Lundin Petroleum Net Income Rises 23% on Record Crude

By Marianne Stigset

Aug. 13 (Bloomberg) -- Lundin Petroleum AB, Sweden's largest oil explorer, said second-quarter profit gained 23 percent as record oil prices more than made up for a decline in output.

Net income rose to 380 million kronor ($60 million), or 1.20 krona a share, from 309 million kronor, or 0.98 krona, a year earlier, the Stockholm-based company said today in an e- mailed statement. That missed the 403 million-krona median estimate of six analysts surveyed by Bloomberg. Sales of oil and gas increased 23 percent to 1.7 billion kronor.

``We continue to believe in a high oil price going forward,'' Chief Executive Officer Ashley Heppenstall said in the statement. ``The oil industry is finding it increasingly difficult to increase supply and as a result oil prices have had to rise to reduce demand.''

Oil prices almost doubled from a year earlier, climbing above $140 a barrel for the first time in June. The company brought on new production from the Alvheim field in Norway. It's also expanding in South East Asia with new licenses in Malaysia, Vietnam, Cambodia and Indonesia, as well as in Sudan and Congo.

Production fell 25 percent to 27,600 barrels of oil equivalent a day, from 36,700 barrels last year, Lundin said. Output for the first six months averaged 27,000 barrels of oil equivalent a day, 17 percent below forecast, due to delays in the start-up of the Alvheim field in Norway and the K5F project in the Netherlands, as well as delays to drilling at the Broom field in the U.K, Lundin said.

The explorer cut its production guidance for the year to 32,500 barrels of oil equivalent a day, down from a previous forecast of 36,500 barrels. It expects to pump over 40,000 barrels of oil equivalent a day next year, it said.

Lundin has risen 6.3 percent so far this year on the Stockholm Stock Exchange, giving the company a market value of 22.7 billion kronor. The benchmark OMX Stockholm 30 Index has declined 17 percent in the period.

To contact the reporter on this story: Marianne Stigset in Oslo at mstigset@bloomberg.net