July 22, 2025

CORRECTED TRANSCRIPT Var Energi ASAVAR NO Q2 2025 Earnings Call 22 July 2025 4 00 AM ET

VAR ENERGI · Q2 2025

Corrected Transcript

22-Jul-2025

Vår Energi ASA

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Q2 2025 Earnings Call

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Vår Energi ASA

(VAR.NO) Corrected Transcript

Q2 2025 Earnings Call 22-Jul-2025

CORPORATE PARTICIPANTS

Ida Marie Fjellheim Carlo Santopadre

Head-Investor Relations, Vår Energi ASA Chief Financial Officer, Vår Energi ASA

Nicholas Walker

Chief Executive Officer, Vår Energi ASA

OTHER PARTICIPANTS

Matthew Smith John A. S. Olaisen

Analyst, Bank of America Analyst, ABG Sundal Collier Holding ASA

Teodor Sveen-Nilsen Lydia Rainforth

Analyst, SpareBank 1 Markets AS Analyst, Barclays Capital Securities Ltd.

Victoria McCulloch

Analyst, RBC Europe Ltd.

MANAGEMENT DISCUSSION SECTION

Operator

Hi, everyone, and welcome to Vår Energi's Q2 Presentation for 2025. This call is being recorded. For the first part of this call, all participants will be in a listen-only mode. Afterwards, there'll be a question-and-answer session. [Operator Instructions]

I would like to introduce Head of IR, Ida Marie Fjellheim. Ida, please go ahead.

Ida Marie Fjellheim

Head-Investor Relations, Vår Energi ASA

Good morning, everyone, and a warm welcome to Vår Energi's second quarter 2025 results. The presentation today will be given by our CEO, Nick Walker; and our CFO, Carlo Santopadre. Nick and Carlo will present the results, and afterwards, we will open up for Q&A.

I will now hand the word over to Nick.

Nicholas Walker

Chief Executive Officer, Vår Energi ASA

Thank you, Ida. And good morning to you all. And I hope you're having a nice summer break. And thank you for taking time out to join us today for our second quarter 2025 results presentation. I'm pleased to report strong results for the quarter. Our key growth projects have been delivered as expected, which means we're on track to meet our plans for transformational growth in 2025. And we're moving forward a pipeline of quality new projects at pace that will sustain value creation in the longer term. And on the back of this strong performance and the resilience of the company to manage through the volatile markets, we continue to provide attractive and predictable dividend distributions.

Vår Energi ASA

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Q2 2025 Earnings Call 22-Jul-2025

So, now, let us look at the highlights for the quarter. Production is on track to meet the midpoint of the full year guidance range. We delivered production of 288,000 barrels of oil equivalent per day in the second quarter. The

Jotun FPSO at the Balder field is successfully on stream, as expected, and is ramping up.

Johan Castberg is now producing at plateau levels. Our major turnaround for the year will be behind us at the end of July, and we're now producing above 350,000 barrels per day with more to come very soon. And we strengthened our financial position with CFFO post-tax in the quarter at $766 million. We maintain a strong focus on cost discipline with reducing operating costs on track to be around $10 per barrel by the fourth quarter, as guided. And our gas sales strategy continues to create value, with 25% of volumes locked in for the second quarter at $92 per boe.

And during the first half of 2025, our financial position has been strengthened through a successful refinancing of credit facilities, and issuance of senior notes, totaling $5.2 billion, reducing cost of debt and providing significant available liquidity. And to further improve the resilience and competitiveness of our business in a volatile market, we're reducing 2025-2026 spend by $500 million in total, while maintaining our long-term production outlook.

And we're delivering on our transformational growth targets and plans to unlock future value. We're adding around

180,000 barrels of oil equivalent per day, a peak for nine project startups this year. And with the key projects now online, we expect to reach around 430,000 barrels per day in the fourth quarter this year.

We're on track to sustain production of 350,000 barrels to 400,000 barrels per day towards 2030, which will be achieved by developing our portfolio of around 30 early phase projects. We sanctioned four projects so far this year, and expect a total of over 10 projects sanctioned by the end of the year. And our leading exploration track record continues with three commercial discoveries so far this year, generating new projects.

And lastly, we continue to provide attractive shareholder distributions. We confirm a dividend distribution for the second quarter of $300 million, which means we'll pay stable or growing dividends for the last 14 quarters. And we're providing dividend guidance for 2025 full year of $1.2 billion, and now that our key new projects are online, we're also guiding $1.2 billion for the full year 2026.

And given the resilient financial outlook and level of liquidity for the company, we're able to maintain this dividend guidance under any realistic price scenario. And we have a resilient and flexible business that provides competitive advantage in the current volatile market conditions. And we continue to improve this resilience, incrementally getting better and better all the time. And if you look back over the last few years, you see this thread running through how the company has performed.

We have a cash flow breakeven around $40 per barrel, averaged over the period 2025 to 2030. This means at

$40 per barrel, we're covering all our costs and funding our growth plans. So anything above $40 per barrel is available to fund dividends or debt repayments. And as I said, we refinanced the business with $5.2 billion, reducing cost of financing, extending debt maturity profile. Our available liquidity today stands at $3.5 billion. I think this shows the strong confidence in the company's outlook. Around one-third of our production is gas, which provides a natural hedge to our financial outlook. And we're using our gas sales strategy to create additional value with around 20% of our volumes this summer period locked in at $90 per barrel.

And all of our major projects in our line and what is ahead of us is a series of high value tieback projects. With around 65% of our future capital spend uncommitted, this provides us with flexibility to manage the business through the cycles. And we're taking this opportunity in the cycle to improve our business, and use some of our

Vår Energi ASA

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Q2 2025 Earnings Call 22-Jul-2025 flexibility, reducing spend by a total of around $500 million over 2025-2026, and this is being done without any impact on the long-term production outlook for the company.

So, now looking at some of the details. Vår Energi is one of the fastest growing E&Ps globally, and we're the third largest oil and gas producer in Norway. And we've built a business – built a high quality, diversified asset base in all areas of the NCS, with interest in around 50% of all producing fields and infrastructure and a large exploration footprint. And we're also one of the largest exporters of gas from Norway. This amazing portfolio, which provides lots of optionality, is driving our growth and sustained production. And we're stepping up the pace to realize this value. The mantra, as I've said before, is move faster and you'll see some further examples of increased pace in our presentation today.

And we're delivering transformational production growth in 2025. From 280,000 barrels of oil equivalent per day in

2024, we will grow to around 430,000 barrels per day in the fourth quarter this year. That is double 2023 levels.

