“Vår Energi Reports Significant Decline in Q1 Earnings Compared to Last Year Despite High Production Growth Plans”

Vår Energi earned significantly less in the first quarter of this year than at the same time last year.

It shows one recent quarterly report from the oil and gas producer.

• Vår Energi delivers a profit after tax of USD 195 million (NOK 2.07 billion) in the first quarter, down from USD 431 million in the first quarter last year
• Operating profit (ebit) falls to 1.43 billion dollars (15.2 billion kroner), from 1.75 billion dollars at the same time last year
• Analysts had previously expected the company to post a profit after tax of $285.2 million, according to estimates from Bloomberg. At the same time, they expected an operating result (ebit) of 1.46 billion dollars
• The turnover was 2.09 billion dollars in the quarter, from 2.49 billion dollars the previous year

As previously promised, the company will pay out a dividend of 270 million dollars to the owners for the first quarter. Vår Energi promises a similar dividend for the second quarter as well.

Largest owner in Vår Energi is Italian Eni with 63 per cent.

– High level of activity

– We maintain a high level of activity in order to deliver more than 50 percent production growth over the next three years, says CEO Torger Rød in Vår Energi, according to a melding.

The company’s goal is to produce 350,000 barrels of oil equivalent per day by the end of 2025. Among the projects that will contribute to this are Balder X, Johan Castberg, Fenja and Breidablikk.

The Vår Energi share was up to NOK 45 at the peak last autumn, after oil and gas prices had risen a lot. This year, the stock has fallen by around 25 per cent. The company’s market value is NOK 63 billion.

Produced less

The company has previously reported that overall production averaged 214,000 barrels of oil equivalent per day in the first quarter. This is around 11 per cent lower than in the same quarter last year.

Of the production, 62 per cent was crude oil and other liquids, and 38 per cent gas.

Vår Energi achieved a price of 83.6 dollars a barrel for its oil in the first quarter, down from 99.6 dollars a barrel in the same quarter last year.

The company achieved a price equivalent to 175.5 dollars a barrel for its gas in the first quarter, from 163.4 dollars a barrel in the first quarter of last year.

Vår Energi has also announced in advance that the company would lose 127 million dollars (about NOK 1.34 billion) from currency fluctuations in the quarter, after the krone weakened a lot in the first quarter.

Vår Energi loses over one billion in weak krone

Selling some gas at fixed prices

Vår Energi sells some energy on advance contracts. In the first quarter, around 34 per cent of the company’s gas volumes were linked to contracts with fixed prices. The company achieved an average price equivalent to 283 dollars per barrel of oil equivalent for these volumes.

For the second quarter, the company has sold 22 percent of its gas production at a fixed price, which on average corresponds to USD 191 per barrel of oil equivalent.

For the third quarter, the company has sold around 20 per cent of its gas production at a fixed price which on average corresponds to 189 dollars per barrel of oil equivalent.