Its EBIT rose to US$404 million from US$261 million a year earlier but lagged the US$442 million expected by analysts, Refinitiv Eikon data showed.
Sales volumes rose as Sverdrup achieved production of 470 000 bpd in April, a month sooner than forecast by operator Equinor, but prices fell.
It increased its 2020 production guidance to 160 000 - 170 000 boe/d, citing the faster ramp-up at the Johan Sverdrup oilfield, Western Europe’s biggest oilfield by output.
As a result, it lowered its operating cost guidance to US$2.80/bbl from US$3.40.
Its output guidance was also buoyed by postponed maintenance at the Edvard Grieg and Alvheim oilfields.
It said its guidance did not take into account output cuts announced by the Norwegian government on Wednesday as part of global efforts to support crude prices and curb oversupply.
Lundin said it would advise the market on the impact of those cuts within two weeks. The government said the cuts, which would amount to 250 000 bpd in June, would be fairly distributed among fields and companies.
The company said it would cut its 2020 spending by US$300 million versus a previous US$170 million and against an original plan of US$1.31 billion and consider further reductions if low oil prices persist.
The company said its subsea Solveig Phase 1 development startup would be delayed from 1Q21 to 3Q21 and extended well tests at its Rolvsnes project deferred for a year to 2Q22.
Those deferrals will lower Lundin’s 2020 capital spending by US$185 million.
It will also cut its exploration programme to five wells from originally planned 10 wells, with four wells being postponed until the next year.
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/01052020/lundin-energy-cuts-spending/