This is driven by nine project startups during the year, adding around 180,000 barrels per day of new production at peak levels. And we're also guiding approximately 400,000 barrels per day in 2026. And with our high quality portfolio with significant upside, we can organically sustain production at 350,000 barrels to 400,000 barrels per day towards 2030.

And now looking at 2025 production, where we're on track to meet the midpoint of the full year guidance range of

330,000 barrels to 360,000 barrels of oil equivalent per day. First half 2025 production came in at 280,000 barrels per day, which was at lower end of expectations, and this is due to the later startup and slower ramp-up to plateau at Johan Castberg than initially anticipated.

We continued with excellent performance at our operated assets with production efficiency better than targets at

95% for the first half of the year. Second quarter production was impacted by 30,000 barrels per day of reductions due to planned turnarounds. All of our major turnarounds for the year will be complete by the end of July, with reduced impact for the rest of the year. And our key growth projects have been delivered as expected, with four of the nine projects to come on stream this year already online. Johan Castberg is producing at full capacity. The

Jotun FPSO at the Balder fields, and Halten East are both ramping up. And Ormen Lange Phase III has started ahead of plan. And the remaining five projects are on track to start-up as planned in the second half of the year.

Current production is above 350,000 barrels per day. This is before the restart of Snøhvit following the completion of the turnaround at the end of July, and only includes low volumes from the start of Jotun FPSO. So, there are more volumes to come very soon. And we expect to produce around 430,000 barrels per day in the fourth quarter ahead of our guidance, which means we're on track to meet the midpoint of the production guidance range for the year.

Turning now to our two key project startups, the main catalyst for our transformational growth this year.

Production through the Jotun FPSO at the Balder Field was successfully started in June, in line with expectations.

And this marks the start of a new era for the Balder Field, extending the life of the first production license on the

NCS to 2045 and beyond. Production will ramp up as the 14 completed new wells are brought on stream.

Commissioning of these is currently running ahead of schedule, and we now expect to reach peak production during September of around 80,000 barrels of oil per day gross.

This is on top of the 30,000 barrels per day currently being produced through the Balder FPU and Ringhorne facilities. And the project is developing gross recoverable reserves of around 150 million barrels with a further 45 million to 50 million barrels coming from Phases V and Phase VI, and this is produced with low operating costs of

Vår Energi ASA

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Q2 2025 Earnings Call 22-Jul-2025 around $5 a barrel. Together with Balder Phase V, the project has a payback of around two years from production start-up.

And we're making good progress on Phase V. The first dual-lateral well has now been successfully drilled and we'll start to see the Phase V wells come on stream from the fourth quarter this year. And with the Jotun FPSO installed as an area host, we're actively working to bring new volumes through the facility to create additional value and you'll hear more on this later.

And Johan Castberg started up at the end of the first quarter and in June reached plateau production levels of

220,000 barrels of oil per day gross with Vår Energi's net share being 66,000 barrels per day. And these are large volumes in our portfolio with an export tanker lifting from the field taking place every three to four days. Also, these are very high quality volumes trading at material premium versus Brent.

The initial field development is for gross recoverable reserves of between 450 million and 650 million barrels of oil which will be produced with low operating costs of around $4 a barrel. The field will be produced for more than 30 years contributing to significant growth and value creation with a payback time of less than two years from start- up. And the Johan Castberg area is highly prospective and several new discoveries made in recent years are being moved to development, including an extensive infill drilling program planned to sanction this year.

The Johan Castberg Cluster 1 development consisting of two phases is targeting sanction of the first phase being the Isflak discovery by the end of the year. And we recently announced the Drivis Tubåen discovery in the area which is assessed to be commercial. In total, there are between 250 million and 550 million barrels of additional gross unrisked recoverable resources identified in the area which we anticipate will enable us to keep the facilities full towards 2030. So we see Johan Castberg as a key driver for sustaining production long term.

And now looking at operational performance, you can see that we have a strong trend of continuous improvement. Overall, we have a good safety record which is generally getting better. In the first half of the year, we had a good out-turn with zero actual serious incidents, and this performance takes strong focus every single day. On production costs, we achieved $12.2 per barrel in the first half of the year, which is within expectations.

And looking forward, we're on track to reduce production cost to around $10 a barrel in the fourth quarter this year. And we target to sustain at this level long term, which is around 30% reduction from 2023 levels. And this is driven by the new fields coming on stream that have OpEx of around $4 a barrel and continued high focus on realizing cost synergies and improvements. And you can also see we have a strong improving trend on production efficiency for our operated assets, which was 95% in the first half of the year and ahead of our target.

And I think these elements go hand-in-hand. Strong safety focus drives good operational discipline and is a good example of the incremental improvements I talked about earlier.

And we're positioning the company to adapt to the energy transition to ensure relevance and investability long term, and we're delivering on our decarbonization plan. We're top quartile in the industry globally on carbon emissions intensity, and our methane emissions continue to be at a near zero level. So we're already doing very well, but we want to go further and we're aiming to be carbon neutral in our net equity operational emissions by

2030. And we'll achieve this through further investments in electrification of our key assets and direct investment in national carbon capture projects to offset what we can't reduce. We have a plan in place to achieve this objective. And I'm also pleased that we're getting recognition for our ESG leadership. Sustainalytics continue to rank us as a top rated company. This puts us in the top 15% of global oil and gas industry. And we continue to be included in the Oslo Stock Exchange ESG Index as the only oil and gas company. I think this is leveraging to how the company is viewed.

Vår Energi ASA

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Q2 2025 Earnings Call 22-Jul-2025

And Vår Energi has an amazing portfolio with lots of optionality and growth opportunities. Our 2P reserves stand as you can see at 1.2 billion barrels. This is either in production or under development and underpins our transformational growth. But we're much more than that. We have 2C contingent resources of around 900 million barrels, and we're moving forward around 30 early phase projects accounting for approximately 600 million barrels. We also have an exciting exploration portfolio of over 1 billion barrels of net risked resources where we expect to drill out about 50% of this over the next four years. And so putting this together, we have over 3 billion barrels of resource potential, with 60% yet to be developed and that is how we will organically sustain production long term. And we're working at pace to create value from this opportunity.

And we have a resilient and flexible portfolio of around 30 early phase projects that we're progressing towards development. These are mostly subsea tiebacks to existing infrastructure with low costs and short time to market.

