Annual Report 2005 (6 MB) - Lundin Petroleum

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The wholly owned French companies have been consolidated for tax purposes within France from 1 January 2003. The taxation liability of a French company can be reduced wholly or in part by the surrender of losses from another French company. Losses incurred by a company prior to tax consolidation can only be carried forward and utilised against that company’s income indefi nitely. During 2005 the Swedish taxation authority (Skatteverket) conducted a tax audit of Lundin Petroleum AB for the fi nancial years 2002 to 2003. The tax authorities have disallowed a portion of expenses recharged to Lundin Petroleum AB by Lundin Oil Services SA for costs associated with services performed by the management of the Lundin Petroleum Group. As Lundin Petroleum AB is in a tax loss position, this disallowance of the expenses reduces the tax losses carried forward but does not result in a current tax charge. The tax losses incurred have not been recorded as deferred tax assets due to the uncertainty as to the timing of their utilisation. The tax authorities have charged penalties on the value of the taxable eff ect of the disallowed costs amounting to TSEK 5,038.1. The company is challenging the assessment of the penalties and the disallowance of the management costs as the company believes that they are a valid charge to the Parent Company of the Lundin Petroleum Group and as such, Lundin Petroleum has not made a provision in the accounts for the penalties charged. A deferred tax benefi t for the amount of TSEK 42,028 has been accounted for directly in equity. The deferred tax liability arises on the excess of book value over the tax value of oil and gas properties and the fair value of the derivate instruments. Group Group Specifi cation of deferred tax assets and tax liabilities Deferred tax assets 2005 2004 Unused tax loss carry forwards 172,705 361,669 Site restoration provision 68,509 27,657 Royalties 5,060 4,862 Overlift 2,785 – Fair value of derivative instruments 45,125 406 Other deductible temporary diff erences 3,603 1,753 Deferred tax liabilities 297,788 396,347 Accelerated allowances 1,723,501 1,129,549 Fair value of derivative instruments 3,097 – Exchange gains and losses – 30,246 Capitalised acquisition cost 8,360 6,262 Other taxable temporary diff erences 100 75 1,735,058 1,166,132 Unrecognised tax losses The Group has Swedish and Dutch tax loss carry forwards, including tax losses in the current fi nancial year, of MSEK 420.8 which in part are not yet assessed. The tax losses can be utilised indefi nitely. A deferred tax asset relating to the tax losses carry forward has not been recognised as at 31 December 2005 due to the uncertainty as to the timing and the extent of their utilisation. This treatment is consistent with the comparative year’s accounts. NOTE 9 – OIL AND GAS PROPERTIES (TSEK) Group 2005 > 63 < Group 2004 Parent Company 2005 Parent Company 2004 Production cost pools 5,541,704 4,246,283 – – Non-production cost pools 191,167 49,741 – – 5,732,871 4,296,024 – –
NOTES 2005 Production cost pools UK France Netherlands Tunisia Indonesia Norway Venezuela Ireland Total Cost 1 January 2,193,340 985,066 624,948 76,555 107,707 564,521 233,829 31,419 4,817,385 Acquired on consolidation Additions - production/ – – – – – -781 – – -781 development 637,067 40,998 65,572 2 103,599 665,813 35,470 – 1,548,521 Disinvestments – -1,364 -1,980 – – – – -32,708 -36,052 Reclassifi cations Currency translation – -993 – – 195 – – – -798 diff erence 463,096 40,100 25,879 3,121 55,456 52,090 49,575 1,289 690,606 31 December 3,293,503 1,063,807 714,419 79,678 266,957 1,281,643 318,874 – 7,018,881 Depletion 1 January Depletion charge for -158,520 -146,630 -138,326 -39,242 -29,362 -15,810 -43,212 – -571,102 the year -508,519 -67,651 -70,834 -18,831 -16,192 -26,663 -44,738 – -753,428 Write-off s – – -30,162 – – – – – -30,162 Disinvestments Currency translation – 1,364 1,978 – – – – – 3,342 diff erence -66,310 -6,152 -6,445 -1,819 -31,770 -1,590 -11,741 – -125,827 31 December -733,349 -219,069 -243,789 -59,892 -77,324 -44,063 -99,691 – -1,477,177 Net book value 2,560,154 844,738 470,630 19,786 189,633 1,237,580 219,183 – 5,541,704 2004 Production cost pools Cost UK France Netherlands Tunisia Group Indonesia Norway Venezuela Ireland Total 1 January – 850,740 555,507 80,532 52,014 160,038 240,220 – 1,939,051 Acquired on acquisition Additions - production/ 1,663,419 – – – – 458,429 – 30,024 2,151,872 development 704,350 126,202 68,994 – 72,565 111,739 12,734 2,622 1,099,206 Disinvestment – -858 – -3,787 -2,801 -190,077 – – -197,523 Changes in estimates Currency translation – 16,170 4,928 301 – 19,117 – – 40,516 diff erence -174,429 -7,188 -4,481 -491 -14,071 5,275 -19,125 -1,227 -215,737 31 December 2,193,340 985,066 624,948 76,555 107,707 564,521 233,829 31,419 4,817,385 Depletion 1 January Depletion charge for – -92,978 -77,873 -27,242 -11,410 -23,176 -22,382 – -255,061 the year -175,680 -55,665 -61,669 -12,319 -8,903 -38,328 -28,688 – -381,252 Write-off s – – – – -13,861 – – – -13,861 Disinvestment Currency translation – 858 – – 2,801 47,204 – – 50,863 diff erence 17,160 1,155 1,216 319 2,011 -1,510 7,858 – 28,209 31 December -158,520 -146,630 -138,326 -39,242 -29,362 -15,810 -43,212 – -571,102 Net book value 2,034,820 838,436 486,622 37,313 78,345 548,711 190,617 31,419 4,246,283 > 64 < Group
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 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: NOTES The tax on the Group’s prof
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
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Annual Report 2005 (6 MB) - Lundin Petroleum

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