Sweden-based Lundin Petroleum said Tuesday that it will expense $14 million in exploration costs during the second quarter.
The company will expense $14 million in post tax exploration costs and recognize a net foreign exchange gain of about $28 million for the second quarter of 2015.
Lundin said its profitability for the second quarter of 2015 will be “impacted by certain expensed exploration costs as well as a foreign currency exchange gain, mainly related to the revaluation of loan balances.”
These items will have no impact on the reported operating cash flow or EBITDA for the period, the company added.
During the second quarter of 2015, Lundin will incur pre-tax exploration costs of about $61 million that will be charged to the income statement and offset by a tax credit of $47 million.
The exploration costs are mainly tied to an exploration well drilled in Norway during the second quarter of 2015 on the Morkel prospect in PL579 that was announced as an uncommercial oil discovery.
Lundin will also recognize a net foreign exchange gain in its income statement for the second quarter of 2015 of $28 million.
The foreign exchange gain mainly relates to the revaluation of loan balances at the prevailing exchange rates at the end of each reporting period, Lundin added.