Vår Energi: Third quarter 2022 production update and revised full-year guidance

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Sandnes, Norway, 11 October 2022: Vår Energi ASA (OSE: VAR, the "Company") will publish its financial report for the third quarter 2022 on Tuesday 25 October. Today, the Company provides an update on production and sales volumes and other relevant items.

Vår Energi’s net production of oil, liquids and natural gas averaged 215 kboepd in the third quarter of 2022, an increase of 2% compared to 210 kboepd in the second quarter of 2022 and a decrease of 11% compared to the third quarter of 2021 (recalculated from 247 kboepd to 242 kboepd with adjusted conversion factor¹).

Production in the third quarter was impacted by operational issues at both partner-operated and operated fields. Planned turnarounds were completed according to schedule and budget during the quarter. Based on the year-to-date production and current projections for the fourth quarter, the Company has revised the full-year 2022 production guidance to 220-225 kboepd from the previously communicated 230-245 kboepd.

Production of crude oil and NGL (liquids) in the third quarter amounted to 63% (60% in the second quarter) whereas gas production was 37% (40%). During the quarter, the Company continued to reduce NGL recovery to increase gas volumes and sales to capture the current favourable gas prices, representing approximately a reduction of 2 kboepd on an annual basis. Total volumes produced in the third quarter were 19.7 mmboe whereas volumes sold in the quarter amounted to 18.1 mmboe.

The Company obtained an average realised price (volume-weighted) of USD 139 per boe in the quarter in a continued strong commodity price environment. Realised gas price of USD 203.9 per boe is a result of flexible gas sales agreements, allowing for optimisation of indices and various exit points in Europe. Vår Energi entered fixed price contracts in Q4/Q1 2021/22 for approximately 18% of Q3 gas volumes at an average price of USD 140/boe.

Q3 2022 Q2 2022 Q3 2021¹
Production (kboepd)
Crude oil 122.0 113.3 131.8
Gas 78.8 84.6 92.0
NGL 13.7 11.9 23.4
Total  214.5  209.8 247.2
Realised prices (USD/boe)
Crude oil price 107.8 116.0 71.8
Gas price 203.9 151.3 76.3
NGL price 61.8 70.9 45.7
Average (volume-weighted)  139.0  124.1 70.6
Volumes sold/lifted (mmboe)
Crude oil 10.1 10.7 13.1
Gas 6.6 6.9 7.4
NGL 1.4 1.9 2.3
Total  18.1  19.5 22.9
Total production (mmboe) 19.7 19.1 22.7
Over/(Underlift) (mmboe) -1.6 0.4 0.2

Other items

Vår Energi’s functional currency is NOK, whilst interest-bearing loans are in USD. The weakening of NOK in the third quarter 2022 is expected to lead to a related net exchange rate loss of approximately USD 260 million.

The information above is based on a preliminary assessment of the Company's third quarter 2022 financial results and may be subject to change until the financial statements have been finally approved and published by the Company.

¹ With effect from 1 January 2022, the Company adjusted its gas conversion factor from 6.65 to 6.29 boe per 1 000 Sm3 gas to be in line with Norwegian industry practice based on typical properties on the NCS.

Third quarter webcast and conference call

Vår Energi will release its quarterly results on 25 October at 07:00 CET. A webcast and conference call followed by Q&A will be held at 10:00 CET, hosted by CEO Torger Rød and CFO Stefano Pujatti. You can follow the webcast with supporting slides, available on:

To access the conference call, please pre-register at: https://www.netroadshow.com/events/login?show=e3f36eae&confId=43057

You will receive your access details via email.

The report, presentation and webcast will be available at www.varenergi.no.


Investor relations

Ida Marie Fjellheim, Head of Investor Relations

+47 90509291


Media relations

Andreas Wulff, Communication Manager

+47 92616759


About Vår Energi

Vår Energi is a leading independent upstream oil and gas company on the Norwegian continental shelf (NCS). We are committed to deliver a better future through responsible value driven growth based on over 50 years of NCS operations, a robust and diversified asset portfolio with ongoing development projects, and a strong exploration track record. Our ambition is to be the safest operator on the NCS, the partner of choice, an ESG leader and a net-zero producer (Scope 1 and 2) by 2030. Vår Energi has more than 900 employees and equity stakes in 36 fields producing net 246,000 boe per day in 2021. We have our headquarters outside Stavanger, Norway, with offices in Oslo and Hammerfest. To learn more, please visit varenergi.no.

This information is subject to disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.