Var Energi ASA

Good morning, everyone, and a warm welcome to Voronashi's first quarter 2025 results. The presentation today will be given by our CEO, Nick Walker, and our CFO, Carlo Santopada. Nick and Carlo will present the results, and afterwards, we will open up for Q&A. I will now give the word to Nick.

Thank you, Ida, and good morning to you all, and a warm welcome to our first quarter 2025 results presentation. I'm pleased to report strong results in line with expectations and that we're on track to deliver transformative growth in 2025. We're once again in a more uncertain market environment and Vore Energy's resilience and flexibility will allow us to navigate successfully through the cycles, which I'll come on to during my remarks this morning. And as a result of our resilience, we continue to provide attractive dividend distributions. Also today, you'll see that we are launching a new company logo with a more modern feel and reflecting the rebranding of ENI, our major shareholder, a year or so ago. I think our rebranding highlights the significant benefits we get from being able to draw on the extensive capabilities and expertise of ENI that we do at multiple levels and which has material value for shareholders. So now let us look at the highlights for the quarter. We delivered operational performance in line with expectations, with production, as you can see, at 272,000 barrels of oil equivalent per day in the first quarter, supported by continued strong performance at our operated assets. And in March, we saw the successful startups of Holten East and Johan Casberg projects, which are now both ramping up. We continue to deliver strong financial results with CFFO post-tax in the quarter of $1.3 billion, We maintain our strong focus on cost discipline with reduced operating cost of $11.6 per barrel in the quarter, which is within guidance. Our gas sales strategy continues to create value, and we've locked in around 20% of our gas volumes in the summer period at high prices. We increased liquidity through the recent issuance of 1 billion euro senior notes, which was significantly oversubscribed. And we reduced net debt at the end of the quarter with a leverage ratio of 0.8 times. And 4NG is one of the fastest growing EMPs globally. And we're on track to deliver on our 2025 growth target and unlock future value. We'll add around 180,000 barrels of oil equivalent per day at peak from nine project startups in 2025. And we're on track to deliver over 400,000 barrels per day in the fourth quarter this year. The Oten FPSO is now successfully moored at the field location, and the Boulder X project is on track to start up at the end of the second quarter. And our leading exploration track record continues, highlighted by the recent Zagato discovery, unlocking significant potential in the Goliata area. And lastly, we continue to provide attractive shareholder distributions. We confirm a dividend for the first quarter of approximately 12 US cents per share, in line with guidance. which is to be distributed in May. And we're providing Q2 2025 dividend guidance of $300 million, the same as for Q1, which means we've paid stable or growing dividends for the last 13 quarters. And in the current uncertain market environment, VoEnergy's business remains resilient, with a low free cash flow breakeven of around $40 per barrel, averaged over the period 2025 to 2030, and generating between $5 and $9 billion of free cash flow over the same period at an oil price range of $65 to $85 per barrel, inclusive of a planned investment program to sustain production long-term. And with around 70% of our future capital spend uncommitted, this provides us with flexibility to manage the business through the cycles, giving us the option to slow down spend if these lower prices persist. demonstrating the resilience and flexibility of our company. So now let us look at some of the detail. VoEnergy is one of the fastest growing EMPs globally, and we're the third largest oil and gas producer in Norway. And we've built a high quality diversified asset base in all areas of the NCS, with interest in around 50% of all producing fields and infrastructure, and as you can see, a large exploration footprint. We're also one of the largest exporters of gas from Norway, with gas making up a material share of our production mix, 35% in the first quarter. This provides a natural hedge to our financial outlook. And this amazing portfolio, which provides lots of optionality, is driving our growth and sustaining production. And we're stepping up the pace to realize this value. And the mantra in the company is more faster. And I believe we will also incrementally improve the outlook, increasing resources, reducing costs. And you'll see examples today where the business has already moved on from what we outlined at our CMU just a few months ago. This incremental improvement will create significant value. And we are firmly on track to deliver transformational production growth in 2025. from 280,000 barrels of oil equivalent per day in 2024. We'll grow to over 400,000 barrels per day in the fourth quarter this year. This is double 2023 levels. This is driven by nine project startups that will happen during the year, adding around 180,000 BOEs per day of new production at peak levels. And we're also guiding approximately 400,000 barrels per day in 2026. And with our high quality portfolio with significant upside, we can organically sustain production at 350 to 400,000 barrels per day towards 2030. And looking now at how we will deliver this production growth in 2025. First quarter production came in at 272,000 barrels of oil equivalent per day, which is in line with our expectations. This was supported by excellent production efficiency from our operated assets. As you can see, 97% production efficiency in the quarter. And the nine projects that will drive our production growth through the year are all on track to