Lundin Energy AB (Lundin Energy) is pleased to announce that due to the continued outperformance of the Edvard Grieg field, the gross proved plus probable (2P) reserves have been increased by approximately 50 million barrels of oil equivalent (MMboe), lifting the gross 2P ultimate recovery for the field to 350 MMboe1, 2. The expected plateau production period from the Greater Edvard Grieg Area, which also includes the Solveig Phase 1 and Rolvsnes Extended Well Test (EWT) developments, has been extended by a further year to late 2023.
The Edvard Grieg field continues to outperform, with the water production levels significantly lower than anticipated, which is supported by a recently completed 4D seismic survey that provides excellent imaging of the movement of water in the reservoir and shows the water injection flood front to be further away from the production wells than predicted, indicating increased oil-in-place in the field. An updated reservoir model has been completed, incorporating these latest results, which supports increased reserves and an extension to the plateau production period.
Edvard Grieg gross 2P reserves are increased by approximately 50 MMboe (33 MMboe net to Lundin Energy), lifting the gross 2P ultimate recovery for the field to 350 MMboe1,2, representing an increase of 90 percent from the original PDO. These additional reserves are significantly value accretive as no additional investment is required, above the planned infill well programme. The reserves estimates have been audited by ERCE3.
The gross 2P ultimate recovery for the Greater Edvard Grieg Area, which includes Edvard Grieg, as well as the Solveig Phase 1 and Rolvsnes EWT developments, is increased to 410 MMboe2. These additional reserves extend the plateau production period for the Greater Edvard Grieg Area by a further year, to late 2023, representing a five-year extension from the original PDO.
There is significant further upside in the Greater Edvard Grieg Area, where the total gross ultimate resource potential is estimated to be 800 MMboe, which includes upsides to existing fields and unrisked prospective resources. Several attractive exploration targets have been identified within tie-back distance to the existing facilities, with the operated Merckx prospect in licence PL981, scheduled for drilling in the fourth quarter 2020. The aim is to progressively mature these opportunities in order to keep the facilities full beyond 2023.
Nick Walker, COO of Lundin Energy, said:
“Since Edvard Grieg first oil in 2015, the field has year on year exceeded our expectations both from a reservoir as well as an operational performance perspective. What has been achieved at Edvard Grieg epitomises the best of Lundin Energy, through the application of subsurface expertise, cutting-edge technology and operational excellence, combined with a determined and entrepreneurial approach to operatorship. This reserve increase and plateau extension is incredibly value accretive, as it comes with limited additional investment. I’m confident, that as we continue to explore in the Greater Edvard Grieg Area, it will grow further and drive material additional value to the partnership and Norway.”
(1) The reserves were calculated using a nominal Brent oil price of USD 42 per barrel in 2020, 48 in 2021, 54 in 2022, 61 in 2023, 62 in 2024, 64 in 2025, 66 in 2026, 67 in 2027, 68 in 2028, 70 in 2029 and increasing by 2 percent per year thereafter.
(2) 2P ultimate recovery is cumulative production to date plus remaining proved plus probable (2P) reserves. The remaining Edvard Grieg gross 2P reserves were 190 MMboe as at 31 July 2020.
(3) The reserves for Edvard Grieg have been audited by ERC Equipoise Limited, a third party independent reserves auditor, and were calculated in accordance with the 2018 Petroleum Resource Management System (SPE PRMS) Guidelines of the Society of Petroleum Engineers (SPE), World Petroleum Congress (WPC), American Association of Petroleum Geologists (AAPG) and Society of Petroleum Evaluation Engineers (SPEE). The effective date of the analysis was 31 July 2020.
Lundin Energy has grown from an oil and gas exploration company into an experienced Nordic energy developer and operator. We continue to explore new ideas, new concepts and new solutions to maintain our position as an industry leader in production efficiency, sustainability and decarbonisation. (Nasdaq Stockholm: LUNE). For more information, please visit us at www.lundin-energy.com or download our App www.myirapp.com/lundin
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This is information that Lundin Energy AB is required to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the contact persons set out above, at 08.00 CEST on 29 September 2020.
Certain statements made and information contained herein constitute “forward-looking information” (within the meaning of applicable securities legislation). Such statements and information (together, “forward-looking statements”) relate to future events, including Lundin Energy’s future performance, business prospects or opportunities. Forward-looking statements include, but are not limited to, statements with respect to estimates of reserves and/or resources, future production levels, future capital expenditures and their allocation to exploration and development activities, future drilling and other exploration and development activities. Ultimate recovery of reserves or resources are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.
All statements other than statements of historical fact may be forward-looking statements. Statements concerning proved and probable reserves and resource estimates may also be deemed to constitute forward-looking statements and reflect conclusions that are based on certain assumptions that the reserves and resources can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions) are not statements of historical fact and may be “forward-looking statements”. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations and assumptions will prove to be correct and such forward-looking statements should not be relied upon. These statements speak only as on the date of the information and Lundin Energy does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable laws. These forward-looking statements involve risks and uncertainties relating to, among other things, operational risks (including exploration and development risks), productions costs, availability of drilling equipment, reliance on key personnel, reserve estimates, health, safety and environmental issues, legal risks and regulatory changes, competition, geopolitical risk, and financial risks. These risks and uncertainties are described in more detail under the heading “Risk management” and elsewhere in Lundin Energy’s Annual Report. Readers are cautioned that the foregoing list of risk factors should not be construed as exhaustive. Actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements are expressly qualified by this cautionary statement.