Var Energi ASA Aktie

It is now 3:00 p.m. here in Oslo, and time to welcome you all to this Extraordinary General Meeting of Var Energi ASA. My name is Thorhild Widvey. I'm the Chair for the Board of Directors, and it's my pleasure to declare the meeting officially open. As per the notice, the Board has proposed that attorney at law, Viggo Bang-Hansen serves as Independent Chair. I will therefore give the word to him to take us through the items on today's agenda, please.

Thank you for that, Thorhild. The general meeting is now closed for additional participation, and we will shortly move to the first item on the agenda. Before that, we can inform the meeting that we, in total, have shares present constituting 83.7% of the company's share capital. The exact number of votes and shares represented will be included in the minutes.

With that, we'll move to the formal agenda items and the opportunity to vote on these shall also have been opened. The first item on the agenda is election of a meeting Chair and a person to co-sign the minutes. The Board has, as Thorhild said, proposed that I chair the meeting as Independent Chair and to co-sign the minutes, I propose that General Counsel, Sverre Bjelland, who is present, is elected. Shareholders who have not yet voted on agenda item 1 can do so now.

[Voting]

The count then shows that Item 1 has been approved.

Item 2 for consideration today deals with approval of the notice for the meeting and the proposed agenda. The notice was distributed with the required 3-week notice period and was also announced as a stock exchange release on 21st July. Absent any questions or comments to this, we ask all shareholders to finalize their votes on item 2.

[Voting]

The count then shows that the notice and the agenda are approved.

We then come to Item 3 on the agenda, approval of the audited interim balance sheet and notes as per 31st May 2026, as published on 17th of August, together with the EGM notice. With no questions received under this item, we ask the shareholders to finalize their votes on item 3.

[Voting]

The minutes will then reflect that the audited interim balance sheet and notes as per 31 May 2026 have been approved.

Item 4 on the agenda relates to distribution of dividends for Q2 2026 in the amount of NOK 1.355 per share based on the interim balance sheet just approved under Item 3. Absent questions, we ask those who have not yet done so to cast your votes on item 4 now.

[Voting]

And the count then shows that the dividend distribution has been approved as proposed. That brings us to the last item on today's agenda, Item 5 and the proposed authorization to the Board to increase the share capital through issuance of new ordinary shares. No questions to this item either, so we then ask the shareholders to finalize their votes on item 5 now.

[Voting]

And the count shows that the authorization has been approved as proposed.

We then concluded all the matters on the agenda today. Exact voting figures on each of the voting items will appear in the minutes, which will be made available shortly on the company's website. With that, we can declare the general meeting to be adjourned. And on behalf of Var Energi, we thank you all for participating.

Hello, everyone, and welcome to the Vår Energi [indiscernible] of 2026. Today's call is being recorded. [Operator Instructions] I would like to introduce Head of IR, Ida Fjellheim. Ida, please go ahead.

Thank you. Good morning, everyone, and welcome to Var Energi Second Quarter 2026 Results Webcast. Today, we will cover both our second quarter results and the announced Munotransaction. We will begin with the quarterly results presentation, followed by a presentation of the proposed transaction. Following by presentations, we will open the line for questions. I'm also pleased to welcome Ian Shade, CEO of BlueNord, who will be joining us for the Q&A session. With that, let me hand over to our CEO, Nick Walker.

Well, 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 BlueNord transaction details. And of course, I'm pleased to have you [indiscernible] with us who will make a few comments at the end and participate in the Q&A session.

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 Var Energi, 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 Var Energi and BlueNord, 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 planned 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. We have increased resilience with net debt reduced to $3.4 billion, and our leverage ratio is down to 0.4x net debt to EBITDA. We completed a successful issuance of EUR 750 million hybrid bond in the quarter and have high available liquidity of $5.3 billion. 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 BlueNord that we announced today, we are building the largest independent E&P in Europe. During the quarter, we sanctioned key projects in the Balder and Gjøa areas, developing 110 million barrels of net reserves. We see strong performance at the Bridabit field. This will see reserves increase by 50% since the PDO and lead to the next phase of development. And we've been actively managing our NCS portfolio with 5 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 BlueNord 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 Var Energi 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% 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 390,000 to 410,000 barrels per day. We continue to see strong performance on our 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 Balder and Jotun turnaround is completed during July, all of our major turnarounds for the year are behind us. Additionally, in late second quarter, Johan Castberg production was impacted by issues with the power generation system on the FPSO. Solution has been established and production was back to normal levels from mid-July. And looking forward, we're starting up 4 new projects during the year. As the Alpes North project in the Ekofisk 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 at 3 projects in the Bolder area, the Hilton FPSO debottlenecking, the King development and Bolder Phase VI 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 planned turnarounds are completed and with new projects and wells coming on stream.

And looking now at operational performance. You can see that we're continuing our strong trend of incrementally improving our deliveries. We're seeing strong improvement in safety performance during the year across a range of metrics. And we've now had 0 material incidents over the last 2 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 0 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 operated 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 strength in Norwegian krone 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 Parion's assets to secure long-term production growth in the Joe and Asgard areas. Secondly, swap an agreement with DNO to align interest in the Ringer North development and consolidate positions in the Yo area. And thirdly, divestments in equity interest in the Goliat and Fenia fields to accelerate value creation from recent exploration success and reduced capital commitments without meaningful near-term production impact.

And lastly, an asset exchange with Equinor strengthened the company's position around Golar by taking an interest in and operatorship in the large Pion gas discovery with the plan to tie it back to the ore facilities, extending the third 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 and 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. 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 a developing around 380 million barrels net and with strong economics, where the average breakeven is around $30 per barrel and rates of return of 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 2 important new operating projects, all the next new wells and our subsea projects, which means so far this year, we sanctioned 4 projects, developing total reserves of 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 2 sanction projects in the quarter. Firstly, the bolder next new Wells project is the next phase of development in the Balder and is enabled by existing infrastructure and available capacity. The project comprised the first phase of 7 wells tied back to the auto FPSO with expected start-up in Q4 2027. And provision is being made for future phases of drilling with the subsea facilities having capacity for an additional 9 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 breakeven of around $30 per barrel and rates of return above 35%. This project also supports the planned consolidation of infrastructure, including decommissioning of the Balder FPU from 2028, which reduces operating costs and emissions. And we continue to see a significant resource upside in the Balder area, where we're deploying our subsurface expertise and technology unlock this opportunity, such as newly acquired seismic an advanced horizontal drilling and completion technology.

Our aim here is to keep the facilities full in the long term. The remaining bolder Phase 5 wells and the initial King well will start up this quarter and Phase 6 will come on stream in the fourth quarter. And then we have both the next -- further bolder neck drilling, full development of King, ring on North, Rigon vision, all being progressed towards sanction. We see a lifetime for Balder well beyond 2045, and we'll be drilling in this area for many years to come.

And then on to the subsea projects where Var Energi is the operator. This comprises the development of the Ophelia Joe Nord and Ceresa discoveries in 3 licenses as a coordinated subsea development tied back to the Ehm. First production is expected from Carisa already in the third quarter of 2027, followed by start-up of Aphelia and Neonode 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 breakeven 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.

Yowa is a core operated hub in Var Energi portfolio, and we've been working to extend field lifetime. The -- or Subsea projects, combined with the planned development of the recently acquired Pion gas discovery through the hub is expected to extend for lifetime beyond 2045. We also see material exploration prospectivity near or with 6 operated exploration wells to be drilled in the next 18 months. We see exciting opportunities to continue to create significant further value in the e-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 subsea tiebacks to existing infrastructure or facility enhancement projects with low cost short time to market and high returns with average breakevens 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 the sanction of 10 projects in 2025 and a further 4 projects so far this year.

And you can see that we're working towards a further 5 potential project sanctions in 2026. And which means we're on track to deliver on our target of up to 8 project sanctions this year. And while we've been moving projects forward into execution, we're continually replenishing the early phase project topper as we further derisk the potential of our exciting portfolio. We have the people, the equipment, the contracts in place to deliver the planned project program.

And delivering on this project portfolio will develop around 500 million barrels of contingent resources and deliver on our long-term production target. And now turning to our exploration program where you can see we have a strong track record of unlocking value. We continued this success in the first half of the year with 3 commercial infrastructure-led discoveries out of 6 wells drilled. One of these discoveries, FreetoCalu is already in production, and the other 2 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. Several exploration wells remaining with 3 in the Balder area, 3 important wells in the Gjøa 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, thank you.

Thank you, Nick, and good morning, everyone. I quote that presentation rehome best today. Before we go into the details of the combination with Bruno, let's look at our second quarter 2026, where we actually delivered record financial results. We achieved an average realized price of $101 per BOE and generated a significant cash flow from operations after tax of $2.1 billion. Our financial position continues to strengthen. We reduced net debt from $5.2 billion in Q1 to $3.6 billion in Q2 and further improved our leverage ratio to 0.4x, with a record high level of available liquidity of $5.3 billion.

During the quarter, we successfully issued a EUR 750 million sale bond and we were assigned with a travel rating by feature with a stable outlook, highlighting our energy strong credit profile. Free cash flow in the quarter was $1.4 billion. We continue to deliver attractive returns to our shareholders and on the back of a solid operational performance, continuous project sanctioning. Record financial results and in conjunction with the noncommission Nord, which is expected to complete around. With the dividend level for Q2 at $350 million and also guide the same level for Q3. Our long-term dividend poly of 25% to 30% of the CFFO per tax over the cycles remains intact.

We generated record revenue of $3.7 billion in the quarter, more than doubling from the same quarter last year, driven by both higher production and higher prices. We are less than average an average price of $101 per barrel in the quarter with average oil price at $110 per barrel, approximately $6 per barrel above digit Brent. The gas price of $91 per BOE was approximately $1 above the average spot market reference price.

A brief update also on our managing position. With regards to oil, for the remainder of 2026, 23% of our post-tax adjusted oil production is protected with an average flow of $70 per barrel, issuing at the same time, continued a substantial exposure to the price upside. Approximately 8% of our post-tax adjusted oil production were using color options, which provide market participation up to $140 per barrel with a floor of $75 per barrel. We also have in place 3-way option structures with a cash loss potential of approximately $5 million.

With regard to the gas, approximately 8% of the third and fourth quarter 2026 and 9% of the first quarter 2027 gas production has been hedged using color options, issuing a floor at around $85 per BOE with a cap at around $275 per BOE. Considering both our fixed price gas sales and our gas hedging approximately 35% of our gas sales for the remainder of the year have a floor is at around $83 per BOE.

Generated material cash flow in the second quarter. Cash flow from operation after tax in the quarter was $2.1 million, almost doubling from the previous quarter, driven by higher prices and higher lifting volumes. CapEx for the quarter, including exploration, was $645 million. The strong operating cash flow covered the CapEx with a solid margin, and CFFO to CapEx coverage was [indiscernible] in the quarter.

Our full year 2026 development CapEx guidance remains unchanged at $2.5 billion to $2.7 billion. We expect activity levels to be somewhat higher in the second quarter -- in the second half of the year reflecting higher daily activity, more final investment decisions and projects start up. Our liquidity and financial position has significantly strengthened during the quarter with a healthy cash balance of around $2.5 billion and a record high total available liquidity of $5.3 billion.

Looking at the development of our cash position in the quarter, we generated above $3 billion before tax and working capital movements, up nearly 50% compared to the previous quarter, driven by higher prices and higher sold volumes. Working capital impact has been slightly negative by $96 million, mainly due to a reduction in payables. Taxes paid amounted to $850 million related to 2025 results. With a cash outflow of $681 million in investments into our high-value project portfolio.

In April, we successfully issued a EUR 750 million be bond, increasing our available liquidity. Also, in June stability as planned, $300 million in dividends related to our Q1 2026 results. The company has this quarter with a very strong financial position. We continued to reduce our leverage ratio, net interest-bearing debt on EBITDAX to 0.4x significantly reduced from 0.7x in the previous quarter and remaining well below our over-the-cycle target of below 1.3%.

We are committed to maintaining an investment grade at in addition to our BAA rating from Modis and BBB rating for Standard & Poor, but with a stable outlook. We also obtained a travel rating from Fitch also with a stable outlook, strengthening our overall credit profile.

Now let's look at the tax guidance for the remainder of 2026 and first half 2027. In the second half of the year, we will pay taxes related to 2026 results, and we are expecting to pay approximately NOK 25 billion. For the first half of the next year, we give sensitivities based on 2026 estimated profits at different price scenarios.

In the second quarter, we paid approximately NOK 8 billion in taxes related to 2025 results, and we paid a total of approximately NOK 40 billion in the first half of this year. We continuously pursue value generation to our business model. We continue investing in our opportunity-rich portfolio, we can realize on exploration successes. And we pursue accretive M&A opportunities. As the deals we announced in the second quarter and the transaction we're announcing today demonstrate.

We remain committed to deliver long-term attractive dividends to our shareholders is our third record demonstrates with 18 quarters of stable growing dividend. On the back of a solid over short performance, continuous project sanctioning, record financial results and in conjunction with noncommission or expected to complete around the end of '26. We raised the second quarter dividend to $350 million, and we guided $350 million also for the third quarter, which is subject to audit financial results with sufficient equity and general meeting approval of dividend.

Gramalote work as the last few months have clearly shown to us. We continue to maintain a disciplined approach and we'll continue guiding dividend level on a quarterly basis, in line our long-term dividend policy of 25% to 30% of CFFO after tax over the cycle. We'll continue assessing the situation towards year-end as indicating during our previous quarterly call. The company continues to strengthen and progressing its growth plan, maintaining discipline and focus on value generation for longer.

With that, I hand it back to Nick to go through the details of the combination with boon. Thank you.

Well, thank you, Carlo. And moving on to now the details of the combination with Var Energi and BlueNord, which we were excited to announce this morning. As Var Energi continues to grow its natural evolution of our strategy to step outside of Norway and Denmark offers a low risk, stable operating and fiscal regime with similar offshore characteristics to the NCS. The combination increases our exposure to European gas markets and strengthens the company's position as a reliable and secure supplier of energy to. And this is a complementary transaction for both sets of shareholders where the companies together are creating a stronger, more diversified company with increased scale, resilience, cash generation and shareholder returns.

It has growth with strategic assets in the highly compatible Danish continental shelf. It adds value with a raised long-term production target of around 450,000 barrels per day. It increased its returns with limited near-term investments and we're leveraging Var Energi's strong balance sheet to create significant financial synergies together supporting resilient cash generation and strengthening Var Energi's long-term dividend capacity.

This transaction is accretive on a per share basis to reserves, production, cash flow from operations, free cash flow and dividend capacity. And the combination of Var Energi with BlueNord builds the largest independent producer of oil and gas in Europe and the fifth production hub area for the company and the Danish Underground Consortium or DUC further diversifying Var Energi's portfolio, and we're maintaining our balanced commodity mix at around 65% oil, 35% gas and it increased our exposure to European gas markets and expands access to European gas infrastructure and entry points, strengthening the company's position as a reliable and secure supplier of energy to Europe.

And now summarizing the transaction details. Var Energi is to combine with BlueNord in a 4 share and cash transaction. The consideration is 248.4 million new shares in Var Energi representing a share issuance of 9.95% and $204 million in cash. This equates to 9.7153 shares in Var Energi for NOK 76.83 in cash for each share held in BlueNord. And the BlueNord shareholders to be compensated in cash for any dividend paid precompletion from the third quarter 2026 onwards.

The transaction is subject to approvals by BlueNord shareholders and relevant authorities and license partners, and we expect closing around the end of the year. Post closing, the Var Energi free float will increase to around 43%, which is positive towards higher liquidity and increased index weightings. And the ENI will remain the long-term strategic majority shareholder with approximately 57% ownership post transaction. And this transaction represents another key step in our successful growth journey. We've built a high-quality portfolio through a series of transactions and then have successfully focused on exploiting the upside opportunities.

Since the company's inception in 2018, we've increased production over 2.5x and we've created significant shareholder value. Since the IPO just over 4 years ago, total shareholder return has been around 190% and you can see some of the metrics from the transaction here increases scale and value creation with an increased long-term production target of around 450,000 barrels per day.

Reserves and resources grew to 2.4 billion barrels with a long reserve and resource life at 15 years. We maintained a low operating cost of $10 to $11 per barrel, and we continue with top quartile emissions intensity. And the BlueNord assets are high quality with long life. The assets are part of the DUC consortium located in close proximity to our existing assets in the southern part of the NCS and with similar geology. Reserves and resources stand at 195 million barrels net and current production is around 45,000 barrels per day.

These are derisked assets with lower near-term capital requirements and with low decline rates, which is complementary to our existing portfolio. And the Danish offshore area is a low risk and stable operating and fiscal regime with similar characteristics to the NCS. So the assets provide a strong strategic fit with our existing NCS portfolio. And the BlueNord combination adds to our material resource base, the combined company's 2P reserves will stand at 1.5 billion barrels, which underpins current production levels.

And we're much more than that with 2C contingent resources of around 900 million barrels, where development plans are being progressed. And we also have an exciting NCS exploration portfolio of around 700 million barrels of net risk prospective resources. And so putting this together, the combined portfolio has over 3 billion barrels of resource potential with over 50% of this yet to be developed.

This opportunity-rich portfolio underpins our value creation. In developing our material resource base is how we will deliver our increased long-term production target for the combined company of around 450,000 barrels per day. The levers that drive this are maximizing production from our high-quality producing assets, delivering on our portfolio of projects in execution, progressing our significant portfolio of early phase projects towards sanction and unlocking more value with our focused NCS exploration program that is adding new projects all the time and continuing to add to our portfolio with value accretive M&A such as the BlueNord transaction that we announced today.

And with that, I'll hand over to Carlo to provide more details on how we create value from the transaction.

Thank you, Nick. As Per said, the combination between age and Benard, the complementary transaction for Bose shareholders where the companies together are getting a stronger, more diversified company with increased scale, resilience, stronger cash generation and shareholder returns. We expect to create material financial synergies. We expect to reduce the financial cost above our currently as capitalizing on bone investment-grade balance sheet. We also see synergies from reduced overheads and strengthened our gas sales portfolio. We're expecting to realize $250 million to $300 million in synergies that will contribute to strengthen our balance sheet and enhance our dividend capacity. In addition to that is a material value generation potential upside from the maturation of the remaining 2C resources in the DCS portfolio.

The combination will be accretive on all the key metrics on a per share basis after the capital increase. Production reserves, CFF after tax, free cash flow and dividend capacity. Distraction with a combination of shares and cash is a proof of our commitment to maintain our investment-grade rating. We strengthened our balance sheet, thanks to the share issuance, while maintaining the pro forma, the attrition of interest-bearing debt on EBITDAX well below our target of below 1.3 cycles with a minimal impact on the current metric.

Our attractive long-term dividend policy of 25% to 30% of the CFF after tax on cycles is maintained and underpinned by the increased dividend capacity post combination. I will now summarize the key highlights of our strengthened investment proposal after combination with not. We'll increase our reservior resource base to $2.4 billion, which means a solid 15 years reserve resource life. The lantern production outlook is raised by more than 10% to around 450,000 barrels per day long term. Our CapEx guidance remains unchanged at approximately $2.5 billion average per year, and our portfolio remains characterized by short cycle investment with quick cash conversion leveraging on limited near-term CapEx associated with the DCS portfolio.

We maintain a very resilient cash flow generation capacity, being free cash flow neutral at $40 per BOE. Our dividend capacity increases and will give additional support to our attractive long-term dividend policy at 25% to 30% of the CFFO after tax over the cycles. Finally, our free float will go from about 37% to about 43%. This will increase the liquidity of our stock and potentially increase the weight in the value stock exchange indexes when we're currently included. Look forward to expanding our shareholder base with no shareholders. And with that, I hand it back to Nick for concluding remarks.

Yes. Thank you, Carlo, and we're excited to announce the transaction today. We're excited to work towards BlueNord being part of the company and having the employees join us and also excited to have some new shareholders join us. And -- but before we go to questions, I'd like to ask you and Solar delighted that he's here today to say a few remarks before we open up for your questions.

