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UPDATE 2-Lundin Petroleum to spin off assets from beyond Norway

Published 2017-02-13, 04:07 a/m
© Reuters.  UPDATE 2-Lundin Petroleum to spin off assets from beyond Norway
BP
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* Plans listing of Malaysia, France, Netherlands assets

* Made another oil discovery in the Arctic

* Sees 2017 output below forecast

* Analyst welcomes split, shares rise (Adds oil discovery estimate, output plans, analyst, share price)

By Nerijus Adomaitis and Terje Solsvik

OSLO, Feb 13 (Reuters) - Swedish oil firm Lundin Petroleum LUPE.ST plans to spin off its assets from outside of Norway into a separately listed company and will distribute shares in the new firm to existing investors, it said on Monday.

Separately the company's main Norwegian business announced an oil discovery in the Arctic Barents Sea, while Lundin also set an output target for 2017 that was below forecasts in a Reuters poll of analysts. assets that will be hived off, situated in Malaysia, France and the Netherlands, will become part of the newly formed International Petroleum Corporation (IPC).

"Given ongoing developments and successes with the company's assets in Norway, the IPC Assets, held within a separate and independent entity, would benefit from enhanced strategic flexibility and management focus," Lundin said.

Its aim is to build IPC into a leading independent international oil and gas company.

"IPC has applied to the Toronto Stock Exchange to list its shares ... under the ticker IPCO, and also intends to list its shares on the NASDAQ Stockholm stock exchange," Lundin said.

The company also announced the discovery of between 35 million and 100 million barrels of oil equivalents in its Filicudi prospect in Norway's southern Barents Sea and said it saw significant upside potential.

In total, Lundin and its partners believes drilling of further prospects on the licence could lift the total discovery to some 700 million barrels of oil equivalents, it added.

Lundin and Norway's Aker BP (LON:BP) AKERBP.OL each hold 35 percent stakes in the licence, known as PL533, while DEA Norway owns 30 percent.

Separately, Lundin also set a 2017 output guidance of 79,000-91,000 barrels of oil equivalent per day (boepd), including IPC, up from 72,600 boepd in 2016 but below the average forecast of 93,446 in a Reuters poll of analysts.

The production guidance for Lundin Petroleum Norway was 70,000-80,000 boepd, whilst the IPC production guidance was 9,000 to 11,000 boepd.

The spin-off will be a popular move among investors as it allow the remaining company to focus exclusively on Lundin's Norwegian assets, Swedbank analyst Teodor Sveen-Nilsen said in a research note.

"Despite the soft production guidance and downside risk to our 2017 production forecast, we guess the market will focus on the spin-off and Filicudi discovery," he added. He has a "reduce" rating on the stock.

At 0817 GMT, Lundin Petroleum's shares traded 2.7 percent higher in Stockholm while Aker BP rose 0.7 percent. European oil and gas shares .SXEP traded 0.4 percent higher. (Editing by Keith Weir)

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