Var Energi ASA

Good morning, everyone, and welcome to Void and Ashi's second quarter 2026 results webcast. Today, we will cover both our second quarter results and the announced Blue Nord transaction. We will begin with the quarter results presentation, followed by a presentation of the proposed transaction. Following those presentations, we will open the line for questions. I'm also pleased to welcome Eoin Sherlow, CEO of Blue Nord, who will be joining us for the Q&A session. With that, let me hand over to our CEO, Nick Walker.

Thank you Ida and good morning to you all and I hope you're having a nice summer break and thank you for taking time out for joining us today. We've had a very active quarter with lots to report on this morning. First we'll cover our second quarter results and then we'll review the Blue Nord transaction details and of course I'm pleased to have you and Sherlock with us who will make a few comments at the end and participate in the Q&A sessions. I'm pleased to report record financial results for the second quarter, supported by operational delivery as planned and high realized prices. We continue delivering strong momentum across Vought Energy, and I'm excited about the company's outlook. We're improving outcomes, increasing the pace of delivery, and optimizing the portfolio, which is increasing resilience and unlocking significant long-term value. And we're excited to announce today the combination of Vought Energy and Blue Nord, creating the largest independent producer of oil and gas in Europe. The combined business will have increased production target of around 450,000 barrels of oil equivalent per day and reinforces our role as a reliable and secure supplier of energy to Europe. Together we're creating a stronger, more diversified company with increased scale, resilience and cash generation. The combination increases production, reserves and resources underpinning our ability to deliver long-term value to our shareholders. And so now let us look at the highlights for the second quarter. Production is on track to meet full year guidance with production in the first half of the year at 391,000 barrels of oil equivalent per day. This is supported by strong performance from our operated assets. And we expect production in the second half to be higher as our major plan turnarounds are now complete and with new projects and wells coming on stream. And as I said, we delivered record financial results in the quarter. with significant CFFO post-tax of 2.1 billion dollars. We have increased resilience with net debt reduced to 3.4 billion dollars and our leverage ratios down to 0.4 net debt to EBITDAX. We completed successful issuance of 750 million euro hybrid bond in the quarter and have high available liquidity of 5.3 billion dollars. and you can see we received a credit rating from Fitch of BBB with stable outlook to go with existing investment grade ratings from S&P and Moody's. And we continue to unlock long-term value. Firstly, with the combination with Blue Nord that we announced today, we are building the largest independent EMP in Europe. During the quarter, we sanctioned key projects in the Boulder and Yowa areas, developing 110 million barrels of net reserves. We see strong performance at the breeder bit field. This will see reserves increased by 50% since the PDO and lead to the next phase of development. And we've been actively managing our NCS portfolio with five transactions announced in the quarter, unlocking value creation and extending field life. And lastly, we continue to deliver long-term attractive shareholder returns. As a result of the expected value creation from the Blue Nord combination and our strong financial results, were increasing shareholder returns. We confirm a dividend distribution for the second quarter of $350 million to be paid exclusively to existing Vought Energy shareholders. This means we've paid stable or growing dividends for the last 18 quarters. And we're providing dividend guidance of $350 million for the third quarter to the shareholders of the combined company. Delivering attractive and sustainable dividends over the cycle is a key priority for management and we remain committed to our long-term dividend policy of 25 to 30 percent of cash flow from operations after tax over the cycles. So now looking at some of the details starting with 2026 production. First half production came in at 391,000 barrels of oil equivalent per day and we're on track to meet the full year guidance range of 390 to 410,000 barrels per day. We continue to see strong performance out of operated assets with production with high production efficiency. And as we advised at the start of the year, the second quarter was impacted by planned turnarounds. And when the Boulder-Yolton turnaround is completed during July, all of our major turnarounds for the year are behind us. Additionally, in late second quarter, Johan Casper production was impacted by issues with the power generation system on the FPSO. A solution has been established and production was back to normal levels from mid July. And looking forward, we're starting up four new projects during the year. Firstly, the Elphys North project in the Echo Fisk area came on stream in the second quarter as planned, with production in line with expectations. And in the second half, we're on track to start up three projects in the Boulder area. The Yolton FPSOD bottlenecking, the King development, and Boulder Phase 6. And we have a large portfolio of over 50 production wells that are planned to start up during this year. So far, we're on target with around 50% already in production, meaning we will see higher production in the second half of the year as our major plant turnarounds are completed and with new projects and wells coming on stream. Looking now at operational performance, you can see that we're continuing our strong trend of incrementally improving our deliveries. We've seen strong improvement in safety performance during the year across a range of metrics. and we've now had zero material incidents over the last two years. This takes hard work every day. And we continue, as you can see, our trend of reducing carbon emissions intensity and we're ranked in the top 15% of the industry globally. And our methane emissions continue at the near zero level. And we continue to be recognized for our ESG leadership and are ranked by both Sustainalytics and S&P Global in the top 15% of the global oil and gas industry. For production efficiency on our operating assets, you can see a strong improving trend. We achieved 94% in the first half of the year. This is inclusive of the impact of planned turnarounds and was better than we expected. And on production costs, we achieved $10.8 per barrel in the first half compared to our guidance of $10 for the full year. The increase was primarily driven by strengthening Norwegian Krona and adjusting for this reduces the first half OPEX to $10.3 per barrel in line with the guidance for the year. We have ambitious targets to deliver further operational improvements, which over time will create significant further value. And as I mentioned at the start, during the quarter, we announced a series of transactions, high grading our NCS portfolio to strengthen long-term value creation. Firstly, the acquisition of Pandian's assets to secure long-term production growth in the Yoa and Asgard areas. Secondly, swap agreement with DNO to align interests in the Ringhorn