Swedish oil and gas exploration and production company Lundin Petroleum has cut its capex for 2016.
In a statement on Friday, Lundin revealed that its 2016 development, appraisal and exploration budget totals $1.08 billion and represents a 26 percent decrease on 2015 capital expenditure.
The company’s exploration and appraisal budget has been slashed 64 percent compared to last year. Lundin has earmarked $145 million for the exploration and appraisal activity, most of which will be spent in Norway – $115 million – where it plans to drill two exploration wells during 2016, targeting unrisked prospective resources of 250 MMboe.
Furthermore, Lundin’s appraisal programme involves the re-entry of the 2015 Alta-3 appraisal well in PL609 (WI 40%) in the southern Barents Sea to deepen the well and to perform a production test.
The 2016 appraisal budget also includes expenditure on field development studies for Phase 2 of the Johan Sverdrup field (WI 22.6%), development studies for the Luno II discovery in PL359 (WI 50%) and a development feasibility study for Alta and Gohta in PL609.
While mostly dealing with operations in Norway, Lundin has set aside $30 million for exploration in Malaysia. The money will be spent on two exploration wells, Bambazon and Maligan prospects. Bambazon has already been completed, while Maligan is currently being drilled, targeting net unrisked prospective resources of 94 MMboe.
The company is looking to benefit from the fact that low oil prices have pressured the drilling contractors to reduce dayrates for their drilling rigs,
Lundin is currently tendering for a rig for its southern Barents Sea drilling programme, with an anticipated start of drilling operations mid-year 2016.
Alex Schneiter, President & CEO of Lundin Petroleum said: “Our exploration and appraisal budget will remain focused on our three key growth areas: the southern Barents Sea and the Utsira High in Norway and the Sabah area in Malaysia. Lundin Petroleum is well positioned to take full advantage of significantly reduced rig rates.”