Lundin Petroleum today confirmed it had sliced off part of its assets to create a new company.
The move is part of Lundin’s strategy to narrow its focus on Norway.
The firm’s assets in Malaysia, France and the Netherlands have been funneled into a newly formed company called International Petroleum Corporation (IPC). The new company plans to list its shares on the NASDAQ Stockholm stock exchange under the stock ticker IPCO.
Lundin chairman Ian Lundin said: “The spin-off of our international assets into IPC creates an exciting new company with a strong balance sheet and a proven Board and management team.
“Their focus will be to create value at a time in the cycle when the industry remains under-capitalised and multiple opportunities are available as companies rationalise their portfolios. With the spin-off, Lundin Petroleum will become fully focused on Norway, which I am convinced will serve to further crystallise the value of our high-growth asset portfolio in the North Sea and the southern Barents Sea.”
The Lundin Family will continue to be the largest shareholders of IPC following the completion of the distribution.
IPC will be led and directed primarily by current members of the Lundin Petroleum management team and Board of Directors. Mike Nicholson, current Chief Financial Officer of Lundin Petroleum, will serve as President and Chief Executive Officer and a Director of IPC. Christophe Nerguararian, current Vice President Corporate Finance of Lundin Petroleum, will serve as Chief Financial Officer of IPC. Jeffrey Fountain, current Vice President Legal at Lundin Petroleum, will serve as General Counsel of IPC. Lukas H. Lundin, who is a director of Lundin Petroleum, will serve as Chairman of the Board of Directors of IPC. IPC’s other Directors will include Ashley Heppenstall, Chris Bruijnzeels, Torstein Sanness and Donald Charter.
A company statement added: “The proposed spin-off of the IPC Assets will allow Lundin Petroleum’s management to solely focus on maximising shareholder value from its Norwegian portfolio which has continuously grown in size and value since Lundin Petroleum entered Norway in 2004, with the Norwegian assets now accounting for 96% of Lundin Petroleum’s reserves and 88% of Lundin Petroleum’s 2017 production guidance.
“Lundin Petroleum’s strong liquidity position of $1billion of headroom coupled with its operating cashflow generation allows the company to retain all external bank debt and still be able to fully fund its committed capital expenditure up to Johan Sverdrup first oil in late 2019. The Company’s net debt at year end 2016 amounted to approximately $4billion.”
IPC is expected to produce between 9,000 to 11,000 boepd. Lundin’s Norwegian assets are expected to produce between 70,000 to 80,000 boepd.
The spin-off confirmation comes on the same day, Lundin announced a 100 million barrel oil find. Read more here.
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