And we're creating a subsea factory with standardization, precommitments and strategic partnerships to reduce costs, improve predictability and speed up time to first production. And we've created real momentum here with four projects sanctioned so far this year, including the recent commitments to the Fram Sør and Balder Phase VI subsea tieback to projects. In total, we're expecting to sanction over 10 projects by year end as indicated on the chart. The portfolio has strong economics with average breakevens of around $35 a barrel and good rates of return. And we're using the opportunity of the lower prices to rework some projects to make them even better and improve economics and we're having success at this.

And we've just announced the sanction of the Fram Sør subsea tieback project delivering high value barrels. This is the next phase of development in the prolific Fram license, where Vår Energi has a 40% interest. Fram Sør is a combined development of several discoveries that will export oil and gas by the Troll C platform. And the project will develop net reserves around 50 million barrels of oil equivalent and contribute with around 20,000 barrels per day net to Vår Energi at peak once the project starts up at the end of 2029. Project economics are strong and fulfilled Vår Energi's investment criteria for new developments. And building on recent exploration success, a series of follow-on exploration targets in the Fram license are set to be drilled in the coming years, unlocking potential further upside. Vår Energi estimates that the remaining prospective unrisked resources in the area are more than 200 million barrels gross, so there's lots more to come from this prolific license.

And we've also recently sanctioned the Balder Phase VI Project, a fast-track development that will be an important contributor to sustaining long-term, high-value production through the newly installed Jotun FPSO. The project consists of one multilateral production well, installation of new subsea template and a flow line that will be tied in to the Jotun FPSO and is developing gross reserves of 15 million barrels. By using equipment held in inventory, we're able to fast-track this project, which will start up by the end of 2026, only 18 months from sanction. And this project has strong economics with a breakeven well below $35 per barrel and an IRR above

35%.

In addition, the Balder has several early phase projects that are also being progressed, including what we're calling Balder Next, which is targeting gross resources of up to 50 million barrels and consists of four elements.

First of all, decommissioning the Balder FPU, transferring selected FPU wells to the Jotun FPSO, accelerating production through debottlenecking the Jotun FPSO, and then also drilling new production wells. And this rationalization of the facilities in the Balder Area will drive significant OpEx and carbon emissions reductions. With the Jotun FPSO serving as a new area host, production from the Balder field is expected to remain at 70,000 to

80,000 barrels per day gross towards 2030.

And now turning to our exploration program. Our leading exploration track record continues with three commercial discoveries so far this year generating new projects. Yesterday, we announced a commercial gas condensate discovery at the Vidsyn ridge very close to Vår Energi's operated Fenja field in the Norwegian Sea. The Vidsyn

Vår Energi ASA

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Q2 2025 Earnings Call 22-Jul-2025 ridge has the potential to hold gross recoverable resources of up to 100 million barrels of oil equivalent where Vår

Energi is the operator with a material 75% interest. The Vidsyn discovery well confirmed gross recoverable resources of 25 million to 40 million barrels of oil equivalent in high quality reservoirs. The remaining potential of the region will be assessed through an appraisal program to facilitate a subsea tieback development.

And as I've already mentioned, we made another discovery, Drivis Tubåen, close to Johan Castberg, which is commercial to tieback to the facilities. And as we announced earlier in the year, we continue to build on the Goliat

Ridge success in the Barents Sea, where we are operator with a material 65% interest. With estimated gross discovered plus prospective recoverable resources above 200 million barrels, this potentially is as big as the

Goliat development.

To assess the exciting Goliat Ridge discovery further, we've recently finished shooting a new 3D seismic survey and we'll follow that with two further appraisal wells in the second half of this year, with the aim to progress the fast-track development of the Goliat Ridge through the Goliat FPSO where there is plenty of available capacity.

Putting this together so far this year we've confirmed 40 million to 60 million barrels of net discovered commercial resources from our exploration program, but the upside is significantly higher from the further appraisal of these discoveries.

And we continue with an active exploration program for the remainder of the year, with 9 further wells to drill, targeting over 110 million barrels of net unrisked resources. It's going to be exciting to see these results come in.

And so we're making significant progress, maturing our upside resource potential into value, through committing to new projects and making new commercial discoveries.

So that rounds off my operational update and I'll now hand over to Carlo to review the financials. Thank you.

Carlo Santopadre

Chief Financial Officer, Vår Energi ASA

Thank you, Nick, and good morning to all. I would like to start by summarizing the key financial highlights of the second quarter. We have achieved a robust realized prices compared to spot and peers with a weighted average price of $70 per boe. We generated strong revenues and an operating cash flow after tax of $766 million in Q2.

We confirm the second quarter dividend of $300 million and on the back of the incoming material production growth and the maturation of our very high quality project portfolio, we plan to sustain this level for the remaining of 2025 and 2026.

In the quarter, we successfully issued $1.5 billion of senior notes refinanced our credit facilities, reducing cost and extending maturity of our debt portfolio. Our balance sheet remains strong and resilient with $3.5 billion in available liquidity and a leverage ratio of 0.9, net debt to EBITDAX. Even in a lower price environment, as we are maturing our high quality resource base, we're adding value to our asset and increasing our financial resilience to impairment strengthening our balance sheet. We're successfully progressing in what is a transformational year for

Vår Energi.

I will now go into the details of our second quarter financial performance. We obtained a robust pricing for our products in the quarter, but relative to spot and peers. In the quarter, we generated more than $1.8 billion of revenue in line with the previous quarter notwithstanding the lower price. Realized oil price in the quarter was $68 per boe above average Brent in the quarter due to lifting schedule. [indiscernible] (00:25:10) Johan Castberg, the significant volume addition to our oil production is at a material premium versus Brent contributing to high grade our entire portfolio. Realized gas price was $79 per boe, well above spot pricing as a result of optimization of indexes and fixed price transaction in our gas sales contracts.

Vår Energi ASA

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Q2 2025 Earnings Call 22-Jul-2025

Going forward, we have used our flexible gas year contracts to lock in high prices in the summer months. We have already executed fixed price transactions with customers and for Q3 we have sold approximately 18% of our volumes at a $90 per boe. For the next gas year starting 1st of October, we have locked in around 15% of volumes, with pricing estimated to be around $80 per boe until end of Q2 2026. We continue to have a robust gas sales portfolio with access to several markets and we continue to have flexibility in the contracts to decide the split between month ahead, day ahead and fixed price.

