Var Energi Announces First Quarter 2024 Trading Update

Source: www.gulfoilandgas.com 4/12/2024, Location: Europe

Var Energi ASA (OSE: VAR) will publish its financial report for the first quarter 2024 on Tuesday 23 April. The Company provides an update on production, sales volumes, and other relevant items.

Var Energi's net production of oil, liquids and natural gas averaged 299 kboepd in the first quarter of 2024, an increase of 33% from the fourth quarter of 2023 and an increase of 40% compared to the first quarter of 2023. The increased production in the quarter reflects volumes from Vår Energi Norge AS (formerly Neptune Energy Norge AS) accounted for from 1 January 2024 and a full quarter with production from the Breidablikk field, which started up in the fourth quarter of 2023.

The production split in the first quarter was 63% oil and NGLs (liquids) and 37% gas. Total volumes produced were 27 mmboe whereas volumes sold in the quarter amounted to 26 mmboe. Vår Energi achieved a strong average realised price (volume-weighted) of USD 75 per boe in the quarter. The realised crude price was USD 84 per barrel. The realised gas price of USD 67 per boe is a result of fixed price contracts and flexible gas sales agreements, allowing for optimisation of pricing indices. The fixed price contracts represented 16% of first quarter gas volumes sold at an average price of approximately USD 134 per boe, substantially above the spot market reference price.

Production (kboepd)
Crude oil
Q1 2024: 169
Q4 2023: 138
Q1 2023: 119
YTD 2024: 169
YTD 2023: 119

Gas
Q1 2024: 111
Q4 2023: 74
Q1 2023: 82
YTD 2024: 111
YTD 2023: 82

NGL
Q1 2024: 19
Q4 2023: 13
Q1 2023: 13
YTD 2024: 19
YTD 2023: 13

Total
Q1 2024: 299
Q4 2023: 225
Q1 2023: 214
YTD 2024: 299
YTD 2023: 214

Realised prices (USD/boe)
Crude oil price
Q1 2024: 84
Q4 2023: 85
Q1 2023: 84
YTD 2024: 84
YTD 2023: 84

Gas price
Q1 2024: 67
Q4 2023: 89
Q1 2023: 176
YTD 2024: 67
YTD 2023: 176

NGL price
Q1 2024: 51
Q4 2023: 47
Q1 2023: 54
YTD 2024: 51
YTD 2023: 54

Average (volume weighted)
Q1 2024: 75
Q4 2023: 84
Q1 2023: 116
YTD 2024: 75
YTD 2023: 116

Sales volumes (mmboe)
Crude oil
Q1 2024: 15
Q4 2023: 13
Q1 2023: 11
YTD 2024: 15
YTD 2023: 11

Gas
Q1 2024: 9
Q4 2023: 6
Q1 2023: 7
YTD 2024: 9
YTD 2023: 7

NGL
Q1 2024: 2
Q4 2023: 1
Q1 2023: 1
YTD 2024: 2
YTD 2023: 1
Total
Q1 2024: 26
Q4 2023: 20
Q1 2023: 18
YTD 2024: 26
YTD 2023: 18

Total production (mmboe)
Q1 2024: 27
Q4 2023: 21
Q1 2023: 19
YTD 2024: 27
YTD 2023: 19

Other items

Vår Energi Norge AS is consolidated as of 1 January 2024.

Vår Energi's functional currency is NOK, whilst interest bearing loans are in USD and EUR. The weakening of the NOK in the first quarter of 2024 led to a net unrealised (non-cash) exchange rate loss of approximately USD 185 million. The loss results in a higher tax rate (approximately 88%) as exchange rate losses are not deductible under the special petroleum tax.

As previously communicated, the following items impacted the free cash flow in the quarter: Net cash consideration for the Neptune Energy Norge acquisition of approximately USD 1.2 billion, cash tax payment of approximately NOK 5 billion (approximately USD 0.5 billion) and a dividend payment for the fourth quarter 2023 of USD 270 million, paid in February 2024.

The information above is based on a preliminary assessment of the Company's first quarter 2024 financial results and may be subject to change until the financial statements have been finally approved and published by the Company.

First quarter webcast and conference call
Vår Energi will release its quarterly results on 23 April 2024 at 07:00 CEST. A webcast and conference call followed by Q&A will be held at 10:00 CEST, hosted by CEO Nick Walker and CFO Stefano Pujatti.


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