Vår Energi: Third quarter 2024 trading update
Sandnes, Norway, 10 October 2024: Vår Energi ASA (OSE: VAR, the "Company") will publish its financial report for the third quarter 2024 on Tuesday 22 October. Today, the Company provides an update on production, sales volumes and other relevant items.
Vår Energi’s net production of oil, liquids and natural gas averaged 256 kboepd in the third quarter of 2024, a decrease of 11% from the second quarter and an increase of 22% compared to the third quarter of 2023. The production in the quarter was affected by planned seasonal maintenance and turnaround activity on several assets which is now mostly complete. The average production of 281 kboepd in the first nine months of 2024 is in line with expectations for the period. The Company is narrowing the 2024 full year production guidance range to between 280 to 290 kboepd, with the upside level dependent upon the timing of the start-up of Johan Castberg, which is expected towards the end of the fourth quarter.
The production split in the third quarter was 66% oil and NGLs (liquids) and 34% gas. Total volumes produced was 23.6 mmboe whereas volumes sold in the quarter amounted to 24.0 mmboe. Vår Energi obtained a strong average realised price (volume-weighted) of USD 76 per boe in the quarter. The realised crude price was USD 81 per barrel. The realised gas price of USD 76 per boe is a result of fixed price contracts and flexible gas sales agreements, allowing for optimisation of indices. The fixed price contracts represented 18% of third quarter gas volumes sold at an average price of approximately USD 135 per boe, substantially above spot market reference price.
| Production (kboepd)1 | Q3 2024 | Q2 2024 | Q3 2023 | YTD 2024 | YTD 2023 | |
| Crude oil | 154 | 162 | 126 | 162 | 120 | |
| Gas | 86 | 103 | 71 | 100 | 75 | |
| NGL | 16 | 22 | 13 | 19 | 14 | |
| Total | 256 | 287 | 210 | 281 | 209 | |
| Realised prices (USD/boe) | ||||||
| Crude oil price | 81 | 85 | 87 | 83 | 83 | |
| Gas price | 76 | 70 | 91 | 71 | 124 | |
| NGL price | 46 | 44 | 43 | 47 | 43 | |
| Average (volume weighted) | 76 | 77 | 85 | 76 | 94 | |
| Sales volumes (mmboe) | ||||||
| Crude oil | 14.2 | 15.1 | 11.9 | 43.9 | 32.5 | |
| Gas | 7.7 | 7.9 | 5.8 | 24.8 | 18.4 | |
| NGL | 2.0 | 2.1 | 1.4 | 6.3 | 3.7 | |
| Total | 24.0 | 25.1 | 19.0 | 74.9 | 54.5 | |
| Total production (mmboe) | 23.6 | 26.1 | 19.3 | 76.9 | 57.0 | |
¹ Produced figures are including fuel gas not for sale
Other items
Vår Energi Norge AS is consolidated as of 1 January 2024.
Vår Energi’s functional currency is NOK, whilst interest bearing loans are in USD. The strengthening of the NOK in the third quarter of 2024 led to a net exchange rate gain of approximately USD 47 million.
As a result of the company history of mergers and acquisitions, Vår Energi has several assets valued at fair value in the balance sheet. Changes in assumptions, cost and production profiles can result in impairments and reversals.
Non-cash impairment charges are estimated to be around USD 314 million pre-tax (around USD 90 million post tax) for the third quarter, mainly related to the Balder field. The impairment was triggered by increased costs and delayed start-up as communicated in August.
As previously communicated, the following items impacted the free cash flow in the quarter: one cash tax payment totaling approximately NOK 3.5 billion (approximately USD 0.3 billion) and a dividend payment for the second quarter of USD 270 million, paid in August.
The information above is based on a preliminary assessment of the Company's third quarter 2024 financial results and may be subject to change until the financial statements
Third quarter webcast and conference call
Vår Energi will release its quarterly results on 22 October at 07:00 CEST. A webcast and conference call followed by Q&A will be held at 10:00 CEST, hosted by CEO Nick Walker and CFO Stefano Pujatti.
You can follow the webcast with supporting slides, available on:
https://events.webcast.no/vaar-energi/quarterly-reports/rcuKmpSizv0pTKIqywej
Contact
Investor relations
Ida Marie Fjellheim, Head of Investor Relations
+47 90509291
ida.fjellheim@varenergi.no
Media relations
Andreas Wulff, VP Public Affairs
+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 with a tangible plan to reduce emissions from our operations by 50% within 2030. Vår Energi has around 1400 employees and equity stakes in 43 fields. We have our headquarters outside Stavanger, Norway, with offices in Oslo, Hammerfest and Florø. 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