North development and consolidate positions in the Yoa area. And thirdly, divestments in equity interests in the Goliath and Fenya fields to accelerate value creation from recent exploration success and reduce capital commitments without meaningful near-term production impact. And lastly, an asset exchange with Equinor, strengthening the company's position around Yoa by taking an interest and operatorship in the large peon gas discovery with the plan to tie it back to the YoA facilities, extending the field lifetime. And the strategic rationale for these transactions is multiple. It's about high grading in core areas, increasing ownership in key assets, expanding into high value opportunities, extending field lifetime, accelerating value realization from exploration success and flexibility in capital allocation. Combined, these transactions do not materially impact the company's short-term production target, but materially strengthen our long-term outlook. And I think these are great examples of how we're continuously high-grading the portfolio to create long-term value. We're now looking at how we deliver on our long-term production targets. With recent project sanctions, we now have 16 high-value projects in execution. These are all subsea tiebacks or facility enhancement projects. and you can see are developing around 380 million barrels net and with strong economics where the average break even is around $30 per barrel and rates of return around 35%. And because these projects all leverage existing facilities, the average unit production cost is very low at around $3 per barrel. All of these projects are progressing on track as communicated. And during the quarter, we sanctioned two important new operating projects. for all the next new wells and EOA subsidy projects. Which means so far this year we've sanctioned four projects, developing total reserves around 170 million barrels net, adjusted for the transactions that we announced in the quarter. This gives us high confidence that we will once again have an organic reserve replacement this year well above 100%. These project sanctions demonstrate our ability to mature and execute a portfolio of high quality developments. supporting production growth and long-term value creation. And now I want to look at the two sanctioned projects in the quarter. Firstly, the Boulder Next New Wells project is the next phase of development in the Boulder area and is enabled by existing infrastructure and available capacity. The project comprised the first phase of seven wells tied back to the Yolton FPSO with expected startup in Q4, 2027. Provision is being made for future phases of drilling, with the subsea facilities having capacity for an additional nine wells. The initial project is developing gross 2p reserves of 86 million barrels, and of course we have a high working interest here with 90%, so it's material to us. And you can see strong economics with a break-even of around $30 per barrel and rates of return above 35%. This project also supports the planned consolidation of infrastructure, including decommissioning of the Boulder FPU from 2028, which reduces operating costs and emissions. And we continue to see a significant resource upside in the Boulder area, where we're deploying our subsurface expertise and technology to unlock this opportunity, such as newly acquired seismic and advanced horizontal drilling and completion technology. Our aim here is to keep facilities full in the long term. The remaining Boulder phase five wells and the initial King well will start up this quarter and phase six will come on stream in the fourth quarter. And then we have further Boulder next drilling, full development of King, Ringhorn North, Ringhorn Vision, all being progressed towards sanction. We see a lifetime for Boulder well beyond 2045 and we'll be drilling in this area for many years to come. And then on to the subsea projects where Vore Energy is the operator. This comprises the development of the Ophelia, Yoa Nord and Serissa discoveries in three licenses as a coordinated subsea development tied back to the Yoa hub. First production is expected from Serissa already in the third quarter of 2027, followed by startup of Ophelia and Yoa Nord in the second half of 2028. And this project includes development of total gross 2p reserves of 76 million barrels of oil equivalent. And as you can see, strong economics again with break even below $35 per barrel and a rate of return above 25%. And this project is enabled by our project factory approach, combining standardized solutions, coordinated execution and utilization of existing facilities to accelerate development. And the project will be executed through a coordinated drilling and installation campaign, leveraging existing supplier partnerships, realizing synergies and efficient execution. Now, YOA is a core operated hub in Vaughan Energy's portfolio and we've been working to extend field lifetime. The YOA subsea projects, combined with the planned development of the recently acquired Peon gas discovery through the hub, is expected to extend field lifetime beyond 2045. We also see material exploration prospectivity near to YOA, with six operated exploration wells to be drilled in the next 18 months. We see exciting opportunities to continue to create significant further value in the viewer hub area. And we still have a large portfolio of around 30 high return early phase projects that are moving towards sanction. All of these are subsidy tiebacks to existing infrastructure or facility enhancement projects with low costs, short time to market and high returns. With average break-evens, as you can see, around $35 per barrel and rates of return above 25%. And we've built significant momentum with our project factory approach, with a sanction of 10 projects in 2025 and a further four projects so far this year. And you can see that we're working towards a further five potential project sanctions in 2026, which means we're on track to deliver on our target of up to eight project sanctions this year. And while we've been moving projects forward into execution, we're continually replenishing the early phase project hopper as we further de-risk the potential of our exciting portfolio. We have the people, the equipment, the contracts in place to deliver the planned project programme. And delivering on this project portfolio will give up around 500 million barrels of contingent resources and deliver on our long-term production target. And now turning to our exploration programme. Well, you can see we have a strong track record of unlocking value. We've continued this success in the first half of the year with three commercial infrastructure-led discoveries out of six wells drilled. One of these discoveries, Frida Kahlo, is already in production and the other two are being matured towards development. Now, the majority of our exploration program in 2026 is in the second half of the year and we have some exciting wells to come. Seven exploration wells remaining with three in the Boulder area Three important wells in the Yoa area and a high impact well in the Asgard area. And it's going to be exciting to see these results come in. And looking ahead, we have a significant exploration position in all areas of the NCS. And we have an exciting program already lined up for 2027 with some important high impact wells.

So that rounds off my operational update and I'll now hand over to Carlo to review the financials.