in south-western Sudan. "We intend to drill an exploration well in the first quarter of 1999 to test our most promising prospect on the block," says Nordin. Off the Falklands, where the first Sodra Petroleum well proved a disappointment, Nordin admits a discovery is needed as "it is an expensive place to drill". "Overall, we are trying to focus on low-cost reserves and production. As the oil price is out of our hands, all we can do is to control our internal costs."