Vår Energi is a leading independent upstream producer on the Norwegian Continental Shelf, ramping a low-cost, long-life portfolio (Balder Phase VI/Jotun FPSO, Johan Castberg) to 376 kboepd in Q2 2026, +31% YoY, on track for FY2026 guidance of 390-410 kboepd. Adjusted ROIC of 14.6% against an 8% WACC and +USD 392m economic profit confirm value creation even through-cycle.
Crucially, reported FY2025 EBIT of USD 4,185m was flattered by a +550.6 net impairment reversal (Balder CGU +739.0 vs Njord/Gjøa/Snorre/Snøhvit goodwill losses). mttssn removes this one-off gain, cutting adjusted EBIT to USD 3,946m and adjusted NOPAT to USD 868m at the 78% marginal petroleum-tax rate — so the returns above are conservative, not inflated.
The balance sheet is sound: NIBD/EBITDAX 0.7-0.8x, investment-grade, with a policy quarterly dividend (~USD 300m). The optically thin ~2% equity ratio is an artefact of a USD 12.8bn non-interest-bearing deferred tax liability inherent to the Norwegian regime, not a solvency concern.
Value creation is real but oil-price levered: Q2 2026 realised USD 101/boe (crude USD 110, a USD 6 premium to dated Brent) sits above a conservative through-cycle assumption, so capitalising current earnings overstates intrinsic value. On a through-cycle price deck the economic-profit spread narrows, leaving limited margin of safety at NOK 43.
Base NOK 47 (≈+9%) rewards genuine EP, low leverage and a well-covered dividend at a mid-cycle deck; bull NOK 62 if oil holds firm and volumes reach the top of guidance with FCF-funded distributions; bear NOK 33 on an oil-price normalisation that compresses the EP spread toward the cost of capital.
At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~13.8%, limited by ROIC 15% ≈ WACC 8%) it cannot reach the current EV. No-growth value is $-15/share (-35% of price); the market prices in growth and/or a higher ROIC than booked — richly valued on this lens. Read the sensitivity grid.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | $62 | ≥14% | +44% | 30% | Oil holds firm; volumes top of guidance; FCF-funded distributions |
| Base | $47 | ≥14% | +9% | 45% | Mid-cycle deck; genuine EP, low leverage, covered dividend |
| Bear | $33 | ≥14% | -23% | 25% | Oil normalises; EP spread compresses toward WACC |
| Prob-weighted | $48 | — | +12% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | -13 | -13 | -12 | -11 | -11 | -9 |
| 7.25% | -14 | -14 | -14 | -13 | -13 | -11 |
| 8.00% (base) | -15 | -15 | -14 | -14 | -14 | -13 |
| 8.75% | -16 | -15 | -15 | -15 | -15 | -14 |
| 9.50% | -16 | -16 | -16 | -15 | -15 | -15 |
Green = fair value above the current price of $43.03. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
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376 kboepd Q2 2026 (+31% YoY); Balder/Jotun and Johan Castberg lift FY2026 into 390-410 kboepd guidance.
Adjusted ROIC 14.6% vs 8% WACC; +USD 392m economic profit even after removing the impairment-reversal gain.
FCF USD 1,671m funds a policy quarterly dividend (~USD 300m) with NIBD/EBITDAX 0.7-0.8x.
Q2 crude realised USD 110/boe, a USD 6 premium to dated Brent; gas ~USD 91/boe.
Low leverage and capital-return capacity intact despite a capex-heavy growth phase.
Vår Energi is a genuinely value-creating NCS E&P — 14.6% adjusted ROIC vs 8% WACC and +USD 392m economic profit, conservatively struck after removing a one-off impairment-reversal gain — with a strong production ramp, low leverage and a well-covered dividend. Quality is real for the sector.
But it is a price-taking commodity producer running on a mid-cycle deck (Q2 realised USD 101/boe), leaving limited through-cycle margin of safety at NOK 43. We rate it HOLD, medium conviction; base NOK 47, with wide scenario dispersion tied to the oil price.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open · Latest interim: 📄 open
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| Total income (revenue) FY2025 | 8,096 | Statement of comprehensive income / p.142 📄 p.142 | FY anchor revenue; LTM adds Q1 2026 and subtracts Q1 2025. |
| Operating profit FY2025 | 4,185 | Statement of comprehensive income / p.142 📄 p.142 | Reported EBIT; includes the +550.6 net impairment reversal we normalize out. |
| Net impairment reversal FY2025 (P&L) | 551 | Note 17 Impairment / p.167-168 📄 p.142 | Net gain: Balder CGU reversal +739.0 (PP&E) partly offset by Njord/Gjoa/Snorre/Snohvit goodwill losses; a period-specific one-off removed to normalize EBIT. |
| Marginal petroleum tax rate | 0.78 | Note 13 Tax / p.156 📄 p.156 | 22% ordinary + 56% special = 78% marginal; used to tax-effect adjusted EBIT into NOPAT. |
| Impairment charge/reversal by CGU | 574 | Note 17 Impairment / p.168 📄 p.168 | LTM net reversal (+574.5) = FY +550.6 - Q1'25 loss (-23.9) + Q1'26 nil; Balder -739.0 reversal vs Njord/Gjoa/Snorre/Snohvit losses. |
| Goodwill 31 Dec 2025 | 3,358 | Note 14 Intangible assets / p.164 📄 p.164 | Technical goodwill 2,995 + ordinary 363; deferred-tax-driven, not amortised, not added back. |
| Q1 2026 operating profit | 1,308 | Q1 2026 statement of comprehensive income / p.25 📄 p.25 | Latest interim EBIT (no impairment in the quarter); added in LTM bridge. |
| Q1 2025 operating profit (comparative) | 972 | Q1 2026 statement of comprehensive income / p.25 📄 p.25 | Prior-year quarter subtracted in LTM bridge. |
| Total equity 31 Mar 2026 | 565 | Q1 2026 balance sheet / p.26 📄 p.26 | IC equity base (Q snapshot); thin due to large non-interest-bearing deferred tax liability. |
| Interest-bearing debt 31 Mar 2026 | 5,898 | Q1 2026 balance sheet / p.26 📄 p.26 | IB loans non-current 5,793.6 + current 103.9; core of invested capital. |
| Cash and cash equivalents 31 Mar 2026 | 696 | Q1 2026 balance sheet / p.26 📄 p.26 | Excess cash (518.3) above 2% of revenue removed from IC. |
| Q1 2026 revenue | 2,667 | Q1 2026 statement of comprehensive income / p.25 📄 p.25 | +42.5% YoY vs Q1 2025 (1,871.3) on higher prices; added in LTM bridge. |