January 30, 2019 / 7:17 AM / 6 months ago

UPDATE 2-Lundin Petroleum lifts dividend, long-term output forecast

(Adds outlook, share price, changes dateline to LONDON)

By Nerijus Adomaitis

LONDON, Jan 30 (Reuters) - Swedish oil firm Lundin Petroleum , a partner in Norway’s giant Johan Sverdrup oilfield, raised its output expectations and dividend payment plans on Wednesday after beating fourth-quarter core profit forecasts.

The company plans to drill 15 exploration wells this year, a record, with a goal of discovering more than 750 million barrels of oil equivalent in potential new resources, it told an investor presentation in London.

Lundin now expects output of over 150,000 barrels of oil equivalent per day (boepd) in 2020, up from a previous forecast of more than 130,000 boepd and compared with 81,100 boepd in 2018.

In 2023, output is expected to exceed 170,000 boepd, up from an earlier target of more than 160,000 boepd.

The increase will come primarily from the startup of the Johan Sverdrup oilfield, the largest North Sea discovery in more than 30 years, but also from existing fields and other soon-to-be-developed assets, it said.

“Growing production and low cost is our main message,” Lundin Chief Operating Officer Nick Walker said.

Lundin, 20 percent owned by Norway’s Equinor, said it would pay a 2018 dividend of $500 million, or $1.48 per share, higher than the $1.10 per share expected by analysts.

Lundin will switch to quarterly dividend payments, with a plan of maintaining or increasing the dividend over time in line with its financial performance.

“Our dividends are sustainable at below $50 a barrel, and not many companies can say that,” Chief Executive Alex Schneiter told Reuters.

North Sea oil currently sells at around $62 per barrel.

Lundin’s fourth-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) rose to $448.5 million from $429.8 million a year earlier, topping the $440 million expected by analysts in a Reuters poll.

The company’s 2019 production is seen between 75,000 and 95,000 barrels per day, depending on when Sverdrup’s first phase begins operations. Start-up is scheduled for November, the company reiterated.

Lundin shares had gained 4.2 percent by 1513 GMT, making them the best performer on the European Oil and Gas Index , which rose 0.4 percent. (Writing by Terje Solsvik, additional reporting by Gwladys Fouche and Ole Petter Skonnord Editing by Dale Hudson and Jason Neely)

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