Why is Lundin Petroleum Spinning Off Its Assets?

Given the volatile state of the oil and gas market, companies have had to get a little creative when it comes to staying afloat. Lundin Petroleum is the latest giant to shake up its approach, confirming that it’s sold off a large chunk of its assets, and plans to form a brand new company.

The move is part of Lundin’s plan to refocus its attention on Norway, and take a step back from its presence in Malaysia, France and the Netherlands. The cash will be used to fund the development of a new company called International Petroleum Corporation (IPC). Chairman Ian Lundin has confirmed that IPC will release its shares on the NASDAQ Stockholm stock exchange, listed under the stock ticker IPCO. Of course, the distribution has been carefully planned to ensure the Lundin family remains the largest shareholder of IPC.

“The spin-off of our international assets into IPC creates an exciting new company with a strong balance sheet and a proven Board and management team,” he comments.

Honing in on Norway

“Their focus will be to create value at a time in the cycle when the industry remains under-capitalised and multiple opportunities are available as companies rationalise their portfolios,” adds Lundin. “With the spin-off, Lundin Petroleum will become fully focused on Norway, which I am convinced will serve to further crystallise the value of our high-growth asset portfolio in the North Sea and the southern Barents Sea.”

New company fronted by Lundin bigwigs

While IPC is a new venture, it will be spearheaded by current members of the Lundin Petroleum Board of Directors and management team. Current Chief Financial Officer Mike Nicholson will step up as President and Chief Executive Officer, as well as a Director of IPC. Lundin Petroleum’s Vice President Corporate Finance Christophe Nerguararian will serve as Chief Financial Officer, while current Vice President Legal Jeffrey Fountain has been appointed General Counsel.

With output expectations of between 9,000 to 11,000 boepd, IPC will play a keynote role in amplifying Lundin’s Norwegian presence. The curated team will work together to maximise shareholder value, grow the Norwegian portfolio and ensure that IPC hits its ambitious boepd targets.

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