Vår Energi ASA

Earnings Release • Feb 11, 2025

Vår Energi delivering growth, value and increased dividends

Vår Energi delivering growth, value and increased dividends

Sandnes, Norway, 11 February 2024: Today, Vår Energi (OSE: VAR, the "Company")

reports financial results for the fourth quarter and full year 2024. Vår Energi

is also hosting its Capital Markets Update (CMU) to present an update on its

strategy for growth, resilience and value creation towards 2030 through

sustained high production, strong cash flow generation and increased dividends.

"Vår Energi reports strong operational and financial results for 2024. This is

supported by production within guidance and capital and operating expenditure

below the guided range due to cost discipline and efficient operations. With

three new projects on stream in 2024, Johan Castberg nearing start-up and the

Balder Jotun FPSO on track for production by the end of the second quarter, we

continue to deliver high value growth. This is reflected in shareholder

distributions for 2024 of around USD 1.1 billion and raised first quarter 2025

dividend guidance of USD 300 million," said Nick Walker, the CEO of Vår Energi.

"2025 is transformational for Vår Energi, with production set to grow above 400

thousand barrels of oil equivalent per day (kboepd) in the fourth quarter and

remain at around 400 kboepd in 2026. Towards 2030, we plan to organically

sustain production of 350 to 400 kboepd by capturing the value upside in our

high-quality assets with a net resource potential of over 3 billion barrels," Mr

Walker continued.

"To deliver, we are stepping up the pace and activity level, moving more than 25

early-phase projects forward faster, with a target to sanction up to eight

projects in 2025. Furthermore, we are accelerating infill drilling, increasing

exploration activity, while becoming carbon neutral in our operational emissions

by the end of this decade. We are delivering significant value creation through

reduced costs, a high quality and flexible investments program, and incremental

improvements throughout our operations. This provides resilience in a volatile

business environment, strong cash flow generation and strengthens our long-term

shareholder distribution capacity, as reflected in a raised dividend policy to

25 to 30% of cash flow from operations after tax," Mr Walker ends.

Delivering strong results in 2024:

Operational and financial performance in-line with expectations

· Full-year production of 280 kboepd, within guidance

· Cash flow from operations post tax of USD 378 million in the fourth quarter

and USD 3 408 million for the year

· Full year unit production cost of USD 12.8 per boe, well below original

guidance

· 2024 capex of USD 2.6 billion, below original guidance

· Neptune Energy Norge transaction synergies increased to approximately USD

600 million post-tax, over time

Delivering growth and unlocking future value

· Progressing key projects Johan Castberg and Halten East towards start up in

the first quarter 2025, and Balder Jotun FPSO by end second quarter 2025

· Moving projects into execution by sanctioning Balder Phase V in the fourth

quarter 2024, targeting start-up in late 2025

· Six discoveries in 2024, including two in in fourth quarter, and near 50%

exploration success rate for the year

Attractive and predictable dividends

· Dividend of USD 270 million (NOK 1.213 per share) for the fourth quarter

will be distributed 25 February 2025

· Long-term dividend guidance raised to 25-30% of CFFO after tax

· Increased dividend guidance of USD 300 million for the first quarter of

2025, with full year planned dividend at the lower-end of the 25-30% range of

CFFO after tax

CMU highlights - Delivering growth and value:

Stepping up the pace, sustaining high production towards 2030

· Fourth quarter 2025 production guidance increased to over 400 kboepd driven

by project start-ups, with full year 2025 production expected at 330-360 kboepd

· Plan to maintain 2026 production at around 400 kboepd and organically

sustain production between 350-400 kboepd towards 2030

· High-value barrels driving down production costs to approximately USD 10 per

boe in fourth quarter 2025, with a target to sustain at this level in the

future[1]. Full year 2025 production cost guidance of USD 11-12 per boe

· Delivering high-value projects in 2025 with nine project start-ups, adding

180 kboepd at peak

· 2025 expected capex[2] of USD 2.3-2.5 billion, with average annual capex of

USD 2-2.5 billion towards 2030

· A strong resource base with more than 2.1 billion boe of net proved plus

probable (2P) reserves and 2C resources providing a solid foundation for long

-term value creation

· Progressing more than 25 early phase projects targeting more than 500

million boe net 2C contingent resources, with around 8 new development project

sanctions this year

Unlocking future value

· Maintained NCS exploration leadership, increasing activity to around 20

wells in 2025 (13 in 2024) and approximately USD 350 million of exploration

expenditure

· Strong, diversified exploration portfolio with over 1 billion boe of net

risked resources with around 50% to be drilled out in the next four years

Becoming carbon neutral by 2030

· Clear path to reduce Scope 1 operational emissions by over 50% by 2030

· Becoming carbon neutral in our net equity operational emissions by 2030

through direct investment in natural carbon capture offsets

Ensuring resilient and attractive shareholder returns

· Strong free cash flow generation of USD 5-9 billion over 2025-2030 period³

and a flexible investment program with approximately 70% of capex uncommitted

· Increased capacity for shareholder returns and raised long-term dividend

policy

1. In real 2025 and NOK/USD at 10.5

2. Excluding exploration and abandonment

3. Scenario Brent 65 USD/boe and 85 USD/boe.

Presentation and webcast today at 14:00 CET

The CMU presentation followed by Q&A will be live webcasted from 14:00 CET,

hosted by CEO Nick Walker, COO Torger Rød and CFO Carlo Santopadre.

The presentation material and webcast will be available at www.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.

Safe and responsible operations are at the core of our strategy. Our ambition is

to be the safest operator on the NCS, and to become carbon neutral in our net

equity operational emissions by 2030.

Vår Energi has around 1400 employees and equity stakes in 40 producing fields.

We have our headquarters outside Stavanger, Norway, with offices in Oslo,

Hammerfest and Florø. To learn more, please visit varenergi.no.

Contact

Investor relations

Ida Marie Fjellheim, VP Investor Relations

+47 90509291

Ida.fjellheim@varenergi.no

Media relations

Andreas Wulff, VP Public Affairs

+47 92616759

andreas.wulff@varenergi.no

This announcement may include projections and other "forward-looking" statements

within the meaning of applicable securities laws. Any such projections or

statements reflect the current views of Vår Energi AS ("Var Energi") about

further events and financial performance. No assurances can be given that such

events or performance will occur as projected and actual results may differ

materially from these projections. Vår Energi ASA undertakes no obligation to

publicly release any revisions to these forward-looking statements to reflect

events or circumstances after the date of this announcement.