Update on fourth quarter 2021 financial results and webcast details for the presentation on 1 February 2022

Lundin Energy AB (Lundin Energy) will publish its financial report for the fourth quarter 2021 and host a webcast presentation for the 2021 year end results and a 2022 business update on Tuesday, 1 February 2022. For the fourth quarter 2021, Lundin Energy will expense pre-tax exploration costs of approximately MUSD 20, and recognise a net foreign exchange loss of approximately MUSD 84.

AkerBP transaction
On 21 December 2021, Lundin Energy announced that it had entered into an agreement (the transaction) with AkerBP whereby AkerBP will absorb Lundin Energy’s E&P business through a cross-border merger in accordance with Norwegian and Swedish law. Before completion of the cross-border merger, the shares in the company holding Lundin Energy’s E&P business will be distributed to Lundin Energy shareholders. Consequently Lundin Energy will present its E&P business as discontinued operations in the consolidated Income Statement and will present the asset and liabilities associated with the E&P business as assets and liabilities held for distribution.

All the items included in this update on the fourth quarter 2021 financial results relate to Lundin Energy’s E&P business unless stated otherwise.

Continuing operations
Once the transaction with AkerBP is completed, the renewable business, which is reported as continuing operations, will be debt free and have a cash balance of MUSD 130, to cover capital expenditure and other working capital items. The renewable business is expected to be free cash flow positive from late 2023, when the renewable portfolio has been fully built out and all projects are operational.

Exploration costs
It is the Company’s policy to capitalize costs associated with its exploration activities and when it is determined that a commercial discovery has not been achieved, the associated exploration costs are charged to the income statement. For the fourth quarter of 2021, Lundin Energy will incur pre-tax exploration costs of approximately MUSD 20, which will be charged to the income statement and offset by a tax credit of approximately MUSD 16. The exploration costs are mainly related to the Dovregubben well in PL976, the Lyderhorn well in PL1041 and relinquished licenses.