Var Energi (OSLO: VAR) has continued the recent trend for oil and gas companies by announcing a doubling of its annual profits.
For 2022, the Norwegian North Sea operator – owned by HitecVision and Eni – raked in pre-tax takings of $5.9 billion, up from $2.6bn in 2021.
The company, which listed on the Oslo Sotck Exchange last year, attributed its strong balance sheet to the higher oil and gas prices seen for much of last year.
Cash flow from Var’s operations was $5.6bn for the year, with the company planning to distribute a dividend of $270 million for the first quarter of 2023.
Production for 2022 was 220 thousand barrels of oil equivalent per day (kboepd), after the company warned of a production drop in October.
For 2023, Var expects its production to be within the 210 kboepd to 230 kboepd range.
Exploration success of over half
The operator’s exploration success rate last year was 57%, adding approximately 65 million barrels of oil equivalent (mmboe) of resources.
That includes the Var-operated Lupa discovery, the largest on the Norwegian Continental Shelf for 2022.
Var is on on track for production of above 350 kboepd by the end of 2025, based on 17 sanctioned projects “with the majority well into execution with committed investments”, including the key projects Balder X, Johan Castberg and Breidablikk.
In the long-term, the company says it has an ambition of sustaining production and high value creation beyond 2025, supported by operational excellence, a high-value project portfolio, world-class exploration capabilities and value accretive M&A
Var chief executive Torger Rod said: “Today, Var Energi celebrates one year as a listed company. In that brief period, we have delivered strong cash generation and attractive dividends.
“We have also progressed our development projects and are firmly on track for the end-2025 production and cost targets.
“Our exploration team yet again delivered world-class results and we are proud to be the operator of the largest discovery on the NCS in 2022.
“We expect a continued high activity level for 2023 as we work to realise our full potential and deliver more than 50% production growth towards end-2025 and lay the foundation for sustained high value creation beyond that.”
Var Energi is one of the largest exploration and production companies in Norway, with production from 36 oil and gas fields.
It was created in 2018 through a merger between Point Resources, owned by private equity firm HitecVision, and Eni Norge.
In February, Var Energi listed on the stock exchange in Oslo – Eni and Point Resources remain the firm’s largest shareholders.
Recommended for you
