Vår Energi (VAR) Q4 2024 & CMD 2025 earnings summary

Executive summary

• Delivered strong 2024 results with 280,000 barrels/day production, up over 30% year-over-year, driven by new project startups, Neptune asset integration, and 93% production efficiency.

• Positioned as Norway's 3rd largest oil and gas producer, with interests in about 50% of producing assets and a diversified, high-quality portfolio.

• Major projects (Johan Castberg, Halten East, Balder X) nearing completion, supporting guidance for over 400,000 barrels/day in Q4 2025 and sustained 350,000-400,000 barrels/day through 2030.

• Significant resource growth in 2024, with a 300% reserve replacement ratio and 600% total resource replacement ratio.

• Committed to carbon neutrality in operations by 2030, with over 50% emission reduction and near-zero methane emissions since 2024.

Financial highlights

• 2024 revenue reached $7.4 billion, with Q4 revenue at $1.7 billion and CFFO after tax of $3.4 billion.

• Dividends paid in 2024 totaled $1.1 billion, with Q1 2025 dividend guidance raised to $300 million.

• Leverage ratio at 0.8x net debt/EBITDA, with cash balance of $279 million and total liquidity above $1.3 billion.

• Realized gas price averaged $73/BOE, generating $300 million in extra sales revenue above spot in 2024.

• CapEx peaked at $2.6 billion in 2024, with 2025 guidance at $2.3-$2.5 billion, and exploration spend planned at $350 million.

Outlook and guidance

• 2025 production guidance: 330,000-360,000 barrels/day, exceeding 400,000 barrels/day in Q4; 2026-2030: 350,000-400,000 barrels/day.

• Production cost guidance for 2025 is $11-$12/boe, targeting ~$10/boe in Q4 2025.

• Free cash flow projected at $5-$9 billion (2025-2030) at $65-$85 Brent, with break-even at $40/barrel.

• 70% of future CapEx uncommitted, providing flexibility to adapt to market conditions.

• Dividend policy raised to 25%-30% of CFFO after tax, with 2025 dividend expected at the lower end of this range.