Quant Investing's Shareholder Yield Letter for the month ended June 30, 2025.
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Var Energi AS – Norway
Description
Var Energi ASA (Var Energi) is a Norwegian oil and gas company that specializes in the exploration and production of oil and natural gas on the Norwegian Continental Shelf.
As of the end of 2024, the company owned interests in 40 producing oil and gas fields.
Sales by Geography
Var Energi operates exclusively within the geographical area of Norway. As such, 100% of its sales is derived from exploration and production activities on the Norwegian Continental Shelf.
Market Presence
Var Energi brand and is recognized as one of the largest independent oil and gas producers in Norway.
Management and Shareholding
Nicholas Walker serves as the Chief Executive Officer of Var Energi. There is no record indicating that he or any other members of the executive team or board of directors are large shareholders in the company.
The largest shareholder is Eni SpA, holding 63.0% of the shares and valued at NOK 4,336 million (USD 427 million).
Share Buyback Programs
The company does not currently operate a general share buyback program for its publicly traded shares.
Instead, the company’s main share repurchase activities are linked to employee share purchase and savings programs.
However, the number of shares outstanding remained unchanged, indicating no impact from repurchases.
Dividend Policy
Var Energi will pay a dividend of USD 300 million for Q1 2025 (NOK 1.245 per share), up 4.4% from Q1 2024 when it paid NOK 1.192 per share.
The company has raised its dividend policy from 20–30% to 25–30% of cash flow from operations after tax.
A similar USD 300 million dividend is planned for Q2 2025, payable in the third quarter.
Recent results
Total income fell by 4.3% to USD 1,871 million, down from USD 1,956 million in Q1 2024. The decline was due to lower overall production (down 9%), despite stronger prices.
EBIT (earnings before interest and taxes) was USD 972 million, down 7.8% from USD 1,054 million in Q1 2024, primarily due to lower production and higher depreciation.
Net profit increased significantly to USD 453 million, up 353.0% from USD 100 million during the prior year period, the increase mainly driven by a USD 339 million foreign exchange gain as the Norwegian krone strengthened against the U.S. dollar.
Earnings per share rose to USD 0.18 (Q1 2024: USD 0.04), matching the increase in net profit.
Shares outstanding remained at 2.50 billion ordinary shares, and 4 class B shares as of 31 March 2025, with no changes from previous periods.
Operational Highlights
Halten East and Johan Castberg projects began production in March 2025. Johan Castberg is ramping up to 66,000 barrels/day net to Var Energi; while, Halten East targets 20,000 barrels/day at peak later in the year. Balder X project is on track to start by end of Q2 2025.
A new oil discovery at Zagato in the Goliat area added between 15-43 million barrels in resources and raised Goliat Ridge’s gross discovered and prospective resources to over 200 million barrels.
Production efficiency on operated assets reached 97% in Q1 2025.
Exploration efforts continued with 20 wells planned in 2025.
Outlook
Full-year 2025 production guidance remains at 330,000–360,000 barrels/day, with an end-of-year target of over 400,000 barrels/day, up from 272,000 in Q1.
Unit production cost is expected to drop to around USD 10 per barrel by Q4 2025 and USD 11 to 12 per barrel for the full year compared to USD 11.6 in Q1.
Var Energi sees risks from:
- Commodity price volatility
- Geopolitical instability
- Resource availability on the Norwegian Continental Shelf
- Climate regulations and CO₂ taxes, which are increasing to ~NOK 2,240/ton by 2030
Further Reading
Current Newsletter Portfolio
Notes:
The Shareholder Yield Letter portfolio is an equally weighted strategy and does not include dealing charges to buy or sell securities. Taxes are not included in total return calculations. “Return” includes gains from price appreciation, dividend payments, interest payments, and stock splits. For securities not quoted in Euro the total return is shown in the currency the security is quoted in. Sources for price data: Yahoo! Finance (finance.yahoo.com), Financial Times (www.ft.com), and company websites.
The Shareholder Yield Letter is published by Serendipity Ventures (UG) haftungsbeschränkt a limited liability company incorporated in Germany. The company’s address is Langbehnstr. 15, 22761, Hamburg, Germany. Telephone: +49 40 4146 6659, Email: [email protected]
Newsletter’s Investment Strategy
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Be sure to look at the two flow charts at the bottom of the article.
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Stop buying when markets are falling!
The newsletter only recommends new investment ideas if the moving average of the MSCI World index is above its 200-day simple moving average (SMA).
The 200-day SMA rule only applies to the recommendation of new investment ideas, the stop loss strategy (see below) applies to existing ideas.
The index we use:
- Developed Markets World-Wide - MSCI World USD Index
(Click on the links to see a price chart with its 200-day simple moving average)
The Stop Loss strategy
The Shareholder Yield Letter follows a strict stop loss system which sells an investment if it has fallen more than 20% from the all-time high.
Stop-loss Rules.
The following are the rules of the newsletter’s stop loss strategy:
- A trailing stop-loss where you calculate the losses from the highest price the company has reached since it was recommended.
- Only look to see if the stop-loss percentage has been exceeded once a month, on the newsletter’s publication date. If you look at it daily, you may sell if the share price becomes volatile. This will also ensure that you keep your trading costs as low as possible.
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- Measure the trailing stop-loss in the currency of the company’s primary listing. This means measure the stop-loss of a Swiss company in Swiss Francs (CHF) even if your portfolio currency is Euro (EUR).
- Adjust the trailing stop-loss for dividend payments as the share price usually falls by the amount of the dividend payment.
- Reinvest the cash from the sale in a current newsletter investment idea. This will make sure that you sell losing investments and invest the proceeds in the current best ideas
