Lundin Drills Sixth Dry Well, Prompting Cut in Analyst Estimate

island innovator drilling rig
The well was drilled by the Island Innovator which will now drill wildcat well 26/10-1 in production licence 674 BS, where Lundin Norway AS is the operator. Image: Island Offshore

By Jonas Cho Walsgard

(Bloomberg) — Lundin Petroleum AB , a Swedish oil explorer with a stake in one of Norway’s biggest discoveries, drilled a sixth unsuccessful well in a row, prompting Swedbank AB to lower its estimate of the value of the company’s assets.

Lundin, based in Stockholm, drilled a dry well at the Kopervik prospect in Norway’s North Sea, the Norwegian Petroleum Directorate said today in a statement.

The well was drilled about 20 kilometers (12 miles) northwest of the Johan Sverdrup discovery, the biggest oil find off Norwegian shores in decades. The find, with as much as 2.9 billion barrels of oil, raised optimism over Norway’s potential after a decade of falling crude production, while establishing Lundin as one of the Nordic region’s most successful explorers.

Lundin has drilled six dry or uncommercial exploration wells since it made the Alta discovery in the Arctic Barents Sea in October, “which must be a negative record for the company’s highly regarded exploration team,” Teodor Sveen Nilsen, an analyst at Swedbank, said in an e-mailed note.

Swedbank cut its net asset value estimate for Lundin by 0.5 krona a share. The explorer, still rated a strong buy by the bank, fell 4.4 percent to 107.6 kronor in Stockholm yesterday. The stock exchange is closed today for a holiday.

–With assistance from Mikael Holter in Oslo.

Copyright 2015 Bloomberg.