Lundin warns of $162mn earnings hit in Q1
Swedish oil firm Lundin Energy has warned it expects to book $81mn in pre-tax exploration costs and incur a further $81mn in net foreign exchange losses in the first quarter.
The exploration costs mainly relate to the Bask exploration well, as well as relinquished licences, Lundin said in an update on April 14. Bask, drilled at licence PL533B in the frontier Barents Sea, was reported as dry in January. The expense will be offset by a $63mn tax credit, however, as Norway allows operators to deduct some exploration costs from their tax base, in order to encourage drilling.
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While the Norwegian krone was stable against the US dollar, the euro weakened against the greenback by around 4%. The forex loss is mainly non-cash, relating to the revaluation of loans.
Lundin is due to publish its first quarter earnings on April 29.