Vår Energi (VAR) Q1 2025 earnings summary

Executive summary

• Achieved strong Q1 2025 results with production of 272,000 boepd, supported by high efficiency and major project start-ups including Halten East and Johan Castberg, and nine new projects expected to add 180 kboepd at peak.

• Maintained attractive and predictable dividends, confirming $0.12/share for Q1 and guiding $300 million for Q2, with a policy of 25–30% of CFFO after tax.

• Jotun FPSO moored and on track for end-Q2 2025 start-up, supporting transformational growth.

• Rebranding launched with a new logo, reflecting alignment with major shareholder Eni.

• Material cash flow from operations of $1.3 billion and reduced net debt, with a leverage ratio of 0.8x.

Financial highlights

• Generated $1.8 billion in revenue, up from previous quarter due to higher sales volumes and prices.

• Net profit of $453 million, a $628 million increase from previous quarter, mainly due to increased revenue and exchange rate gain.

• Operating cash flow after tax was $1.3 billion, with strong liquidity of $2.7 billion.

• Issued EUR 1 billion in senior notes, more than four times oversubscribed, supporting a diversified long-term capital structure.

• CapEx for Q1 was $595 million, with Balder X and Johan Castberg as main contributors.

Outlook and guidance

• 2025 production guidance is 330,000–360,000 barrels/day, targeting over 400,000 barrels/day in Q4.

• Production cost guidance for 2025 is $11–12/boe, trending to ~$10/boe by Q4.

• CapEx guidance for 2025 is $2.3–$2.5 billion, with exploration at ~$350 million and abandonment at ~$150 million.

• Dividend policy remains at 25–30% of CFFO after tax, with $300 million guided for Q2.

• Free cash flow break-even at $40/bbl (2025–2030), with $5–$9 billion FCF expected at $65–$85/bbl oil.