Norway's Vaar Energi raises production goal, beats profit expectations
Vaar Energi is majority owned by Italy's Eni. On?Tuesday, it raised its production target and reported a higher than expected operating?profit in the fourth quarter. However, Vaar Energi said that they would be cautious with their dividend guidance because of lower oil and gas prices.
Oslo-listed Vaar’s earnings before interest, tax and other expenses for October through December dropped 5.8% year-on-year to $947 millions on lower oil prices. This beat the $838 million average forecast of 13 analysts in a poll compiled by the company.
Vaar CEO Nick Walker stated in a press release that "we are proud to have delivered transformational... growth in 2025. We doubled production in just two years."
CAPEX RISING, OUTPUT GOAL RAISED
Norway's third largest listed oil and gas producer has forecast that full-year production will be in the range 390,000-410,000 barrels equivalents per day in 2026, an increase from 332,000 barrels in 2025.
Vaar has raised its long-term production target to over 400,000 boed from 350,000-400,000 Boed previously, with the support of 13 projects currently in execution and 30 early-phase projects that are maturing.
Walker stated that the company plans to sell some assets to optimize its portfolio in the near term.
Vaar shares rose 0.1% at 0906 GMT in line with the Norwegian market.
The company expects to sanction eight new projects in 2019. It is expecting capital expenditures of between $2.5 and $2.7 billion by 2026. This will average out to about $2.5 billion per annum from 2027-2032.
The company plans to drill 12 exploration holes in 2026, compared to 20 last year. Exploration spending is expected to be between $250 million and $300 million.
The previous capital expenditure target was between $2 and $2.5 billion from 2026 to 2030.
Brokers DNB Carnegie stated that it may be difficult for Vaar to reach its revised long term output goal with the current asset portfolio.
The company paid a total of 1.2 billion dollars for the entire year 2025, and maintained a quarterly dividend for the first quarter in 2026 of $300 million.
Walker stated that "given the volatility and uncertainties in the world, we're taking a more cautious approach" (on the dividend guidance). He added that the company was committed to paying 25% to 30% after taxes of its cashflow generated by operations.
(source: Reuters)