Fantastic. Thank you, Nick. So I'll start by saying that 1 of the nice things about joining another company's results call even if these will soon be our results, too, is that you get to Baskin the globe of a strong quarter without having had to have done any of the work needed to deliver it. So the least I can do is say congratulations to the Board team. It's a really great set of results. But I think unfortunately, with this morning's announcement, today is about much more than just 1 quarter. It's a day that brings our 2 companies together strengthens both of us and opens up an exciting future.

And what I'll do is I'll come back to why I think the combination makes so much sense, but I would like to start just by briefly touching on the BlueNord story. So BlueNord became a partner in the Danish Underground Consortium in 2019 and since then, our team has been focused on 2 things that have really defined the company we are today. The first was delivering the tire redevelopment, giving one of Europe's most important gas fields a new lease of life and also creating an asset that will continue producing strongly and at relatively stable levels well into the 2040s.

The second and above all, was that we focused on delivering for our shareholders. So we built a capital returns policy with exactly that objective in mind. And in just over a year, we've returned close to $800 million to our shareholders. And that brings us to today. So for me, combining with Var Energi feels like a very natural next step in our journey. We've already shown what a focused company with 1 core area can do. And now when part of the enlarged Var Energi, our shareholders will benefit from a business with a broader portfolio, a longer-term returns profile and the support of an investment-grade balance sheet.

And I genuinely believe that this is a case of stronger together. The combination brings far into Denmark through a world-class asset, and it reinforces the role of both our companies have always played providing reliable, responsibly produced energy to Europe. So whether you've been a more shareholder for many years or you'll become 1 through this transaction, from today, we're all invested in the same future. A larger, more diversified company with greater resilience and an even stronger ability to deliver through cycle.

So that's the thought I'd like to leave you with. Even if it was already sunny, the future looks just a little bit brighter today than it did yesterday, thank you.

Good. Thanks, Ewen. I think with that, we'll open up for questions. I think the operator is going to run this process.

We'll now take from Tianhong Bi of Citi. Please go ahead.

Congrats on the transaction. The question is on the combined CapEx outlook. You're keeping your CapEx unchanged at $2.5 billion, while Blue not had previously guided to around $100 million to $150 million of CapEx per year through 2030. Is that a digital spend being fully offset by the synergies or is keeping the overall CapEx unchanged require any current projects to be delayed or deprioritized?

Yes. Thanks for the question. So when it comes to our average CapEx, as you for sure know we guided an average CapEx over our plan, which is 2026, 2032, of an average of $2.5 billion and I will not just guided what you say for a shorter period. And what we see is that on average, over the pedis not really changing the $2.5 billion. So you might have a gain 1 year when you have $100 million more. But as a matter of fact, the average over the plan period remains pretty much unchanged.

And reflecting that $100 million is a small percentage of $2.5 billion, too. So we're talking about small numbers.

The characteristic of the DCS portfolio is actually to have a relatively small amount of CapEx. That's the.

I mean this is 1 of the belt. I think the point here is it's very complementary profile because the development CapEx is being spent on the Danish assets and all the blue or assets. And so the decline rate is growing to below and the relatively small capital has to go in whereas we as a company, yes, our big projects are behind us. But as we've announced, we've got almost 50 projects that we're moving forward to sustain long-term production, and that requires investment. So when you put the 2 companies together, our cash flow profile is strengthened as a company because we have more cash flow and reduce capital with the combined company.

So I think it's -- there's a lot of synergies putting the 2 together.

Next question will be from the line of Prem Cook of RBC.

Can you just talk us through the strategic thinking on this expansion to the day's continental shelf? And maybe, in particular, in relation to this, Nick, you said it was a natural evolution of Var strategy to step outside of Norway. What other geographical areas do you see as a step outside of Norway that you're targeting as part of your wider M&A strategy for the longevity of the business. And there was 1 question, I'll leave it there.

No, thanks for the question, and I knew that question was coming. So look, we're a big company. We're producing 400,000 barrels a day. And really, there's been a lot of consolidation of activity in Norway, 10 years ago, there were 50 companies active in Norway now there's half that number. And of course, we have been a big part of that consolidation. And we've created a business before BlueNord of producing above 400,000 barrels a day long term. But we shouldn't be satisfied with that.

As a company, we want to continue to grow. And we are still focused on trying to grow within Norway, and I think there are opportunities to do that. And you saw us announce, for example, 5 transactions in the quarter, 1 of which was the acquisition of the remaining assets of Palio relatively small deal, but it's another good example of consolidation, and I think there's still things to do here. But I think we have to be realistic as a finite limit to this. And we should not be satisfied as a company with just producing above 400,000 barrels.

They have 400,000 barrels as long as we can and then declining. We have to continue to create growth and value long term. But where we go is not quite so easy because Norway is a low-risk regime, which is very supportive investment into the industry and is reflected in who we are as a company. And so what I said is the natural evolution for our strategy. And I think stepping into Denmark is a very similar risk profile to us. It's serology. It's not very far away. The fiscal regime is very similar. And I think it's a great fit with us.

Now it does say we were prepared to go outside of Norway. And I think we would be prepared to go elsewhere, but we have to find a place that's compatible with our risk profile as a company. And that's not that easy. So we will keep looking. And I think the key thing about M&A is you have to be opportunistic about this. And it has to fit our strategy and we have to be able to do it where we can create shareholder value. And those are how we look at this.

And the next question will be from Teodor Sveen-Nilsen of SB1 M. Please go ahead.

Also Conrad, which looks to be for both parties. I believe -- or a on 2 see resources. Nick, what will you do with the 2C resources of rumor that the team in Bus not been able to do this far?

Well, we took a perspective on that thinking about the transaction, and we would hope that we could unlock these things. And I think Bruno has done a fantastic job in creating value and -- but I think there's an opportunity here for us to work with the operator to create value out of this. And you've seen what we've been doing in Norway, and I think we've got the capability and a push to try and create value out of those. But I mean, we haven't valued it on this basis, but it's an upside in our transaction that we see as an opportunity to create further value and we should be looking to maximize production and value out of these assets. And I'm sure that's what will happen in due course.

And we'll now move on to our next question from Naisheng Cui of Barclays. Please go ahead.

Congratulations for the deal. One question from me, please, a Energy paid limited premium on Blue not shares. And could you comment on the bidding process or probably just how was the competition level in bidding resources in the weather North Sea region, please?

So maybe I can start by taking that one. So there wasn't a bidding process, so to speak. We had a bilateral engagement with or I think we went through a very helpful diligence process where we both understood our asset bases better. And I think from our perspective, the real point here is that we think there is a significant value uplift from being part of the combined Var entity. So we think it's a stronger combination. We think there is a much more resilient outlook for distributions, we think that with the production profile is above 400,000 barrels a day into the 2030s, there's really significant potential there that our shareholders will continue to benefit from.

Particularly because the consideration is 80% stock, our shareholders aren't really giving up upside. We still get to participate in that, and they get to participate that in a much stronger base. And I would just echo the point that Nick made before in relation to the 2C question, there is a lot of potential that still remains within the Blue more balance sheet -- sorry, within the Blend portfolio, but it's really about making sure that you're able to deliver that. And that's something where I think based on the experience that Var has demonstrated in Norway. There will be some good operational synergies as well in terms of being able to take that experience and exercise it in Denmark.

And we'll now take our next question John A. Olaisen of ABG.

I wonder, do you have any precommitments from the Blue nor shareholders?

So we have sober AS who sit on our -- who are represented on our Board. They have supported the transaction and they hold under 10%, but that is the that is the commitments that we have so far.

Have you been in contact with BlueNord shareholders?

We have, since the transaction has been announced, obviously, had a dialogue with our shareholders, and that will continue in the near term.

Are they positive to the transaction? And do you expect the deal to come through without having to adjust the bid offer.

I think it's difficult for me to comment on that in the way that I think you're looking for exactly. But what I can say based on the conversations that we have had with Suber, who sit on our Board. And I think there's no reason to think that they aren't representative of the broader shareholder base. There has certainly been a strong recognition of the rationale for the transaction and participating as a shareholder in the combined and what the combined has the potential to deliver.

[Operator Instructions] Now I'll move on to our next question from Sasikanth Chilukuru of Jaffee.

A question regarding -- through the appendix of the deal. You mentioned the material Danish tax losses year-end 2025 of $336 million value post tax. So I was just wondering how that could be realized and how quickly those tax losses could be monetized.

So the tax loss position that we have is almost entirely Chapter 3 tax losses. So that is effectively the hydrocarbon tax regime that they have within Denmark. It depends on commodity prices, how quickly those are realized. But I think within the near term, within the next 12 to 24 months is a reasonable expectation.

And a question regarding gas prices. Our gas volumes or sale of gas volumes from the deal. Is it fair to assume that this would form a part of the overall gas volumes at are markets, no distinction in terms of how gas could be marketed in the -- post the combination.

When it comes to this, yes, as you said, this gas, of course, will become part of our overall gas portfolio. Clearly, there are contracts in place that will be honored and maintained as they had. But there are flexibilities you can -- we can find in our own portfolio, optimizing the overall portfolio because our approach again is on a portfolio basis. So having more volumes allow us to find opportunities, director indirectly within the overall gas sales and gas production we have. I don't know if we answered your question, but this is the way we're looking at it when it comes to the opportunity side.

A follow-up question from Tianhong Bi of Citi.

This 1 is on shareholder returns. You obviously have raised Q2 and Q3 dividends, your earnings release and presentation no longer mentioned a special dividend. Should we therefore assume that the higher base dividend has replaced a special dividend previously expected in 4Q? Or does that option remain open?

No, of course, we have lifted our dividends today, and this reflects also the 2 things. It reflects the higher prices that we've seen recently since the start of the conflict in the Middle East in beginning in March. And also record financials and, of course, the deal that we've done today, which is value accretive. And so we have lifted the deal, they do it then so and increase them. We remain open to the idea that if we see high prices going forward, that we will make a decision at the end of the year on a potential extraordinary dividend.

But it's all depending on how we see the market going forward and what the results are when we get to February next year. As you'll appreciate, there's a lot of volatility. And I thought it was coming to an end a few weeks ago, and now it feels like it's not. And so it's quite uncertain what the outlook is going to be, and let's see where we are in February, and we'll decide then.

We'll now take our next follow-up question from Victoria McCulloch of RBC.

A couple more from me. Could you help us quantify the impact on 3Q production of the -- sorry, your Casper apologies and production issues due to the problems there? And then in listed BlueNord, can you give us a bit more detail on the bond -- the remaining bond with the synergies coming, I guess, from a financial perspective, are you required to wait until 2031 to redeeming the remainder of this.

So on the operational issues at Johan Castberg. I mean there were some problems with the power generation system. We've started in late June. It's -- we're now back at full production and we have a solution to manage this. So it's had obviously had an impact. I mean what I said, and we're not going to comment on individual fields and details like that. But -- on an overall basis, our second half production is going to be higher than our first half because we're -- basically, all of our shutdowns are behind us by now. And we're bringing on new projects, as I listed, and we've got quite a lot of new quite high impact wells to come on, so second half production is going to be higher, and we're on track to deliver our annual guidance outlook of 390,000 to 410,000 barrels a day.

And then I don't know if you want to answer that.

Maybe I can answer and then I'll leave eventually. I went there is need for some more detail, probably you should take a follow-up. So when it comes to the not outstanding bonds. It's clearly our intention in the due time onto market conditions to refinance those bonds, so we will follow on the bonds. The contractors and the contractor test provide for. And this will be done as soon as practical because we clearly see financial synergies coming from the refinancing of the existing structure -- capital structure of order. So I don't know if there is any from your side if you need any more detail, but that's our intention post closing.

Maybe Victoria, I could just address 1 of the specific things which you said about the bonds having to be outstanding until 2031, which I think you were referring to the maturity of BNR 18. So that is an instrument that has the maturity in 2031, but it also has a cold period before that. So that will be something that will aid the refinancing process when the board gets to that stage.

We'll now take our next follow-up question from Naisheng Cui of Barclays.

Just 2 follow-up questions, if that's okay. The first one is the deal increases exposure to European gas from Var energy and we know that the market is very about a warm winter, a war of LNG coming next year. And I want to ask perhaps to Nick that what's your opinion on European gas and whether the BlueNord deal will change any of your gas hedging strategy? And then I have a second question, if that's okay. I wonder if the BlueNord shareholders have a lockup period or can this sale post the deal closing?

In terms of gas, I've been quite bullish on European gas for a long time, well before the war actually and so I was more sort of a view that not all of this gas is going to come and of the fact that there could be disruptions in the world. That wasn't anticipating the war in the Middle East, but it's a big disruption -- and it's very unclear how that's going to translate. If you look at the forward curve, it drops substantially at the end of Q1 next year, but actually, we are starting to see that lift.

So actually, I actually continue to be in a place where I am looking -- and we feel that we're going to see higher prices for longer because the world needs a lot of energy. And that's 1 aspect of this. The second piece is that we went into this conflict largely unhedged as a company in terms of financial hedges. And we put in place since then some policy to put in place, both on the oil side, as Carlo mentioned, but also on the gas side. And really what we're doing here is to try and protect the bottom of the market and keep ourselves exposed to the higher end of the market.

So at this present time, at the right prices, we're layering in some financial hedges. We also use our contractual mechanisms in our gas -- long-term gas sales contracts to also put in fixed prices, and we've been doing that and layering that in as progressively as we communicated. So as I look out, I think we will see stronger prices. But what I will also say is that the Bone portfolio is robust to variable prices. So our business is robust to low prices and we have to expect that this is a cyclical business, and we have to manage through highs and lows.

And -- but long term, we're positive towards the world demand for oil and gas looking at .

Maybe, Nick, if I can just add only one addition because also I think is what to consider that if you look at the combined company, our mixed oil and gas portfolio, combined basis remains pretty much the same because the North is more or less 50-50. It represents approximately 10% of our current production level. So if you look then on the combined company, the mix we have remains very much stable. So the exposure to the gas European gas market, the pros potentially because it does not really change and not profile.

Maybe I could just add and Cargo made very eloquently 1 of the points that I was about to say. But I think just the other piece, when we think about the continued exposure to BlueNord shareholders. I think anybody who has invested in Bluenord probably took a relatively constructive view or had a relatively constructive view on the outlook for the European gas market. I think just building on Carlo's point, I don't think that changes given the commodity mix is very consistent.

Perfect.. And how about the second question, please? Whether if there's the Bruno shareholders have a lockup or continue to sell post the deal closing?

There's no -- there's no.

We'll now take our next follow-up Teodor Sveen-Nilsen from Cerro San Nielsen. Please go ahead.

A few follow-ups from me. First, could you shed some light on the discussion around the mix of new shares and cash payment in deal? Second question that is specifically on second quarter financials. Was it only cost issues that drove up the production cost this quarter? Or are there any other factors you can highlight?

Okay. I'll capture the OpEx 1 first, Teodor. I mean you saw that OpEx for the first half was $10.8 million but of course, we discharged or completed a lot of turnarounds in the second quarter. So that results in slightly lower production and also some costs associated with that. So that's one aspect. But also we've seen the strengthening of the Norwegian krone and as I went through in my discussion, if we go -- if we recalibrate the $10.8 million with the exchange rate change, we got to $10.3 million.

So that gives you the sense of that -- in terms of mix of new shareholders, I think there's quite -- quite a few shareholders that have shares in both companies, which is obviously very positive to this. And I think in terms of the mix of shares and cash in this deal, I think we looked at this and recognize that -- from a Var perspective, we wanted to use shares still. I think the only way this deal was ever going to get done is with shares, largely shares.

And I think what happens after this is that the Blue Norge shareholders share in the broader company, which is very positive, but also get a cash component now. It's roughly [ 84 -16 ] is the split. And -- and I think what we're doing is really trading high-value shares on both sides to create a win-win deal here. There's another side also, I think pods or free float, which is very important. And we're going to roughly 44% free float and so that's very positive in terms of demand for the shares, but also from the index fund passive index funds. So I think there's a lot of benefits around for this.

And also, if I can just add, there's also structuring that, as you can imagine, is preserving the quality of the balance sheet and investment grade, as you can imagine, because the use of debt is fairly limited.

Yes, understood. And then just a follow-up on that one. Of course, equity will increase steel is the present increased by around $1.1 million? Or are there any under holiness, which is going in line.

Yes, but then get. Yes, the book end is going to increase. Of course, I think you mentioned $1.1 billion. is correct. Didn't get the question, sorry.

Or are there any other accounting effects to...

We're not expecting.

Okay. So book value equity purely from a deal will increase by $1.1 billion.

That's what Yes. Perfect.

We'll now take our next follow-up from John Olaisen of ABG.

Letting me take the follow-up question. I wondered a little bit on the synergies. $250 million, $300 million is quite a high amount in relation to the value of the deal. And you mentioned 3 areas -- 3 kind of synergies, the lower financing cost overheads and gas sales optimization. Is it possible to split -- give some indication of how the $250 million to $300 million will fall on those -- into those 3 categories, please?

Yes, sure. That's fine. I think you can easily consider the financial synergies coming from a reduction of the cost and see financial synergies when it comes to the guarantee structure in place, account for the 85% to 90% of the total amount that same, [ 80-25] so it's absolutely the most important material part. Then we see also, again, overhead and commercial upside from the portfolio. But that is a split you can consider when it comes to the synergies we announced.

And this is driven from a very strong balance sheet that we have that drives this opportunity.

Can really appreciate the debt that is going to be refinanced with respect to refinance. And if you look at the differential in the cost is around 200 basis points, so it's somewhat imputive to see this value.

I'd just like to add to all the other follow-up on other analysts congratulate to giving you with this creative and accretive deal. Have a good day.

As there are no more audio questions, I'll hand it back to Id for questions. Over to you, either.

We've got a couple more questions from this coming in writing. A follow-up on the synergies from Alejandra Magana the announced synergies are predominantly financing and overhead related. Looking beyond those, where do you see the greatest operational or commercial upside from combining the portfolios that isn't yet reflected in the $250 million to $300 million guidance?

I was mentioning when it comes to the commercial upside in the gas portfolio, initial estimate is reflected. Of course, we will look more into the portfolio and see what we can combine. So we are reflecting a relatively small portion of the total $250 million to $300 million. When it comes to the upside linked to the development of the 2C resources is actually not included in the $250 million to $300 million. So there is a potential further upside that, of course, will take a bit of time for us to mature together with the operator.

But going to Johan point before, is where we believe as more energy, we can bring experience, we can bring, of course, the willingness to invest in creating value. So it's not in the $250 million, $300 million is eventually on top, but we see some material possibility in there as well.

Next question from Anders Rosenlund of SEB. You say the transaction is accretive on reserves per share, but you're incurring a material amount of debt as well. Could you talk about the debt you're incurring in terms of total amount will be refinanced, et cetera? And also, is the transaction also accretive on an enterprise value to reserve basis.

Yes. So when it comes to the debt, yes, we will take approximately $1.4 billion, which is the -- that we expect to enhance. This is not really impacting our -- it's not minimal, our current leverage ratio, our current attrition, so that reduction. We are currently 0.4x on a pro forma basis, we should be between 0.4x and 0.5x, so pretty much immaterial, I would say, very well within the 1.3x, which is our long-term target of being below 1.3x, so this is when it comes to the debt we intend to refinance and also, of course, it goes together with the synergies we expect.

So I would say pretty much pretty material impact. And when it comes to the accretion on the -- was it to reset. Yes, this is also something that we see. I mean I think you have to consider, we are talking about 2 different kind of portfolios. This year is a portfolio where you have low near-term CapEx, year-end CapEx is basically mostly production and OpEx with a lower tax rate. So if you look at the volumes, as you put together with EVs, we're probably, I think, also to consider the lower tax rate, which is actually quite accretive in a context where CapEx are low. And it's different, of course, from now we invest a lot a different tax system we provide for a better financial return. So that's the way you should look at it.

It's also worth just saying that BlueNord has tax losses that will cover the hydrocarbon tax in 2026 at least, which will further enhance the accretion on our reserve base.

