The fourth well drilled in an oil and gas discovery in the Barents Sea should serve as a reference point for further work, Lundin Petroleum said.

Lundin announced that its Norwegian subsidiary started drilling its fourth appraisal well at the Alta discovery, estimated to hold between 125 million and 400 million barrels of oil equivalent.

"The main objective of the Alta-4 well is to further appraise the Alta discovery and to provide a calibration point for the drilling of a horizontal well for a possible extended well test that is being planned for 2018," the company said in a statement.

The Norwegian Petroleum Directorate, the nation's energy regulator, signed off on Lundin's permit earlier this week for work in the Barents Sea. Recent data assessments of the eastern and northern parts of the Barents Sea, areas previously a source of dispute with Russia, led to upward revisions of the reserve estimate by up to 65 percent.

The company made the initial discovery at the Alta prospect in 2014. Alta is close to existing discoveries and is in line with Lundin's efforts to exploit the regional potential. Addressing some of the concerns about operations in frigid northern climates, the company said the part of the Barents Sea where Alta is located is ice-free because of the Gulf Stream.

Lundin in its outline for the first quarter said total production was 82.6 million barrels of oil equivalent per day, at the upper end of its guidance. The company gained leverage in Norwegian waters last year when regional major Statoil spent $538 million to acquire an 11.9 percent stake in the company.

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