Lundin to book impairment charges, gains

Sweden’s Lundin Petroleum said on Wednesday that it expects to book some USD 35 million of exploration and impairment charges for Q2 but would net USD 118 million in foreign exchange gains.

“The Norwegian Krone and the Euro strengthened against the US Dollar by approximately 2 and 7% respectively during the second quarter of 2017 and the foreign exchange gain mainly relates to the revaluation of loan balances at the prevailing exchange rates at the end of the reporting period,” the company said in a statement.

Lundin would gain a further USD 52 million from the spin-off of its IPC business, which completed in April, while its impairment and exploration costs would be offset by USD 27 million of tax credits, it added in a statement.

An impairment charge of about USD 13 million is linked to the sale of a 39% stake in the Brynhild field in PL148 in the Norwegian North Sea. Most of the USD 22 million exploration costs are linked to the failed Gohta appraisal well, which the company spudded in March, as well as to other Norwegian licences that the company is seeking to abandon, the press release added.