Absolutely.

And it's very significantly accretive on a cash flow basis in '27 and '28.

[indiscernible] Was supporting the investment phase and we have to that very good trend.

Next question. The acquisition for BlueNord is stated as a cash and stock deal but the cash aspect, how is this being funded? i.e., is there debt financing? Or will this be funded from assessing liquidity or new borrowings and how might this transaction impact current credit ratings for the company and the outlook?

I think I will refer a bit to what we said before. The cash component of the deal is approximately $200 million. So we see relatively low and I mean we have available equity of $5.3 billion and a cash balance of $2.5 billion because we're not saying that this is absolutely manageable within the existing liquidity. When it comes to the.

And we sold some assets that which covered this and the entirety...

Yes. So Ares perspective is absolutely manageable within the existing framework. When it comes to the investment we reading, we've done, of course, our own analysis. So we see no impact at all. And actually, the structuring with shares and cash with the majority actually of shares is, I would say, quite a friendly credit rating structural because it reduced limit utilization of that. So I don't see great guiding this.

Great. I'll finish off with toric. Can you throw some color on the pipeline of the investment opportunity that you evaluated before reaching a deal with due to the asset portfolio in the Gulf of America competing on operational costs and economics.

Look, we continue to look opportunistically at opportunities that fit with our strategy and where we can create shareholder value. And as I said earlier in answer to the question, I think it's important that it has to fit with the risk profile that we have in Norway, and I think that's what people have invested into. And Denmark fits very well with that, and that's how we see this. And where else and what else we might do, we'll have those considerations in mind. And as I said, we look to continue to grow the business long term, creating shareholder value, and that's what we're about.

Thank you. That concludes the Q2 presentation call. We wish you all a good summer.

even to become PAUSE

Good afternoon. It's now 03:00 p.m. in Oslo, and it's time to welcome you all to the 2026 Annual General Meeting of Var Energi. My name is Liv Monica Stubholt. I'm the elected Deputy Chair of the Board of Directors, and it's my pleasure to hereby declare the meeting officially opened. As per the notice for the meeting, the Board has proposed that attorney at law, Viggo Bang-Hansen serve as Independent Chair of the meeting. I would therefore give the floor to him to lead us through the items on today's agenda. Viggo?

Thank you for that, Liv Monica. The general meeting is now closed for additional log-ins, and we'll shortly move to the agenda items set out today. Before that, I can inform the meeting that we have in total -- that we in total have shares present constituting 83% of the share capital. And the exact numbers of shares represented will be set out in details -- in detail in the minutes from the meeting. With that, we will move to the formal agenda items, and the opportunity to vote on these shall now also have been opened.

The first item on the agenda is election of a meeting Chair and a person to co-sign the minutes. As Liv Monica said, the Board has proposed that I chair the meeting, and I propose that General Counsel, Sverre Bjelland, who is present, co-sign the minutes together with me. Shareholders who have not yet voted can then vote on Item 1.

[Voting]

Everyone seems to have voted and the count shows that Item 1 has been approved. Item 2 for consideration deals with approval of the notice and the proposed agenda. The notice for the meeting was distributed with the required 3-week notice period and was also announced as a stock exchange announcement on 8th May. Unless there are any questions to this, we then ask all shareholders to finalize their votes on Item 2.

[Voting]

And we then note that Item 2 has been approved. We then come to Item 3 on the agenda, approval of the annual accounts and annual report for 2025 and review of the Board's statement on corporate governance prepared in accordance with the Norwegian Accounting Act. The accounts and the reports together with the audit report were all published on 20 March and have also been made available on the company's web page. We've not registered any questions or comments to this item, so we'll then move to voting.

[Voting]

Seems all votes are then in, and the minutes will reflect that the annual accounts and report for 2025 has been approved and that the corporate governance statements have been addressed. Item 4 on the agenda relates to the company's report on remuneration for senior executives, which is subject to an advisory vote by the general meeting. No questions received on this item either, so we ask those who have not already done so to vote on Item 4.

[Voting]

We then note that Item 4, the vote is closed and the minutes will reflect that the remuneration report has been approved. Item 5 on the agenda relates to renewal of the Board's authority to distribute dividends and make group contributions on the basis of the company's financial statements for 2025. We have not received any questions to this item. So we ask again that all of you who have not yet done so to vote on Item 5 now.

[Voting]

The count then shows that the Board authorization with respect to dividends has been approved. We then come to Item 6 on the agenda and the proposal to renew the Board's authorization to increase the share capital through issuance of new shares, all as further detailed in the notice for the meeting. Absent questions or comments to this item, we then ask all to vote on Item 6.

[Voting]

And the count then shows that the Board authorization has been approved as proposed. Next item on the agenda, Item 7 relates to renewal of the Board authorization to acquire own shares, again, as further detailed in the notice for the meeting. No questions noted here either. So we'll then ask those who haven't already done so to vote on Item 7.

[Voting]

And the count then shows that the Board authorization has been approved as proposed. That brings us to Item 8 on the agenda and approval of the auditor fee for 2025. Again, no questions here. So we ask everyone to vote on Item 8.

[Voting]

And the count then shows that the auditor fee has been approved. Moving on to Item 9 on the agenda, which relates to appointment of members to the Board by shareholders holding ordinary shares only pursuant to Section 6B of the company's bylaws. The company's Nomination Committee has made a proposal for the appointment, which has been made available on the company's website. No questions here either, and we ask those of you who have not yet done so to vote on Item 9, and we note that voting here is done separately for each of the 2 candidates that have been proposed reelected.

[Voting]

The count then shows that Thorhild Widvey and Ole Johan Gillebo have both been reelected in accordance with the Nomination Committee's recommendation. Item 10 on the agenda relates to appointment of members to the Board by shareholders holding B shares pursuant to Section 6A of the company's bylaws. No questions on this item. And we also note that all eligible shares have now voted in support of the proposal, meaning that Francesca Rinaldi and Claudia Almadori have both been reelected as proposed.

We then come to Item 11 on the agenda and approval of remuneration to the members of the Board. The company's Nomination Committee has made the proposal in this respect. And again, this has been made available on the company's website and also set out in the notice for the meeting. No questions received for this item. So we then move to voting, i.e., voting on Item 11.

[Voting]

The count then shows that the Board compensation as proposed by the Nomination Committee has been approved. Item 12 on the agenda relates to appointment of members to the Nomination Committee. In accordance with Section 10 of the company's bylaws, the company's Nomination Committee has made the proposal also in this respect. Absent questions, we ask everyone to issue their votes on Item 12 now, noting again that voting is done separately for each of the candidates.

[Voting]

The count then shows that each of the Nomination Committee members have been reelected as proposed. Item 13 on the agenda relates to approval of remuneration to the members of the Nomination Committee. Committee has also here made the proposal as have been detailed in the notice. And no questions received, we ask again that everyone issue their votes on Item 13.

[Voting]

And the count then shows that the committee compensation has been approved as proposed. We have then reached Item 14 on the agenda, approval of the interim balance sheet and notes as per 31 March 2025. The balance sheet and notes together with the auditor's statement have been made available on the company's web page. We have not received any questions to this item. So we'll then move to voting and ask those of you who have not yet done so to cast their votes now.

[Voting]

The count then shows that the interim balance sheet and notes have been approved. That brings us to the last item on today's agenda, Item 15 and distribution of dividends for Q1 2026 in the amount of NOK 1.11 per share, all as further detailed in the notice. The proposed dividend will be based on the interim balance sheet approved under Item 14. No questions on this item either, so we ask all of you to cast your votes.

[Voting]

The vote is closed and the count shows that dividend distribution has been approved in the amount proposed. With that, we have concluded all the matters on the agenda today. Exact voting figures on each of the items will appear in the minutes of the meeting, which in due course, will be made available on the company's website. And with that, we declare the 2026 Annual General Meeting adjourned. And on behalf of Var Energi, we thank you all for participating.

Hi, everyone, and welcome to the Vår Energi's Q1 Presentation of 2026. Today's call is being recorded. [Operator Instructions]

I would like to introduce Head of IR, Ida Marie Fjellheim. Ida, please go ahead.

Thank you, and good morning to everyone. A warm welcome to Vår Energi's First Quarter 2026 Results Presentation. The presentation today will be held by our CEO, Nick Walker; and our CFO, Carlo Santopadre. Nick and Carlo will go through the presentation, and then afterwards, we will open up for Q&A.

I will now hand the word over to Nick.

Well, thank you, Ida, and good morning to you all, and thank you for joining us today for our first quarter 2026 results presentation. I'm pleased to report we delivered as planned in the quarter with record high production and strong financial results. And we're strongly leveraged to the current high price environment.

Our operations have not been disrupted by the war in the Middle East, demonstrating the strategic importance of Norway as a secure and responsible supplier of energy to Europe. We're continuing to transform as a company to harness the entrepreneurial energy of our team, implementing technology to improve outcomes and increasing the pace of value creation.

We're showing further progress in incrementally improving the outlook for the company for increased resilience while maintaining flexibility, which I think is key in supporting investments through the cycles. With our high-quality portfolio of high-return early phase projects, we are targeting to deliver long-term production above 400,000 barrels per day, which will sustain high shareholder returns over time. And underpinned by strong performance and cash flow generation, the company continues to deliver attractive shareholder returns.

So now let us look at the highlights for the quarter. As planned, we delivered record high production in the quarter of 406,000 barrels per day. This is supported by strong performance from our operated assets with 97% production efficiency in the quarter. And all of the new projects we started up during last year are producing according to plan.

We delivered strong financial performance with significant CFFO post tax in the quarter of $1.1 billion. Available liquidity is stable at $3.5 billion, and our leverage ratio was reduced to 0.7x at quarter end. And the company is well positioned in volatile markets. The war in the Middle East, I think, amplifies the strategic importance of Norway as a secure, reliable and responsible supplier of energy to Europe. We are leveraged to the high prices, and we will see the North Sea premium prices reflected in the second quarter with crude liftings priced in the first weeks of April averaging $130 per barrel.

We've used this opportunity to lock in high gas prices for a portion of our volumes in the second and third quarters. We continue to unlock long-term future value from our high-quality portfolio. Two projects were sanctioned in the quarter, which develop around 80 million barrels of net reserves, and we made 3 commercial exploration discoveries.

Lastly, we continue to provide attractive long-term shareholder returns. We confirm the dividend distribution for the first quarter of $300 million, which means we paid stable or growing dividends for the last 17 quarters. And we're providing dividend guidance of $300 million for the second quarter. Delivering attractive and sustainable dividends over the cycles is a top priority of management. Should prices remain elevated through the rest of the year, we'll make a decision at year-end for an extraordinary distribution of excess cash to our shareholders.

So looking at some of the details. Vår Energi is a leading pure-play E&P. And in the quarter, I see we've now grown to the second largest oil and gas producer in Norway. We have a high-quality diversified asset base in all areas of the NCS with interest in around 50% of all producing fields and infrastructure and a large exploration footprint. This is a opportunity-rich portfolio that will allow us to deliver higher production and value for longer. We also have a balanced commodity mix with gas being around 1/3 of our production volumes, making us one of the largest gas exporters from Norway. It also means we're leveraged to the current high gas prices in Europe, which I think are likely to extend beyond the end of the hostilities in the Middle East.

In the first quarter, we delivered record high production of 406,000 barrels of oil equivalent per day, which is in line with guidance. All of the new projects we started up last year are producing according to plan. We continue with excellent performance at our operated assets with high production efficiency. And you can see that the second and third quarters will be impacted by some planned turnarounds. However, the annual average reduction is small at around 6,000 barrels per day.

During this year, we will start up 4 new projects: Balder Phase 6, Jotun FPSO debottlenecking, Eldfisk North and the King Development. And we have a large portfolio of 60 new development and infill wells that will start up during the year. So far, we're on track with 11 new wells in production. We've had a strong start to the year, and we're on target to deliver annual guidance of 390,000 to 410,000 barrels per day.

Looking now at our operational performance. You can see that we continue to incrementally improve our outcomes. We've seen a strong improvement in safety performance in the quarter across a range of metrics. And so far this year, we've had 0 incidents with serious potential. I think this takes hard work every day. We continue 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.

We target to reduce emissions further from 3 main levers: electrification with power from shore, portfolio optimization and energy management. When the ongoing Njord and Snøhvit electrification projects are complete, approximately 40% of the company's production will be produced with power from shore.

Together with Equinor, we have decided to terminate further work to develop an area solution for the electrification of the Balder Grane area with power from shore due to challenging economics. Together with Equinor and the license partnership, we'll determine how best to mature the development of the remaining resources in the area.

In addition to emissions reductions, Vår Energi aims to become carbon neutral in our net equity operational emissions by 2030 through removals in the voluntary carbon market. 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 operated assets, you can see we have a strong improving trend, and we achieved a high 97% in the first quarter ahead of target.

On production costs, we achieved $10.4 per barrel in the first quarter. This is slightly higher than target due to the impact of the strengthening Norwegian kroner. And going forward, we expect to maintain production costs at around $10 long term. I think these elements go hand-in-hand. Strong safety and environmental focus drives good operational discipline, and we aim to deliver continuous improvement, which over time creates significant value.

Vår Energi has an amazing portfolio, which is opportunity-rich, where we have a track record of continuously growing reserves and resources organically. You can see our 2P reserves stand at 1.3 billion barrels, which underpins our current production levels, but we are much more than that. We have 2C contingent resources of around 900 million barrels. These resources are undeveloped. And we're moving forward over 30 early phase projects to develop around 2/3 of these volumes.

We also have an exciting exploration portfolio of around 1 billion barrels of net risk resources. So putting this together, we have around 3 billion barrels of resource potential with 60% of this yet to be developed. Developing this opportunity is how we will deliver higher production for longer and meet our target of over 400,000 barrels per day.

The levers that will drive this are: firstly, through maximizing recovery from our high-quality producing assets; secondly, delivering on our portfolio of 15 projects in execution; thirdly, we're progressing over 30 early phase projects towards sanction; and finally, we're unlocking more value with our focused exploration program that is adding new projects all the time.

For this program, we are progressing activity to create value from around 70% of the undeveloped resource upside in our portfolio. And on top of this, we continue to take an opportunistic approach to further M&A where there is a strategic fit and we can create value.

Looking now at how we will deliver this. We have 15 high-value projects in execution. These are all Subsea tiebacks or facility enhancement projects. You can see developing around 290 million barrels net with strong economics where the average breakeven is around $30 per barrel and rates of return are over 30%.

And because these projects all leverage existing facilities, the average unit 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 2 new projects, Goliat Gas Export with more on that in a moment, and the King Development.

The first phase of the King Development is an extended reach well from the Ringhorne platform. The well is developing 2P reserves around 9 million barrels gross and with a low breakeven of below $15 a barrel. The well is currently drilling is expected to start up around midyear. Success will drive further King Development phases.

And last week, we announced the sanction of the Goliat Gas Export project. This value-creating project secures the lifetime of the Goliat assets in the Barents Sea to around 2050 and unlocks future area developments. The project is increasing oil production from the Goliat field and allows the gas reserves that are currently being reinjected to be exported by the Hammerfest LNG plant and the gas banking arrangement and to be sold when processing capacity is available. The project comprises a 12-kilometer gas export line to connect the Goliat FPSO to the Snøhvit pipeline and is expected to come on stream in the third quarter of 2029. And this project is developing 2P reserves of 112 million barrels of oil equivalent, of which around 15% is oil. The project has robust economics with a breakeven in line with the company's target and provides significant upside potential from optimization of the Goliat operations.

The project is also an enabler for the Goliat Ridge development, where the resource potential is over 200 million barrels. We are working at pace to also move that project towards sanction. And we have a large portfolio of over 30 high-return early phase projects that we are moving towards sanction. All our Subsea tiebacks to existing infrastructure or facilities enhancement projects with low cost, short time to market and high returns with average breakevens of around $35 per barrel and rates of return above 25%.

We've built significant momentum with our Subsea project factory approach and an entrepreneurial focus on value creation. We sanctioned 10 projects in 2025 and have sanctioned a further 2 projects so far this year. And you can see that we're working towards a total of 13 possible sanctions in 2026. And so I'm confident we'll deliver on our guidance of 8 project sanctions in the year.

During the quarter, we secured a contract for a high-specification harsh environment drilling rig to allow us to do some of the more complex wells we are planning. And we have the people, the equipment and the contracts in place to deliver the planned project program. Delivering on this project portfolio will develop around 500 million barrels of contingent resources and we'll achieve our target of over 400,000 barrels per day long term. And we're continuing to add new projects as we further derisk the potential of our exciting portfolio.

Turning now to our exploration program, where we have a leading track record. Since 2021, we've added 290 million barrels of contingent resources at a success rate of 45% and over 70% of these volumes are already in production or in the development process. We've continued this success this year with 3 commercial infrastructure-led discoveries out of 6 wells drilled so far in the year. These discoveries are already being turned into value.

Frida Kahlo will start production through the Sleipner this quarter. And Omega Sør is expected to sanction as a tieback to Snorre by year-end. Most of our high-impact exploration program in 2026 is in the second half of the year. We have 7 wells remaining with key prospects to be drilled in the Balder, Johan, and Åsgard areas.

Looking ahead, we have a significant exploration position in all areas of the NCS, and we're already lining up an exciting program for 2027 and 2028 with some important high-impact wells.

That rounds off my operational update, and I'll now hand over to Carlo to review the financials. Thank you very much.

Thank you, Nick, and good morning, everyone. In the first quarter of 2026, we delivered strong financial results on the back of record high production and robust realized prices in the quarter. Our average realized price for the quarter was $77 per BOE, and we generated material cash flow from operation after tax of $1.1 billion. We continue to have a strong financial position with $3.5 billion in available liquidity.

The leverage ratio stands at 0.7, further reduced from previous quarter level. Free cash flow in the quarter was $475 million, more than sufficient to cover Q1 dividends. We continue to deliver attractive returns to our shareholders. We confirm the dividend level of $300 million for Q1 and also guide the same level for Q2. Our long-term dividend policy of 25% to 30% of CFFO after tax over the cycles remains intact.

We generated nearly $2.7 billion in revenues in the quarter, a 45% increase from the same quarter last year, driven by substantial production increase. We realized an average of $77 per barrel in the quarter with average crude price at par with Brent for the quarter at approximately $80 per barrel.

The realized gas price of USD 73 per BOE was approximately $7 below the average spot market reference price. This was due to a combination of volumes sold year ahead, LNG cargoes and volumes sold with month-ahead indexation in a rising market, whereas the impact will be the opposite in a descending market.

We continue to have a robust gas sales strategy with access to several markets while retaining the flexibility in the contracts to decide the split between month ahead, day ahead and fixed price. More specifically on our oil sales, we ended the quarter in an underlift position. However, most of this has been reversed in April with a significant price upside and timing has turned out to be good as we have realized an average price of approximately $130 per barrel for the 3 million barrels priced until now in the month.

Since the beginning of the year, price volatility has been high and increased further since the beginning of the conflict in the Middle East. In this context, we have seen material premium differentials to Brent for our oil, and those premiums will be reflected in our next quarter sales.

The company has carefully evaluated opportunities to hedge a portion of its oil and gas production with financial instruments, aiming to mitigate downside risk while preserving material exposure to potential market upsides.

For the remainder of 2026, 23% of post-tax adjusted oil production is protected with an average floor of $64 per barrel, ensuring full exposure to market upside. Maximum potential loss associated with hedging strategy in place is approximately $15 million. In addition, approximately 8% of the third and fourth quarter 2026 and 6% of the first quarter 2027 gas production has been hedged using collar options, ensuring a floor at around $85 per BOE with a cap at around $280 per BOE.

Considering both our fixed price gas sales and our gas hedging, approximately 30% of our gas sales for the remainder of the year have been sold with a forward price at around $84 per BOE.

Vår Energi generated material cash flow in the first quarter. Cash flow from operations after tax in the quarter was $1.1 billion, a decrease from the previous quarter, mainly due to impact of working capital movements, offset by lower tax payments in the first quarter.

