Annual Report 2005 (6 MB) - Lundin Petroleum

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Other reserves comprises: Group Available-forsale reserve > 49 < Hedge reserve Currency translation reserve Total other reserves Balance at 31 December 2004 – – -126,389 -126,389 Change in accounting policy – -98,194 – -98,194 Balance at 1 January 2005 – -98,194 -126,389 -224,583 Change in fair value 99,109 -61,931 – 37,178 Transfer to retained earning – 98,194 – 98,194 Currency translation diff erence – – 301,587 301,587 Balance at 31 December 2005 99,109 -61,931 175,198 212,376 Restricted Equity Parent Company Unrestricted equity Total equity Share Capital Statutory reserve* Retained earnings Net result Balance at 1 January 2004 2,515 958,297 – -150,147 810,665 Transfer of prior year net result – -150,147 – 150,147 – New share issuance 22 16,013 – – 16,035 Share based payments – – 10,712 – 10,712 Net result – – – -28,673 -28,673 Balance at 31 December 2004 2,537 824,163 10,712 -28,673 808,739 Transfer of prior year net result – -28,673 – 28,673 – New share issuance ** 34 59,241 – – 59,275 Transfer of share based payments – 6,575 -6,575 – – Share based payments – – 18,981 – 18,981 Net result – – – 6,265 6,265 Balance at 31 December 2005 *** 2,571 861,306 23,118 6,265 893,260 * The share premium reserve as at 31 December 2004 has been reclassifi ed to statutory reserve in line with the Swedish Company Act. ** Included in the amount of new shares issued at 31 December 2005 are 346,500 shares which had been issued but not registered. *** Lundin Petroleum AB’s share capital at 31 December 2005 amounts to SEK 2,571,402 represented by 257,140,166 shares with a quota value of SEK 0.01 each.
ACCOUNTING PRINCIPLES Introduction In June 2002 the European Union (EU) adopted International Financial Reporting Standards (IFRS) for all companies listed on a stock exchange within the European Union with eff ect from 1 January 2005, the adoption date. Lundin Petroleum’s Annual Report for 2005 has been prepared in full compliance with IFRS, including one year of comparative fi gures in line with IFRS 1. As a result, Lundin Petroleum’s date of transition is 1 January 2004. The fi nancial statements of the group have been prepared in accordance with prevailing IFRS standards and International Financial Reporting Standards Committee (IFRIC) interpretations adopted by the EU Commission at the end of December 2005. The consolidated fi nancial statements have been prepared under the historical cost convention, as modifi ed by the revaluation of held for sale fi nancial assets. The preparation of fi nancial statements in conformity with IFRS requires the use of certain critical accounting estimates and also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are signifi cant to the consolidated fi nancial statements, are disclosed under the headline “Critical accounting estimates and judgements”. The fi nancial statements of the Parent Company are prepared in accordance with accounting principles generally accepted in Sweden, applying RR 32 issued by the Swedish Financial Accounting Standards Council and the Annual Accounts Act. RR 32 requires the Parent Company to use similar accounting principles as for the Group, i.e. IFRS to the extent allowed by RR 32. The Parent Company’s accounting principles deviate from the Group’s in respect of Pensions where FAR 4 is applied and valuation of shares in subsidiaries, which are valued at cost. IFRS Transition IFRS 1 provides fi rst time adopters of IFRS with exemptions from full retrospective application of the newly adopted standards. Lundin Petroleum has utilised the following exemptions: IFRS 2 – Shared based payments. This standard will not be applied to the Group’s incentive warrants programme granted before 7 November 2002. The 2004 programme granted after 7 November 2002 and not yet vested before 1 January 2005 will be recognised in line with this standard. IFRS 3 – Business Combinations. This standard has not been applied to business combinations prior to 31 March 2004. IFRS 5 – Non Current assets held-for-sale and discontinued operations. This standard has been adopted prospectively as from 1 January 2005 and therefore the comparative numbers have not been restated. IAS 21 – The eff ect of changes in foreign exchange rates. At the date of transition to IFRS the cumulative historic translation diff erences are deemed to be zero. The gain or loss on a subsequent disposal of any foreign operation will exclude translation diff erences > 50 < that arose before the date of transition to IFRS but will include translation diff erences arising after this date. IAS 39 – Financial Instruments, as adopted by the EU, has been applied as from 1 January 2005 and therefore the comparative numbers have not been restated. Changes in accounting principles on the adoption of IFRS IFRS 2 – Shared based payments Under Swedish GAAP Lundin Petroleum did not recognise employee incentive warrants issued as compensation cost when the exercise price was equal to or at a premium to the market price at the time of issue. IFRS 2 requires a charge to be recorded in the income statement to record the issue of employee incentive warrants as well as a liability in relation to the employee incentive warrants programme. As a result of the transition to IFRS, shareholders equity as at 31 December 2004 included a credit of MSEK 10.7. The result for the year 2004 included a charge of MSEK 10.7 in the personnel costs. IFRS 3 – Business combinations This statement deals with the business combinations and the treatment of any excess purchase price over the allocated asset values. Under IFRS 3 the excess purchase price is recorded as goodwill whereas under Swedish GAAP the excess value was allocated to the acquired assets. There was no change required to the treatment of assets currently recorded by Lundin Petroleum. IAS 1 – Presentation of fi nancial statements In accordance with this standard some classifi cation and layout changes have been implemented in the annual report 2005. Below the signifi cant ones are disclosed: Minority interests are included in shareholders’ equity as a separate component and are included in the net result for the year in the income statement. The shares in Associated companies has been removed from Other shares and participations and are shown on a separate line in the Balance Sheet. Changes in fair values and revaluation of assets have been specifi ed in the statement of changes in equity and in the notes. IAS 21 – The eff ect of changes in foreign exchange rates This statement deals with the eff ects of foreign exchange rates. The eff ects of recording a change in functional currency of certain subsidiaries within the Lundin Petroleum Group are in line with the requirements of this standard, related to the oil and gas assets recognised in these companies. The negative eff ect on shareholders’ equity net of deferred tax at 1 January 2004 amounted to MSEK 11.5 and MSEK 4.6 at 31 December 2004. The positive eff ect net of deferred tax on the result for the year ended 31 December 2004 amounted to MSEK 8.2. At the date of transition to IFRS the cumulative historic translation diff erences are deemed to be zero. The gain or loss on a subsequent disposal of any foreign operation will exclude translation diff erences that arose before the date of transition to IFRS but will include translation diff erences arising after this date.
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 and 10: UNDERSTANDING RESERVES AND RESOURCE
Page 11 and 12: MARKET DESCRIPTION World Oil Produc
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: STATEMENT OF CHANGES IN EQUITY CONS
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
Page 71 and 72: NOTES NOTE 12 - SHARES IN ASSOCIATE
Page 73 and 74: NOTES The Group has entered into th
Page 75 and 76: NOTES life. It was further agreed t
Page 77 and 78: NOTES NOTE 33 - EARNINGS PER SHARE
Page 79 and 80: NOTES Salaries, other remuneration
Page 81 and 82: NOTES NOTE 39 - INCENTIVE WARRANTS
Page 83 and 84: SUPPLEMENTAL INFORMATION - RESERVE
Page 85: Corporate Head Offi ce Lundin Petro

Annual Report 2005 (6 MB) - Lundin Petroleum

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