I also like to mention that our oil production is fully hedged on a post-tax basis for the remaining of 2025 with monthly put option a strike price of $50 per boe. Vår Energi generated solid cash flow in the second quarter. Cash flow from operation after-tax in the quarter was $766 million, a decrease from the previous quarter, mainly due to higher tax payments and temporary negative working capital effect. Our CapEx for the quarter, including exploration, was $761 million but Balder X and Johan Castberg continues to be the largest contributor of the total spend. The 2025 development CapEx guidance of $2.3 billion to $2.5 billion is unchanged.

Our resilient and strong liquidity position continue to improve in the quarter. Here we see the development in our cash position from Q1 2025 to the end of Q2 2025. We generated approximately $1.4 billion in CFFO before tax and working capital movements. Working capital impacted negatively with around $120 million mainly as a result of higher receivable in the end of the second quarter compared to the first quarter. We paid as planned higher taxes in the quarter amounting to around $500 million, up from $213 million in the previous quarter.

We further had a cash outflow of $781 million in investment in our high value growth projects. We distributed, as planned, $300 million in dividend related to the first quarter 2025 as a result of the successful issuance of $1.5 billion senior Notes and the refinancing of the revolving credit facilities, we substantially increased that available liquidity and we are maintaining a diversified long-term capital structure aligned with our business needs. At the end of the quarter, we have a cash balance of $718 million and an overall available liquidity of around $3.5 billion.

In the first half of 2025, we have strengthened our financial position through the successful refinancing of credit facilities and issuance of senior notes totaling $5.2 billion. By doing this, we have reduced the cost of debt, increased our available liquidity, extended the maturity profile and strengthened our core bank group.

Our leverage ratio, net interest bearing debt on EBITDAX ended at 0.9 which is a slight increase from the previous quarter, but continues to be well below our over the cycle target of below 1.3. In light of the production growth in the second half of the year, we spent that ratio to scale back during the remaining part of 2025. Our debt portfolio is well-diversified with a weighted average time to maturity of five years when excluding the 60 years hybrid. This is supporting the execution of our growth strategy towards 2030 and beyond. We have BAA3 rating from Moody's and BBB rating for Standard and Poor's, both with a stable outlook and we are committed to maintain our investment grade rating.

Our strong financial position and our resilient and flexible project portfolio lay a solid foundation for continued material shareholder distribution and growth and it is a unique investment proposition that Vår Energi offers.

Now let's look at the tax guidance for 2025 estimated profits where half is paid in the year and after will be paid in the next year. Please note that from now on we will move from paying a 60 installments per year to 10 installments per year. In the first half of 2025, we paid around NOK 7 billion in three installments. One is Q1 and two in Q2. For the second half of 2025, we expect to pay around NOK 13 billion with two installments in the third quarter and three in the fourth quarter. We have included the tax sensitivity for the first half of 2026, which is

Vår Energi ASA

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Q2 2025 Earnings Call 22-Jul-2025 giving the cash tax estimate at a different price scenario where the middle case is giving around $1.6 billion, while the sensitivities between $0.6 billion and $2.6 billion according to the indicative price range.

Vår Energi has a strong track record of delivering value to our shareholders. Since the IPO, we have returned more than $3.8 billion in dividend maintaining stable payments over the last 14 quarters. Considering the current macro environment, the solid financial performance in the second quarter of 2025, the transformative production growth on stream and our high quality, resilient and flexible product portfolio. We can continue to support attractive and profitable dividends going forward. On the back of this, I'm pleased to confirm a dividend of $300 million for the second quarter and guide a total dividend distribution of $1.2 billion for the full year 2025 and $1.2 billion for the full year 2026.

Finally, I will summarize our full year 2025 long-term guidance. For 2025, our production guidance is 330,000 to

360,000 barrels per day, reaching more than 400,000 barrels per day by Q4 2025. This is up from the previous guiding. We will maintain approximately 400,000 barrels per day in 2026 and further, we will sustain 350,000 to

400,000 barrels per day until 2030. 2025 production cost is expected to come up to come at $11 to $12 per barrel, down to around $10 per barrel by Q4 as we ramp-up production.

CapEx guidance is maintained at $2.3 billion to $2.5 billion in 2025 going down to $2 billion to $2.5 billion thereafter. Exploration expenses and abex will be in the range of $200 million to $300 million and $150 million respectively in the medium to long-term. For this year, we plan to invest around $380 million in exploration activities and expect abandonment expenditures to be around $100 million. We are guiding $300 million in dividend for Q3 and Q4 2025 resulting in a full year dividend of $1.2 billion. Demonstrating strength, we're re also guiding dividend for 2026 of $1.2 billion paid quarterly.

With that, I hand it back to Nick for concluding remarks. Thank you.

Nicholas Walker

Chief Executive Officer, Vår Energi ASA

Well, thank you, Carlo. I have just one final slide to summarize. I'm pleased to report we once again delivered strong results in the quarter. Our key growth projects have been delivered as planned and as a consequence, production this year is expected to be at the midpoint of the full year guidance range. And we're meeting our plans for transformation of growth in 2025 and unlocking future value by moving forward at pace our early phase project portfolio, which means we're on track to sustain 350,000 to 400,000 barrels per day towards 2030.

And we continue to strengthen and improve the resilience of our financial position, incrementally improving the business all the time allowing us to navigate successfully through the cycles. And as a result of our strong performance, we continue to provide predictable and attractive dividend distributions, meaning we're delivering on our strategy for growth and value creation. These are our second quarter 2025 results and the reasons to be invested in Vår Energi.

Thank you for your time. And with that, we'd now like to open up for your questions.

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Q2 2025 Earnings Call 22-Jul-2025

QUESTION AND ANSWER SECTION

Operator

Thank you. We'll now start the Q&A session. [Operator Instructions] The first question will be from the line of Matt Smith from Bank of America. Please go ahead. Your line will now be unmuted.

Matthew Smith Q

Analyst, Bank of America

Hi there. Good morning, Nick. Good morning, Carlo. Thanks for taking my questions. I had a couple, please. The first, sort of a granular one on the production outlook that you show on slide 6 and I guess you are continue to guide the expectations for production for the full year to be in line with the midpoint and I suppose that slightly in contrast with the Q1 and Q2 performance being towards the lower end of your range. So I just wanted to check what was giving you the confidence, what have you seen so far in 3Q to sort of correct and get back to the midpoint of the guidance, so that be the first one on production.

And then the second one, I wanted to come back to the sort of CapEx comments because on the one hand, we're talking about doing more, moving faster all with the goal to sort of sustain production into the 2030s, but on the other hand, you've announced a $500 million of cost savings, I think part of that is CapEx and project deferrals.

