Vår Energi Reports Strong First Quarter Results for 2025
Norwegian oil and gas company Vår Energi has released its interim report for the first quarter of 2025, showcasing what it describes as robust performance. As detailed in the firm’s report, the production level reached 272 thousand barrels of oil equivalent per day (kboepd) in Q1 2025, aligning with forecasts. Furthermore, the company anticipates an additional 180 kboepd at peak from nine project launches expected to occur in the fourth quarter of 2025. The quarter was characterized by sustained strong performance across operated assets, surpassing initial targets. The firm reported a post-tax operational cash flow of $1.3 billion and a reduction in net debt, resulting in a leverage ratio of 0.8x. Profit before taxes for the quarter stood at $1,279 million, a significant increase from $671 million in the previous quarter. Additionally, the net profit for this period was recorded at $453 million, marking an increase of $628 million compared to the prior quarter.
CEO Highlights Growth Potential and Project Updates
Vår Energi’s CEO, Nick Walker, expressed satisfaction with the company’s strong quarterly performance, stating, “We are pleased to deliver strong results in line with expectations for the quarter.” He mentioned that the Halten East and Johan Castberg projects began production in March, with the Jotun FPSO anticipated to commence operations by the end of the second quarter. The company is poised for significant growth in 2025, projecting an increase of around 180 kboepd from new initiatives and aims to exceed 400 kboepd by the fourth quarter.
New Developments in Major Projects
The Halten East project is expected to achieve peak production of 20 kboepd in Q4 2025, while the Johan Castberg project is currently ramping up towards a production rate of 66 kboepd in the near future, as indicated in the report. Furthermore, the FPSO Balder Jotun has reached its designated field location after departing and obtaining the necessary regulatory approvals for the use of its living quarters, helicopter decks, and cranes in March. This positions the Balder X project for a start-up by the end of Q2 2025. The Balder X initiative is projected to recover approximately 200 million barrels (mmboe) of additional reserves from the Balder-Ringhorne area, extending the production lifespan to 2045 as part of the Balder Future redevelopment project in the North Sea.
Exploration Success Amid Market Uncertainty
Walker also highlighted Vår Energi’s ongoing exploration achievements, particularly the Zagato discovery in the Barents Sea, which marks the third consecutive find near the FPSO Goliat, boosting the total discovered and prospective gross recoverable resources in the Goliat ridge to over 200 mmboe. Despite acknowledging the current market uncertainties, Walker remains optimistic about the enduring importance of oil and gas, asserting that the company possesses the flexibility and resilience to navigate through market fluctuations. He remarked, “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.”
Dividend and Exploration Plans for 2025
With strong operational and financial outcomes, Vår Energi confirmed a dividend distribution of USD 300 million for the first quarter while adhering to its distribution policy of allocating 25-30% of cash flow from operations after tax for the entire year. According to the report, the company aims to engage in approximately 20 exploration wells this year, targeting net risked prospective resources of around 125 mmboe, with an expected exploration expenditure of about $350 million for 2025. While the first quarter of 2025 was generally marked by new discoveries and project initiatives, two North Sea wells did not yield results. The Njargasas prospect, managed by Aker BP, and the Kokopelli prospect, under Vår Energi’s operation, were both dry.
