Lundin Petroleum AB plans to spin off its assets from outside of Norway into a separately listed company and will distribute shares in the new firm to existing investors, it said Feb. 13.
Separately the Swedish oil firm's main Norwegian business announced an oil discovery in the Arctic Barents Sea, while Lundin also set an output target for 2017 that was below forecasts in a Reuters poll of analysts.
The assets that will be hived off, situated in Malaysia, France and the Netherlands, will become part of the newly formed International Petroleum Corp. (IPC).
"Given ongoing developments and successes with the company's assets in Norway, the IPC Assets, held within a separate and independent entity, would benefit from enhanced strategic flexibility and management focus," Lundin said.
Its aim is to build IPC into a leading independent international oil and gas company.
"IPC has applied to the Toronto Stock Exchange to list its shares ... under the ticker IPCO, and also intends to list its shares on the NASDAQ Stockholm stock exchange," Lundin said.
The company also announced the discovery of between 35 million barrels of oil equivalents (MMboe) and 100 MMboe in its Filicudi prospect in Norway's southern Barents Sea and said it saw significant upside potential.
In total, Lundin and its partners believe drilling of further prospects on the license could lift the total discovery to some 700 MMboe, it added.
Lundin and Norway's Aker BP each hold 35% stakes in the license, known as PL533, while DEA Norway owns 30%.
Separately, Lundin also set a 2017 output guidance of 79,000 boe/d to 91,000 boe/d, including IPC, up from 72,600 boe/d in 2016 but below the average forecast of 93,446 in a Reuters poll of analysts.
The production guidance for Lundin Petroleum Norway was 70,000 boe/d to 80,000 boe/d, whilst the IPC production guidance was 9,000 boe/d to 11,000 boe/d.
The spin-off will be a popular move among investors as it allow the remaining company to focus exclusively on Lundin's Norwegian assets, Swedbank analyst Teodor Sveen-Nilsen said in a research note.
"Despite the soft production guidance and downside risk to our 2017 production forecast, we guess the market will focus on the spin-off and Filicudi discovery," he added. He has a "reduce" rating on the stock.
At 2:17 a.m. CT (8:17 GMT) Feb. 13, Lundin Petroleum's shares traded 2.7% higher in Stockholm while Aker BP rose 0.7%. European oil and gas shares traded 0.4% higher.
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