start up as scheduled. With the key projects being firstly Holton East, which started up in mid-March. This will ramp up as new wells are brought on stream through the year and is expected to reach pre-net production of around 20,000 barrels per day in the fourth quarter. Johan Carstberg started up at the end of March and is expected to ramp up to plateau levels of 66,000 barrels per day net during the second quarter. And the Boulder X project, where we're on track to commence production by the end of the second quarter and ramp up over a three to four month period to peak rate of around 70,000 barrels per day net. In addition, we have a significant infill drilling program of more than 30 wells planned to come online during the year. which arrested the decline from existing productions. Around one quarter of the wells were completed in the first quarter. And where we stand today, the company expects to reach the midpoint of the production guidance we've given of 330 to 360,000 barrels per day for the full year 2025, dependent on the startup timing and ramp up profile of the new fields coming online through the year. And we're on track to produce over 400,000 barrels per day in the fourth quarter. And now looking at production costs. As you can see, we have a strong trend of reducing unit costs. Operating costs were $11.6 per barrel in the first quarter within the guided range. This is around 20% reduction since 2023 levels. Looking forward, we expect to reduce unit OPEX to around $10 per barrel in the fourth quarter this year. This is driven by the new fields coming on stream that have OPEX of around $4 per barrel and a continued high focus on realizing cost synergies and improvements. And we expect to be able to sustain at this level long term. I think this performance demonstrates strong cost discipline within the organization and is a good example of the incremental improvements I talked about earlier. And responsible operations are key to our license to operate, and our ambition is to be the safest operator. Overall, we have a good safety and environmental trend, which is generally getting better. In the first quarter, we had a good outturn with zero actual serious incidents. This performance takes strong focus every single day. Also, we continue to position the company to adapt to the energy transition. to ensure relevance and investability long-term. We're top quartile in the industry globally on carbon emissions intensity, and our methane emissions continues at the near zero level. So we're already doing very well, but we want to go further, and we're targeting becoming carbon neutral in our net equity operational emissions by 2030. And we'll achieve this through further investments in electrification of our key assets, and direct investment in natural carbon capture projects to offset what we can't reduce. We have a plan in place to achieve this objective. And I'm very pleased that we're getting recognition for our ESG leadership. Sustainalytics rank us as a top rated company. This puts us in the top 10% of the global oil and gas industry. And we continue to be included on the Oslo Stock Exchange ESG index as the only oil and gas company. And I think this is leveraging to how the company is viewed. And now looking at three major projects. Firstly, Holten East project in the Norwegian Sea, which is started up in mid-March on time and on budget. Holten East is the development of several smaller fields tied back to the Asgard facilities. Initially, the production Project is developing 100 million barrels of gross reserves and achieving gross peak production of 80,000 barrels of oil equivalent per day. And with significant unrest upside in the area of 100 to 200 million barrels. And the project is in the ramp up phase and production will grow through the year as new wells are bought on stream with the expectation of achieving peak production in the fourth quarter of around 20,000 barrels per day of all energy next year. And I think Holtenese is a great example of leveraging the value of existing infrastructure to provide high-value barrels with short time to market and low carbon emissions. And then Johan Casberg, which started up at the end of March, marking the start of a new era for the Barents Sea region. The field is currently ramping up. 15 of the 30 planned development wells have been completed, which is sufficient to achieve plateau production levels. And the drilling program is scheduled to continue until the end of 2026. This initial phase is developing 450 to 650 million barrels gross. Plateau production levels of 220,000 barrels a day of oil are expected to be achieved within the second quarter, before energy's share being 66,000 barrels per day. So this is an important catalyst for our growth target. for more than 30 years, contributing to significant growth and value creation with an expected payback time of less than two years. And the Owen Casberg area is highly prospective, and several new discoveries made in recent years are already being moved to development, including an extensive infill drilling program planned to be sanctioned this year. Johan Casberg cluster one development costing of two phases is targeting sanction of the first phase being its flak discovery in the next year. And in total, there are between 250 and 550 million barrels of additional gross unrecoverable resources identified in the area. Which is and we anticipate will enable us to keep the facilities full towards 2030. So after years of investments, we see a bright future at Johan Casberg with significant upsides and long-term value creation ahead. And then turning to the Boulder X project, which is nearing completion. You can see that the Jotun FPSO has successfully been moored on schedule in the Boulder field. All that remains is to hook up the FPSO to the subsea facilities, and to complete final commissioning of the vessel before expected startup at the end of the second