UPDATE 2-Lundin Petroleum sees production up in 2010/2011

STOCKHOLM, Nov 11 (Reuters) - Lundin Petroleum said on Wednesday production could rise by as much as 30 percent next year, helping lift the Swedish oil firm's shares after third-quarter profits fell shy of forecasts. Lundin said daily production for 2009 would come in the mid-range of its full-year forecast of 35-42,000 barrels of oil equivalents, but increase in 2010 thanks to a production start at its Volund well. Chief Executive Ashley Heppenstall said the production was likely to increase to 40-50,000 barrels per day next year, with a further increase likely in 2011. "As we go into 2011, I don't want to give any guidance. But clearly I expect that production will increase above 2010, because 2011 will be the first full year for Volund," he said in a conference call. Shares in Lundin were up one percent by 1108 GMT, with analysts optimistic about the firm's production forecasts. "Overall, I think it was a good result," said Rolf Haakensen, an analyst at Handelsbanken Capital Markets. "I feel very confident on 2010 in ... that they have excess production on the Norwegian continental shelf when it comes to Volund." Lundin said it had completed development on two of four wells at Volund, an oil field in the North Sea. BULLISH ON OIL Oil prices have soared since the start of the year, gaining 77 percent as industrial output recovered in China and economic recovery took hold in the United States. Prices are still 46 percent off their 2008 high of $147 per barrel, however. Lundin said it believed that sustained economic recovery would push oil prices higher, toward $80 per barrel, which would increase shareholder value as it raised production levels. The company posted pretax profit of 124 million Swedish crowns ($18 million) for the third quarter, compared with 766 million a year earlier, and lower than the 464 million crowns forecast in a Reuters poll of eight analysts. Earnings before tax and depreciation came in ahead of expectations, however. Lundin said its results were negatively affected by 529 million crowns of costs related to unsuccessful exploration and writedowns of assets in Venezuela. ($1=6.868 Swedish Crown) (Reporting by Nick Vinocur; Editing by Joel Dimmock) Keywords: LUNDIN PETROLEUM/ (Stockholm Newsroom, tel [phone], e-mail: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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