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Investing.com -- Vår Energi ASA (OL:VAR) on Friday reported second-quarter production of 288,000 barrels of oil equivalent per day (kboe/d), in line with both internal forecasts and consensus estimates.
The figure matched RBC Capital Markets’ forecast of 287kboe/d and supports the company’s unchanged full-year 2025 production guidance.
Vår expects full-year 2025 output between 330,000 and 360,000boe/d. Production in the fourth quarter is now projected at approximately 430kboe/d, up from previous guidance of more than 400kboe/d.
Total (EPA:TTEF) volumes sold during the quarter were 26 million barrels of oil equivalent (mmboe), resulting in a minor underlift of 0.2mmboe. The production mix in the second quarter was 68% liquids and 32% gas.
Oil was sold at an average realized price of $68 per barrel, in line with expectations. Natural gas averaged $79 per barrel of oil equivalent (boe), slightly ahead of forecasts due to 25% of volumes sold under fixed-price contracts at around $92/boe.
Vår reported a net foreign exchange gain of $80 million. The company also posted non-cash impairment reversals of approximately $510 million pre-tax, or $112 million after tax, while incurring $70 million in impairments tied to technical goodwill on the Njord, Gjøa, and Snøhvit areas.
RBC Capital Markets maintained an “outperform” rating on the stock with a price target of NOK 44.
The brokerage noted that while Vår continues to offer an implied dividend yield above 14%, investor sentiment remains cautious.
Sustained delivery following the startup of the Balder X and Johan Castberg fields is expected to be a key focus.
Within its stated dividend policy of distributing 25%–30% of cash flow from operations (CFFO), RBC estimates that the current payout of $300 million per quarter can be maintained down to a Brent price of $57/bbl through year-end.
A price of around $63/bbl may be required to support similar payouts in 2026. Analysts noted that Vår’s flexibility on capital expenditures provides additional room to manage payouts without affecting production targets.