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Lundin Petroleum Almost Matches Apples 50-Fold Gain, Ripe for Takeover

The Lundin family from Sweden are a powerhouse in the oil industry and have been responsible for some of the largest natural resource discoveries and deals over the last 80 years, finding the world’s largest natural gas field, and some of the largest gold deposits.

Lukas Lundin, the family’s investment manager, has announced that after already noting a 45-fold gain since it began trading in 2001 (almost equalling Apple Inc. which gained 50-fold), he expects Lundin Petroleum AB to double in value over the next decade after the success of its biggest ever North Sea discovery.

Lundin Petroleum’s stock surged on the back of the discovery of the Avaldsnes and Aldous prospects in 2010 and 2011 respectively, which were later renamed the Johan Sverdrup field. Buoyed by this discovery, estimated to contain 3.6 billion barrels of oil, Lundin Petroleum has become Europe’s most expensive explorer, and Lukas expects that it will grow from its current market value of $6.8 billion to around $16 billion.

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“I am extremely optimistic about Lundin Petroleum, short-term as well as longer-term.” The company has “proven that they have capability to deliver world-class exploration successes. It is hard not to be bullish.”

Macquarie Group has suggested that this success and growth will make Lundin Petroleum a potential takeover candidate. Phil Corbett, an analyst at Deutsche Bank AG, has also made the same suggestion, explaining that, “they have had terrific exploration success.  Based on trends over the past decade, the market may see it as one of the more likely M&A candidates in the sector, given its Norway focus and the production growth that’s coming through.”

The oil company currently produces around 35,600 barrels of oil a day, but forecast this to increase to 150,000 barrels a day by 2018 as wells start to come online that tap into the Johan Sverdrup field.

By. James Burgess of Oilprice.com



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