Lundin exploring US$10.7B sale

Nordic oil producer Lundin Energy AB is exploring a potential sale that could rank as one of the largest European oil and gas deals in years, people with knowledge of the matter said.

The Swedish company is working with an adviser to study strategic alternatives, the people said, asking not to be identified because the information is private.

Shares of Lundin Energy gained as much as 14 per cent Monday, the biggest intraday jump since April 2020. They were up 10 per cent at the close in Stockholm, giving the company a market value of about 96.8 billion kronor (US$10.7 billion).

Lundin Energy owns a stake in Norway’s giant Johan Sverdrup field, which is operated by Equinor ASA. It’s also the operator of the Edvard Grieg oilfield on the Norwegian continental shelf.

The company said in a statement Monday that it “continuously engages in opportunities that are potentially value accretive” and at times holds talks with “various parties” in that context. No conclusive decisions have been made regarding any such discussions as of today, Lundin Energy said.

The oil and gas industry has seen a flurry of dealmaking as energy majors seek to off-load non-core assets and take advantage of improved prices.

Royal Dutch Shell Plc agreed earlier this year to sell its Permian Basin assets in the U.S. to Conocophillips for US$9.5 billion, while BHP Group reached a deal to combine its oil and gas operations with Woodside Petroleum Ltd. Neptune Energy Group Ltd.’s owners are considering a sale that could value the U.K. explorer at more than US$5 billion, Bloomberg News reported last week.

Lundin Energy’s deliberations are ongoing, and there’s no certainty they will lead to a transaction, the people said. The company could also consider other options such as a merger or asset disposals, the people said.

An investment vehicle controlled by Lundin family trusts is the Swedish company’s biggest shareholder with a 33 per cent stake, according to data.

A sale of Lundin Energy would help its family owners get out of their largest oil and gas holding at a time when the industry’s future is increasingly fraught. The Lundins have a range of other interests in the resources sector, with major stakes in roughly a dozen listed companies including copper producer Lundin Mining Corp., precious metal miner Lundin Gold Inc., gold developer Bluestone Resources Inc. and explorer NGEX Minerals Ltd.

Lundin Energy has been seeking to burnish its environmental credentials. In June, Lundin Energy said it would neutralize its share of direct emissions from the Johan Sverdrup field, a first for a major oil facility.