Vår Energi reports strong operational and financial performance in the second quarter and first half of 2024
Sandnes, Norway, 23 July 2024: Vår Energi ASA (OSE: VAR) reports strong operational performance and financial results in line or better than guidance. The Company is on track to deliver on the 2025 growth target and unlock future value.
Strong operational performance
- Production of 293 kboepd in first half in the upper end of guidance range for the period
- Good production efficiency on operated fields
- Maintenance program successfully executed in the quarter
Good financial performance
- Total income in the quarter was USD 1 940 million, a decrease of USD 16 million from last quarter
- Achieved realised gas price of USD 70 per boe, USD 10 per boe above spot price
- Unit production cost below guided range with USD 12.4 per boe in the quarter
- Solid cash flow from operations of USD 711 million
- Long term gas contracts with key customers extended for an additional 12 years
Progressing towards ~400 kboepd by end-2025 and unlocking future value
- Balder X target fourth quarter 2024 start-up remains with sail-away decision in August
- Recent start-ups of Eldfisk North and Kristin South projects. Johan Castberg firmly on track for fourth quarter first oil
- Portfolio optimisation resulting in sale of Norne and Bøyla assets with expected completion by year-end
- Close-to-infrastructure exploration success in the Balder and Gjøa areas
Continued attractive and predictable dividends
- Dividend of USD 270 million (NOK 1.184 per share) for the second quarter will be distributed 6 August
- Dividend guidance of USD 270 million for the third quarter of 2024, with a dividend distribution of approximately 30% of CFFO after tax for the full year
- Solid balance sheet with leverage ratio of 0.8x
“We are pleased to see another quarter of delivery, with strong operational and financial results. Production in the first half of the year averaged 293 thousand barrels of oil equivalent per day, in the upper end of the guided range for the period. While high realised gas prices above spot were maintained, the full year operating costs and capital spend will be in the lower end of the guided range. As a result, we continue to provide attractive and predictable shareholder returns.
Vår Energi remains on track to increase production to around 400 kboepd by end 2025, as one of the world’s fastest growing E&P’s. We continue to make good progress on delivering on our portfolio of development projects with the recent start-ups of Eldfisk North and Kristin South. The Johan Castberg FPSO has left the yard and is firmly on track to start-up in the fourth quarter. At Balder X, the FPSO is nearing completion and modifications implemented to improve the flexibility to install the vessel on the field, enabling a decision on installation before the winter weather period to be made at the end of August.
Our exploration program continues to add value with the commercial Cerisa discovery in the Gjøa area. Added to three recent discoveries, the area holds total gross recoverable resources to be developed of up to 110 million barrels of oil equivalent with potential to be tied back to the partly electrified Gjøa asset, ensuring low carbon emissions, and high margin barrels.
In the quarter, two strategically important long-term gas sales agreements were extended with Eni and VNG, for the supply of up to an additional 10 billion standard cubic meters of natural gas until mid-2036. Portfolio optimisation continued, with sales announced for the non-core Norne and Bøyla assets.
We maintain our ESG leading position, with top quartile carbon emissions intensity performance, while being awarded as operator the Iroko CO2 storage license in the North Sea.” says Nick Walker, the CEO of Vår Energi.
Webcast and conference call
The company will today hold a webcast and conference call followed by Q&A at 10:00 CET 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/flfrQrJ8fHjBty4IRq6Y
The report, presentation and webcast will be available at www.varenergi.no.
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 more than 50% within 2030. Vår Energi has around 1400 employees and equity stakes in 47 fields. We have our headquarters outside Stavanger, Norway, with offices in Oslo, Hammerfest and Florø. To learn more, please visit varenergi.no
Contact
Investor relations
Ida Marie Fjellheim, Head of Investor Relations
+47 90509291
ida.fjellheim@varenergi.no
Media relations
Andreas Wulff, VP Public Relations
+47 92616759
andreas.wulff@varenergi.no
This announcement may include projections and other “forward-looking” statements within the meaning of applicable securities laws. Any such projections or statements reflect the current views of Vår Energi AS (“Var Energi”) about further events and financial performance. No assurances can be given that such events or performance will occur as projected and actual results may differ materially from these projections. Var Energi undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this announcement.
This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act. This stock exchange release was published by Ida Fjellheim, Head of Investor Relations at Vår Energi ASA, on 23 July 2024 at 07:00 CET.