Vår Energi (VAR) Q2 2025 earnings summary

Executive summary

• Strong Q2 2025 results with production above 350,000 boe/d, ramping up from major project startups and on track for 430,000 boe/d in Q4 2025.

• Key growth projects, including Jotun FPSO and Johan Castberg, are online and ramping up, with four of nine new projects for 2025 already on stream.

• Financial position strengthened through successful refinancing and senior note issuance, increasing liquidity and reducing cost of debt.

• $300M Q2 dividend confirmed; $1.2B annual dividend guidance for 2025 and 2026, with stable or growing payouts for 14 consecutive quarters.

• $500M spend reduction achieved for 2025–2026 without impacting long-term production outlook.

Financial highlights

• Q2 2025 operating cash flow after tax was $766M; total income $1,849M; revenue exceeded $1.8B.

• Realized oil price was $68–70/boe; 25% of Q2 gas volumes sold at $92/boe, above spot due to optimized contracts.

• Q2 production cost was $12.7/boe, up from Q1 due to new field start-ups and maintenance.

• Available liquidity at quarter-end was $3.5B, with a leverage ratio of 0.9x.

• Free cash flow was $4M, down from Q1 due to higher tax payments and increased capex.

Outlook and guidance

• 2025 production guidance: 330,000–360,000 boe/d, with Q4 expected at 430,000 boe/d; 2026 guidance at ~400,000 boe/d.

• Production cost expected at $11–12/boe for 2025, dropping to ~$10/boe by Q4.

• CapEx guidance for 2025: $2.3–2.5B; exploration spend ~$380M; abandonment ~$100M.

• Dividend guidance of $1.2B for both 2025 and 2026, targeting 25–30% of CFFO after tax.

• Long-term production outlook sustained at 350,000–400,000 boe/d through 2030.