Vår Energi (VAR) Q3 2024 earnings summary

Executive summary

• Delivered resilient operational and financial results in Q3 2024, with production for the first nine months averaging 281 kboepd and Q3 at 256 kboepd, in line with guidance and supported by successful maintenance shutdowns.

• Major projects (Johan Castberg, Balder X, Halten East) are on track to add 150 kboepd by Q3 2025, targeting 400 kboepd by end of 2025.

• Completed acquisition and integration of Neptune Energy Norge, making the company the second largest independent E&P on the NCS.

• Cost discipline led to reduced production cost guidance below $13/boe for 2024, targeting $10/boe by end of 2025.

• Attractive and predictable dividends maintained, with Q3 and Q4 2024 set at $270 million and leverage ratio reduced to 0.7x.

Financial highlights

• Q3 2024 revenues exceeded $1.8 billion, with total income at $1,871 million, down sequentially but up year-over-year on higher volumes.

• Q3 cash flow from operations after tax was $1.3 billion, with available liquidity of $2.1 billion.

• Realised gas price averaged $76/boe, oil at $81/boe, with additional gas revenues above spot totaling $322 million YTD.

• CapEx for Q3 was $718 million; full-year CapEx guidance reduced to $2.6 billion.

• Leverage ratio (NIBD/EBITDAX) improved to 0.7x, with net interest-bearing debt at $4.1 billion at end-Q3.

Outlook and guidance

• 2024 production guidance narrowed to 280,000–290,000 boe/d, with upside tied to Johan Castberg startup.

• Production cost guidance lowered to below $13/boe for 2024, targeting $10/boe by end of 2025.

• CapEx guidance for 2024 reduced to $2.6 billion; exploration CapEx at $350 million, abandonment at $100 million.

• Dividend policy maintained at 20–30% of CFFO after tax, with 2024 at the upper end.

• Longer-term production expected at 350–400 kboepd through 2030.