Lundin Petroleum Announces Exploration and Impairment Expenses for the Third Quarter 2013 Results
Lundin Petroleum AB (Lundin Petroleum) will incur exploration expenses of approximately USD 19 million and non-cash impairment expenses of approximately USD 42 million for the third quarter 2013 (the Period) results. These expenses will be offset by a deferred tax credit of USD 16 million giving an after tax net impact to the income statement for the Period of USD -45 million.
Exploration expenses:
During the Period Lundin Petroleum completed the Biotitt (PL544) and Cliffhanger (PL265) exploration wells, offshore Norway, as dry holes. The drilling of the wells and associated licence costs amounted to USD 12 million which will be expensed to the income statement for the Period. A further USD 7 million of exploration expenses will be charged to the income statement for the Period in relation to relinquishment of certain licences in Norway and other exploration related costs.
Impairment expenses:
Lundin Petroleum has completed certain technical studies on the Janglau and Ara discoveries on PM308A (WI 35%) in Malaysia and concluded that these discoveries are not currently commercially viable. Consequently the carrying value of these two discoveries will be written down to zero resulting in a non-cash impairment charge for the Period of USD 42 million.