Annual Report 2005 (6 MB) - Lundin Petroleum
Annual Report 2005 (6 MB) - Lundin Petroleum
Annual Report 2005 (6 MB) - Lundin Petroleum
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NOTES<br />
NOTE 39 – INCENTIVE WARRANTS PROGRAMME<br />
The Company runs an incentive programme for employees whereby warrants are issued to employees enabling them to buy shares in the<br />
company. The warrants were issued at a price equal to or at a premium to the average share price for the ten trading days following the<br />
AGM. The warrants are valid for three years but can not be exercised within the fi rst year of issue. Issued warrants to employees leaving<br />
the Company within the fi rst year of issue, are forfeited.<br />
Movements in the number of incentive warrants outstanding and their related weighted average exercise prices are as follows:<br />
Average weighted<br />
exercise price in<br />
SEK per share<br />
<strong>2005</strong> 2004<br />
Incentive warrants<br />
outstanding<br />
> 78 <<br />
Average weighted<br />
exercise price in<br />
SEK per share<br />
Incentive warrants<br />
outstanding<br />
At 1 January 24.11 5,249,800 4.15 5,247,300<br />
Granted 60.20 2,900,000 45.80 2,250,000<br />
Forfeited – – 45.80 -65,000<br />
Exercised 17.48 -3,391,800 7.16 -2,182,500<br />
Lapsed 45.80 -80,000 – –<br />
At 31 December 50.93 4,678,000 24.11 5,249,800<br />
The weighted average share price relating to the incentive warrants exercised during <strong>2005</strong> amounted to SEK 68.77 per share.<br />
The fair value of incentive warrants granted during the period using Black & Scholes method valuation model amounted to TSEK 21,286<br />
based on an assessed volatility of 27% and the continuously compounded Swedish government bond interest rate of 2.38%. The total<br />
expense accounted for during the period amounted to TSEK 18,981.<br />
Incentive warrants outstanding at the end of the year have the following expiry date and exercise prices:<br />
Issued 2003 Issued 2004 Issued <strong>2005</strong><br />
Exercise price (SEK) 10.10 45.80 60.20<br />
Exercise period 31 May 2004–<br />
31 May <strong>2005</strong>–<br />
15 June 2006–<br />
31 May 2006<br />
31 May 2007<br />
31 May 2008<br />
Valuation per warrant 1 2.53 7.97 7.34<br />
1 The valuation has been calculated using the Black & Scholes method.<br />
NOTE 40 – SUBSEQUENT EVENTS<br />
In the UK Budget 2006 dated 22 March 2006 it was announced that the oil and gas supplemental tax will be increased from 10% to 20%<br />
in 2006. This will increase the eff ective tax rate for the UK oil and gas properties from 40% to 50%. The eff ects of this increase will be<br />
accounted for during the year ended 31 December 2006.<br />
At 7 April 2006, the Board of Directors and the President of <strong>Lundin</strong> <strong>Petroleum</strong> AB have adopted this annual report for the fi nancial year<br />
ended 31 December <strong>2005</strong>.<br />
Stockholm, 7 April 2006<br />
Ian H. <strong>Lundin</strong> C. Ashley Heppenstall Carl Bildt<br />
Chairman of the Board President & CEO<br />
Adolf H. <strong>Lundin</strong> Lukas H. <strong>Lundin</strong> Kai Hietarinta<br />
Honorary Chairman<br />
Viveca Ax:son Johnson William A. Rand Magnus Unger