Vår Energi (VAR) Q1 2025 earnings summary

Executive summary

• Achieved strong Q1 2025 results with production of 272,000 BOE/day, robust operational performance, and successful startups at Halten East and Johan Castberg; nine new project start-ups expected to add 180 kboepd at peak in 2025.

• Major projects progressing as planned, with Balder X on track for Q2 2025 startup and Jotun FPSO moored for end-Q2 start-up.

• Confirmed Q1 dividend of $0.12/share ($300 million), with Q2 guidance at the same level, maintaining a policy of 25–30% of CFFO after tax and 13 consecutive quarters of stable or growing dividends.

• Maintains strong cost discipline, ESG leadership, and a robust exploration track record, with rebranding reflecting 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 and $1.3 billion operating cash flow after tax in Q1, with total income of $1,871 million and net profit of $453 million.

• Realised oil price was $76/BOE, gas price $87/BOE, and average realised price $79/BOE.

• CapEx for Q1 was $595 million, mainly for Balder X and Johan Castberg; development capex for 2025 is $2.3–$2.5 billion, with $350 million for exploration.

• Ended Q1 with $660 million cash and $2.7 billion available liquidity; EUR 1 billion in senior notes issued, more than four times oversubscribed.

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

Outlook and guidance

• 2025 production guidance is 330,000–360,000 BOE/day, with Q4 2025 expected to exceed 400,000 BOE/day.

• 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 $350 million for exploration and $150 million for abandonment.

• Dividend policy remains at 25–30% of CFFO after tax, with Q2 2025 dividend guidance at $300 million.

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