So could you talk us through the moving parts here, what's changing, what's not and also the thinking given that the commodity price environment has held up reasonably well so far? Thanks.

Nicholas Walker A

Chief Executive Officer, Vår Energi ASA

Yeah. Good questions, Matt, and thanks for joining. On the production side, I mean, it's been quite a complicated year to forecast this year, given the nine projects coming online with 180,000 barrels a day. And of course, going into the year, we recognized some of that uncertainty in the range, in the thinking, that we came up with. And as I commented the first half has been at the bottom end of the range most of that's because – pretty well all of that's because Johan Castberg came on a little later than we anticipated and the ramp-up took a little bit longer. But, where we are now is all of our key projects are online so, yes, there are two big ones, but Balder – Jotun and

Castberg, but Halten East came online well, is producing well and Ormen Lange Phase III has also come online and they're all online. And the ramp-up is going, I would say, the stability in those assets is rather good and I would say, we're also ramping-up rather well on Balder.

And where we see today and where we are today is we're producing over 350,000 barrels a day. You'll also recognize that we also saw some upside in this year, which we didn't talk about too much at our Capital Markets

Day, so when we put everything together, we now see that we're going to be able to produce around 430,000 barrels a day in Q4, and that's a bit more than we sort of guided or the expectation is. So when you put that together, the second half, I think from what we see today, is going to be rather strong and Jotun is ramping-up rather quickly and where we stand today, we think we're going to get that on to peak rates in September. And so, we think you put that together, we can be in the middle of the guidance range for the year.

And then on your second question about cost savings, I think on this – savings across the board and it's natural when the price comes down, activity drop, the opportunity is to use some of that time to look at how we're spending money in the business and can we do it more efficiently, can we take cost out and we've looked across our whole business and determine that we can do some things slightly differently and re-phase some things that we can achieve the same outcomes basically with less money. Some of it's cost savings, so where we've [ph] read (00:38:58) big contracts recently and we've got lower pricing, some of it's we've chosen to rework some

Vår Energi ASA

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Q2 2025 Earnings Call 22-Jul-2025 projects to make them better but we keep adding projects all the time. When we talk to our Capital Markets Day, it was 25 projects, now we've got 30 and we made – announced another exploration discovery yesterday we keep adding to this and there's an opportunity to optimize all of that and make it better and we're using this opportunity to do that. And that's why we feel confident of taking some cost out but at the same time maintaining the long- term outlook on production for the business. Hopefully that sort of helps you understand how we're looking at this,

Matt.

Matthew Smith Q

Analyst, Bank of America

Got it. Very good. Thank you, Nick. Happy to pass it on.

Operator

Thank you, Matt. The next question will be from the line of Teodor Nilsen from SP1 Markets. Please go ahead. Your line will now be unmuted.

Teodor Sveen-Nilsen Q

Analyst, SpareBank 1 Markets AS

Good morning, Nick, and good morning, Carlo. Thanks for taking my questions. Few questions from me. First, just want to follow-up on the cost saving question and the $500 million you're specifically talking about. [indiscernible]

(00:40:10) cost inflation generally in the industry, I just want to know how you see that, are you seeing the same as [indiscernible] (00:40:18) cost inflation and how is that included in your $500 million cost reduction?

Second question, that is on dividend. Nick, you said that the $1.2 billion dividend for 2026 is set within more realistic oil and gas price scenarios, I just wanted to know where do you see net debt increases after which oil and gas price level and assuming that you do keep the $1.2 billion for dividend.

And then final question for me, that is the Vidsyn discovery congrats on that, looks promising. Can you share any thoughts around potential development solutions and then timeline on that, that would be useful? Thanks.

Nicholas Walker A

Chief Executive Officer, Vår Energi ASA

So I'll cover the first and the last question, and Carlo can talk about dividends for you. So cost savings, I mean, we – our big projects have come to an end and we're into looking forward and committing to new projects. And if you go back six months, I would say there was cost pressure in the industry in a number of areas as I look today,

I think that cost pressure feels to me to be taken out. And in fact, we're seeing that. As we commit to new things, we're able to take cost out, I guess through the market sitting where it is today. Rig rates have gone down. We see that the rates for things have gone down where we've awarded new contracts recently, we've been able to do it at lower pricing.

So what I would say is as I look forward and I think we're seeing less activity in the world and an opportunity, yes,

Norway's a bit more increased but there aren't many new projects coming to market and I think we can play into that and see a lower outlook. And we're getting the benefit of that, we've reworked some projects we've gone around the contracts a bit and we've taken cost out.

So I don't feel the same inflationary cost pressures today that might have been there six months ago. And I think that just reflects the uncertainty in the market, not just within Norway, but internationally. A lot of the equipment that we buy is not just bought in Norway, it's bought internationally.

Vår Energi ASA

(VAR.NO) Corrected Transcript

Q2 2025 Earnings Call 22-Jul-2025

And then maybe I'll just talk about Vidsyn before Carlo talks about the dividends. I mean, it's a great discovery. It sits very close to Fenja where we operate. We have 75% of it. I think it's a gas condensate discovery. Fenja ties into the Njord facility and Njord has capacity to develop this gas condensate through there, so that would be the natural host, it's not that far away. Whether we go through the Fenja facility or have a direct tieback, it's too early to say. We've discovered in the first well, 25 million to 40 million barrels of gas condensate and in very high quality reservoir.

And there's – on this ridge, there's a two or three other prospects and we're – I think we can very simply appraise those, so – and we've got new seismic over the area or two. So we'll be moving forward like we have with everything else to move this forward at pace. It's quite material to us because we've got 75% here, so it's an exciting outcome and I think very good we have other things in the area, too, so it's very positive, I would say. It's a good outcome from our exploration program.

So hopefully that gives you a bit of color around. And it's a bit early to talk too much about the development given that we've just finished the well but we'll move that forward at pace and you know perhaps in the coming months we can be clearer about that. So, Carlo, on dividends.

Carlo Santopadre A

Chief Financial Officer, Vår Energi ASA

Yes. Thank you, Teodor, for your question. When it comes to the dividend and 2026 guidance, clearly the big picture where we are now, where we move forward our main projects is further de-risk compared to a few months ago. Production is coming, the growth is coming and 2026 as well will be a strong year as we guided and of course the production that is coming is giving additional tangibility into it.

