Vår Energi reports financial results for the fourth quarter and full year 2025. The Company also hosts its Capital Markets Update (CMU), presenting an updated strategy for delivering higher production and more value for longer, with material cash flow generation and attractive dividends.
'We are pleased to have delivered transformational growth in 2025, doubling production in just two years. The Company delivered record high production, high reserve replacement, strong financial performance and significant value creation, while further de-risking the outlook through the completion and startup of nine projects, including Jotun FPSO at the Balder field and Johan Castberg. Vår Energi has never been in a stronger position for long-term value creation, and continues to deliver attractive returns, reflected in shareholder distributions for 2025 of USD 1.2 billion, in line with guidance', said Nick Walker, the CEO of Vår Energi.
'Vår Energi is guiding full year 2026 production in the range of 390 to 410 thousand barrels of oil equivalent per day (kboepd) and raises the long-term production target to more than 400 kboepd. This is supported by a portfolio of 13 high value projects in execution, a flexible pipeline of around 30 early phase projects being matured, and a strengthened asset base with increased reserves and resources', Mr Walker continued.
'Driven by an entrepreneurial, performance-oriented organisation, we continue to leverage incremental improvements across the business, including enhanced recovery through infill drilling and targeted exploration, while becoming ever more efficient with reduced costs. This continues to provide resilience in a volatile business environment, strong cash flow generation, and long-term attractive shareholder returns in line with our stated dividend policy of 25 to 30% of cash flow from operations after tax over the cycle', Mr Walker ended.
Delivering a transformational 2025:
Record high production
- Production of 397 kboepd in the quarter and full year 2025 production of 332 kboepd
- Outlook for the company is de-risked with major projects completed
- Nine new growth projects started up during the year as planned, adding around 180 kboepd new production at peak
- Strong operational performance in 2025, with an average production efficiency of 92%(1)
Strong financial performance
- Strong CFFO post tax of USD 1.3 billion in the quarter and USD 4.6 billion for the full year 2025
- Available liquidity of USD 3.5 billion and leverage ratio of 0.8x at year end 2025
- Unit production cost at the lower end of annual guidance at USD 11.1 per boe and USD 10.0 per boe for the quarter
Unlocking long-term future value creation
- Delivered 10 project sanctions in 2025, developing 160 million barrels of oil equivalent (mmboe) net with average USD 30 per boe breakeven
- High value exploration activity delivering six commercial discoveries in 2025
- Increased reserves and resources(2) of 2.2 billion boe at year end 2025 with 2P reserve replacement ratio of 185%(3)
Delivering attractive dividends
- Fourth quarter dividend of USD 300 million (NOK 1.209 per share) will be distributed 12 February
- Dividend guidance of USD 300 million for the first quarter of 2026(4) in line with dividend policy of 25-30% of CFFO after tax over the cycles
CMU highlights – More value for longer:
Targeting higher production and value creation for longer
- De-risked company with major projects complete, with full year 2026 production expectation at record 390-410 kboepd, in line with previous guidance
- High value barrels delivering full year 2026 production cost guidance of around USD 10 per boe, reiterating target to sustain at this level long term
- Delivering higher production for longer, raising the production target to above 400 kboepd long term
- A material resource base with around 2.2 billion boe of net proved plus probable (2P) reserves and 2C contingent resources providing a strong foundation for long-term value creation
- 13 projects in execution developing 210 mmboe of 2P reserves net with low operating costs, breakeven at around USD 30 per boe and IRR above 30%
- Progressing around 30 high value early phase projects targeting approximately 550 mmboe net 2C resources with attractive economics
- Up to 8 new project sanctions in 2026
- 2026 expected capex(5) of USD 2.5-2.7 billion, with average annual capex of USD 2.5 billion over the period 2027-2032
Unlocking more value
- Continued high exploration activity, with 12 planned wells in 2026, targeting around 75 mmboe in net risked prospective resources.
- 2026 exploration spend of USD 250-300 million
- A material, diversified exploration portfolio of over 1 billion boe of net risked resources
Safe and responsible
- Industry top quartile emission intensity of approximately 9 kg CO2e/boe
- Strong ESG ratings, in the top 15% of the oil and gas industry globally
Ensuring long-term returns
- Incrementally improving for increased resilience and flexibility, delivering high value barrels with a free cash flow breakeven at around USD 40 per boe over the period 2026-2032
- Strong free cash flow generation of USD 5-10 billion over 2026-2032 period(6) and a flexible investment program with approximately 60% of capex uncommitted
- Robust project portfolio, balanced commodity mix, and significant uncommitted capital support resilience, flexibility and long-term dividend policy
- Operated assets, excluding Balder Jotun FPSO ramp up period
- Proved and probable (2P) reserves, plus contingent resources (2C)
- Ratio of reserves added through revisions and/or acquisitions to production in 2025
- The dividend is subject to 31.03.2026 audited interim balance sheet with sufficient free equity and AGM approval of dividend
- Excluding exploration and abandonment
- Scenario 10 USD/bbl below and above reference case throughout the period as stated in the appendix of the presentation
Source: Vår Energi
