Vaar Energi Marks Rise in Quarterly Profit
February 12, 2025
Oslo-listed Vaar Energi, majority-owned by Italy's Eni, raised its dividend on Tuesday as the oil and gas exploration and production company reported a fourth-quarter operating profit in line with expectations.
Vaar's earnings before interest and tax (EBIT) for the October-December quarter rose to $1 billion from $399 million a year earlier, in line with the average $1.03 billion forecast in a company-provided poll of 13 analysts.
Vaar's shares were up 5.8% by 1011 GMT, strongly outperforming the wider European oil and gas index that was up 0.6%.
Analysts at RBC said the stock's positive reaction was underpinned by the dividend increase and expectations for the company's production to exceed 400,000 barrels oil equivalent per day (boed) by the end of 2025.
The company said it will increase its dividend for the first quarter of 2025 to $300 million, or 1.213 crowns per share, from $270 million for the fourth quarter.
For the full year, it plans to distribute 25%-30% of its cash flow from operations (CFFO) after tax, compared to the previous guidance of 20%-30%.
Last year, Vaar Energi paid a total of $1.1 billion in dividends.
Compared to the full year of 2023, Vaar's output rose by 31% to 280,000 barrels of oil equivalent per day (boepd) due to the acquisition of Neptune Energy's Norwegian assets and the start-up of new projects.
"Vaar Energi is set for significant production increase as we enter 2025, a year of transformational growth for the company, and we're on track to reach more than 400,000 boed in the fourth quarter," CEO Nick Walker said in a statement.
Walker told a news conference the company could sustain production organically at 350,000-400,000 boed towards 2030 as it planned to approve about eight new projects this year.
The Equinor-operated EQNR.OL Arctic Johan Castberg oilfield, in which Vaar has a 30% stake, was expected to come on stream in the first quarter, while Vaar's own Balder X development was set to start output by the end of the second quarter after several delays.
Vaar also plans to drill some 20 exploration wells in 2025, including seven in the Barents Sea, looking to add more resources.
(Reuters - Reporting by Nerijus Adomaitis; Editing by Terje Solsvik, Muralikumar Anantharaman and David Evans)
