Vår Energi starts the year strong, setting course for ‘transformational growth’ in 2025

Norway’s oil and gas player Vår Energi has published the interim report for the first quarter of 2025, disclosing what it says are strong results.

As disclosed in the Norwegian firm’s First quarter 2025 report, production of 272 thousand barrels of oil equivalent per day (kboepd) in Q1 2025 is in line with predictions. Additionally, approximately 180 kboepd at peak are expected to be added from nine project start-ups scheduled towards Q4 2025.

The quarter was marked by what the firm says is continued strong performance on operated assets ahead of target. A cash flow from operations post tax of $1.3 billion was reported, while the net debt was reduced, with a leverage ratio of 0.8x.

Profit before taxes in Q1 amounted to $1,279 million compared to $671 million in the previous quarter. Furthermore, the net result for the period amounted to $453 million, which is an increase of $628 million compared to the previous quarter.

“We are pleased to deliver strong results in line with expectations for the quarter. The Halten East and Johan Castberg projects came on stream and the Jotun FPSO is expected to start production by end of the second quarter. The Company is set for transformational growth in 2025, adding around 180 thousand barrels of oil equivalent (kboepd) from new projects and is on track deliver over 400 kboepd by the fourth quarter,” noted Vår Energi CEO Nick Walker.

The Halten East and Johan Castberg projects were brought on stream in March. The former is expected to reach peak production of 20 kboepd in Q4 2025, and the latter is currently ramping up towards a production level of 66 kboepd in the coming months, the report states.

Furthermore, FPSO Balder Jotun is said to be moored at the field location after setting sail and receiving regulatory approvals to use the living quarters, helicopter decks, and cranes on the FPSO in March. This means the Balder X project is on track for start-up at the end of Q2 2025.

The Balder X project is set to recover around 200 million barrels (mmboe) of additional reserves from the Balder-Ringhorne area, where the production lifetime is being prolonged to 2045, as part of the Balder Future redevelopment project in the North Sea.

Walker went on to state that Vår Energi’s exploration success continues, highlighted by the Zagato discovery in the Barents Sea, third in a row near FPSO Goliat, increasing the total discovered and prospective gross recoverable resources on the Goliat ridge to over 200 mmboe.

Even though the Vår Energi CEO believes the current market environment to be uncertain, he remains confident that the long-term fundamental role of oil and gas remains unchanged and that his company has the flexibility and resilience to navigate through the cycles.

Walker commented: “In the current uncertain market environment our business remains resilient, with low free cash flow break-even and a highly flexible investment program of which 70% is uncommitted. Our investment grade balance sheet provides significant available liquidity, underscored by the recent issuance of EUR 1 billion of senior notes, four times oversubscribed.

“On the back of strong operational and financial results, we confirm an attractive dividend distribution of USD 300 million for the first quarter, while maintaining our distribution policy of 25-30% of CFFO after tax for the full year.”

According to the report, the company plans to participate in around 20 exploration wells this year, targeting net risked prospective resources of approximately 125 mmboe. The expected cost of exploration for 2025 is around $350 million.

While the Norwegian firm’s Q1 2025 was generally marked with new discoveries and project start-ups, two North Sea wells also came up dry. The first was the Njargasas prospect, operated by Aker BP, and the second the Kokopelli prospect, where Vår Energi is the operator.