CapEx for the quarter, including exploration, was $553 million, lower than the previous quarter. The 2026 development CapEx guidance is unchanged, and we expect to spend between $2.5 billion to $2.7 billion for the full year. Our liquidity and financial positions continue to be solid with a healthy cash balance stable at around $700 million and total available liquidity of $3.5 billion. We have a diversified long-term capital structure with an average debt maturity of around 5 years, which aligns with the strategic needs of the business.

Looking at the development of our cash position in the quarter. We generated above $2.2 billion before tax and working capital movements, up 20% compared to the previous quarter, mostly driven by higher prices and higher volumes. The effect of the price spike in March will positively impact second quarter cash flow.

Increase of trade receivable for March sales contributed to working capital negative impact in the quarter of $525 million. These higher receivables will be collected in Q2.

Tax paid amounted to $640 million, down compared to the previous quarter as a result of 2 cash payments instead of 3. We had a cash outflow of $582 million in investments into our high-value project portfolio. Also, in February, we distributed as planned $300 million in dividends related to our Q4 2025 results.

The company has a strong financial position. During the quarter, we have reduced our leverage ratio, net interest-bearing debt on EBITDAX to 0.7, down from 0.8 in the previous quarter and continues to be well below our over-the-cycle target of below 1.3.

Our debt portfolio is well diversified. We have a Baa3 rating from Moody's and BBB rating for Standard & Poor's, both with a stable outlook, and we are committing to maintain our investment-grade rating. Our strong financial position and our resilient flexible project portfolio lay a solid foundation for continued growth and material shareholder distributions going forward.

Now let's look at the tax guidance for the 2026 results. In the first half of the year, we pay taxes related to 2025 results. In the second half of the year, we give sensitivities based on 2026 estimated profits, where half is paid in the year and half will be paid in the next year.

In the first quarter, we paid NOK 6.2 billion in taxes. And for the second quarter of 2026, we expect to pay around NOK 8 billion. We have included a sensitivity for the second half of 2026, which is giving the cash tax estimates and updated price scenarios, given a range of $2 billion to $3.1 billion according to the indicated price ranges.

Our balanced capital allocation framework remains firm. In the current elevated price environment, we are well positioned as a company, being set to produce at a record high level in 2026. Recognizing the potential for increased profit and cash flow generation in the current market environment, we will allocate such extra funds in accordance to our capital allocation framework.

Any additional cash flow will be allocated between extraordinary shareholder directors and strengthening the balance sheet. Maintaining an investment-grade balance sheet remains of fundamental importance to us.

We remain committed to deliver long-term attractive dividend to our shareholders as our track record demonstrates with 17 quarters of stable or growing dividend. For the first quarter of 2026, we confirm the dividend of $300 million and guide $300 million for the second quarter, each subject to other financial results with sufficient equity and general meeting approval of dividend.

We're in a volatile world as the last few months have clearly shown us. We continue to maintain a disciplined approach. And for the remainder of 2026, we will continue guiding dividend on a quarterly basis, in line with our long-term dividend policy of 25% to 30% of CFFO after tax over the cycle.

Dividends remain top priority for the management with a clear focus on attractiveness and sustainability over the cycle. We will assess the situation towards year-end and should price remain elevated through the year at the current level, we will make a decision for an extraordinary distribution of excess cash to our shareholders in accordance with our capital allocation framework. The company is successfully progressing its delivery path as planned, strengthening the basis for a material value generation for longer.

Finally, I will summarize our 2026 guidance, which remains unchanged. Production guidance is 390,000 to 400,000 barrels per day. Production costs will be around $10 per barrel and willing to sustain at this level for the long term.

Development CapEx will be $2.5 billion to $2.7 billion. Exploration expenses and OpEx will be around $250 million to $300 million and $200 million, respectively. Last but not least, we are confirming Q1 dividend of $300 million, maintaining a dividend level of $300 million for Q2 2026. We're keeping the long-term dividend policy of 25% to 30% of CFFO post tax over the cycle.

With that, I hand it back to Nick for concluding remarks. Thank you.

Well, thank you, Carlo. I have just one final slide to summarize. We're delivering on our investment proposition and the company is positioned to generate more value for longer. Our material resource base of around 3 billion barrels is the foundation for this. We're currently producing above 400,000 barrels per day as planned, and we're targeting to maintain this level long term. And we are opportunity-rich and are investing in a series of high-value, low-risk, short-cycle projects that will increase returns, adding significant value and cash flow.

We continue to incrementally improve the business for increased resilience and flexibility with a free cash flow breakeven of around $40 per barrel, which I think is important for supporting investment through the cycles. We generate more value for longer and are leveraged to higher prices, supporting long-term attractive returns, in line with our dividend policy of 25% to 30% of CFFO post tax over the cycle.

The war in the Middle East, I think, amplifies the strategic importance of Norway as a secure and responsible supplier of energy to Europe. All of these factors combined to deliver significant shareholder value. And you can see total shareholder return since the IPO 4 years ago of over 170%.

These are our first quarter 2026 results and, I think, the reasons to be invested in Vår Energi. Thank you for your time, and we'd now like to open up for your questions.

And with that, I hand to the operator.

The first question will be from the line of Tianhong Bi of Citi.

Can you hear me okay? Can you hear me?

Yes, we can.

Nick, you mentioned extraordinary dividends. Eni also introduced an extraordinary dividend mechanism above $90 per barrel Brent. Is that the same kind of play you guys have in mind for Vår as well?

And then on portfolio opportunities, Equinor recently framed its NCS 2035 plan around a 50% reduction in both tieback cost and time from discovery to production. Do you see this as an operating efficiency tailwind for Vår? Or could it also create further M&A opportunities between Vår and Equinor.

Good questions. In terms of dividend, look, our focus of management is to provide long-term sustainable dividends. And clearly, if these prices continue through this year, then we generate significantly more cash than we planned. We're going to continue guiding on a quarterly basis. But in terms of any extraordinary dividends, we will make a decision at the end of the year. So it will be into early next year when we report our Q4 results on what we would do with excess cash. But if that continues, then we would look at implementing an extraordinary dividend. We're not going to guide beyond that because I think there's a lot of volatility in the market. But ultimately, if we see high prices long term, we intend that we should return some of that to shareholders.

In terms of moving projects forward. Look, I think we set out at our Capital Markets Day and also last year the increased pace of activity we're doing as a company through our project factory approach. We're already delivering projects quicker than we've done in the past. And we see that standardization, speed, simplification are all important factors for creating value long term, and we have a big portfolio of opportunities that we operate to move forward.

So to give an example, Balder Phase 6, we sanctioned last summer. We've already installed much of the Subsea facilities, and we will be online in Q4 this year. So that's 18 months after sanction. I think it's very good that Equinor is also moving ahead and increasing the pace. And of course, as you know, quite a lot of our portfolio overlaps with Equinor. And so many of -- about half of our 30 projects are operated by Equinor. And so their approach to increase pace, improve value, we fully support and is also good for us as a company. Hopefully, that answers your questions.

And the next question will be from the line of Teodor Sveen-Nilsen.

Two questions. First one, on the potential impact of the higher prices we've seen recently, you all made an extra dividend. I just wonder if you can discuss how the current prices and current cash flow impacts your investment appetite. Should we expect some accelerated project developments? Yes, any thoughts on that would be useful.

Second question is your sort of view on the realized oil prices. Obviously, you currently see a premium versus the current prices because of the Hormuz situation. What's your view on the spread between your realized oil prices and the Brent oil prices if Hormuz opens today?

Teodor, I'll take the first question, and Carlo will cover the second. In terms of -- we said at our Capital Markets Day that we were going to lift our investment rate to speed up projects and invest more for longer to deliver over 400,000 barrels a day.

The reality is, we optimize our outlook for our company every day. I mean, it's a whole series of decisions, and we look to create long-term value. I mean, my aim is that we set out above 400,000 barrels a day long term. I would like to be able to improve that over time. So very much, we continue to look, outlook and look at the opportunities ahead of us to think about whether we can improve it. But I can't promise we're going to spend any more money than we've set out, but we continue to look to optimize our portfolio going forward. And that's certainly a possibility.

So Carlo, do you want to address the...

Sure, sure, sure. Teodor, thanks for the question. So when it comes to the realization and the premium on Brent and if I got correctly, your question is our view on what would happen if Hormuz opens tomorrow. Well, we see high premium, as we mentioned, and those will be -- this will become visible in our Q2 results because those premiums were mostly for the deliveries in May and onwards.

I think that even if Hormuz opens today, this is something that will remain -- of course, will normalize over time. But in the very short term, it will still remain in a premium environment because it will take a while even if there is a full opening today to really absorb the situation and give to all the logistic aspects involved in that, some stabilization. So I'm not expecting this to be a very long-term effect. But in this year, I would expect this to remain stabilizing over time for the next months to come.

[Operator Instructions]

This is Sasikanth Chilukuru from Jefferies. I had two questions. The first was regarding the extraordinary dividend. You also reiterated your dividend policy of 25% to 30% of CFFO. I was just wondering if you would stick to this policy regardless of the macro and even if the prospects of extraordinary dividend would fall under this policy?

The second was on hedging. You introduced hedges for both oil and gas production this quarter. Could you share more detail on the policy guiding this decision? Additionally, should we expect further hedging activity going forward, especially particularly for oil?

Carlo, do you want to take this?

Yes, I can take. I'll take both. So when it comes to the dividend policy, our dividend policy long term of 25% to 30% specifically focused tax over the cycle remains intact. So an extraordinary dividend will be part of the policy, but it's not going to change the policy, because it's meant to be long term, it's exactly meant to go through the cycle and the fluctuations over the cycle.

When it comes to the hedging of oil, we are taking a bit more, I would say, proactive approach compared to what we did back in the past because the company is very different. We had a program where we were basically hedging at $50 flat in the past years, and then we decided to take a bit different approach because the size of the company is very different. Also, the production profile is very much derisked compared to where it was when we were in the execution phase.

So we look at the market always. The target is to hedge just part of our post tax production. So we don't have close to 100% of production. And the main purpose is to secure a floor without capping the upside. So that's the main objective of the policy. And we will continue, of course, doing this actively over time because we do this on a rolling basis.

I think just to come back on the first one, our policy is 25% to 30% of CFFO post-tax over the cycles. But clearly, with higher prices, we generate more CFFO. And of course, staying within the policy still gives us the opportunity perhaps to go above the dividend run rate that we have at the moment. So as we say, we will assess this at the year-end and make a decision at that point in time on the level of excess cash that we might return.

And we'll now take our next question from Victoria McCulloch of RBC.

Just one firstly on production. At the CMU earlier this year, you highlighted that January production was 416,000 barrels a day and that the capacity of the assets was about 440,000 barrels a day. Can you just talk us through the moving parts from, I guess, the average in January to the full quarter?

And then on the Goliat Gas expansion, what's your -- I guess, what's the expectation in terms of timing for Hammerfest to be able to take the gas from this development section? What's your base case assumption in terms of timing? That would be very helpful.

Yes. On production, we set out at our Capital Markets Day how we performed so far this year. And clearly, we have upsets in the performance of assets and timing of activity coming online and new wells. So those things, all, is complex optimization. And so it's clear the quarter average was 406,000. That's in line with our guidance range for -- in terms of how we set out the year. And we're on track to deliver within our guidance range. And in fact, what I'll say is that the top end of our guidance range is still achievable from where we sit today. So timing of wells coming in has a bearing also on some of the outcomes. So that's sort of how we've set this out.

In terms of Goliat Gas, it's a great project, actually. It secures the lifetime of Goliat to 2050. It adds more oil because it allows us to optimize the management of the reservoir, and then we deliver the gas into the Hammerfest LNG project. And of course, that is full for some time. And when that goes on decline or cannot meet its profile, we get the opportunity to use the capacity to redeliver our volumes.

If you assume that it's full until it comes off plateau in sometime in the 2040s, that's when we would get the gas back. But if at some point during that time, the facility can't keep full for whatever reason, then we would also get volumes back. So -- but our base case is the assumption that it comes in the 2040s when Hammerfest LNG goes on decline.

I think, this is also a really important project for unlocking the future potential of Goliat. We have our Goliat Ridge discoveries that we've made and the potential there is over 200 million barrels, and we're working to move that project forward. And our aim is to do it as quickly as we can. It's very close to Goliat.

But of course, the moment as we're injecting gas resources into the reservoir, we're limited on how we handle the gas. But of course, Goliat Ridge would also generate more gas, which would have a challenge for us. And then we'd have to spend money to dispose of that additional gas somewhere. So this project also facilitates and makes it more efficient to develop Goliat Ridge. So they're linked. It's a good project. It creates the long-term perspective for the asset, and now we can go and invest into the remaining opportunities around there.

Just if I can ask a follow-up on that quickly, Nick. The breakeven for this project looks, I guess, lower than, I guess, the threshold at which you've talked about sanctioning projects at $30 a BOE. Is it just a very compelling investment at this point in the cycle in addition to opening up the wider investment area?

I mean, it's the right time to do it. There's a lot of resources here. And actually, we haven't guided a specific breakeven, but it's in line with what we have used as a company, which is $35 a barrel or breakeven. So it's in line with that as a project.

The next question will be from the line of John Olaisen of ABG.

Questions, 2 actually. Q1 '26 was a 6th quarter in a row with significant underlift, if my notes are correct. I just wonder if you could comment on that a little bit. Is that just a coincidence? Or is this some -- is it not a coincidence? And also maybe, when should we expect to see a reversion of the accumulated underlifting?

My second question is more a comment or a follow-up actually on Teodor's question regarding premium -- on premium to Brent. Are there any particular fields that you would highlight where you get significant premium to Brent at the moment? I know the Johan Sverdrup is seeing some $10 premium to Brent over the last few weeks. And I know you're not in Sverdrup, of course. But if there are any fields that you could -- would highlight, it would be interesting.

I'll take -- I can take both. Thank you, John. So when it comes to the underlifting, it's true that we've been in a stable underlifting position. And every quarter fluctuates. What -- so -- I mean, it's just part of how the lifting program is built up. You know that, each field is different, license is different. It depends on which is your equity volumes. So these are very operational mechanisms.

In Q2, what we see is that, we see a significant reversal of the underlifting position, again, for the very same operational reasons because a lot of cargoes that were not lifted in March has already been lifted in April as we speak, because we are almost at the end of the month with a very high prices, and this is, of course, a positive note. So we expect Q2 to be in a good overlift position, so rebalancing the global position, but it's very operational.

When it comes to the premium, just to give a bit of the grades that we see, we are seeing a lot of premium, very material premium is Johan Castberg, Grane and Balder, for example, just to make some examples of where we are seeing quite a material premium.

I think to give a bit of color. We were in over 40 fields. But we've seen premiums up to $20 for some crude sold in May, but we have a whole range of different qualities. So we don't want to provide guidance on the broad spectrum. But I mean...

We're just mentioning some of those that, yes.

But some very significant premiums.

And your next question will be from the line of Nash Cui of Barclays.

Nick and Carlo, thanks for taking my questions. I have two, please. The first one is on production flexibility. I wonder how easy is it for Vår Energi to push back on some of your maintenance or to bring more volume online quicker than planned?

And then my second question is on gas price actually. In your report today, you disclosed good gas collar options between $85 to $270 (sic) [ $280 ] per barrel, which is amazing thus between Q3 to Q1 next year. I wonder given that, what is your view, kind of medium-term view on gas price over oil, where do you see the more relative upside, please?

Okay. So thanks, Nash. I'll take the first, and then Carlo will talk about gas prices. In terms of production, as I went through the slides, I think you saw that we have a slight dip in Q2 and Q3, which is planned turnarounds. But this year, we actually don't have many. And so the average impact over the year is around 6,000 barrels a day. We have looked at those to see what we can shorten or push back, of course, but there's very limited things that we can do, but actually the impact is very limited.

In terms of trying to maximize production, that's what we do every day actually. So we work hard to deliver volumes. And I can assure you, we're going to maximize the production that we can out of our portfolio as much as we can. But I think we don't have much flexibility because we're already doing that. So hopefully, that answers the question. And then Carlo, maybe you to pick up the gas prices. And I might want to comment at the end as well.

Yes. Sure, sure. So when it comes to the gas price and aging, as you mentioned, we got a very good spot to place a very attractive collar, I would say, with the target again to protect the downside, although we saw a cap so high that we felt it was very reasonable to enter into 0 collar.

Where do we see most of the upside? It's a bit difficult question, because the 2 things that are in my view now very much correlated, because what is happening in the Middle East is disrupting actually both. And you also have to consider that the storage in Europe are very, very low.

So in the very short term, if the blockade continues, I think both the market will be quite impacted. And there is a dynamic for storage replenishment in Europe that will be dragged into the summer, even if there is an opening and also fair to say that there are plans to be repaired over time, and this will take time. So -- and so if there is -- where there is the most -- it's a bit difficult to say, but I believe both will be pretty much sustained over the next months for maybe different dynamics, but in the end, the very same route. And Nick, please?

Yes. I mean, we're obviously disrupted in this period of time with gas suppliers in the world, and that's obviously why we've got big prices at the moment. And I think when this conflict ends, it will take some time to recover. I think there are some facilities need to be repaired and this disruption in the world will need to be unwound.

But going into this, the assumption a lot of analysts had we would see very low prices in Europe due to the large flows of new LNG coming online, particularly in North America and the Middle East. I've made it clear. I didn't believe the very negative views. I think for lots of reasons, this disruption that we see today is a good example of the uncertainty. You can see many of those projects aren't necessarily going to come on time. But I also see a strong demand growth for energy, particularly in North America. You can't buy gas. New gas power generation capacity sold out for 6 years. And I mean, what's all that going to do when it comes online, it's going to burn a lot of gas and a lot of that's to drive AI and data centers around the world.

And so, I think, world demand for energy and gas is perhaps underplayed and particularly in North America. And I think that would flow through to gas prices. So we have been a bit more positive on the long-term outlook once this market disruption at the moment settles down. So that's sort of how we look at things here.

And your next question will be from the line of Anders Rosenlund of SEB.

How much of the reported gas production is production gas, i.e., gas used for -- or fuel gas, as you call it, used for own consumption?

Yes, we report this way and it's around 8,000 BOE per day.

[Operator Instructions] And we'll now move on to our next question from Steffen Evjen of DNB Carnegie.

I have a question on Balder production. So it was my understanding that the capacity here after FPSO started was around 110,000 barrels per day gross in production is now at around 90,000 over the past few quarters. So my first question is, could you help me bridge the gap between the 90,000 and 110,000 and whether this is constraints to FPSO or performance of the wells or any other things? My second question is, should we expect any upside from these levels over the next quarters to the peak capacity level?

Good, Steffen. I think we've explained in the past quite a number of times that these Balder wells, when we drill them, they have high initial rates, and they decline quite rapidly, and they have a very, very long tail. And so that requires us to continually invest into the portfolio we're bringing new wells on. So it reaches a peak rate rather than a plateau rate.

And so, when you -- last year, we installed the Jotun FPSO that adds 80,000 barrels a day of gross production when it's potential, when it's full. And then we also have the additional FPU production, which was about 30,000. And so you're right in saying we have potential capacity of 110,000. But we also have to continue to invest into the well stock to keep this full. And I think at the end of last year, we reported some delays on some wells on Balder Phase 5. So that has had an impact. So we expected to have a few more of those wells on by now. But that was all built into our outlook for this year when we came into a guide for this year.

And so it's this continuous process of continually investing into the capacity. What we are going to find is, it's not going to be limited by oil capacity. It's going to be limited by gas handling capacity and water handling capacity ultimately because as these wells get more water cut and get more gas, that's what's going to be the limiting factor. And that's why we're doing the Balder debottlenecking project at the moment, which will come online later this year, which will -- which is essentially there to improve gas handling capacity and water handling capacity, which will help us produce the volumes out quicker. But we will be continuing to drill here for many, many years. And that's why we are confident to be able to say that we're going to be able to sustain around 80,000 barrels a day through the area long term. Hopefully, that answers the question.