[indiscernible] (00:44:32) our ability to generate a significant cash over the longer term at various price scenario

[ph] during this tenure (00:44:37). I believe that, there's also another element to look at, again it's our ability to flex the CapEx and as we are doing, we have always done a lot over and we are now implementing this a bit of flex

CapEx without impacting our long-term view on production. And also our leverage ratio because if you look at the leverage ratio we have, which is 0.9 and we are expecting this to scale back during the course of the year, there is quite a big headroom when it comes to our target of the well below 1.3 or below 1.3.

As such, if I get correctly your question, our ability to sustain the dividend will not realize also a significant headroom when it comes to our financial and debt ratio. So we have quite a significant buffer, I would say, when it comes to the ability of sustaining dividend [indiscernible] (00:45:29) price, which is lower than we see now and

[ph] that ratio will (00:45:34) move significantly. We still remain well below the 1.3. So I hope that this answer your question if I got correctly.

Teodor Sveen-Nilsen Q

Analyst, SpareBank 1 Markets AS

Well, yeah, [ph] well, not precisely but unfortunately (00:45:45) when we say there's a lot of headroom, is that like

$10, $20, $30 per barrel oil price before you need to increase net debt. Do you want to comment on that?

Nicholas Walker A

Chief Executive Officer, Vår Energi ASA

Yeah. But Teodor, we're not going to say we can sustain dividends at a certain price. I think the way to look at this is that we have a resilient business. We need to look at it over the long term. We can sustain production long term with – our CapEx is coming down, our OpEx is coming down. And we have a lot of resilience, we have a lot of

Vår Energi ASA

(VAR.NO) Corrected Transcript

Q2 2025 Earnings Call 22-Jul-2025 liquidity in the company. And I think you have to look at pricing in the long term and realistic pricing levels to sustain world oil and gas pricing, means that we believe that we can sustain our dividend levels and realistic pricing levels in the way we've guided and I think that's the way to look at this.

Teodor Sveen-Nilsen Q

Analyst, SpareBank 1 Markets AS

Okay. Understood. That's all for me. Have a nice summer. Thanks.

Nicholas Walker A

Chief Executive Officer, Vår Energi ASA

Thank you, Teodor.

Carlo Santopadre A

Chief Financial Officer, Vår Energi ASA

Thank you, Teodor.

Operator

Thank you. The next question is from the line of Victoria McCulloch from RBC. Please go ahead. Your line will now be unmuted.

Victoria McCulloch Q

Analyst, RBC Europe Ltd.

[indiscernible] (00:47:05) thanks for your time for questions this morning. A couple from me on Q3 and then one on Goliat. So first of all, on OpEx, it was obviously higher in 2Q. Can I just confirm that's symptomatic of the ramp- ups and that we should expect to see similar higher OpEx in Q3 with Jotun ramping up? Then secondly on maintenance in Q3, you highlighted that the turnarounds are expected to be completed by July. I know that certainly is the case with Snøhvit. Is that across the wider portfolio and so we should see a more muted maintenance impact on the sort of non-ramping-up or non-new fields for Q3? And then just on the Goliat work that you're [indiscernible] (00:47:48) drilling in the second half of this year, you mentioned the fast-track development.

Would that be a development that you'd be looking to sanction in 2026 or is that something that could fall into

2025? Thanks very much.

Nicholas Walker A

Chief Executive Officer, Vår Energi ASA

Good. Maybe I capture those. I think the OpEx – higher OpEx in this quarter is driven by a few things. One is

Castberg is in the ramp-up phase, so you get all of the OpEx but not much of the production. And secondly, we got a disproportionate amount of the turnarounds in the quarter which obviously carry quite a lot of costs, which goes into OpEx, too. And then of course, you got a bit lower production as a consequence of those turnarounds.

So, this was always expected in this quarter at this level and in our forecast. So it's not outside of what we would expect. I think when you go into Q3, of course, we got much more production and we're going to see the – and that new production – Castberg's $4 a barrel plateau. So we're going to see that I think Q3 is going to be at lower

OpEx than Q2 of course. And of course, we've got the ramp-up of the barrels from Jotun, which is also going to drive it down further. So, we are very confident that by the end of the year that we are going to be at the $10 range that we set out, which as we've guided, given the new volumes coming on and the focus on cost control in the business.

Vår Energi ASA

(VAR.NO) Corrected Transcript

Q2 2025 Earnings Call 22-Jul-2025

I think in terms of maintenance activity, in terms of turnarounds, as I commented in my notes, 30,000 barrels a day impacting Q2. And Snøhvit will be complete by the end of July. And so most of the big turnarounds have happened, but there is still some things going on in Q3. I think it represents about 13,000 barrels a day potential impact in Q3, but most of it is skewed this year into Q2.

And then as far as Goliat goes, I mean, this is exciting and we're driving this forward as quickly as we can and we just finished shooting a new 3D seismic survey over the whole structure. We are working to get – to process data by the end of the year, so fast-track to get there. The importance of this is that the current seismic is over 25 years old and you can't really see much on it, and so we're hopeful with new seismic, we can start to understand the subsurface a lot better. And that's one of the reasons this hasn't perhaps moved forward in the past. And then we're going to drill in the second – towards the end of this year, two further appraisal wells. Our aim is to have enough of the subsurface data in our hands to start development planning in earnest at the end of the year, although we've got a team already mobilized on to moving this forward.

And this is my aim sometime during next year that we start to commit to long lead equipment to move this project forward. I think it's a bit early for us to say the timeframe for this, but I'm very confident this is going to turn into a project. And we'll sort of come to timing, I think, a bit later in the year as to when we think we might be able to sanction something and get it on production. But we're aiming to move forward very quickly here. There's a big opportunity at Goliat. There's a lot of capacity available there. And the resources are, I believe, quite significant.

And so it's going to be exciting when we see these further wells in the [indiscernible] (00:51:30) to understand the real scale of this opportunity. So hopefully, that gives you a bit of color on those three items, Victoria.

Victoria McCulloch Q

Analyst, RBC Europe Ltd.

Super. Thanks, Nick. Thanks very much.

Operator

Thank you, Victoria. The next question will be from the line of John Olaisen from ABG. Please go ahead. Your line will now be unmuted.

John A. S. Olaisen Q

Analyst, ABG Sundal Collier Holding ASA

Good morning and thanks for taking my questions. Sorry for coming back to the cost savings of $500 million. It's a huge amount. And production costs going forward on an annualized basis would probably be around $1.5 billion, and I assume that $500 million is not only cost savings from production. So I assume there's some cut in CapEx and exploration as well. Is it possible to split up the $500 million? How much will we see going forward in the lower production cost, and how much is impact on CapEx and exploration? Is it possible to give a split of how the

$500 million is [indiscernible] (00:52:36), please, breakdown?

