Var Energi ASA

Overview Key strengths Key risks Strong growth ahead in projects that have relatively low execution risks. Relatively high production cost for its oil and gas. A flexible dividend policy and conservative leverage targets. Concentration in Norway, although this is a stable country. Robust liquidity and ample financial flexibility. No diversification outside upstream. Largest shareholder provides additional comfort. Var Energi ASA completed the acquisition of Neptune Energy Norge on Jan. 31, 2024. In our view, this merger will have a positive effect on Var Energi's business risk profile due to the resulting accelerated production growth toward 400,000 barrels of oil equivalent per day (boepd), increased operatorship, and lowering production costs per barrel (/bbl). In our view, it will also balance the

...The Neptune transaction, coupled with organic growth, is set to boost production through 2025. Var Energi ASA completed the acquisition of Neptune Energy Norge on Jan. 31, 2024. In our view, this merger will have a positive effect on Var Energi's business risk profile due to the resulting accelerated production growth toward 400,000 barrels of oil equivalent per day (boepd), increased operatorship, and lowering production costs per barrel (/bbl). In our view, it will also balance the portfolio with more gas and added production from the Barents Sea. The acquisition was funded through available liquidity and credit facilities, which has resulted in a temporary increase of net debt. However, we anticipate the metrics will remain commensurate with the '###' rating, with funds from operations (FFO) to debt staying above 45%....

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