Annual Report 2005 (6 MB) - Lundin Petroleum

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the shooting of additional seismic in South-West Heather, the successful application of under balanced drilling techniques in Villeperdue or additional appraisal drilling in PL006c in Norway. Lundin Petroleum estimates its contingent resources in exactly the same manner as its reserves. In addition, an associated work programme is required to mature these into reserves. There is a chance that identifi ed resources will not mature into reserves. It is important to realise that Lundin Petroleum contingent resources are not the same as Lundin Petroleum’s exploration resources. Under the SPE/WPC defi nitions exploration resources are classifi ed as prospective resources. Prospective resources are those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from undiscovered accumulations. Prospective resources Lundin Petroleum has a large portfolio of exploration blocks. These exploration blocks are evaluated using techniques like gravity and magnetic surveys, geochemical surveys, seismic surveys and basin analysis. This analysis results in a long list of leads and drillable prospects. Leads are identifi ed potential hydrocarbon accumulations that will require additional study before they are matured into prospects and appear in drilling plans. Prospects are ready to drill. It is important to realise that prospects and leads carry exploration risks, which result in a chance of not fi nding commercial hydrocarbons. These risks are identifi ed by Lundin Petroleum and help management in ranking exploration activities. In 2006 Lundin Petroleum is planning to drill (operated and non-operated) 15 exploration wells targeting in total 750 MMboe of unrisked prospective resources net to the Company. By assuming that about 50 percent of the identifi ed leads in Lundin Petroleum’s portfolio do not mature to drillable prospect status, Lundin Petroleum estimates a further 1,130 MMboe of net unrisked prospective resources, which could be targeted by exploration work programmes in 2007 and beyond. Organic growth As an integrated exploration and production company, Lundin Petroleum is continuously aiming to grow the business by identifying exploration targets and maturing exploration targets into drillable prospects, and thus increase its prospective resource base. By drilling exploration wells and discoveries, prospective resources are moved into contingent resources and after formulating a development strategy and demonstrating commerciality, contingent resources are moved into 2P reserves. > 7 < Lundin Petroleum Proven and Probable Reserves United Kingdom Norway 2007 Norway Venezuela Tunisia France France Paris Basin United Kingdom Indonesia Netherlands Proven and Probable Reserves 146.1 MMboe at 1 January 2006 2006 Contingent Resource Estimate Other Contingent Resources Internal Estimate 131 MMboe net Lundin Petroleum Prospective Resource Estimate 2008 Undefined Timing Prospective Resources Internal Estimate 1,130 MMboe net Lundin Petroleum
MARKET DESCRIPTION World Oil Production 2004 North America 18% Russia/Caspian 14% Asia Pacific 10% Russia/Caspian 28% Africa 5% Africa 11% South & Central America 8% Middle East 31% Europe 8% Total Production 80.3 million bopd World Gas Production 2004 North America 28% South & Central America 5% Europe 12% Middle East 10% Asia Pacific 12% Total Production 2,691.6 billion m 3 World Oil Reserves End 2004 112 101 Africa South & Central America Source: BP Statistical Review of World Energy 2005 17 734 41 61 123 Europe Middle East Asia Pacific North America Russia/Caspian > 8 < GLOBAL RESERVES Crude oil Crude oil is found on all continents of the world. The Middle East is by far the region where the largest proven oil reserves are found, followed by Russia/Caspian and Africa. In total, global proven oil reserves amounted to 1,189 billion bbls at the end of 2004, of which 62 percent