Nicholas Walker A

Chief Executive Officer, Vår Energi ASA

John, I think Carlo will give a bit of color on this.

Carlo Santopadre A

Chief Financial Officer, Vår Energi ASA

Okay. Thank you for your question, John. So when it comes to $500 million cost reduction, is what we expect this to have roughly a 20% of it, which is impacting the operating cost and the remaining part of which is CapEx and mostly, of course, between the early phase project and base CapEx that we have part of exploration as well. So

Vår Energi ASA

(VAR.NO) Corrected Transcript

Q2 2025 Earnings Call 22-Jul-2025 as you mentioned, it's an important amount, but is what we can deploy as part of our flexibility that [indiscernible]

(00:53:11) and is not impacting our production outlook. It is very important because as you can imagine, those costs, those activities were foreseen in 2026. It would have been contribute to production later on in the plan and sometimes it's even a small impact in 2028 or 2029. And we have taken this opportunity to make these projects better, to mature them further without impacting again our long-term production. So I hope this granularity gives a bit more insight of where we see this reduction.

John A. S. Olaisen Q

Analyst, ABG Sundal Collier Holding ASA

Yeah. So just – so you say 20% cut in production costs and the rest is CapEx and exploration? Is that right?

Carlo Santopadre A

Chief Financial Officer, Vår Energi ASA

Yeah.

John A. S. Olaisen Q

Analyst, ABG Sundal Collier Holding ASA

[indiscernible] (00:53:53)

Carlo Santopadre A

Chief Financial Officer, Vår Energi ASA

Yeah.

John A. S. Olaisen Q

Analyst, ABG Sundal Collier Holding ASA

And on – is it possible to say of those 80% [indiscernible] (00:54:02) cost cuts, how much is cut in exploration and how much is on CapEx?

Nicholas Walker A

Chief Executive Officer, Vår Energi ASA

I mean, we will scale back exploration a little bit next year. I think just naturally, given the prospects that we have and the opportunities we have, I think it goes up and down but we'll still have a material exploration program next year. And we've guided that we will drill 60 wells over a four-year period. We're still going to meet that target.

We're doing a bit 20 this year. I think next year will be a little bit less. So we think about $70 million is the sort of order that we might take out of exploration for next year compared with what we've guided and then the rest is into the capital side of things.

We've got 30 projects that we're moving forward. And there's real opportunity to optimize which ones we move forward and in which place. We can't do all of them at once. And so we're actually in a unique place where we can optimize the projects and make them better. And what we're finding is that by taking a bit more time to sanction things, we can take cost out. We can change the project scope a little bit, and we can also use this current environment to reduce cost and that's also part of it.

John A. S. Olaisen Q

Analyst, ABG Sundal Collier Holding ASA

Vår Energi ASA

(VAR.NO) Corrected Transcript

Q2 2025 Earnings Call 22-Jul-2025

But you do not make any change or – at least right now in the long term in the guidance when it comes to CapEx and exploration, is that right, because you've given guidance for 2026...

[indiscernible] (00:55:36)

Nicholas Walker A

Chief Executive Officer, Vår Energi ASA

No, we haven't changed the long-term guidance, no. And I think we will update the guidance when we come to our capital markets update next year. I think it's fair to say, I've talked about incremental improvements in our business and if you look back over a few years and compare what we say today with what we said two years ago, there's a lot of change and a lot – all in the right direction. Our production has got better, our costs have come down and we're seeing that trend. We set out 350,000 barrels to 400,000 barrels a day long term. What I see is upside in that. And I see upside in that for the same cost base from what we're looking at. And so, actually, I think as we move forward, we're going to make the business look better than it looks today and that gives us opportunity to optimize things, to perhaps slow some things down, to maintain the same outlook, and reduce costs associated with it.

John A. S. Olaisen Q

Analyst, ABG Sundal Collier Holding ASA

And my second question goes to the use of cash flow going forward. You say that you'll be free cash flow breakeven at $40, I assume that is post interest payments, and post lease payments. First, could you confirm that? And then...

Carlo Santopadre A

Chief Financial Officer, Vår Energi ASA

Yeah.

John A. S. Olaisen Q

Analyst, ABG Sundal Collier Holding ASA

Yes, maybe confirm that, please, whether it's interest payment and post lease payment.

Carlo Santopadre A

Chief Financial Officer, Vår Energi ASA

Yes. Yeah. Yeah. The $40 breakeven is...

John A. S. Olaisen Q

Analyst, ABG Sundal Collier Holding ASA

Yeah. That will be for dividend or deleveraging?

Carlo Santopadre A

Chief Financial Officer, Vår Energi ASA

It's confirmed it's correct. What you said is correct. The $40 breakeven is the company breakeven, so it's including clearly the breakeven of each single project as mentioned, $35 for the subsea tieback, and includes also the in service of debt, corporate cost, G&A.

Vår Energi ASA

(VAR.NO) Corrected Transcript

Q2 2025 Earnings Call 22-Jul-2025

Nicholas Walker A

Chief Executive Officer, Vår Energi ASA

And, just on that, John, I would like to see we can make this better. A year ago, that was $45 that number. Now, it's $40. And I think, as we look forward, we're committing to projects that have breakevens below $35 a barrel.

We do infill wells at $30 a barrel. Our OpEx is coming down. I think we're going to be able to reduce that number over time, and again, make the business progressively more robust.

Carlo Santopadre A

Chief Financial Officer, Vår Energi ASA

Yeah.

John A. S. Olaisen Q

Analyst, ABG Sundal Collier Holding ASA

But do you plan to de-lever the balance sheet over the next one to two years or will everything go to dividend or free cash flow [indiscernible] (00:58:20)?

Nicholas Walker A

Chief Executive Officer, Vår Energi ASA

I think a lot depends on balancing the outcomes here. So, we intend to fund the growth program with what's ahead of us and sustain production long term, because I think that's what drives revenue. We intend to fund the dividends, we intend to maintain an investment grade balance sheet. And then, depending on the price outlook, we might choose to flex those things and, [indiscernible] (00:58:46) high prices, of course, we can de-lever a bit more, but we're going to balance all of those things in a responsible way, but I think we can do all of them.

John A. S. Olaisen Q

Analyst, ABG Sundal Collier Holding ASA

That'd be great. That's all for me. Thanks a lot and have a great summer. Thank you.

Nicholas Walker A

Chief Executive Officer, Vår Energi ASA

Thank you very much. Thank you.