quarter. All 14 production wells are completed, and we expect production will ramp up to peak levels of 80,000 barrels of oil per day gross within three to four months of production start. And this project will secure production from the Boulder area beyond 2045, unlocking gross 2P reserves of around 150 million barrels. And we have continued to grow our resource base through successful exploration in the area and are stepping up the pace, moving several tieback projects forward at speed to capitalize on the EOT and FPSO. This will sustain production longer term and includes the Boulder Phase 5, planned to come on stream later this year, and Boulder Phase 6, expected to sanction in 2025, together adding a further 45 to 50 million barrels gross. And also in the greater Boulder area, where several new early phase projects are being progressed towards sanction, including Ringhorn North, Boulder Future Phases, and the King Discovery, targeting gross contingent resources of more than 70 million barrels. So the Boulder X project, with a payback time of around two years, including the sanction of Boulder Phase 5 project, marks the startup of a new era in the North Sea. And we see many years of value creation ahead. And Vore Energy has an amazing portfolio with lots of optionality and growth opportunities. Our 2P reserves stand at 1.2 billion barrels. This is either in production or under development and underpins our growth to over 400,000 barrels a day in Q4. And we will stay there a few years, but without investment would then decline. But we are much more than that. We have 2C contingent resources of around 900 million barrels. And we're moving forward around 30 early phase projects accounting for approximately 600 million barrels of resources. And we also have an exciting exploration portfolio of over one billion barrels of net risk resources. We expect to drill out about 50 percent of this opportunity in the next four years. And so putting this together, we have over three billion barrels of resource potential with 60 percent yet to be developed. That's how we will organically sustain production long term. And we're working at pace to create value for this opportunity. And we have a resilient and flexible portfolio of around 30 early phase projects that we're progressing towards development. These are all subsea tiebacks to existing infrastructure with low cost and short time to market. And we're creating a subsea factory with standardization, pre-commitments and contract alliances to reduce costs, improve predictability and speed up time to first production. And we've created real momentum here and a targeting sanction of up to 14 projects by the end of 2025, as indicated on the chart. This is a progression from what we detailed at our CMU. We'll probably not meet all of these dates, but we're confident on achieving the eight project sanctions we guided for this year. With some examples being a Boulder phase six, Fram South project and the Yowe area subsea projects. And this portfolio has strong economics with average break-evens of around $35 per barrel with good rates of return. And with 70% of our future capital uncommitted, we have the flexibility to slow down some activity if the lower price environment continues without impacting near-term production. This could also create the opportunity to drive down costs and make the projects even better. And as we move forward, we'll consider each project on a case-by-case basis. And now moving to exploration. And as you know, Vorenergy has a leading NCS exploration track record with around 50% commercial success rate over the last six years. And this performance continues into 2025 with the Zagato oil discovery as third successful well in a row at the Goliath Ridge. Estimated gross resources discovered on the trend are now up to 100 million barrels of oil, with estimated discovered plus prospective resources increased to above 200 million barrels. This is potentially as big as the original Goliath project. And the Goliath Ridge consists of a series of adjacent bounded prospects next to the Goliath Field, with the same good quality reservoirs as those producing at Goliath. The three wells drilled so far have successfully discovered oil in separate fault blocks, which significantly de-risks the prospectivity in the undrilled areas. And so far, water has not been encountered in any of the wells. So it is possible the whole area is filled with hydrocarbons. And so to delineate this exciting discovery, we'll acquire new seismic this summer and drill two further appraisal wells commencing in the third quarter this year. with the aim that we have all the subsurface data in our hands by the end of the year required to progress a development. And you can see this is in close proximity to the existing infrastructure. And this provides the opportunity for a fast-track, low-emissions, cost-efficient development using the available capacity of the Goliath FPSO, which adds high-value barrels. And this discovery is significant. with the resources in the area to be developed being potentially upwards of 350 million barrels of oil equivalent gross, as you can see on the chart, including upside in the Goliath field, development of the gas resources, and the resources on the Goliath Ridge. And with Vorenergy's 65% interest in the area, if the full potential can be realized, this could add over 15% to the company's book 2P reserves. So this is a material opportunity, and we will de-risk it at pace. And as we previously announced, we've stepped up the pace of exploration with around 20 wells planned this year. That will make us the second most active explorer on the NCS. There are some key wells to be drilled in the next two quarters, and so it's going to be exciting to see these results come in. So that rounds off my operational update, and I'll now hand over to Carlo to review the financials. Thank you.

Thank you, Nick, and good morning to all.