VAR: Project Pipeline Will Lift 2030 Production 18% Above Market Estimates

Analysts have nudged their price target on Vår Energi slightly higher, reflecting an upward bias from NOK 33 to NOK 34 at the lower end, and a more bullish NOK 46 target, supported by expectations of a steadily expanding project pipeline and production profile through 2030.

Analyst Commentary

Recent research updates present a mixed but constructive picture, with price targets now clustered in the mid 30s to mid 40s. This reflects both confidence in the long term production ramp up and caution around execution and market conditions.

Bullish Takeaways

• Bullish analysts highlight the upward revision of the lower end of the valuation range to NOK 34 as confirmation that downside risk is gradually receding.
• The NOK 46 target is tied to expectations that the company can deliver production growth around 18 percent above current 2030 consensus, supporting a re rating as volumes scale.
• Growth oriented views focus on the expanding project pipeline through the end of the decade, which, if executed on time and on budget, could justify a valuation premium versus peers with flatter profiles.
• Some see the current share price as not fully discounting the anticipated capacity additions, suggesting scope for multiple expansion as project visibility improves.

Bearish Takeaways

• Bearish analysts lean toward more conservative price targets around NOK 34 and retain Neutral stances. This signals limited near term upside relative to perceived risk.
• Caution centers on execution risk across a broader project portfolio, where delays, cost inflation or operational hiccups could erode the expected uplift in 2030 production.
• There is concern that the optimistic growth case may already be partially reflected in forward valuations, reducing the margin of safety if commodity prices soften.
• Some remain wary that the projected outperformance versus consensus relies on sustained capital discipline and a stable regulatory backdrop, both of which are vulnerable to external shocks.

What's in the News

• An extraordinary general meeting approved a third quarter 2025 cash dividend of NOK 1.211 per share, totaling NOK 3.0 billion. Payment is set for 25 November 2025 with an ex date on 17 November 2025 (extraordinary general meeting, dividend announcement).
• Management reaffirmed production guidance, targeting 330,000 to 360,000 barrels of oil equivalent per day for 2025. About 430,000 barrels per day is expected in the fourth quarter and approximately 400,000 barrels per day is planned to be maintained in 2026 (corporate guidance).
• Third quarter 2025 operating results showed a sharp production increase, with total output rising to 370 kboepd from 256 kboepd a year earlier, driven by higher crude oil and gas volumes (operating results announcement).
• The company agreed to acquire TotalEnergies' ownership in the Ekofisk PPF redevelopment project, lifting its stake in licence PL018F from 12.388 percent to 52.284 percent and adding an estimated 38 mmboe of net proved plus probable reserves. First production is targeted for the end of 2028 (business expansion, Ekofisk PPF).
• Production has started from the Askeladd West subsea gas field in the Barents Sea, supporting the Snøhvit field and helping secure long-term feedstock for the Hammerfest LNG plant (business expansion, Askeladd West).

Valuation Changes

• The fair value estimate has edged down slightly to NOK 38.88 from NOK 38.97, implying a marginally lower central valuation point.
• The discount rate has decreased slightly to 6.79 percent from 6.81 percent, reflecting a modestly lower assumed risk profile in the valuation model.
• Revenue growth has been effectively maintained at 6.68 percent, with only a negligible rounding adjustment versus the prior 6.68 percent assumption.
• The net profit margin remains virtually unchanged at 9.76 percent, indicating no material revision to long-term profitability expectations.
• The future P/E has fallen slightly to 13.23x from 13.29x, pointing to a marginally less demanding multiple embedded in forward valuation assumptions.