There are no further questions in queue. I will now hand it back to Ida for closing remarks.

Thank you very much. There are no further questions from the chat. So that concludes the first quarter 2026 presentation. We thank you all for joining, and wish you a good rest of your day. Thank you.

Good afternoon, everyone. It's a pleasure to welcome you all to Var Energi's 2026 Capital Markets Update and presentation of our fourth quarter 2025 results. It's great to see so many people here in the room and also joining us on the webcast.

2025 has been a transformational year for the company. And today, we will present an updated plan for how we will be delivering higher production and more value for longer with material cash flow generation and attractive dividends. Our CEO, Nick Walker, will lead the way, followed by presentations held by several members of our leadership team. In addition to Nick, [ Torgir, Carlo and Ellen ], we will have our Head of Projects, [ Otkar Dalane ], that will walk us through our high-value project portfolio; and our Head of Exploration, Luca Dragonetti, who will take us through how we will continue to deliver value through our exploration activities. Following the presentations, we will open up for questions.

With that, I'd like to invite Nick to the stage.

Well, thank you, Ida, and good afternoon, everyone, and welcome to Var Energi's 2026 Capital Markets Update together with a review of our Full Year 2025 results. And it's really great to see you all here again in Oslo and also a warm welcome to all of you who are joining us online.

I'm pleased to report that we delivered on our plan for transformational growth in 2025, delivering record high production, strong financial performance and significant value creation. I'm excited for the outlook for Var Energi. We have fantastic assets, a tremendous team, and you'll see today that we have strong momentum improving the outlook for the company and as we say, to create more value for longer.

And there's 4 key messages we want to get across today. Firstly, we significantly derisked the company with our major projects now complete, as you can see in this beautiful photograph today. Var Energi has never been in a stronger position. And secondly, we will deliver higher production for longer with more growth opportunities. Thirdly, we're incrementally improving for increased resilience and flexibility. And finally, we have higher value creation, ensuring long-term attractive shareholder returns. I think these are the drivers for significant value creation and are the themes that will run through everything that we talk about today.

But first, I want to provide some context to the business environment as I think it informs how we see our strategy and the decisions that we make every day for the future of the company. I think it's incredible that world population has doubled over my lifetime from 4 billion to 8 billion people. And at the same time, you can see that global energy demand has tripled and will continue to grow as the developing world wants the same living standards that we all enjoy. And this continued energy growth is despite significant improvements in energy efficiency. And it's going to be interesting to see the impact of AI and data centers and what that will have on the future demand for energy. And of course, affordable and reliable energy is vital for economic growth and prosperity. And all credible outlook show oil and gas will be required for decades in addition to an increased share of renewable energy.

In reality, what is happening is energy addition. It's not either/or. The world needs both hydrocarbons and renewable energy sources. And to provide affordable and reliable energy to all and meet the demand for gas, which is a critical transition fuel, it's clear that the world needs significant new investments in oil and gas to offset declines, as you can see on the chart. This requires long-term investment horizons. And we're seeing increased volatility and significant uncertainties in the world, and this can lead to a lower for longer price scenario. And we need to take this into account as we make investment decisions for Var Energi.

To be able to invest through the cycles requires a focus on high-quality, low breakeven projects. And you'll see that Var Energi is doing just that. And our view is that in any scenario, oil and gas will be essential for world energy supply for decades. And those that can produce with low breakeven prices and with as little emissions as possible will have competitive advantage. And as many of you have heard me say before, I believe that Norway is one of the best places to invest in oil and gas. And the reasons for this are really very clear. It's low cost, it's low emissions. In fact, it's world-leading. And that is why Norway should be the last oil and gas region to be shut in.

There's large remaining resources with continued access to new acreage. There's been long-term reliable framework conditions and supportive fiscal regime. And the NCS is a key supplier of energy to Europe. And oil and gas is key to Norway as a major source of industrial activity and employment across the country. This has all been driven by long-term government and public support for the industry, and our assessment is this support is strengthening. And all of these factors have resulted in strong competitive advantage for Norway. It attracts the investment needed to develop the shelf and because Norway is seen as a reliable producer with low emissions.

And so in this context, our strategy is really very simple. It's also consistent, and you'll see this is the same slide we've used for a few years. And our strategy is to ensure growth and value creation for all us -- all stakeholders over time. It's to be a pure-play Norwegian oil and gas company for the reasons that I've set out. And it's to be a reliable and secure supplier of affordable energy to Europe.

And finally, it's to be safe and responsible about how we conduct our business. And we're delivering on our strategy and targets as we will demonstrate today.

And as you can see here, the company has a strong track record of value creation, incrementally improving how we perform. From 2018 when the company was established, we've increased production by almost 2.5x, building the third largest producer on the NCS. And it's quite possible that this quarter, we'll become the second largest producer. And we've significantly improved efficiency and costs, whilst at the same time, materially growing reserves and resources. This is combining to deliver strong financials and returns. And you can see we achieved a total shareholder return since the IPO 4 years ago of 115%.

And as we will show today, we continue to improve the outlook for the company, creating material value for longer. And we continue to transform as a company to deliver more value and faster, incrementally improving every day to realize the opportunities in our portfolio. This is what I think about every morning when I wake up, how do we make it better and better. It's all about harnessing the entrepreneurial energy in the company where everyone can make a difference and contribute to value creation. And our heritage means we have deep and unique NCS expertise, and we are leveraging this. And I think technology is also key, but it's also about implementing to create value.

Of course, we don't deliver alone. We rely on partnerships and collaboration. Our license partners, in particular, [ Equinor ] and key suppliers amongst the best in their fields to help us deliver. And we also draw on the capabilities and expertise of our major shareholder, [ Eni ]. And as much of our value will be delivered through subsea tiebacks, we've established our subsea project factory approach with more on that later. This is how we will create value, and you'll see many examples of this from my colleagues today.

And safe and responsible operations are key to our license to operate, and we have high ambition to be the safest operator. I think overall, we've had good safety and environmental trend from our operations. And you can see in 2025, we had 0 actual serious incidents, material process safety events and accidental spills to sea. But however, we're continuing to have too many low-level incidents, which is a strong improvement focus across our organization. And we continue to decarbonize our operations to ensure relevance and investability long term. And you can see we're already in the top 15% globally on emissions intensity, and our methane emissions are at the near zero level. So we're already doing very well, but our aim is to reduce our emissions further.

And in addition to emissions reductions, Var Energi aims to become carbon neutral in our net equity operational emissions by 2030 through removals in the voluntary carbon market. And we continue to be recognized for our ESG leadership, ranked by both Sustainalytics and S&P Global in the top 15% of global oil and gas industry. I think this is leveraging to how the company is viewed, and you'll hear more from all of this later today from Ellen.

And now looking at the business. Var Energi has a high quality diversified asset base in all areas of the NCS. And you can see we have interest in around 50% of all producing assets and the associated infrastructure and with a large exploration footprint. Only Equinor has a bigger and more diverse portfolio than we do. And we also have a balanced commodity mix with gas being around 1/3 of our production volumes, making us one of the largest gas exporters from Norway. And we stepped up the pace to maximize the value from our portfolio.

With our major projects completed, the outlook for the company is derisked. And what is ahead of us is a series of low-risk, high-value predictable tieback projects with short time to market. We will invest more to deliver higher production for longer from our material resource base, which is opportunity-rich. And we continue to incrementally improve the outlook for the company, making it better and better. And we're increasing resilience and flexibility, which is important for navigating this period of lower prices. And we're investing in high-return projects, delivering higher value creation and ensuring long-term attractive dividends. So this is how we will deliver more value for longer.

So now let us look at the highlights for 2025. I'm pleased to report to you that strong results for 2025, having delivered transformational growth in the year. We delivered record high production in the fourth quarter of 397,000 barrels per oil equivalent per day and 332,000 barrels per day for the year. Our major projects, Johan Castberg and Boulder X were completed on schedule. And in total, 9 new growth projects started up during the year as planned, adding around 180,000 barrels per day at peak. And we're making good progress unlocking the future value of our portfolio. And you can see we sanctioned 10 high-value projects in 2025. These are developing around 160 million barrels of net reserves with average breakeven price of $30 per barrel. And we continue to create value from exploration with 6 commercial successes in the year, and we're already turning this into value.

And this -- bringing this together, we increased reserves with 2P reserve replacement of 185%. And we delivered strong financial performance last year with cash flow from operations post tax of $4.6 billion for the full year. Production costs for the year were at $11.1 per barrel at the lower end of our guidance range. And for the fourth quarter, we reduced further to $10 per barrel as we had guided. And we have strong available liquidity of $3.5 billion, and we maintain a strong investment-grade balance sheet. And lastly, we continue to provide attractive dividends. We will pay a dividend of $300 million for the fourth quarter of last year. This will be distributed in February.

This means total 2025 dividend payout is $1.2 billion, which is 26% of CFFO post tax. So in summary, we delivered strong results in 2025, in line with expectations.

And now looking forward to 2026, and we're set for record production levels with 2026 production expected in the range of 390,000 to 410,000 barrels per day, in line with how we've previously guided. And you'll see we're accelerating the pace of new growth opportunities that will support higher production for longer. We have 13 projects in execution. These are developing 210 million barrels of net reserves with low operating costs and breakevens on average around $30 a barrel. And we expect to sanction up to 8 new projects this year, targeting around 140 million barrels net of net reserves. And we're continuing to drill out our exciting exploration portfolio with 12 wells planned, targeting approximately 75 million barrels of net risk resources.

And we continue to drive efficiency, delivering incremental improvements across the whole value chain, and you'll see many examples of this today. 2026 production costs will be around $10 per barrel, and we aim to sustain at this level long term. And we continue to reduce emissions with the long-term aim to be carbon neutral in our operations by 2030. And the key focus of management is to deliver long-term attractive dividends to our shareholders as our track record demonstrates. We're seeing increased volatility and significant uncertainties in the world, and this can lead to a lower for longer price scenario. And so we will take a prudent approach, guiding dividends on a quarterly basis. And we continue the attractive dividend level and provide guidance for the first quarter of 2026 of $300 million. This is the same run rate as we had for 2025. And for the full year 2026, we will continue guiding on a quarterly basis, in line with our long-term dividend policy of 25% to 30% of CFFO after tax over the cycles.

And now let us look at how we will deliver higher production and value for longer. And Var Energi has an amazing portfolio with lots of optionality and growth opportunities. I think you will see that. We have a track record of continually growing reserves and resources organically. And you can see here that our 2P reserves stand at 1.3 billion barrels. This underpins our current production levels. But as a company, we are much, much more than that. We have 2C contingent resources of around 900 million barrels. These resources are undeveloped. And we're moving forward around 30 early phase projects to develop around 2/3 of these volumes. And we also have an exciting exploration portfolio of about 1 billion barrels of net risk resources.

So when you put this together, we have around 3 billion barrels of resource potential. with around 1.7 billion barrels or 60% yet to be developed. Delivering this opportunity is how we will deliver higher production for longer.

And as I said earlier, Var Energi has delivered transformational production growth in 2025. And you can see we doubled production from just 2 years ago. And in 2026, we expect to produce between 390,000 and 410,000 barrels per day. During the year, we will bring online a material program of infill wells and some new project start-ups that will keep production at current levels beyond the end of this year. And long term, we're targeting over 400,000 barrels per day, a step up from the 350,000 to 400,000 barrels per day towards 2030 that we guided at last year's CMU. And these are the levers that will drive higher production for longer.

Firstly, it's through maximizing recovery from our high-quality producing assets. We see a continuous infill drilling program, developing net resources of more than 300 million barrels over time. And these are the best barrels we can develop with breakevens of well less than $30 per barrel. And secondly, as I've mentioned already, we have 13 high-value projects in execution, developing net 2P reserves of 210 million barrels. And this portfolio has average breakevens of around $30 a barrel. And thirdly, we're progressing around 30 early phase projects. These are all tieback developments with short time to market, targeting net resources of 550 million barrels. This portfolio will create material value with average breakevens of less than $35 a barrel, and our aim is to do better than that.

And finally, we're unlocking more value with our focused exploration program. And we have a strong track record of creating value from our exploration, as you'll see later. And we plan to drill 50 to 60 wells over the next 5 years. This program is targeting net risk resources of around 500 million barrels. And when you put all this together, we're progressing activity to create value from around 70% or 1.2 billion barrels of the 1.7 billion barrels undeveloped upside in our portfolio. So we're after and developing a material part of the upside opportunity.

And development of this portfolio of high-value, low-risk short-cycle projects will increase returns from our business, with return on capital employed projected to increase from the current level of around 20% to up to 25% to 30% by 2030. This adds significant value, and Carlo will come back to this later. And additionally, we continue to take an opportunistic approach to further M&A, where there is a strategic fit and we can create value. It is top of mind to seek the next step change in the company's outlook. We're also targeting to optimize our portfolio where we have some high working interest and can reduce our capital requirements for new growth projects. What we have in mind will have limited short-term production impact, and we will move this process forward during the first half of the year.

And this program delivers higher production for longer, targeting over 400,000 barrels per day long term. It's driven by material long-life resource base, which, as you can see, is opportunity-rich. And we will invest more over a longer time horizon into a series of high-value, low-risk short-cycle projects. And we are using this lower price environment to improve the economic resilience of our investments. And importantly, we have the people, the equipment and contracts in place to deliver this improved outlook for the company.

Now Var Energi's high-quality business provides a strong foundation to deliver attractive long-term value to shareholders. As outlined, we will deliver higher production for longer, targeting over 400,000 barrels per day long term. And our high-margin barrels means that the business is free cash flow neutral at around $40 per barrel over the period 2026 to 2032. This means that above $40, we generate cash to pay dividends or to pay down debt, and we're covering all of our costs. And this means we generate strong free cash flow in the range of $5 billion to $10 billion over the same period. And we have a strong investment-grade balance sheet and a lot of flexibility with 60% of our capital uncommitted means that we can manage through the lower commodity price cycles with a lot of flexibility.

And this combines to allow us to pay attractive dividends within our long-term dividend policy of 25% to 30% of cash flow from operations post tax over the cycles. And it is the key focus of management to maintain long-term attractive shareholder returns, and we have a resilient and flexible business that will allow us to navigate this lower price environment.

And to summarize, I want to leave you with the following messages. First of all, Var Energi is a stronger derisked company positioned to generate more value for longer. Our material resource base of around 3 billion barrels is the foundation for this. And we have increased the outlook with higher production for longer, targeting over 400,000 barrels per day long term. And we're opportunity-rich. We're increasing investments in a series of high-value, low-risk short-cycle projects that will increase returns. This adds significant value. And we continue to incrementally improve the business for increased resilience and flexibility with a low free cash flow breakeven of around $40 a barrel. And we will generate more value for longer, supporting long-term attractive returns, in line with our dividend policy of 25% to 30% of CFFO post tax over the cycles. I think these are the reasons to be invested in Var Energi.

And with that, I'm going to hand over to my colleagues, who will provide further details on how we will deliver this exciting outlook for the company, with first up being Torger. But before Torger comes to the stage, please enjoy this film on the further development of the Boulder area. Thank you very much.

[Presentation]

Good afternoon all. it's really good to be here and what a fantastic movie. These kind of movies always gives me goose bumps and it makes me really proud of the industry and my colleagues. Also here, you see a fantastic photo, Johan Castberg at location, the cathedral of the Barents Sea as the Energy Minister, [ Terry Olson ] likes to call it.

On this slide, you see my main topics for today. 2025 was a really good year, and Var Energi has never been in a better position. We have delivered transformational growth, doubling production since 2023, and based on our growing resource base, we are becoming opportunity rich, essentially moving from 2 mega projects to a large portfolio of high-value subsea tieback projects. Through continuous improvement and enhanced capabilities, we are improving all parts of our business. This by improving our ways of working and developing better solutions. The bottom line here is that we have the basis to deliver more than 400,000 barrels per day long term, creating more value for longer, becoming bigger and better.

2025 Transformational Growth delivered. We reached the milestone of above 400,000 barrels per day in August. And we met the full year production guidance of 332,000 barrels. During Q3 and Q4, we saw a record production level for the company. And all projects promised during last Capital Market update were brought on stream during the year. Also, our operated assets performed very well. And with maintenance included, ending on 92% production efficiency, a really strong number. So let's have a look on the key elements to this transformational growth, Jotun and Johan Castberg.

Here, you see Jotun application. I think this is the clearest symbol you can have of our derisked Var Energi. The Balder field [indiscernible] Jotun is really ticking all the boxes, transformational growth, opportunity-rich and continuously improving. So you might ask, how is Jotun doing? I'm happy to say it's very well, producing as expected, being around 80,000 barrels gross per day, and we have a plan to keep feeding Jotun for the long term. Balder Phase V was sanctioned and had first -- or had first oil in December '25. Balder Phase VI will be brought online Q4 this year. And the next phases for the Balder field in Jotun constitutes our 3 main elements, named Balder Next.

The first one is Jotun debottlenecking. It is already sanctioned that happened late last year. And this is to increase the production capacity, which will accelerate production and then enable for the next step being the removal of the Balder [ FU ] to reduce OpEx and emissions, which is planned to happen in 2028. The third step is to drill more wells or new wells in the area, which is planned to be sanctioned this year, 2026, and this is to increase the recovery and feed the Jotun FPSO. So that means that Jotun is a model hub for the future, expected to produce to 2050.

Then we are moving north to Johan Castberg. As you know, started up Q1 2025, and it reached plateau in June 2025. Also, the Johan Castberg FPSO is currently producing stable and as expected with a really robust well potential. Today, 22 wells are completed and the remaining 8 wells will be concluded within the beginning of 2026. And together with Equinor, we target to maintain plateau production at Johan Castberg beyond 2030. This through infill program, new tieback developments and further exploration.

End 2025, we sanctioned the increased oil recovery wells and the [ Eastlack ] subsea tieback. And there is more to come for Johan Castberg. The Snofonn/Skavl subsea tieback might be sanctioned already by end of this year. So that means summarized, Johan Castberg has a large area of prospectivity, estimated to have around 1 billion barrels, meaning production for decades to come.

With Jotun and Johan Castberg at location and producing as expected, this gives us a fantastic derisked foundation for our 2026 production. Around 30% of current production are coming from Jotun and Johan Castberg. 2026 is really set up to deliver record high production. We saw a production average of January of 416,000 barrels per day. And in February, so far, it's 423,000 barrels. Actually, we saw a company record 23rd of January this year, a production of 443,000 barrels.

You might ask what is the potential? I will say that the potential for -- in a perfect production day is around 450,000 barrels. This year, we are going to have less new projects starting up, 4 in total compared to -- and that is, of course, a lot less compared to 2025. And these 4 projects are contributing with an average of 15,000 barrels net the next 2 years. Also, we have a significant infill program, which I will return to later in my presentation.

And then you see a small and a smaller dip in Q2, Q3. This is the turnaround and planned maintenance season. And this year, that will have a limited impact on the full year production. Here, we're talking about 9,000 barrels per day in average. This means that we have a derisked outlook for 2026, and that constitutes a production guidance for the year of 390,000 to 410,000 barrels.

Of all the slides today I'm going to present, I think this one is my favorite, and you will soon hear why. Because Var Energi is oil and gas and what it makes for a living is our resources and reserves. Whilst producing more than ever in 2025, we exit the year with a bigger bank account than we entered the year, 2,200 million barrels of reserves and resources. I get dry in my mouth, fantastic. This is a very strong replacement. That represents a very strong replacement performance in 2025.

Just listen, reserve replacement ratio of 185%, resource replacement of 136%. This means that for each barrel produced, we moved 1.85 barrels into our reserve base. And the result, that means that we have a resource pool that will sustain the production for 70 years based on the 2025 production level. And of course, this is not including any exploration success going forward. So that means it's not very likely. So not only does the company have an impressive resource base, but also it's well distributed across our hubs. And this means that we are adding resilience and flexibility. All hubs have a very solid 2P base, which based on the 2025 production levels will ensure production for the next 10 years. But also, we see that we have a large portfolio of 2C volumes that are currently being matured, meaning that we are opportunity-rich. And all hubs have increased their combined 2P and 2C resources since last capital market update 1 year ago. And this really makes it possible for us to target a production in the range of 90,000 to 110,000 barrels per hub and combined, this gives us above 400,000 barrels per day long term.

