First quarter results bodes grim for Norway’s third-largest oil company, Vår Energi, which see net profits dwindle substantially.

The company thus books a USD 195m profit in the first three months of the year, effectively slashing its bottom line in half from the USD 431m generated in Q1 2022. The results also marks a 12% dip from fourth quarter 2022.

”We deliver continued strong cash generation in the first quarter supported by improved production efficiency, stable oil and gas volumes and high realized prices,” says Vår Energi CEO Torger Rød in a press release.

Daily output in the year’s first quarter came in at 214,000 barrels of oil equivalent per day (oepd). Vår Energi guides for an average production output in the range of 210,000-230,000 barrels oepd throughout the year.

The average volume weighted realized price was USD 116 per barrel, of which realized oil prices came in at USD 84 per barrel and realized gas price registered at USD 176 per barrel. Additionally, first quarter product costs reduced to USD 13.1 per barrel on average.

In the press release, Torger Rød singles out the company’s oil discovery in the Barents Sea and says the company puts a lot of faith in additional findings during the year.

”Our exploration success continued with the Countach oil discovery in the Barents Sea, and we have several attractive prospects to be drilled during the year,” says Rød.

Strides towards meeting the company production target of above 350 oepd by the end of 2025 are progressing according to plan, says Torger Rød. This indicates that Frosk, Bauge and Hyme developments have started production while Fenja is set to come on stream later in the second quarter. And that is why the CEO believes the future holds promise despite the dip in profits.

”Overall, we maintain a high activity level to deliver more than 50% production growth over the next three years,” he concludes.