Lundin Petroleum AB announces that its Board of Directors proposes to redeem 16 percent of the outstanding shares that are currently held by Equinor. Lundin Petroleum’s wholly owned subsidiary Lundin Norway AS (“Lundin Norway”) has further agreed to sell a 2.6 percent stake in the Johan Sverdrup development project, for a cash consideration to Equinor Energy AS (“Equinor Energy”) (together, and together with the steps described below, the “Transaction”).

Highlights

Redemption of 54.5 million Lundin Petroleum shares currently held by Equinor, amounting to 16 percent of the outstanding shares at a price of SEK 266.4 per share
- Consideration of SEK 14.5 billion (approximately USD 1, 557 million) calculated on the closing price of SEK 289.6 per share on 4 July 2019 including an 8 percent discount
- Post Transaction Equinor retain 4.9 percent equity interest in Lundin Petroleum and continue to be a supportive shareholder

Divestment of 2.6 percent of Lundin Norway’s interest in Johan Sverdrup development project to Equinor, retaining 20 percent interest going forward
- Consideration of USD 962 million, with an economic date of 1 January 2019 which includes a USD 52 million contingent payment on future reserve reclassification

The Transaction will be immediately earnings enhancing on a per share basis
- Total shares in issue will be reduced from 340.4 million shares to 285.9 million
- EBITDA, operating cashflow and free cash flow earnings per share will be immediately accretive
- The declared 2018 dividend of USD 1.48 per share paid quarterly remains unchanged

The Transaction will increase shareholder leverage to:
- Key producing assets at Edvard Grieg, Alvheim and soon to be producing Johan Sverdrup and any future outperformance
- Significant exploration and appraisal programme and any future successes and pipeline of seven development project moving to maturity

Unique opportunity to redeem significant minority position at a discount to the market, prior to the startup of Johan Sverdrup and in a high growth phase for the business
- Transaction values Johan Sverdrup at a premium to current market consensus highlighting continuing value upside potential of the field

The Transaction is being funded from existing financial resources and a short-term bridge facility and is subject to Lundin Petroleum shareholder approval, Norwegian regulatory approval, RBL syndicate banks approval and certain other conditions
- EGM to be held at 10.00 am on 31 July 2019 at the Grand Hotel, Södra Blasieholmshamnen 8, 103 27 Stockholm, Sweden
- The Lundin Family and Equinor have both given their irrevocable undertakings to vote in favour of the Transaction

Ian H Lundin, Chairman of Lundin Petroleum, commented:
“The chance to redeem the majority of Equinor’s holding in Lundin Petroleum at a discount to the market and before the pivotal start-up of the Johan Sverdrup development project in November this year, was an opportunity which rarely comes along. The Transaction provides us with a rationalised shareholder structure and all shareholders with enhanced leverage to the ongoing success of Lundin Petroleum, at a time when we continue to unlock further upside potential from our existing asset base and execute on our proven organic growth strategy. We set out a progressive dividend strategy at the AGM this year and I am pleased to note that the strategy will remain unchanged following this transaction, as we look to distribute sustainable returns to our shareholders in the years ahead. With the prospect of all shareholders having an increased exposure to Johan Sverdrup and the growth potential across our portfolio, I and the Board unanimously recommend that shareholders support this value accretive transaction at the EGM later in July.”

About Lundin Petroleum

Lundin Petroleum is one of Europe’s leading independent oil and gas exploration and production companies with operations focused on Norway and listed on Nasdaq Stockholm (ticker "LUPE").

About Equinor

Equinor, is an international energy company with a proud history. Formerly Statoil, we are 20,000 committed colleagues developing oil, gas, wind and solar energy in more than 30 countries worldwide. We’re the largest operator in Norway, among the world’s largest offshore operators, and a growing force in renewables. Driven by our Nordic urge to explore beyond the horizon, and our dedication to safety, equality and sustainability, we’re building a global business on our values and the energy needs of the future.