But a huge number of resources is not enough. You also need to have the right assets. And ours are future fit, high-performing assets, really recognized by low cost and low emissions and high uptime. Several of our assets are electrified and also all our assets, which is important, have ongoing early phase projects that will ensure production and continued value creation for decades. We here see an average lifetime to 2050 and beyond. And in addition, through our large high-quality portfolio, Var Energi holds equity in around 50% of all the Norwegian continental shelf fields, which ensure tieback opportunities and close collaboration in strong partnerships.

We are, as Nick also said, improving the company. You see it through exploration of projects, drilling and well subsurface and operations. But status quo is not an option. So we have set new ambitious long-term targets for our core business, enabled by value-driven technology implementation and the use of artificial intelligence. Why? It is really about finding more improving recovery, better development and running our operations safe and efficient through improved ways of working and our solutions, really enabling more value with less. This has already yielded a lot of value creation.

Example given is the Balder area. By combining this through the subsurface drilling and well and product development, we have doubled the recovery reserves for the ongoing projects, Balder Phase V and Balder VI. Really, as you heard on the film from [indiscernible], she talked about combining artificial intelligence and seismic. What did she say? We are doing things faster, better and cheaper. That means more recovery, higher value. So really, the result here is unlocking value we earlier did not believe was possible.

So to conclude, our ambition is clear. It is to become the best in running our core business, driven by forceful implementation of technology and artificial intelligence. We have seen improved results regarding our operated cost basis. We have talked about it and we have reported and we have achieved, and we got to USD 10 per barrel for Q4 2025. We have reduced the unit operating cost by 30% during the last 3 years. And we will maintain around USD 10 per barrel for the long term. And actually, since last capital market update 1 year ago, we have incorporated USD 400 million net of cost reductions for the period 2026 to 2030. And we are targeting further reductions in the years to come.

The drive for this, high production for longer, 2032 and beyond, subsea tiebacks, which is really utilizing existing infrastructure, that means margin incremental cost and low emissions. Further, we are working relentlessly to improve our operational model, driving down costs, optimizing production and improving the production efficiency. And we are working hard to create economy of scale through collaboration with our partners, particularly here Equinor, when it comes to logistics, infrastructure and assets. That means bases, rigs, helicopters and supply bases. We have done this in the Balder area. We are doing it in Balder area, and we're going to continue to do this.

Then you might think, okay, so what is the sum of the story so far, Torger? If I'm going to summarize it in one word, competitiveness. And when it comes to our case for Var Energi, it means improved competitiveness. This gives more opportunities for value creation and higher activity. And I think you will see this very clear when we are coming to our infill program and our product portfolio.

Let's start with our infill wells. Nick also talked to this and said, this is the most effective and profitable wells to be had. And we will participate in a large number every year between now and 2032, targeting 30 to 40 wells a year. And this year, we will be building up the production with an end year contribution of around 40,000 barrels. What you will recognize in the infill wells is that they have a very strong economy, less than [ 330 ], a lot less for some and a payback time less than 1 year. So I hope you think the same as me. This is really the perfect match for Var Energi with a high-quality portfolio. Big fields are getting bigger. It is good resource management and really high value creation.

Then our high-value projects in execution. We have [ 3 ] projects in execution, representing 210 million barrels of reserves. Last year, we had 9 start-ups and 10 projects sanctioned. This really proves our ability to replenish the portfolio with new production. And here, we have our value-driven approach. We are working very closely and hard with our suppliers to find the best solutions for value creation. And this results in highly competitive portfolio with a breakeven of around $30 per barrel and $3 per barrel in average unit operational cost. And for those that remember well, that means that we have improved this since last CMU, really through our maturation phase, making better solutions, finding more value in our projects.

Then to our large early phase portfolio. I have done quite a few projects in my life. But when I look at this slide and these projects, I have to say what our portfolio. It is opportunity rich, it's high value, it's flexible, it's derisked, and it is really ensuring high production for longer. Last year, we had 25 projects in the early phase, addressing 500 million barrels. And even though 10 projects were sanctioned in 2025, we still have around 30 projects, targeting now 550 million barrels net to develop. That really means that we have been stepping up and growing our early phase portfolio. These are high-return projects with a breakeven of around $35.

So that means that we have been growing our portfolio while maintaining attractive returns. And here, we can ensure you all, we are going to stay disciplined, ensuring sanction high-quality projects. And this year, we are targeting up to 8 sanctions. So -- and now I'm coming to a really important slide. Now you have to keep your attention because the message here is that we are going to produce more for longer. The reason for this is that we have an improved outlook of our business. Today's production forecast for 2030 is 40%, 4-0 percent higher than the outlook that we presented to you in 2023. And actually, it's more than 20% higher than we presented for the Capital Market update last year.

The recipe, we are improving the recovery, continuous focus on maturing and drilling infill wells. As you have seen, we have a big product portfolio, proving our ability to mature and accelerate new opportunities, which I would like to summarize in 2 words, opportunity-rich. And very soon, you will hear [ Odgir ] explain more about this. And of course, we also have a consistent exploration success, and Luka will address this a bit later today.

M&A. As you heard Nick say, it is really part of the DNA in Var Energi. There would have been no more energy without it, but it must be value accretive. And we have been good at it, the value-accretive part, I mean, realizing a lot of value, both based on the Neptune acquisition and more recently, the [ Ecofisk PPF ]. [ Ecofis ] produced fields -- previous produced field that means.

So then I'm coming to my last slide. And to conclude, our value proposition is clear. Transformational growth has been delivered, and we are targeting above 400,000 barrels long term. That means higher for longer. We are derisked and opportunity-rich based on a significant reserve and resource basis of 2,200 million barrels, more than 40 projects under development, our large infill program and really an exciting exploration portfolio. And we will continue improving our capability with the ambition to be best. We are getting bigger and better.

So with that, thanks a lot for your attention. And then [ Olger ] will hand over to you, but first, there's a film. Thank you so much.

[Presentation]

So 2025 was a transformational year for Var Energi. We delivered 9 out of 9 planned project start-ups, including the 2 major projects, Johan Castberg and Jotun FPSO. These two projects has constituted 60% of the total project portfolio the last years. They have been complex and long-duration greenfield and refurbishment projects. Now that they are completed, they will serve as important hubs for future value creation.

Our projects have transitioned together with the company. And our current and future portfolio will be close to 100% focused on subsea tiebacks with low breakevens, higher flexibility, short paybacks and fast execution with lower risk. To ensure success from initiation to start-up, a key focus area has been to implement -- to ensure we implement a project factory way of working. We have, while delivering the start-up, built capability and capacity for the subsea project factory. And we have put all the building blocks in place.

With a portfolio approach of around 30 early phase projects, we have flexibility to choose the most attractive projects first and improve and arrange the rest before moving into execution. It is a disciplined approach to ensure robustness in our portfolio. And then through simplification, standardization and running parallel activities, we capture economy of scale and enable faster development and execution of our project portfolio. Our strategic partnership ensure early engagement and provide us competence and capacity at the right time. And enabled by these points, we can also pre-commit long lead items. And we, in fact, see this as derisking the portfolio, and I will come back with tangible examples from our projects. Altogether, this changes the way we work and improve the solutions. This is the factory project way of working, and it will enable us to get higher production for longer and create more value.

So let me first start with the portfolio. We have demonstrated our ability to mature and develop our resources through the later years. The project portfolio has grown significantly over time, doubling number of early phase projects, including volumes from 2023 to today. This is why we delivered 10 project sanctions in '25, outperforming the target of 8, and moving 160 million barrels into execution. Which means combined with the projects in execution, we now have more than 40 projects in the portfolio. And our projects, they are evenly distributed both in time and across all the hubs.

And it is a strong and healthy funnel. We have been able to pull project start up closer in time, combined with increasing the activity, so the majority of the project is starting up before 2030. The entrepreneurial culture and proactive mindset, then supported by continued commitment from the company, it has really enabled us to step up the pace and deliver faster than also for the future opportunities to refill the portfolio.

A prime example of our project factory is the Balder Phase VI project. It is a project reshaped from a rather complex solution with several wells to a first off for Var Energi, a trilateral well, which means it's a single top hole with 3 branches into the reservoir with a very slim and efficient subsea production system. And this is true value creation and the entire team solving for totality.

We started the project 2 years back and among others, due to pre-commitments, we will achieve first oil in Q4, only 18 months after sanctioning. The project will deliver around 17 million barrels and has excellent economics, with payback in less than 1 year. The factory approach enables learning from this project to be replicated across the portfolio, making us always searching for improvements to optimize value.

And this brings me into the Balder Next project. It is a true [ Kinderg ] 3-in-1, where we continue to develop Balder area through 3 parts.

First, we are increasing the topside processing capacity to accelerate and take on more volumes on Jotun FPSO via the Jotun debottlenecking project. It was sanctioned in '25. It is in full execution, and will achieve start-up this year in '26. Second, we will unlock around 75 million barrels through Balder Next new wells, contributing to maintain [ 70,000 to 80,000 barrels ] per day towards 2030. And third, we reduced OpEx by $130 million annually and removed 70,000 tonnes of CO2 emissions through the Balder FPU decommissioning, where the Balder FPU production volumes are maintained through sidetracks from the new wells.

This shows the deliverables obtained by the subsea project factory. The pace and value creation is supported by way of working and enabled by pre-commitments. Balder Next was initiated last year, beginning of '25. We will deliver first part in '26, first oil from new wells in '27 and take Balder to shore in '28. Balder Next will further position Jotun as one of our core assets ready for the future. This is only the first of many similar early phase projects that will feed the Jotun FPSO with volumes towards 2030 and beyond.

With the Goliat Ridge discovery, a new phase for value creation has begun with an ambition to sanction more than double what Goliat has produced since start-up 10 years ago. The Goliat Gas project ready to be sanctioned in '26 will provide a gas export solution for Goliat, prolonging lifetime towards 2050 and increasing oil production by optimizing reservoir management. It reduces unit OpEx and paves the way for further projects to increase production over Goliat, with the first being the Goliat Ridge project. Together with Goliat Gas, the Goliat Ridge project has the potential to secure more than 300 million barrels of production in the years to come.

The Goliat Ridge is what you may call in the backyard and with discoveries of hydrocarbons in all wells drilled. The extensive appraisal and data acquisition on the Goliat Ridge has proven the potential, and the project team is aiming towards start-up in '29, utilizing available capacity in the high-performing Goliat platform. As Luca will cover later, it doesn't stop with these 2 projects. The Goliat Ridge discovery has unlocked further prospectivity around Goliat that will be matured fast. And we will continue the active infill program in the years to come, building on the previous year's successful volume additions.

And then we have Gjoa, our efficient asset in the North Sea. It's also situated in a very prolific area with 4 discoveries in recent years. These are now combined into 1 project to maximize synergies and enhance the value. We anticipate to sanction the project this year and achieve first oil in '27 for Cerisa and '28 for the rest, meaning less than 2 years between sanctioning and production start-up. In addition to Gjoa subsea projects, Var Energi will drill the first infill well since field start-up this year. And we are here also looking for more. And Luca will come back to our exploration plans with a number of wells already this year.

So let me summarize in 4 points. Var Energi is opportunity-rich. We took 10 sanctions last year, expect up to 8 this year. We keep growing the early phase portfolio, now containing around 30 projects with more than 0.5 billion barrels of contingent resources. The projects have strong economics, low breakevens and with an ambition to improve. With the size of our portfolio, we have the flexibility and optionality in terms of speed and also prioritizing high-value creation. And the subsea projects provide a fast execution with lower risk, and it will enable value -- to create more value for longer, the subsea project factory way.

Thank you for your attention, and I will hand the word over to Luca.

Thank you, Oddgeir, and good afternoon, ladies and gentlemen. It's a great pleasure to be back on stage and talk about exploration and the future of the company. But it's even more impressive to feel lagging behind because you just introduced names of projects that are already delivering in your pipeline that last year were just -- were still in my to-do list. So this is how fast we can go. This is literally delivering seamlessly in Var Energi.

So it's something that we are experiencing altogether, transforming the company and of course, transforming it in the NCS. The NCS remains the excellent playground with a lot of undiscovered resources. We can put numbers, but these are the ones that are widely known. And we believe we are in an excellent position to take advantage of it from an industrial point of view, of course.

We have a portfolio of prospects that is hovering around 200. We believe they are distributed, well distributed and harmonized in a portfolio that include infrastructure-led, so near-field opportunities as well as high impact. The number, of course, of appraisals depends a little bit on the results of the discoveries, on the results of where they are, how they are. So it fluctuates a bit. But the share 80-20 remains representative definitely for our type of activity in terms of drilling.

All this contains roughly 1 billion barrels of oil equivalent net resources, which is a substantial and material basket from which to draw. And 60% of it is oil or at least estimated at the moment. So the portfolio is a very nice thing to have. We have it, and we draw from it using creativity and data. We use expertise and of course, integration of our technology, passion, all these elements are the part of the recipe that take us to take the commitments and drill the ultimate wells.

Selectiveness. We need to select -- we need to be disciplined. And all this has been recorded in the last 4, 5 years. We are looking at track record between '21 and '25. That shows how we added 280 million barrels of oil equivalent in terms of resources. Well, let's have a look. We were talking about how fast we can be in bringing them online, and this is exactly what we were talking about. 70% of it is either producing, therefore, produced, or in their way to be produced.

Success rate speaks for itself. It's substantially higher than the average. And we managed to keep the costs down with a post-tax around $1 per barrel. It's, I would say, a very good introduction. But then what do we do? Well, in 2025, we had a very intense in terms of activity year. We will see later, I will get back to it.

Anyway, Oddgeir already mentioned how much it has been done on the ridge on the Goliat Ridge. It is important to remember that these are not -- the ridge is not the only place in which we have discoveries. We made 6 discoveries, and at least 2 of them account for a substantial additional potential. And you see them recorded on the map, 300 million barrels between the Goliat Ridge and the Vidsyn Ridge as additional and follow-up. It's substantial.

The number of barrels that we added simply last year are in the range of 45 million to 75 million net. And of course, not only the long term, but also results in terms of immediate cash flow have been recorded with Smorbukk Midt. I'm sorry, my pronunciation. This is one of those that I can't pronounce at all, I'm sorry. But it's still -- it still represents a landmark because we were -- we literally were on target during Q2. And in Q3, we started production. This means that we had 16,000 gross, 16,000 barrels per day produced throughout the year, an incredibly short payout time. It's what we are looking forward to. We need long term or midterm because 2029 is just around the corner, and we will see the production from the Goliat Ridge. So let's say, mid to long term, to sustain our production, but also we need immediate results, cash, and we have the portfolio to do so. The portfolio, of course, needs to be fed, and we have the results of the [ APA round ] with 14 new licenses.

We mentioned Vidsyn, and Vidsyn was part of a very, very long story. It's how we managed to integrate legacy exploration with, of course, expertise, subsurface capacities and integration. Imagine the first discovery -- or at least, a well was drilled some 30 years ago. So we were in the previous century with different technologies and results remained doubtful to say the least. So we've been capable of going back, study the data, reintegrate the data with new technologies, new capacities, new seismic imaging. We decided that, that was the way to go and look at the result. We unlocked the potential of the full reach, and we opened up for more opportunities where absolutely close to one of our core area, the Fenja platform, where, of course, we can, I would say easily, nothing is easy, of course, but we can have a subsea tieback, which means, of course, many advantages in terms of operations, but monetization that is much better and simplified.

It's not enough. That's not enough. A new reprocessed seismic has been delivered just a few weeks ago. We are reworking again the whole area, and we will add more opportunities. And the activity follows up. A well is already in our drilling string for 2026, and we are planning to add more in order, of course, to improve the discoveries.

It's -- it's what I -- I mean, I'm Italian, so it could be easy to make a recipe. And this time, I'll go botanic, and it's more like a garden. This is another very, very, very nice garden that has been mentioned earlier on. It's the Gjoa area. And okay, there is no weed because nothing grows by itself. We need to make it grow.

So how do we make it grow? Well, we use our capacities. We use our creativeness. We use our technology, and we leverage on all the discoveries that we made, all the wells that we drill, all the data that we gather. Everything is put together, blended into something that is called exploration because we need to see beyond. And we need, of course, to be capable of producing the results that have been recorded in the area in the last few years with multiple discoveries like Cerisa, Gjoa, Ofelia, Gjoa North.

Follow up. Follow up because now there are more things that we can see because there is better and improved seismic and additional technology. And we can go further. This is what we will try this year with 2 wells already in our plan, Anabelle and Sava. And the idea is to continue. You see a lot of blobs there. Of course, the light blue ones are the prospects, the ones that are not yet matured. But we expect to bring them all into this stage where we will finally put a well on it -- on them. The number itself is impressive. We are talking about more than 200 million barrels recoverable still there for us. So this is the constant gardening activity that we are called upon doing.

And where it all comes together, I believe, has been already shown by Oddgeir, it is the Goliat Ridge. The Goliat Ridge saw intensive activity last year. We drilled 3 wells, 2 of them were appraisals. So this is flexibility, capacity to act, to have a vision and be ready to drill in case of success. Seismic, seismic that will and is already delivering great results because we are substituting something that was shot 25 years ago. It has been stretched. And now we are moving into a completely different environment with the capacity to pinpoint details that were not visible earlier on.

Still on that seismic, on the legacy seismic, we located most of the wells, and we made a fantastic discovery in [ Rhodette ]. That was the one that allowed us to understand the migration path and opened up a story that is not finished. We tested at the end of last year, the appraisal well with over 4,000 barrels of oil per day from 2 levels. There are quite a few other prospects that are following this incredible result of the test because now we know that we can produce from more levels than we expected before.

It's unlocking the future, but it's actually extending the life of this fantastic facility. The same, we are doing on Gjoa, and absolutely the same is happening on Fenya. What is next? Next will be a disciplined and selective approach to high-quality prospects. Coming, of course, from the basket that you saw at the beginning, the $1 billion that is continuously worked on and rejuvenated.

We are looking at 12 wells in 2026 for a total investment that is expected to stay around $250 million and $300 million in 2026. For the coming years, you see that we have in mind to drill 10 to 15 wells per year with a reduced investment based on our capacity to improve and be more efficient in our selection and in our spending.

So all in all, a bright and harmonized approach to a portfolio that is full -- that is really rich. It's a focused exploration program. It's focused on our capacity to create new ideas. So it's based on our creativity. It's fueled by our technology that is capable of transforming our vision in objectives that we can drill next year and in the years to come. Thank you.

Thank you, Luca. We will now have a short break, if I can please ask everyone to be back in the room at half past 3. We'll have the two last presentations and the Q&A. Thank you.

[Break]

Good afternoon, everyone, and welcome back. I am very pleased to be here today and excited to tell you about our deliveries and our progress since last year. As you heard from Nick earlier today, safe and responsible operations are integral part of our strategy and our company values. And we will continue to provide reliable and affordable oil and gas in a safe and responsible way with low emissions and low operating cost.

And to deliver this, we have the perfect toolbox. We have a high-performing organization. What you've heard from Nick and Torger, Luca and Oddgeir today are the ambitions and the achievements from our entrepreneurial One Team culture. This enables us to think differently, embrace new ways of working and to continuously improve. Our strategies and values define who we are, and they give us a shared direction as one team. And we believe that a safe, inclusive and responsible workplace is the foundation for the results that we achieve.

And this is reflected in low turnover and the strong employee engagement that we continue to see across the organization. Strong partnerships are also key to deliver great results. And by working closely with our strategic suppliers, partners and regulators, we deliver safer and more efficient operations with leading ESG performance. This is the team that will deliver more value for longer.

