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Sweden's Lundin Petroleum finds more oil in Norwegian Arctic

Reuters - UK Focus

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OSLO, Nov 22 (Reuters) - Lundin Petroleum (LSE: 0NNR.L - news) has found additional oil and gas in the Norwegian Arctic, the Swedish company and the Norwegian Petroleum Directorate said on Tuesday, lifting the company's shares.

The find is located some 60 km (37 miles) from Lundin's Alta find, which the company estimates could contain up to 400 million barrels of oil equivalent (BOE), and 20 km from the Johan Castberg discovery which contains up to 600 million barrels of oil.

"The total gross resource estimate for the Neiden discovery is between 25 and 60 million (BOE)," Lundin Petroleum said in a statement.

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Shares (Berlin: DI6.BE - news) in Lundin were up 4.46 percent at 0709 GMT, making it the best performing stock in the European oil and gas index .

"Although a discovery is positive, the preliminary volumes estimate ... was significantly below the pre-drill estimate of 204 million barrels," Swedbank (LSE: 0H6T.L - news) analyst Teodor Sveen-Nilsen, who holds a Reduce recommendation on the stock, wrote in a note to clients.

Oil companies such as Statoil (LSE: 0M2Z.L - news) and Lundin have great hopes that the Norwegian Arctic, which is much less explored than the North Sea, could contain significant new oil and gas resources.

Others are less enthusiastic, however, with Royal Dutch Shell (LSE: RDSB.L - news) , Total (LSE: 524773.L - news) and Eni (LSE: 0N9S.L - news) not participating in the latest oil licensing round organised by Norway, which focused on the Arctic.

The only find in production in the Arctic Barents Sea is Eni's Goliat, but others are in development, such as Statoil's Johan Castberg field.

Lundin operates the well at the Neiden discovery and has a 40 percent stake. Its partners are Japan's Idemitsu and DEA, the oil firm controlled by Russian billionaire Mikhail Fridman, each hold 30 percent stakes.

Lundin will next drill a prospect called Filicudi, also located in the Barents Sea, which the firm estimates could contain up to 258 million BOE. (Reporting by Gwladys Fouche; editing by Terje Solsvik and Jason Neely)