Research Update: Norway-Based Oil And Gas Company Var Energi ASA Rated 'BBB'; Outlook Stable

We consider Norway-based oil and gas exploration and production company Vår Energi to be well diversified within Norway, reducing the risks associated with its concentration in a single region. Although the company has issued only a portion of its proposed debt, elevated oil and gas prices support our view that the company's near-term performance will remain very strong. Its operational performance, cash flow generation and ample liquidity also support the rating. We therefore assigned a 'BBB' rating to Vår Energi ASA. The stable outlook indicates that we consider that Vår Energi has sufficient headroom under the rating to handle most adverse scenarios, and that it will maintain funds from operations (FFO) to debt at about 45% over the cycle. The

...- We consider Norway-based oil and gas exploration and production company Vsr Energi to be well diversified within Norway, reducing the risks associated with its concentration in a single region. - Although the company has issued only a portion of its proposed debt, elevated oil and gas prices support our view that the company's near-term performance will remain very strong. Its operational performance, cash flow generation and ample liquidity also support the rating. - We therefore assigned a '###' rating to Vsr Energi ASA. - The stable outlook indicates that we consider that Vsr Energi has sufficient headroom under the rating to handle most adverse scenarios, and that it will maintain funds from operations (FFO) to debt at about 45% over the cycle....

Research Update