And our ambition is clear. Var Energi will be the safest operator on the Norwegian continental shelf. Because safety is not just a priority, it's a prerequisite for everything we do. It's embedded in our strategy, in our values and in the personal responsibility that each of us take when we come to work to work safely and responsibly every day.

And since becoming a listed company in 2022, we have continued to improve our performance. We see a positive trend in dropped objects and a continued reduction in sick leave. And this is by far industry-leading and 1/3 of the Norwegian average. And we believe this is a testimony to our highly motivated colleagues and a thriving working environment. When it comes to incidents with serious potential, we saw a positive development from 2022 to 2024. However, 2025 results are not where we want to be, and we are working hard to turn that trend.

But let me be clear on the most important thing. In 2025, no one got seriously injured working for Var Energi. We had no serious process safety events, and we had no serious accidental spills to sea. And this is something we value, and it shows that we are moving in the right direction on our journey to become the safest operator.

We are convinced that low emissions and low cost will have a competitive advantage, so we continue to decarbonize our operations and to deliver on our ambitions towards early 2030s. When it comes to emission reductions, our plan consists of 3 main levers: it's electrification, portfolio optimization and energy management. And as for everything we do, we have a value-driven approach, meaning we shall not only see -- achieve emission reductions, but also see benefits from either increased gas sales, higher production efficiency or reduced operating costs.

Portfolio optimization, which includes the retiring of noncore assets such as the Balder FPU and Statfjord A, will continue -- contribute significantly in reducing emissions of over 100,000 net tonnes annually and, of course, improve our operating costs. Through energy management, we target to materialize approximately 10% of our emission reductions towards 2030. As an example, in 2025, we managed to reduce emissions on our operated assets by around 30,000 tonnes. And this is a good example of that entrepreneurial mindset, finding new ways to save energy that in turn reduces emissions and costs.

And the emissions we can't reduce, we will offset. We will do it with nature-based quality carbon credits, which is key to deliver on our ambition to become carbon neutral in our operational emissions in 2030. In addition, we are using certified renewable electricity for the equity share of our operated assets and carbon credits from reforestation projects here in Norway to offset emissions in our value chain. Own emissions in the value chain.

And we continue to develop future solutions. We are progressing on our project on developing blue carbon credits through kelp restoration here in Norway. And we are leveraging our core E&P competence. And together with license partners and European emitters, we are progressing on CCS. However, the market is developing with a slow pace and with an immature value chain and regulation. And therefore, we are maintaining a disciplined and value-driven approach in developing CCS in Var Energi. And lastly, once again, we proudly received the badge ESG Top Rated in the industry from Sustainalytics.

At Var Energi, we have a clear and credible path forward. We are on track to reduce emissions by around 35% from today towards early 2030s. Currently in our portfolio, Goliat, [ Yera ], [ Omelania ], [ Tum ], [ Snova ] and Sleipner are already fully or partially electrified. Future reductions will be delivered through the already sanctioned electrification of [ Njord ] and [ Snoviit ] through portfolio optimizations that I talked about. And combined, these -- combined -- sorry, these steps materially lower our emissions while strengthening the long-term resilience of our portfolio.

At the same time, we are bringing more of our future production into electrified hubs. And this means we're not only reducing emissions, we also sustain production volumes in a responsible way. By doing this, we expect that around 40% of our production will be electrified in the early 2030s. And more than half of our new projects will be tied back to already electrified assets.

As I'm rounding off, I think this picture highlights why Var Energi is well positioned for the future, combining low cost with low emissions and an industry that is strongly aligned to continue to drive down emissions. And this is yet an example of Var Energi's commitment to long-term value creation.

Var Energi is already performing at top quartile level. In 2025, our CO2 emissions intensity was 9.5 kilos per barrel, placing us in the top 15% of the global oil and gas producer with a trajectory of further reductions going forward. Our methane intensity is near 0, significantly better than the global average and among the very best in the industry. And I'm also proud to say that our efforts have been recognized. We recently received the Gold Standard Pathway certification from the Oil and Gas Methane Partnership, confirming both the credibility of our reporting and the strength of our plans to continue minimizing methane emissions going forward.

So to conclude, our strategy remains consistent and clear. And our ambition to be the safest operator, to deliver responsibly with low emission, low cost and leading ESG performance remains. By fostering a high-performing organization with an entrepreneurial mindset, we continue to create value for longer.

And with that, I say thank you for the attention. And please now let me pass the floor to our CFO, Carlo.

Okay. Thank you, Ellen, and good afternoon, everyone. It's a pleasure to be here with you today. I would like to start by recapping 2025, a year characterized by transformational growth. The company has delivered a record high production, substantially above 100% reserves [ rep ] ratio and a strong financial performance. Actualized for the year, we generated $4.6 billion of cash flow from operation after tax, a 35% increase from 2024 despite a lower price environment. We have delivered on our promises to reduce operating costs down to $10 in Q4 with a 25% reduction year-on-year.

We continue to have a strong financial position. The leverage ratio is stable year-over-year and down from Q3 level as anticipated. We successfully refinanced the company last year at reduced cost. And as a result, we have high available liquidity at $3.5 billion, up from $13 billion at the end of last year. We continue to deliver attractive returns to our shareholders, distributing a total of $1.2 billion for 2025. For 2026, we continue with a quarterly dividend level of $300 million for Q1 to be paid in June. Our long-term dividend policy of 25% to 30% of CFFO after tax over the cycle remains intact.

We achieved robust realized prices in 2025. We generated nearly $2.2 billion in revenues in Q4 and around $8 billion for the year. Despite lower prices, this is 8% up compared to the previous year on the back of higher production. For the full year, the average realized price is $69 per BOE, and this represents a 6% premium to spot, adding 1 more year of additional revenues above market up to our track record.

Looking at the fourth quarter, realized price for oil was $63 per BOE, and the same goes for gas, which represents $4 above the spot reference price. Looking forward, we have locked in 14% of our gas volumes till September at around $75 per BOE, and we continue to have a robust gas sales strategy with access to several markets while retaining the flexibility in the contracts to decide the split between month ahead, day ahead and fixed price.

We have a balanced commodity mix and a strong gas position, being one of the largest exporters of gas from Norway to Europe. Around 30% of our 2025 production is gas, and most of this is [ PE ] gas to Europe. 70% of these volumes are sold under long-term offtake agreements with established and solid industrial customers in Europe. Some of these contracts are running until 2026.

Our flexible gas sales strategy continues to yield the results. We can optimize around pricing points in Europe and nominate volumes on various indexes to capture upside. Since our listing in 2022, we have on average beaten the spot price by 11%. And in the past 3 years, we have generated additional revenue above spot pricing of $1.4 billion.

We entered 2026 with a solid liquidity and financial position with a healthy cash balance of $700 million and a total available liquidity of $3.5 billion. We have a diversified long-term capital structure with an average debt maturity of around 5 years, which aligns with the strategic needs of the business.

Looking at the development of our cash position from Q3 to Q4. We generated above $1.8 billion before tax and working capital movements, and this is up compared to the previous quarter. Tax payments amounted to $811 million, up compared to the previous quarter, given that we paid 3 tax installments in Q4. We had a cash outflow of $970 million in investments in our high-value projects and for the purchase of interest in [ Eco PPF ]. Also in November, we distributed as planned, $300 million in dividend related to our Q3 2025 results.

Our value-driven capital allocation framework remains unchanged, with focus on high-value investments to support higher production, returning attractive dividends to our shareholders and ensuring resilience through the cycle. We are set for delivering higher production for longer. We have more growth opportunities, and we keep a disciplined CapEx policy with an average portfolio breakeven below $35 per barrel for the new projects. We are committed to maintain an investment-grade balance sheet and a robust credit profile while paying dividends according to our guidance.

Additional free cash flow will be used for extra shareholder distribution and deleveraging. We also have clear criteria for any M&A activity with a selective and disciplined approach designed to capture growth opportunities and exploit synergies. The most important thing for us is drive value for our shareholders over time.

As you heard from all my colleagues earlier, we have a strong foundation for delivering long-term value. We're improving our outlook, and we will deliver more production for longer with more than 400,000 barrels per day long term, and this is a material step-up compared to the previous outlook. Through this period, we will deliver high-margin barrels with a free cash flow breakeven of around $40. High production, short time to market and lower cost is the perfect combination to deliver a very strong and resilient free cash flow, in a range between $5 billion to $10 billion in the plan, underpinned also by high CapEx flexibility, with around 60% of CapEx towards 2032 uncommitted.

And all of this with an investment-grade balance sheet. We remain committed to attractive and predictable shareholder returns. And predicated on strong profits and free cash flow generation, we maintain the long-term dividend policy of distributing 25% to 30% of CFFO after tax over the cycle in dividends to our shareholders.

Looking at the next 7 years, we are well positioned to continue to generate material free cash flow while we continue to invest in high-value barrels. In the period 2026-2032, we're expecting to generate a cumulative free cash flow in the range of $5 billion to $10 billion, assuming a Brent of plus/minus $10 on our F&S case, which will be available for shareholder distribution and deleveraging.

As you can see in the waterfall, the cash flow estimates include uncommitted investments and exploration CapEx, but exclude the potential future value generation associated with successful exploration discoveries, hence representing an upside. We have significant cash flow resilience and flexibility. As you can see here, we have a robust cash flow generation across various price scenarios and a material dividend capacity going forward. We are free cash flow neutral at just $40 per barrel in the period 2026-2032, including all investments and cost of financing. We also have a high degree of flexibility with regards to CapEx spending as we mature our portfolio on new development projects.

We have a low leverage ratio and a solid balance sheet. And all this underpins our resilient dividend capacity in the short, medium and longer term, leaving also headroom for deleveraging and strategic flexibility across various price scenarios. We are freeing up resources to be deployed where we generate more value. We are streamlining our exploration program to make it even more focused and value-oriented, optimizing the long-term annual exploration spend down to around $200 million per year from $200 million to $300 million per year previously. This represents a reduction of up to $100 million per year.

We're also improving our operating expenses compared to our previous forecast, with savings around $400 million over the period of 2026-2030, driven by significant cost reduction across the board. At the same time, we have more investment opportunities in high-value projects to create more value for longer. We are investing in a high-value portfolio with strong economics, short time to market and quick payback time. This results in an increase of our long-term production target to more than 400,000 barrels per day in the long term compared to 350,000 to 400,000 barrels per day in the previous year, while investing an average of approximately $2.5 billion per year over the plan, which is within our previous guidance.

We are opportunity rich, and we will continue investing in higher production for longer. We are moving from a highly complex into a less complex standardized and short time-to-market investment phase. This will allow us to develop our reserves and resources in a much faster way, resulting in a significant value creation while maintaining capital discipline. In 2026, we are expecting development CapEx in the range of $2.5 billion to $2.7 billion. This is broadly flat from last year, notwithstanding increased activity in our early phase project portfolio, including Balder Next, and increased ownership in the [ Ecofys PPF ] projects. In the period 2027-2032, we are expecting to invest on average, around $2.5 billion per year, with high execution activity concentrated in 2027 and 2028, resulting in slightly higher CapEx than average during these 2 years. We continue to be disciplined in selecting what we bring to investment decision, and we maintain our return and breakeven requirements for the portfolio, IRR above 25% and breakeven below $35 per barrel.

One important feature of operating on the NCS is the fiscal framework. The tax system allows for immediate deduction of capital spending against the special petroleum tax, and this makes it an investment supportive regime, as you can clearly see in the graph. We have improved our long-term outlook with higher production for longer and many profitable investment opportunities. But even more important, we are set to incrementally generate more value.

The combination of cost discipline, investments in projects with low breakeven, short time to market and quick payback, together with a supportive tax regime, allow us to sustain the long-term returns and significantly increase the return on capital employed towards 2030 and beyond. It's all about value, but it's also about being resilient in a volatile macro environment. We have a strong balance sheet with a low leverage ratio and a target of staying below 1.3x net debt to EBITDAX threshold over the cycle. Our leverage ratio currently is 0.8x, which is well below our threshold and provides the company with ample financial flexibility. In this slide, we illustrate how our leverage ratio develops across different oil price scenarios. And what we see is that even in extended low price environment, we remain below our 1.3x threshold. And this is after dividends are paid according to our policy. And while we continue investing in our highly profitable project portfolio. This is another result of the perfect combination of cost discipline, low breakeven, short term to market, quick pay back time and supportive tax regime. We have a viable rating from Moody's and a BBB rating from Simple and Poor, both with a stable outlook. We are committed to maintaining this.

Var Energi is a strong [indiscernible] company, investment opportunity reach with higher production and value creation for longer. We remain committed to deliver long-term attractive dividends to our shareholders as our track record demonstrates.

We are seeing increased volatility and significant uncertainties in the world. And this can lead to a lower-for-longer price scenario. But the key focus of the management is to protect the dividends, and we will take thoughtful measures to protect this, while maintaining an investment-grade balance sheet and preserve a strong outlook.

We are taking a prudent approach. And for 2026, we will guide the dividend on a quarterly basis. For the first quarter of 2026, we plan to maintain the current dividend level of $300 million, which is the same run rate as for 2025. The dividend is planned to be paid in June and will be based on the distributable equity at year-end and expected Q1 2026 profit generation. And for the full year 2026, we we will continue guiding on a quarterly basis in line with our long-term dividend policy of 25% to 30% of CFFO after tax over the cycles. We are reconfirming our long-term dividend policy of 25% to 30% of CFFO after tax over the cycle.

Var Energi has an impressive track record of delivering value to our shareholders. Since we listed back in February 2022, we have delivered approximately 115% in total shareholder return. And in total, we have returned around $4.4 billion in dividends to our shareholders.

Finally, I will summarize our 2026 guidance. Production guidance is 390,000 to 400,000 barrels per day. Production costs will be around $10 per barrel and we're able to sustain this level for the long term. Development CapEx will be at $2.5 billion to $2.7 billion. Exploration expenses and OpEx will be around $250 million to $300 million and $200 million, respectively. Last but not least, we are maintaining a dividend level of $300 million for Q1 2026 and we're keeping the long-term dividend policy of 25% to 30% of CFFO post tax over the cycles.

With that, I hand it back to Nick for concluding remarks. Thank you.

Well, thank you, Carlo. I just -- one final slide to wrap up and emphasize our key messages again. I hope you've seen that Var Energi is a stronger derisked company positioned to generate more value for longer. Our material resource base of around 3 billion barrels is the foundation for this. As I said earlier, we've increased the outlook with higher production for longer, targeting over 400,000 barrels per day long term. As we've tried to get across today, we're opportunity rich, and we're increasing investments in a series of high-value, low-risk, short-cycle projects that will increase returns, adding, I think, significant value. And we continue to incrementally improve the business for increased resilience and flexibility with below free cash flow breakeven of around $40 per barrel. And we will generate more value for longer, supporting long-term attractive returns in line with our dividend policy of 25% to 30% of CFFO post-tax over the cycles. And as I said earlier, I believe these are the reasons to be invested in Var Energi.

And with that, I'm going to hand over to Ida to lead our Q&A session. Thank you very much.

Thank you, Nick. Can I invite [ Thorhild ] and Carlo back to the state as well. We'll address questions in the room first. [Operator Instructions] And then we'll take the questions from the call afterwards. Can we start with [indiscernible] here in the middle?

This is [indiscernible] like from Jefferies. I had two questions. The first was regarding the production profile that you've highlighted in Slide 34 and 35. You've talked about improving the outlook. Of course, last year, you presented production declining to around 350. Now we see growth coming in '28 to '30. You've highlighted a lot of projects, but I just wanted to understand if you were to isolate two or three key projects that we should be looking at, that has improved that outlook. That would be interesting.

The second one was regarding capital allocation. Especially, I just wanted to understand your thinking behind -- between dividends and debt reductions on leverage. Just wondering if you are penciling in any debt reductions at all at an absolute level during the -- in between 2026 and 2032? How would you be -- or otherwise, would you be open to actually increasing your net debt levels as well to support the distributions?

Yes, I can start on the first one. Actually, the message today is that we have improved all of our projects. And really, that means also an improved outlook. And I think for this year and the [ product ] that we have been working a lot and actually accelerating and bringing closer is like [ Oddgeir ] talked about, he talked about the [indiscernible] so that one is coming [indiscernible] sanctioning there. Of course, we talked about the Goliat reach and the maturation there as well as, of course, the [indiscernible] subsea projects that is also soon to come in. And on top of this is the I would say, the icing on the cake being the [indiscernible] program. So everything is being improved. Everything is seeing a better outlook today than it did one year ago.

And I think also our acquisition of a bigger interest in the [indiscernible].

Yes. Important.

Important aspect. But I think the key thing here is that what we've done is accelerate a number of projects from what we had a year ago, and we've matured them to accelerate them and really, it's a lot of things that drive this, not just -- you can't pick one or two things. It's multiple activities that drive this. And I think when you see the 40-plus projects on the chart, I think you get the sense of that acceleration and the level of activity.

Really being the prime portfolio that makes answer.

Carlo, do you want to deal with the allocation?

Yes. With the allocation, of course, it's actually a good question. The way we worked out the outlook is basically based on Thorhild was mentioning, accelerating projects and projects are very quick time to market. So going to your point, we have a leverage ratio that we're quite comfortable with it. And investing more with a very short time to market is where we continue to share [ for our ] capital to create more value and sustainable dividend while increasing the debt. So we don't want to, of course, increase the leverage. We have flexibility. We are well below our threshold, but we want to have a sustainable business over time and the kind of portfolio that is why we're exactly doing this. So it's addressing investments and very quick time to market to reshuffle capital and get the money back and sustaining the dividend. So we think the two things will really go together, attractive returns over time and reasonable and prudent leverage position.

And if you think about it, if we keep building the resource base and investing into it, we don't need to reduce debt actually, we just need to keep.

We can actually generate [ Phase 4 ]. Again, what is very important in this plan, I'm probably going [indiscernible] the question is the quick time we can invest and get the funds back somewhat. This is really a peculiarity of our investment proposition.

Teodor Sveen-Nilsen, SB1 Markets. Thank you for the detailed presentation as always. So two questions. [indiscernible], you said that M&A is top of your mind. Just wonder if you could just discuss the type of assets or any particular characteristic -- asset characteristic areas that you are keen on? And second question that is on balance sheet, by end of Q4, you had like a 2% equity ratio approximately $560 million equity. Quarterly dividend of $300 million and you earn around $100 million per quarter. So over time, unless, of course, oil and gas price increases significantly, most likely it will be lower. So the question is, are you willing to run the company with a negative book value of equity?

Good. They are two good questions, and I'll let Carl take the second one in a moment. But in terms of [ A&D ], I mean, this company has been created by putting four companies together and some other asset acquisitions. And we have the capacity and capability to do more. Now that we've delivered transformational growth, I think it's time to think about the next steps. We're not going to talk about the type of assets. But fundamentally, what we're looking at doing is acquiring opportunities where we can create a strategic for us, and we can do it at a price that we can create value, and we will maintain that discipline. But of course, we continue to look to build the business and grow it over time.

And I think we have an ambition -- we set out more than 400,000 barrels a day long term. We have an ambition to make that bigger and longer. And I think we've got the capacity and capability to do it. But we'll, of course, not talk about specific opportunities or anything until we do them.

When it comes to the [indiscernible] question also we had last year. As a big company, we do an assessment, and we don't turn into negative equity, it's not something that we are clearly considering. The dividend are predicated on the base of the expected profit generation. We are entering the year. This year is going to be the highest production year. On the market, it's going to be -- might be a bit soft, but let's say, today is probably a bit different. And the levers that we have, there are several levers to sustain it. What is important is [ constant ] for the management is key to the dividend level, they're really committed to it. And there are levers that we can use in improving the business case or in optimizing our portfolio and all these things will add on to our balance sheet, and we strengthened the balance sheet to sustain the dividend. So it's not a matter of negative equity. We won't turn into negative equity, but we are confident that it's sustainable according to the profit we are going to generate.