Carlo Santopadre A

Chief Financial Officer, Vår Energi ASA

Thanks, John.

Operator

Thank you. The next question is from Lydia Rainforth from Barclays. Please go ahead. Your line will now be unmuted.

Lydia Rainforth Q

Analyst, Barclays Capital Securities Ltd.

I'm just going to come back to the dividend side. And thank you for giving that visibility. And so, one of the questions that I've had this morning is, I guess, whether – or what really the opportunity cost on lower spending is that – is this really that to maintain that dividend you're having to give the opportunity, so I just love you to kind of expand a little bit on that. I know you've talked about it a lot already.

Vår Energi ASA

(VAR.NO) Corrected Transcript

Q2 2025 Earnings Call 22-Jul-2025

And then, the second one was just going back to the production numbers. And I'm not asking you to give 2026 guidance exactly, but the 430,000 barrels sounds as a great exit rate for this year, [indiscernible] (01:00:06)

400,000 barrels for next year, but that does imply quite a big decline rate. So, is there anything [indiscernible]

(01:00:11) next year that we should be thinking about? Or are we at the point where – and I pick up on what you said earlier that you can now do more for the same cost base. Is that the sort of face of that kind of Vår Energi that went that way and over the next couple of years, we'll see more and more evidence about? Sorry, that's probably about four questions there. Yeah.

Nicholas Walker A

Chief Executive Officer, Vår Energi ASA

In terms of the spend, Lydia, well, could you just clarify the question a bit for us again?

Lydia Rainforth Q

Analyst, Barclays Capital Securities Ltd.

Do you think in terms of the choices in the capital framework, and obviously, the choice to keep the dividend and then cost – and then, obviously, reducing the CapEx side, but is there an opportunity cost of that in terms of, are we keeping the dividend at the expense of something significant that you would have been able to do?

Nicholas Walker A

Chief Executive Officer, Vår Energi ASA

No, I don't really see it like that. I see, it's natural and an opportunity – when the prices become lower, I think it's a natural opportunity to try and make the business more efficient and competitive. And I think it creates the opportunity to do that. And as we've continued to put these four companies together and make the company work better and more efficient, we continue to see opportunities to take cost out and make it more efficient. And this environment of a lower price environment also provides the catalyst to be able to do that. And any responsible company should take advantage of that opportunity. And I know our partners are in other areas working to take cost out of their businesses as well, reflecting this current environment.

And, because before – if you go back six months and the comments we made earlier, I mean, I think there was cost pressure in the other direction. And we've seen it go the other way. And I think we can do all of that without really making any difficult choices here. And so, I don't see it as a lost opportunity, paying dividends to create the opportunities, just making the business more efficient. And I think that's what you would expect of us in this environment.

And I think in terms of the production decline, we've guided Q4 this year to around 430,000 barrels. That's because everything's online. And we don't have any planned shutdowns. If you go into next year, it's not about decline, we guided approximately 400,000 barrels for next year. And the reality is that going to be some planned shutdowns during the year. And it's a bit early to sort of guide it beyond the more specifically in the approximately

400,000 barrels. So, I don't think you should look into this is we're declining from 430,000 barrels to 400,000 barrels very quickly is more that is – there's some shutdowns and other activity in the business.

Lydia Rainforth Q

Analyst, Barclays Capital Securities Ltd.

That's it. Thank you.

Vår Energi ASA

(VAR.NO) Corrected Transcript

Q2 2025 Earnings Call 22-Jul-2025

Nicholas Walker A

Chief Executive Officer, Vår Energi ASA

Thank you.

Operator

Thank you, Lydia. As there are no further questions on the telephone conference, I'll hand it back to

Head of IR, Ida Marie Fjellheim.

Ida Marie Fjellheim A

Head-Investor Relations, Vår Energi ASA

Okay. We have one question from Anders Rosenlund at SEB. Is there anything to be said about [indiscernible]

(01:03:37)? Will the prospect be revisited at a later stage?

Nicholas Walker A

Chief Executive Officer, Vår Energi ASA

I mean it's a disappointed outcome, obviously. The well was dry and potentially large prospect, it was always relatively high risk and that's how we saw it. So, as we see it today, technically, I wouldn't see this – there's many other opportunities there, but it may be a question to direct to the operator there in terms of this. But from what I'm aware today is, we don't see much opportunity. But it's the nature of drilling higher risk, higher reward opportunities and the most of the time, didn't work, and some of the time, you are lucky enough that they do, and you get a great outcome. And this one, unfortunately, didn't.

Ida Marie Fjellheim A

Head-Investor Relations, Vår Energi ASA

Thank you. One final question here about our decarbonization plan. You talk about your net zero target for 2030.

What are the assets that you'll need CCS for to offset unavailability of electrification?

Nicholas Walker A

Chief Executive Officer, Vår Energi ASA

Okay. So, we get to this by three means. First of all, further electrification projects. We have some in development today, and we've got some in the sort of project concept stage, which are moving forward. And hopefully, we'll get to invest into those. Secondly, it's about optimizing our facilities. And a good example of this is in the Balder area where we intend to decommission the Balder FPU, and put the flow through the new FPSO. And that has very high carbon emissions, so this is a good piece of reducing OpEx, reducing carbon emissions, simplifying our asset base.

And then, the third piece of this is efficiency. And then, what we can't reduce, then we're going to offset with natural carbon projects. And what this is, is tree planting reforestation projects and we have a partnership with a company here in Norway and we've secured enough capacity to be able to reach a point where that we become carbon neutral in our business by 2030 and our net operational emissions by 2030. So, CCS does not play a part in the way we have our plan.

We do have two CCS licenses, and we are looking at those to see whether we can create a business case. For me, to make this work, you have to hook up the emitter, the transport and the sequestration. Clearly, it's technically possible, but the business case for this is what we're working on. And I don't know the answer today whether we can create a business case that makes it economic to do. But it's something we're looking hard at, and we have the capacity and capability to do it. And I think it could be a good addition to our decarbonization

Vår Energi ASA

(VAR.NO) Corrected Transcript

Q2 2025 Earnings Call 22-Jul-2025 plan long term, if we can find a way to make it commercial. But as we stand today, we don't know whether we can do that. So, I see it as an option on the future. That's sort of how we look at CCS at the moment.

Ida Marie Fjellheim

Head-Investor Relations, Vår Energi ASA

Great. Thank you very much. And thank you all for dialing. That concludes the second quarter 2025 results call for

Vår Energi. I wish you all a great summer.

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