Vår Energi (VAR) Q1 2026 earnings summary

Executive summary

• Achieved record high Q1 2026 production of 406,000 bpd (406 kboepd), supported by 97% production efficiency and strong operated asset performance, up 50% year-over-year and 2% sequentially.

• Delivered significant financial results, with CFFO post-tax of $1.1 billion, robust liquidity of $3.5 billion, and reduced leverage ratio to 0.7x.

• Maintained stable or growing dividends for 17 consecutive quarters, confirming $300 million for Q1 and guiding the same for Q2 2026.

• No operational disruptions despite geopolitical tensions; well positioned in volatile markets and leveraged to high commodity prices.

• Progressed two new project sanctions (Goliat Gas Export and King), targeting 80 million bbls of net reserves, and made three commercial exploration discoveries.

Financial highlights

• Q1 2026 revenues reached $2.7 billion, up 45% year-over-year and $432 million from Q4 2025, driven by higher production and realized prices.

• Average realized price was $77 per BOE; realized gas price was $73 per BOE, with crude at $80 per BOE.

• Free cash flow was $475 million, covering Q1 dividends.

• Leverage ratio reduced to 0.7x, with a stable cash balance and net interest-bearing debt at $5,202 million.

• CapEx for the quarter was $553 million; full-year development CapEx guidance remains $2.5–$2.7 billion.

Outlook and guidance

• Annual production guidance reaffirmed at 390,000–410,000 bpd (kboepd) for 2026.

• Production cost expected to remain around $10 per barrel long-term; Q1 cost was $10.4 due to FX effects.

• Development CapEx guidance unchanged at $2.5–$2.7 billion for 2026; exploration spend $250–$300 million.

• Dividend policy maintained at 25%–30% of CFFO post-tax over the cycle, with potential for extraordinary dividends if high prices persist.

• Targeting leverage ratio (NIBD/EBITDAX) below 1.3x through the cycle.