Vår Energi said net production in the fourth quarter of 2025 rose 43% compared with the same period a year earlier, driven by increased oil and gas volumes and the resolution of operational problems at key facilities, according to the company’s trading update.
Net output averaged 397,000 barrels of oil equivalent per day in Q4, an increase of 7% from the third quarter. For the full year, average production was 332,000 barrels of oil equivalent per day, which the company said was within its guided range.
Operational disruptions reported in December at the Johan Castberg field and the Jotun FPSO were resolved in early January, and production has resumed to expected levels, the company added. Those fixes contributed to the quarter-on-quarter uplift.
Production composition in the quarter was weighted toward liquids, with oil and natural gas liquids representing 71% of fourth-quarter production and gas accounting for the remaining 29%. Total production volumes for the quarter were 36.6 million barrels of oil equivalent, while sales volumes amounted to 35.3 million barrels of oil equivalent. The company said the underlift position recorded in the quarter was mainly the result of timing related to LNG liftings.
Vår Energi reported an average realized price of $62 per barrel of oil equivalent for Q4. The company disclosed a realized crude oil price of $63 per barrel, and a realized gas price of $63 per barrel of oil equivalent, which it said was about $4 above the average spot market reference price during the quarter. Fixed-price contracts made up roughly 15% of gas volumes sold in the period, at an average price of $75 per barrel of oil equivalent.
The weakening of the Norwegian krone during the fourth quarter produced a net foreign exchange loss of about $40 million. The company noted that its functional currency is NOK while interest-bearing loans are denominated in USD and EUR, creating FX sensitivity when the krone depreciates.
Vår Energi also recorded a non-cash impairment in the fourth quarter, estimating technical goodwill impairment of about $70 million before tax. The impairment relates to the Njord Area, Gjøa and Snorre assets. The company said an adjustment following a redetermination process at Snorre - which reduced Vår Energi’s equity share from 18.55% to 18.16% - accounts for the majority of the impairment booked in the quarter.
Free cash flow for Q4 was affected by several significant cash outflows. The company made three cash tax payments during the quarter that totaled about NOK 8.2 billion, which the company equated to approximately $820 million. In addition, a dividend payment of $300 million for the third quarter was paid in November.
Vår Energi also incurred roughly $180 million in cash related to its acquisition of TotalEnergies’ interest in the Ekofisk Previously Produced Fields project. That amount included $147 million in cash consideration plus settlement of costs incurred from January 1, 2025.
Operational and market context
The combined effect of restored output at previously affected facilities and a liquids-heavy production mix supported a meaningful increase in reported production volumes. At the same time, FX movements, a non-cash impairment tied to asset-level redeterminations and sizable tax and acquisition-related payments exerted downward pressure on reported free cash flow for the quarter.