Alta discovery in the Barents Sea, off the west coast of Norway (Image: Lundin Petroleum)

Alta discovery in the Barents Sea, off the west coast of Norway (Image: Lundin Petroleum)

Since Lundin Petroleum (LUPE:OMX) began trading in 2001 at an IPO price of 2 Swedish Krona (roughly CAD $0.31) per share, shares have risen 5,265%.  To put that in perspective, the stock market darling Apple is up 3,898% over the same period.

The Stockholm-based company which is 1/3rd controlled by the Lundin Family Trust has been making world-class discovery after world-class discovery all over the world, but especially offshore Norway.

In 2010, the company discovered the gigantic Johan Sverdrup oil field which holds gross contingent resources of between 1.8 and 2.9 billion barrels of oil equivalent and is expected to produce at a peak rate of up to 650,000 boepd or 25% of Norway's forecasted national oil production.  The company is guiding average production of between 24,000 and 29,000 boepd in 2014.

Today, the company announced a significant oil discovery on their Alta prospect on block PL609 in the Barents Sea off the northern coast of Norway.  It is located only 20km from their recent Gohta discovery.

Out of a 36/64-inch choke, oil and gas flowed at a maximum rate of 3,260 boepd and 1.7 MMcfd, respectively from the exploration well 7220/11-1.  The well encountered a 57 metre gross hydrocarbon column consisting of 11 metres of gas and 46 metres of oil in carbonate rocks.

Ashley Heppenstall took over as President and CEO of Lundin Petroleum in 2002 (Photo: Lundin Petroleum)

Ashley Heppenstall took over as President and CEO of Lundin Petroleum in 2002 (Photo: Lundin Petroleum)

Ashley Heppenstall, President and CEO, commented: "The Alta discovery is a significant predominantly oil discovery in the southern Barents Sea. Alta is close to the nearby Gohta discovery made by Lundin Petroleum just over a year ago. This discovery is another positive step in relation to proving up sufficient resources in the Loppa High area of the Barents Sea to enable the development of oil production infrastructure. We are very excited about this discovery and the potential in the Loppa High area, where we are likely to drill three or four appraisal/exploration wells in 2015. In licence PL609 we have identified several multihundred-million-barrel prospects on trend with Alta and Gohta. Our drilling successes in the Barents Sea have been made possible by extensive preparatory work, including comprehensive environmental assessments and the mapping of sea bottom conditions. The Loppa High area is impacted by the Gulf Stream and, as such, is ice free all year and far from the maximum southern edge of the ice edge."

Based on the early results of the well, the Alta discovery in believed to hold gross recoverable oil and gas resources in the range of 125 million barrels of oil equivalent to 400 million barrels of oil equivalent. The oil resource range is estimated at 85 million barrels of oil to 310 million barrels of oil.

The well was drilled to a depth of 2,221 metres through 388 metres of seawater.

Given this significant hydrocarbon discovery, the rest of their exploration wells planned on the block are less risky.  Lundin plans to drill the Neiden and Borsely prospects further north and the company believes these may contain another significant oil reservoir.

Lundin holds a 40%-interest in block PL609 with RWE Dea Norge AS and Idemitsu Petroleum Norge AS each holding a 30%-interest.

Shares in Sweden closed today up SEK 5.90 to SEK 107.30 (CAD $16.73) or 6%.  Shares of Lundin Petroleum are listed in Toronto under the symbol "LUP" although it is very thinly traded.  The Lundin Group has an almost cult following with Scandinavian investors and get most of their volume there.

Read: Lundin Petroleum finds oil and gas in the Alta well in PL609 in the Barents Sea