was attributable to the Middle East. Natural gas As well as oil, natural gas exists on all continents. However, the reserves of natural gas are distributed diff erently compared to the oil reserves. At the end of 2004 there was 179.5 trillion m3 of proven natural gas reserves, of which the Middle East had 40 percent and Russia/Caspian 32 percent. The growing gap The world has up until now been supplied by oil discovered particularly from 1950 through to the 1970. Despite signifi cant improvements in technology the industry has not discovered enough new reserves to replace the oil being consumed since the mid 1980s (see World Oil Demand graph). The International Energy Agency (IEA) estimates that global oil production will increase by less than one percent up to 2030. Competition - Partners The players in the oil and gas market consist of national oil companies (eg. Aramco, CNPC, Petronas, Statoil), the big integrated oil companies, the majors (eg. Exxon, Shell, BP) and independent oil companies such as Talisman Energy, Tullow Oil and Lundin Petroleum. The main strategy of the national oil companies is to secure the energy supply for their respective countries. They often have downstream operations i.e. refi neries and distribution network/petrol stations. 14.1 World Gas Reserves End 2004 7.1 5.8 72.8 14.2 7.3 58.2 Africa South & Central America Europe Middle East Asia Pacific North America Russia/Caspian Total Oil Reserves 1,189 billion bbls Total Gas Reserves 179.5 trillion m 3
Page 1 and 2: ANNUAL REPORT 2005
Page 3 and 4: PRODUCTION (BOEPD) 40,000 30,000 20
Page 5 and 6: LETTER TO SHAREHOLDERS ...fi rst pr
Page 7 and 8: WORDS FROM THE CHAIRMAN IAN H. LUND
Page 9: UNDERSTANDING RESERVES AND RESOURCE
Page 13 and 14: OPERATIONS REVIEW 2005 was another
Page 15 and 16: OPERATIONS REVIEW Solan/ Strathmore
Page 17 and 18: OPERATIONS REVIEW Workover rig, Par
Page 19 and 20: OPERATIONS REVIEW INDONESIA Lundin
Page 21 and 22: OPERATIONS REVIEW IRELAND In Januar
Page 23 and 24: OUR PEOPLE ARE OUR STRENGTH We have
Page 25 and 26: CORPORATE RESPONSIBILITY In view of
Page 27 and 28: SHARE INFORMATION Lundin Petroleum
Page 29 and 30: BOARD OF DIRECTORS The Annual Gener
Page 31 and 32: BOARD OF DIRECTORS From left to rig
Page 33 and 34: MANAGEMENT Standing from left to ri
Page 35 and 36: CORPORATE GOVERNANCE REPORT- Chairm
Page 37 and 38: INTERNAL CONTROL REPORT THE BOARD O
Page 39 and 40: KEY FINANCIAL DATA Data per share 2
Page 41 and 42: DIRECTORS’ REPORT PRODUCTION AND
Page 43 and 44: DIRECTORS’ REPORT Sudan A compreh
Page 45 and 46: DIRECTORS’ REPORT Write off Write
Page 47 and 48: DIRECTORS’ REPORT hydrocarbons an
Page 49 and 50: BALANCE SHEET CONSOLIDATED AND PARE
Page 51 and 52: STATEMENT OF CHANGES IN EQUITY CONS
Page 53 and 54: ACCOUNTING PRINCIPLES Introduction
Page 55 and 56: ACCOUNTING PRINCIPLES ACCOUNTING PR
Page 57 and 58: ACCOUNTING PRINCIPLES The Group cat
Page 59 and 60: ACCOUNTING PRINCIPLES Site restorat
Page 61 and 62:
NOTES 2005 SEK Average crude sales
Page 63 and 64:
NOTES NOTE 4 - WRITE-OFF OF OIL AND
Page 65 and 66:
NOTES The tax on the Group’s prof
Page 67 and 68:
NOTES 2005 Production cost pools UK
Page 69 and 70:
NOTES Venezuela In November 2002, L
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NOTES NOTE 12 - SHARES IN ASSOCIATE
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NOTES The Group has entered into th
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NOTES life. It was further agreed t
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NOTES NOTE 33 - EARNINGS PER SHARE
Page 79 and 80:
NOTES Salaries, other remuneration
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NOTES NOTE 39 - INCENTIVE WARRANTS
Page 83 and 84:
SUPPLEMENTAL INFORMATION - RESERVE
Page 85:
Corporate Head Offi ce Lundin Petro
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Annual Report 2005 (6 MB) - Lundin Petroleum

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