Vår Energi: Fourth quarter and full year 2022 production update

24 Jan 2023 07:00 CET

Sandnes, Norway, 24 January 2022: Vår Energi ASA (OSE: VAR, the "Company") will
publish its financial report for the fourth quarter and full year 2022 on
Thursday 16 February. Today, the Company provides an update on production and
sales volumes and other relevant items.

Vår Energi's net production of oil, liquids and natural gas averaged 214 kboepd
in the fourth quarter of 2022, stable compared to 214 kboepd in the third
quarter of 2022 and a decrease of 18% compared to the fourth quarter of 2021¹.
Production for the full year 2022 was within the revised guided range at 220.1
kboepd (down from 242 kboepd in 2021¹).

Production in the fourth quarter was negatively impacted by the fire at Åsgard B
in November. This was balanced by positive contribution from all the other hub
areas compared to the previous quarter.

The production split in the fourth quarter was stable from previous quarter with
63% oil and NGLs (liquids) and 37% gas. During the quarter, the Company
continued to reduce NGL recovery to increase gas volumes and sales to capture
the current favourable gas prices, representing approximately a reduction of 2
kboepd on an annual basis. Total volumes produced in the fourth quarter were
19.7 mmboe whereas volumes sold in the quarter amounted to 20.5 mmboe.

The Company obtained an average realised price (volume-weighted) of USD 115 per
boe in the quarter in a continued strong commodity price environment. Realised
gas price of USD 182 per boe is a result of flexible gas sales agreements,
allowing for optimisation of indices and various exit points in Europe. Vår
Energi had fixed price contracts for approximately 30% of fourth quarter gas
volumes at an average price of USD 150 per boe.

Q4 2022 Q32022 Q4 2021¹ FY2022 FY 2021¹
Production (kboepd)
Crude oil 122.4 122.0 142.6 123.7 136.9
Gas 78.3 78.8 94.6 81.7 86.7
NGL 13.5 13.7 21.3 14.7 22.2
Total 214.3  214.5 258.6 220.1 245.8

Realised prices (USD/boe)
Crude oil price 86.6 107.8 80.4 101.7 70.4
Gas price 181.6 203.9 148.3 174.5 79.5
NGL price 54.7 61.8 60.6 65.4 45.0
Average (volume-weighted) 115.1  139.0 103.4 124.1 70.9

Volumes sold/lifted (mmboe)
Crude oil 12.6 10.1 12.3 45.9 49.0
Gas 6.6 6.6 8.0 27.1 28.0
NGL 1.3 1.4 1.8 5.8 8.2
Total 20.5  18.1 22.1 78.8 85.2

Total production (mmboe) 19.7 19.7 23.8 80.3 89.7
Over/(Underlift) (mmboe) 0.8 -1.6 -1.7 -1.5 -4.5

¹ With effect from 1 January 2022, the Company adjusted its gas conversion
factor from 6.65 to 6.29 boe per 1 000 Sm[3] gas to be in line with Norwegian
industry practice based on typical properties on the NCS. Production in Q4 2021
recalculated from 259 kboepd to 253 kboepd with adjusted conversion factor

Other items

Vår Energi's functional currency is NOK, whilst interest-bearing loans are in
USD. The strengthening of the NOK in the fourth quarter 2022 is expected to lead
to a related net exchange rate gain of approximately USD 280 million.

Vår Energi has changed the calculation of over-/underlift in the financial
statements to be in line with other operators on the NCS. From the fourth
quarter of 2022, over-/underlift positions are valued at production cost.

Non-cash impairment charges are estimated to be in the range of USD 100 million
before tax (around USD 25 million post tax) for the fourth quarter, mainly
related to Balder. There are no material changes to the reserves, production
profile or project economics of Balder that have resulted in the impairment.

Following the recent reorganisation of Vår Energi, the categorisation of the key
strategic hub areas has changed to be the Barents Sea, The Norwegian Sea
(including Åsgard), North Sea (including Tampen) and Balder area (including
Grane). Fields previously categorised as 'Other' have been allocated to the hub
areas. Historic data per field can be found on https://investors.varenergi.no/.

As previously communicated, the following items impacted the free cash flow in
the fourth quarter: Cash tax payments of NOK 17 billion (USD ~1.7 billion),
final payment to Exxon of USD ~340 million and a dividend payment for the third
quarter of USD 290 million.

The information above is based on a preliminary assessment of the Company's
fourth quarter and full year 2022 financial results and may be subject to change
until the financial statements have been finally approved and published by the
Company.

Presentation of Fourth quarter and full year 2022 and Capital Markets Update to
be held on 16 February

Vår Energi will release its quarterly results on 16 February at 07:00 CET. A
presentation and webcast including an update on the company's growth strategy
and plan will take place in Oslo at 10:00 CET.

All presentations will be held in English and transferred via live
webcast through
investors.varenergi.no (https://eur06.safelinks.protection.outlook.com/?url=http
s
%3A%2F%2Finvestors.varenergi.no%2Fhome%2Fdefault.aspx&data=05%7C01%7Cida.fjellhe
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z
HumKXdoIhwpzFZxNyVHdC4qDoQtf6qk%3D&reserved=0), with the possibility to ask
questions. The report, presentation and webcast will be available at
www.varenergi.no. Please register your interest here:
 https://pages.oiiku.com/f231f7fb3a58b5ca8dc855faf97a24894106f4badbe330006f66f61
2
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Contact

Investor relations

Ida Marie Fjellheim, Head of Investor Relations

+47 90509291

ida.fjellheim@varenergi.no

Media relations

Andreas Wulff, VP, Communication
+47 92616759
andreas.wulff@varenergi.no (andreas.wulff@varenergi.no?subject=V%C3%A5r%20Energi
%
20CMU%202023)

About Vår Energi

Vår Energi is a leading independent upstream oil and gas company on the
Norwegian continental shelf (NCS). We are committed to deliver a better future
through responsible value driven growth based on over 50 years of NCS
operations, a robust and diversified asset portfolio with ongoing development
projects, and a strong exploration track record. Our ambition is to be the
safest operator on the NCS, the partner of choice, an ESG leader and a net-zero
producer (Scope 1 and 2) by 2030. Vår Energi has more than 900 employees and
equity stakes in 36 fields producing net 220,000 boe per day in 2022. We have
our headquarters outside Stavanger, Norway, with offices in Oslo and Hammerfest.
To learn more, please visit varenergi.no.

This information is subject to disclosure requirements pursuant to section 5-12
of the Norwegian Securities Trading Act.

More information:
Access the news on Oslo Bors NewsWeb site

580589_Var_Energi_Q4_2022_Trading_update.pdf