Vår Energi ASA

Regulatory Filings • Sep 19, 2023

Vår Energi project portfolio and operational update

Vår Energi project portfolio and operational update

Sandnes, Norway, 19 September 2023: Vår Energi ASA (OSE: VAR) today provides an

update on the project development portfolio following completion of a baseline

review of cost and schedule. In addition, the Company narrows the full-year 2023

production guidance range to 210-220 kboepd, while maintaining the end-2025

production target of above 350 kboepd¹.

Key highlights

· Vår Energi is on track to deliver more than 50% high value production growth

on the Norwegian Continental Shelf (NCS) by the end of 2025 supported by 12

projects under development.

· 10 out of the 12 projects are progressing in accordance to estimates and

plan, 8 projects are more than 50% completed. The Breidablikk project is likely

to start-up in the fourth quarter this year, earlier than the planned first

quarter 2024.

· The Balder X targeted start-up is maintained in Q3 2024. To reflect a

tighter supplier market, mitigate schedule risk and to improve construction

productivity the capex estimate has increased by approximately USD 340 million

(~NOK 3.6 billion²) net pre-tax to Vår Energi.

· The Equinor operated Johan Castberg project is impacted by similar factors

in addition to increased scope of work in Norway after mobilisation from

Singapore. The capex estimate has increased by approximately USD 390 million

(~NOK 4 billion²) net pre-tax to Vår Energi. The scheduled start-up in fourth

quarter 2024 remains unchanged.

· The majority of net incremental capex is expected to impact 2024. There is

no change to 2023 capex guidance.

· Full-year 2023 oil and gas production guidance is narrowed to 210-220

kboepd, compared to the previous range of 210-230 kboepd. The 2023 exit rate³ is

expected to be more than 230 kboepd.

· 2023 dividend guidance and long-term dividend policy of a range between 20%

to 30% of the CFFO after tax is maintained.

· The Neptune acquisition, that will add scale, diversification and further

longevity to Vår Energi's portfolio, is confirmed to have expected completion in

the first quarter of 2024.

"Balder X and Johan Castberg are two major development projects that will

materially contribute to our industry-leading production growth and long-term

value creation despite the announced increased capex," said Nick Walker, the CEO

of Vår Energi. "We aim to extend the Balder area production beyond 2045 with the

upgraded Jotun FPSO as a host for potential new tie-ins such as the King and

Prince fields discovered in 2021, and future discoveries and tie-ins"

High activity on the NCS, supply chain challenges and the war in Ukraine have

contributed to cost inflation and resource constraints which are impacting two

key growth projects, Balder X and Johan Castberg. This has impacted the

productivity, and increased expected capex to reach completion, reflecting

additional man-hours to maintain progress, as well as higher prices and rates

for equipment, offshore support vessels and labour.

For the Balder X project, the upgrade of the Jotun FPSO has successfully met key

milestones with the re-float and heavy lift installations completed on plan and

current focus is on executing the remaining construction work and commissioning.

Drilling and subsea activities are progressing according to schedule and the

overall project is more than 80% complete.

The increased capex estimate for Johan Castberg is mainly due to the transfer of

more work than planned from Singapore to the yard in Norway, increased

complexity and lower than expected productivity. Market prices for marine

operations, drilling and completion services have also increased since the last

update. Vår Energi has a 30% stake in Johan Castberg.

The revised estimates for Balder X and Johan Castberg will be included in

Norway's National Budget for 2024 to be published 6 October 2023.

1. Excluding the Neptune acquisition

2. FX USD/NOK 10.5

3. December average

Contacts

Investor relations

Ida Marie Fjellheim, Head of Investor Relations

+47 90509291

ida.fjellheim@varenergi.no

Media relations

Andreas Wulff, Communication Manager

+47 92616759

andreas.wulff@varenergi.no

About Vår Energi

Vår Energi is a leading independent upstream oil and gas company on the

Norwegian continental shelf (NCS). We are committed to deliver a better future

through responsible value driven growth based on over 50 years of NCS

operations, a robust and diversified asset portfolio with ongoing development

projects, and a strong exploration track record. Our ambition is to be the

safest operator on the NCS, the partner of choice, an ESG leader with a tangible

plan to reduce emissions from our operations by 50% within 2030.

Vår Energi has around 1000 employees and equity stakes in 39 fields and the

company produced net 208 kboepd¹ in first half of 2023. We have our headquarters

outside Stavanger, Norway, with offices in Oslo and Hammerfest. To learn more,

please visit varenergi.no.

1. Excluding the Neptune acquisition