This article first appeared on GuruFocus .
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Production:Record high production of 406,000 barrels per day.
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Cash Flow from Operations (CFFO):$1.1 billion post-tax in the quarter.
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Available Liquidity:Stable at $3.5 billion.
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Leverage Ratio:Reduced to 0.7 times at quarter end.
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Dividend Distribution:$300 million for Q1, with guidance of $300 million for Q2.
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Revenue:Nearly $2.7 billion, a 45% increase from the same quarter last year.
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Average Realized Price:$77 per BOE.
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Free Cash Flow:$475 million in the quarter.
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Production Costs:$10.4 per barrel in Q1.
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Development CapEx Guidance:$2.5 billion to $2.7 billion for the full year.
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Exploration Expenses:$250 million to $300 million.
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Operational Efficiency:97% production efficiency in the quarter.
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2P Reserves:1.3 billion barrels.
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2C Contingent Resources:Around 900 million barrels.
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Tax Payments:NOK6.2 billion in Q1, expected NOK8 billion in Q2.
Release Date: April 22, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Var Energi ASA ( VARRY ) reported record high production of 406,000 barrels per day in Q1 2026, supported by strong performance from operated assets with 97% production efficiency.
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The company delivered strong financial performance with significant cash flow from operations post-tax of $1.1 billion and available liquidity stable at $3.5 billion.
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Var Energi ASA ( VARRY ) confirmed a dividend distribution for Q1 2026 of $300 million, marking 17 consecutive quarters of stable or growing dividends.
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The company has a high-quality portfolio with a balanced commodity mix, including being one of the largest gas exporters from Norway, leveraging high gas prices in Europe.
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Var Energi ASA ( VARRY ) continues to reduce carbon emissions intensity and aims to become carbon neutral in net equity operational emissions by 2030, ranking in the top 15% of the industry globally for ESG leadership.
Negative Points
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Production costs were slightly higher than target at $10.4 per barrel in Q1 2026 due to the strengthening Norwegian kroner.
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The company faces planned turnarounds in Q2 and Q3 2026, which will impact production, although the annual average reduction is expected to be small.
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Var Energi ASA ( VARRY ) has decided to terminate further work on the electrification of the Balder Grane area due to challenging economics.
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The realized gas price was approximately $7 below the average spot market reference price due to a combination of sales strategies.
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The company has been in a stable underlifting position for six consecutive quarters, although a significant reversal is expected in Q2 2026.
Q & A Highlights
Q: Nick, you mentioned extraordinary dividends. Is that the same kind of play you guys have in mind for Vr as well? And regarding portfolio opportunities, do you see Equinor's NCS 2035 plan as an efficiency tailwind for Vr or a potential M&A opportunity? A: Nicholas Walker, CEO: Our focus is on providing long-term sustainable dividends. If high prices continue, we may consider an extraordinary dividend at year-end. Regarding project efficiency, we are already accelerating projects and support Equinor's approach, which aligns with our strategy and benefits our shared projects.
Q: How do current high prices and cash flow impact your investment appetite? Should we expect accelerated project developments? Also, what's your view on the spread between your realized oil prices and Brent if Hormuz opens today? A: Nicholas Walker, CEO: We continuously optimize our investment outlook to create long-term value. While we aim to maintain production above 400,000 barrels per day, we are open to optimizing further. Carlo Santopadre, CFO: Even if Hormuz opens, premiums will remain in the short term due to logistical stabilization needs.
Q: Regarding the extraordinary dividend, will it fall under your policy of 25% to 30% of CFFO? Also, could you share more about your hedging policy for oil and gas? A: Carlo Santopadre, CFO: The dividend policy remains intact, and extraordinary dividends will be part of it. Our hedging strategy aims to secure a floor without capping upside, and we will continue this approach actively.
Q: Can you explain the production changes from January to the full quarter? Also, what's the timing expectation for Hammerfest to take gas from the Goliat Gas expansion? A: Nicholas Walker, CEO: Production changes are due to timing of new wells and asset performance. We are on track to meet our guidance. For Goliat Gas, we expect Hammerfest to take gas when it goes on decline in the 2040s, but earlier if capacity allows.
Q: Q1 '26 was the sixth quarter with significant underlift. Is this a coincidence? When should we expect a reversion? Also, are there fields with significant premium to Brent? A: Carlo Santopadre, CFO: Underlifting is operational and fluctuates. We expect a reversal in Q2. Significant premiums are seen in fields like Johan Castberg, Grane, and Balder.
Q: How flexible is Vr Energi in adjusting maintenance schedules or bringing volumes online quicker? What's your medium-term view on gas prices versus oil? A: Nicholas Walker, CEO: We have limited flexibility in maintenance but maximize production daily. Carlo Santopadre, CFO: Both gas and oil prices are impacted by current disruptions, but we expect sustained prices due to storage needs and market dynamics.
Q: How much of the reported gas production is used for own consumption? A: Carlo Santopadre, CFO: Approximately 8,000 BOE per day is used for own consumption.
Q: Could you explain the gap between Balder's current production and its capacity? Should we expect any upside? A: Nicholas Walker, CEO: Balder wells have high initial rates and long tails, requiring continuous investment. We are working on debottlenecking to improve capacity, and we aim to sustain around 80,000 barrels per day long term.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
