Vår Energi reported a rise in production and profits during the third quarter, touting further growth in the coming months as new projects are brought online ahead of schedule.
Pre-tax earnings at the Norwegian E&P group rose (OSE:VAR) to $920 million – up on the previous quarter though below the same period of 2022 owing to lower commodity prices.
Total revenues followed the same trend, rising to $1.6 billion.
Net production of oil, liquids and gas to the company averaged 209,700 barrels of oil equivalent per day (boepd) during the period – up 4% on the previous quarter and mainly due to improved performance from its new developments such as Fenja, Hyme and Bauge.
It also reported a “100% success rate” in its exploration wells during Q3, with positive results at the Equinor operated Crino-Mulder and Crino sidetrack discovery wells, the OKEA-operated Kim exploration well and DNO’s Norma discovery.
Looking to Q4, the group reported no scheduled turnarounds and expects a “further positive impact” on production from the early start-up of both Breidablikk and Tommeliten Alpha. Additional infill wells are also set to come on stream, taking its estimated 2023 exit rate to above 230,000 boepd
It is the first quarterly results overseen by new CEO Nick Walker, who joined the company in September having previously led Lundin Energy during its acquisition by Aker BP last year.
“We are on plan to deliver on our strategy for growth and value creation. I’m pleased to report strong financial results in the quarter supported by good performance at our operated assets and increased commodity prices,” Mr Walker remarked.
“We continue to provide a stable and predictable dividend in line with strategy and our growth trajectory will give increased capacity to sustain this.”
Neptune deal on track
Its takeover of Neptune Energy’s Norwegian business is also progressing, having now been cleared by the Norwegian Competition Authority and approved by the Norwegian Ministry of Petroleum and Energy.
The deal, announced in June alongside Eni’s bid for the rest of the Neptune group, will see the addition of 12 producing assets – three of which are operated – and around 300 local staff to Vår Energi.
It is expected to add 2P reserves of 265 million boe and daily production of 66,000 boepd, of which 60% is gas.
Completion of the transaction is still slated for the first quarter of 2024.
For full-year 2023, Vår said it expects to spend development capex of $2.4-2.7 billion.
A dividend of $270m is also due to be paid in Q4 2023.
“Vår Energi is one of the fastest growing E&P companies in Europe, underpinned by a portfolio of quality development projects that are making good progress towards completion. With Breidablikk and Tommeliten Alpha coming on stream ahead of schedule this month we reached a key milestone to deliver value accretive growth,” added Mr Walker.
“Together with the Neptune Energy Norway acquisition, set to close in Q1 2024, our production is expected to double to around 400,000 boepd by the end of 2025.”