And one thing just to stress this, I mean, the key focus of management of course, is to run the business responsibly and deliver the targets that we've set, but its key focus is to deliver and protect dividends long term. And we will take thoughtful measures to manage that. And I think this -- I'm confident we will manage this issue, Teodor, I think we have quite a number of options to do that. Of course, the first step is to generate the profit to cover it. But I think there's various levers we can use to manage this issue and I'm confident we'll deal with the challenge.

Next question from [ John ], and then we'll take Victoria afterwards.

Yes. Sorry for following up on the dividend side. But in -- when you delivered Q3, you said comfortably -- you say you're very comfortable that you will keep dividends at $1.2 billion for 2026 too and actually, I think you promised that. And now it seems like we abandoned the $1.2 billion. You're only guiding on the first quarter. Is that correct? And I wonder what kind of oil price do you need to sustain the $1.2 billion in dividend?

And Carlo, you showed the chart on Slide #8 where you show that you are cash neutral about $40. The chart seems to imply that at $80, you have about $10 billion in free cash flow accumulated over the next 7 years. If you divide [ plus 7 ], that's about $1.4 billion per year. So does that seem to indicate that you need almost $80 to have a free cash flow that supports the current dividend with a little bit of deleveraging?

Well, I'll take this. When it comes to the $5 billion to $10 billion and the $10 billion that you just mentioned, I don't -- I think you have to look this on over the plan basis, so it does not imply [indiscernible] is the same. Clearly -- but as you mentioned, $80 is more than $1.2 billion, that is actually -- it's higher than that. So it's not what -- sorry?

$1.4 billion.

Yes, exactly. It's more than that. So we're putting ourselves in a higher level. When it comes to what we said in Q3, which was $1.2 billion, and we say we are confident in $1.2 billion. We have a bit different environment. It was around $70 [indiscernible] a lot of discussion about what is going to be 2026. The assessment we did is driven from the -- where we are now, not today because [ whether ] is a lot of premium for geopolitical and on this, we can't debate how long -- what is going to remain or not.

But what we see a lot of volatility, a lot of significant volatilities. Look at the gas price, you have plus and minus 10% on a daily basis, it's extremely volatile. The assessment we did was a little bit more on the prudent side and say, let's assess the business, how it's going, let's assess how the market is going [indiscernible] the entire -- making the right choice for today and for tomorrow. Now we are confident in Q1, we have a visibility, $300 million, and as [indiscernible] was mentioning his top priority for the company for the management to protect the dividend level. But that's what we're including our assessment on being guiding for a quarterly basis, Q1, $300 million and then keeping the 25% to 30% guidance applicable the following quarters.

And my second question is regarding the long list of early phase projects. Is it possible to highlight like two, three key important ones in terms of volume and value that we should keep an eye on, please?

But before we do that, I'd like to just cover a little bit more on this. I mean, on the dividend, I mean the key focus of management is to deliver long-term attractive dividends to shareholders. And I think it's quite simplistic to look at our projections on various oil prices because the low prices, the business can get better. I think we can make it better. I also think we have various options to do different things. And so I think the message we tried to get across today, we have a resilient business that's got lots of optionality and flexibility and that we can use that optionality and flexibility to create different outcomes. So fundamentally, we are focused on delivering long-term attractive dividends, but we are concerned about the volatility and predictability of the market, which changes regularly. And I think our investor base would want us to be prudent about how we think about that, and that's the approach we've taken looking at this. And so we have guided for the first quarter, same run rate as for last year. And we haven't changed our long-term dividend guidance, it's 25% to 30% of CFFO over the cycles. And our aim is to continue to deliver on that through the year. recognizing the uncertainty that's out there. And that's how we've chosen to manage this going forward.

I think, as I say, I think looking at our projections, they're a guide. The reality is if we have low prices for longer, we all make this business better. But I'm confident Thorhild showed a chart showing how we've changed the production chart's outlook. And I am absolutely confident that when we come back next year, that's going to look even better. And we're going to deliver even better projects. And so I think we can continue to create more of this. We've set things like $10 per barrel OpEx, I think we can drive that down further. So I think we can continue to make this company much better and that's what will allow us to long term, deliver sustainable and attractive dividends.

With that [indiscernible], you can figure out which of the projects you'd like to pick out.

Yes, but it is a bit of a repeat to the earlier question. I think number one is the -- really the order of magnitude we have in this portfolio. It's fantastic, and we have been able to -- so is this [ Foreign Language ] in Norwegian, A lot of the smaller creeks make a big river directly translated, so that is one. But then also what -- I talked about our hubs. You know that we actually have early phase projects in the vicinity to all our operator hubs. I think that is really good. So then we're talking about Goliat. We are talking about [indiscernible] and Fenja which [indiscernible] talked about -- we have the U.S. subsea projects close to [ UA ]. And then don't -- in the [ Boulder ] area, we have the [indiscernible], which is a really exciting project, which constitutes the Kinder Egg as [indiscernible] renamed it, very good. And then of course, also, we mentioned the previous produced field, which is really are exciting products. So actually, you're restarting previous produced field from the late '90s, which is going to give a lot of barrels. And then, of course, also what we like is all the subsea buybacks that is coming in and around [indiscernible], where we talk about this 1 billion barrels and decades of production.

So as I understand, impossible to really choose a few, it is -- the order of magnitude that is exciting. So -- and also, I think what is exciting is this -- actually that we improved the projects and execution from around 35 last year to around 30 of this year. So I think that is something to follow.

And part of the nature is we're in 50% of the producing fields in Norway, and we pretty well have investment activity into all of those and so it's sort of difficult to pick out any particular item in all of this.

Got the next question from Victoria and then we'll do [ Amish ] afterwards.

Victoria McCulloch at RBC. Firstly, on production within Slide 35 of your production, you show a 3P reserves upside, is any of that within your $2.5 billion to $2.7 billion CapEx forecast and the longer term $2.5 billion guide that you provided?

Then a second question would be on the projects, the breakeven, I guess, has gone up from last year and from your projects underway from $35 a barrel to $35. Can you give us an understanding, is that project mix? Is that inflation? How do you see that characterized in the, I guess, the creep on breakeven?

Well, I didn't really get your last -- second question because I think the story is opposite, but just -- could you just repeat the second question?

Yes. So on the slide, you show $30 a barrel breakeven for the projects underway, but $35 a barrel breakeven or less than $35 a barrel breakeven for the projects that you're looking to sanction in 2026. Have you seen inflation in the market or higher costs? Or is it in project mix?

The projects that we sanctioned have a breakeven of around $30. So the power is in execution as a breakeven of around $30. Then the projects in the early phase, we see, on average a breakeven around $35. And that is what Nick just talked about, that we feel confident that we're going to work hard to improve. And I think that is also really the red thread true here is that all the projects that we have been working, we have been able to improve and that is really true better solutions. We talked about the new ways of working on -- ways of working and distribution. Yes, we are making more efficient concepts that get more barrels out of the ground for less, simply said. So I think -- and that we're going to continue working. And so when Carlos showed the CapEx, this is not inflation driven. This is activity-driven and the fact that it is driven by our ability to improve the business cases. That means that you actually [indiscernible] on to us and make them ready for sanction. So that's what we are working.

Maybe I could [ fix ] that. What we haven't done is change our targets. Actually, a year ago, we said we want to do projects at less than $35 breakeven and we've been incredibly disciplined. In fact, we've recycled a number of projects to drive this down. And I think we've maintained a less than $35 breakeven, but our focus is not that. It's much lower. And we've been able to do some projects quite a lot lower. And I think this environment will actually deflate some costs, and we're already seeing that and allow us to to make our projects better.

Yes. And then to your question about the 3C, those are not included. What is covered in our CapEx is the development of the 2P and the 2C.

[ So it was written ] to the 3P on the production schedule. Is any of that an upside that you could get without additional CapEx being added?

Now that is really to utilize the potential and opportunities in the existing. So we have not allocated CapEx to that.

No, but we could, Victoria, get some of that because of better performance. So I mean there's a bit of two things around this. Does it need more investment, but also can we get it for nothing, which is the nature of 3P resource a lot at the time.

[indiscernible] In your impairment note in the quarterly report, you give the price assumptions, which you use when you do impairment testing. And those prices are well above your price deck in the presentation material. So I was just wondering, why don't you use the same prices in your price deck in the presentation material as you do in your impairment testing? That's my first question. I would assume that's a reasonable assessment.

Second question is on CapEx. Could you please provide some sort of guidance or indication what kind of investment you're incurring per, I don't know, 100 million barrels of resources developed. So we have some sort of a figure to think about your CapEx going forward, given the mix of the portfolio, I presume it's low CapEx as it's a lot of [indiscernible], et cetera?

Yes, I can take the one for impairment. You mentioned the -- I suppose you are referring to the, what was that, $79 from 2028, for instance?

Yes.

Just for consideration. Those are nominal and what we're showing here is the [indiscernible]. So the $75 we are showing in 2028 in the deck of the [indiscernible] to be inflated 2% basically. So it won't be that different honestly. It's just a different shape.

But aren't your figures in the presentation nominal figures?

No. Those are [ EF ] terms.

Okay. So all the figures that you refer to when it comes to CFFO, et cetera, are [indiscernible] terms?

Sorry, those are nominal figures. $5 billion to $10 billion is not going [indiscernible] so we apply the deck that we have presented, and this deck is just inflated with the base inflation, 2% as we've always done. So the two figures we are looking at are actually quite [ single ] on a nominal basis.

Okay. I can revert that later. And the CapEx question?

Yes, the CapEx question I'm still thinking on. No, I think it -- at least I think it will be difficult to give you a number, dollar per barrel what we communicated is the breakevens of our portfolio. And as we also said, we are staying very disciplined. That means that we are maintaining the sanctioning of $35 internal rate of return above '25. And we see for the projects in execution, as I said, around $30 and then for the early phase, around $35. And then also, of course, Carlo talked to the CapEx guidance going forward for being in the range, $2.5 billion post 2026. I think that is what we have to relate to in this regard. I think it's a bit difficult to -- because it's various equity and all these kind of things. But I think the message and you had it, right, because the subsea tiebacks, they are lower risk, they are standardized, and they are really, let's say, CapEx efficient. So it brings a lot of value per dollar invested. And also, as I think Carlo said a few times, really this short payback time and really also the short cycle time, which makes it very would say, cash generative.

But you have depreciation of -- in the low 20s per barrel. And if you spend -- if you have breakeven of below 35, I would assume that you would push it out further down in your communication if it was much lower and an OpEx of 10, that kind of suggests CapEx of $20 to $25 per barrel of new investments, would that be fair?

Yes. But I think you have to -- I mean, you have to look at it slightly differently. I mean all our tieback -- all our developments are tiebacks, so they come with very low OpEx per barrel. They're not $10.

I said in my presentation, I said $3 per average in operational costs. So that is really the beauty with these projects. They are utilizing existing infrastructure. So really, it's very low incremental operational cost. -- and of course, also the low emission that helps both on -- say, the operational cost and the tax side of things. So that is the beauty of this project.

We're going to cover a couple of questions from the call before we round up with some final questions from the room. We have Nash from Barclays on the line.

It's Nash Barclays. Thanks for the detailed presentation. Two questions, if that's okay. The first one I want to ask about Slide 35. I thought it's an interesting slide, but I wonder, [indiscernible] assets drive the quick production decline post 2030 and should we think roughly $2.5 billion is the CapEx you need to keep production flat?

And then my second question is, it's nice to hear that you guys adopting better technologies, including AI to save cost and improve efficiency. Would you be able to quantify some of the impact over there? And could there be any upside given how quickly that AI is evolving?

So Nash, good afternoon. Page 35 is the question that you had to the start -- the first question. Maybe you could just repeat it.

Yes. Sorry, Nick. My question is, what drives the production decline after 2030? There's a big -- if I look at the dark blue section, there's a big sharp decline after 2030. I wonder what's your assumption over there? And then is $2.5 billion CapEx roughly as a run rate to keep production flat?

I think the way to look at this is that our investments start to run out at that point because what we've put in the hopper here is the development of 2/3 of our 2C contingent resources. And naturally, the activity starts to drop off. In reality, as we move forward, we've got quite a lot of discovered resource that we haven't put projects to. I would expect us to find ways to do that. And secondly, Luca is going to find us lots more oil and gas. And I would expect that we're going to create new projects as we've demonstrated. So the reality is this should get better over time. And I think we wanted to show you an outlook that shows where we can see today and where we see the certainty. But the reality is our capital drops off at the end of this time frame, and that's what drives that.

It is really the lead time, as Nick is saying. And also as we said earlier, we don't include any exploration here. talk about the technology and artificial intelligence. Number one, I think it's difficult to quantify a number. And -- but we see a significant -- you know, the potential is immense. And that is also what we communicate or try to communicate at least is that we are setting very tough ambitions how we are going to drive improvements in our core business from subsurface, drilling and well production development and operations. And really where we see this is, what you say, skyrocketing or amplifying is when we are able to combine it. And that is we are seeing big results already on this particular -- and I think you -- my favorite movie today, she showed it very well because in the [ Boulder ] area, where we have been producing for a long, long, long time. Able to combine the new seismic OBN ocean bottom node seismic with artificial intelligence then suddenly, we are able to develop more, for instance, infill wells. So this is really, I will say, paying off fast, and we see a big, big potential and looking forward to come back and talk more about and present more about this going forward and next year, for sure. But as I said, we want to be best on this, and we have big ambitions that is shown on the slide here. So more to come.

I've also got a question from Christian at Citi.

Tianhong Bi from Citi. I've got a few questions, please. The first one is on your new production forecast. So in the past, you emphasized a phrase of organically sustaining production through 2030 but you've not used stuff wording this time. So should we assume that achieving the new 400,000 barrel per day production outlook now definitely requires some inorganic M&A. And in the medium term, it looks like you'll need contributions from the 3P volumes to reach the 400,000 barrel per day. I understand these are largely linked to the upside in reservoir performance you have any past success cases where 3P volumes have actually contributed? And lastly, I want to follow up on the book value of equity. You talked about balance sheet with sufficient free equity in the footnote. Is there a threshold level that you're required to maintain? And given that your book equity is already running quite slim can we assume from a modeling perspective that you may need to issue more hybrid capital to keep your book equity above a certain threshold?

Maybe if I get the first one and Carlo does the second one. In terms of our production outlook, what we've set out there is continued production out of our 2P reserve base, which includes developed resource and and the 13 projects in development, and it includes development of the 30 early phase projects that we set out, which were -- which are based on discovered resource. We don't need exploration to deliver that outlook. We don't need acquisitions to deliver that outlook. Those things would create more value and upside on that. But I look at the diversity of our portfolio. And I think there's opportunity and upside opportunity in many, many places. I think there's the opportunity for 3P reserves in some places. I think there's opportunity to develop the other part of our 2C continued resources, which are not included in the the developed volume that we're looking at, which is about 2/3 of -- or 300 million barrels, close to of the 900 million barrels, which we can move forward. And I'm confident that we will generate more exploration opportunities. We've made 6 discoveries last year. One is already in production. Three , one is already committed development and the other four are moving in the right direction to be developed. And we would expect to continue to do that. And I think what you should expect is that over time, the trajectory that Thorhild showed is that we've been able to progressively show an improvement in the outlook for the company and organically grow resources, which is what we're based on. I think we can continue to do that over many years.

Yes, I'll take this so when it comes to the hybrid you mentioned. So as we say, the dividends are predicated on the basis of the profit generation and predicated also based on the various levers that we have that we were discussing before, when it comes specific to the hybrid is a tool to strengthen the balance sheet, which is available. You know that you already have issued one back in '23. So we know the product. There is a very active market. So it's a tool that -- is in the toolbox to consider it.

I've got two more questions in writing, one from Matt Smith of Bank of America. Does the CapEx outlook already take into account the potential to reduce high project equity stakes?

The answer to that is no. So we -- if we sell some of our assets, then we would reduce the capital in the outlook.

It's based on equity as of today.

And then the question -- second question from Vidar at Danske Bank. I believe you mentioned production hit 443,000 barrels on the 23rd of January, while it has averaged 2 out of 423 in the first week of February. And from Slide 25, it looks like you expect Q1 to average further below this. Could you provide some color on what drives the decline in production through the latter part of Q1?

Well, I don't think we should call it a decline in production. It is -- really won't say there is, let's say, planned regularity on this installation that reflects the PAM production as such. And of course, also, we we have some startups that is coming in and adds to this. So I think that what we have been showing and what have been producing is very much in accordance to plan. But then, of course, you have some days whenever thing is sticking which was the 23rd of January. That then showed the potential as such when you have the, let's say, simultaneous uptime. And you don't -- I said we are planning with our production efficiency is never 100% as such.

So I've got one question from Stefan here, DNB.

Thank you. Steffen Evjen from DNB Carnegie. Two questions. On the Goliat gas export. Just wondered, since it's now 5% of your 2P reserves, when should we expect those gas opts to hit your volumes, your production? And what kind of revenues could we expect for -- on your side from those volumes? And my second question is on the Jotun FPSO debottlenecking there as well. How much more production capacity can you get out of that FPSO once that project is finished?

Do you want to get those, Thorhild?

Yes, I'll try, I just have to wait on the -- so I remember. The Goliat gas is really what constituting of elements. One is the gas and then it's, I would say, the -- including the oil. But really what that is going to help us with is that, that is one. It's going to let say, be an exit for the gas, and that is also going to optimize the drainage strategy, meaning that we are able to produce more oil so that is, of course, our value equation that we are going to realize immediately when that project is started up. And then it is the gas. And there we will have -- unless we go to [indiscernible] and then we will have our gas redelivery from Snovhit and there is available capacity at Snovhit. So really, it's two ways of monetizing this. It's the additional oil and then following the improved drainage strategy and then is the gas when the gas capacity is available at Snovhit.

So yes, just a follow-up on that, isn't Snovhit sort of actual capacity for quite some time?

Yes. Snovhit, we have -- yes, that's correct. Snovhit have our full capacity into the 2040s. So really, the value question, the immediate value creation of the startup here is related to the oil part, and then later, it's related to the gas part.

But this is a good project. And as also [ Olga ] said, it's -- we will be ready for sanction during this year.

And I think it's worth saying, this is quite a simple project. I mean, it's a very short pipeline length for us to connect this up. And then the other side of this is if when we develop Goliat Ridge, we need to do something with the gas. We can't put it back into the reservoir, and this is the cheapest way of dealing with that. So not only is the project stand-alone on its own and create value, good value, it's leveraging when we look at the Goliat reach development.

And then the Jotun debottlenecking. And that is also -- is really serving two or three purpose. One, it is about debottlenecking the gas and water capacity at Jotun so that will then lead to two things: our ability to accelerate production that we can take more oil to the FPSO. And then secondly, which is having a big impact is, of course, that we then can take [indiscernible] because then we don't need the capacity [indiscernible] so we can take that to shore and then reduce the OpEx, reduce emission. And also, as I will say, a benefit there is that we then are drilling new wells that is both draining the old remaining reserves at -- related to the [indiscernible] and then increasing the recovery in the area. So that is really the see [indiscernible] talked about there.

I think we have room for one more question from -- Oh yes, sorry, I couldn't see you there. Alejandra, JPMorgan.

Alejandra, from JPMorgan. Given the higher investment level outlined today to support your stronger production outlook, where should we expect dividends to fall within the 25% to 30% range in the near term? And my second question is on the $500 million cost reduction program you announced last year for '25 and '26, could you update us on progress so far and how much of that benefit is now reflected in your cost and cash flow guidance?

Could Carlo...

Yes, sure. May I ask you to repeat, please, the first part of the question. If you don't mind, if you can repeat.

The first question?

Yes, the first question, please. Yes.

So where within the 25% to 30% range should we expect the payouts in the near term given the higher investment level for your stronger production outlook?

Sure. We are confirming 25% to 30%. And actually, the increase in CapEx, again, is to be seen in the contrast of which kind of investment we are doing. We're doing investment at a very short time to market and very quick in terms of payback. So we are shuffling the capital very quickly. Every [indiscernible] basically you'll start getting the money back, 2 to 3 [indiscernible]. And this is what is sustaining the dividend long term and the 25% to 30% then still works. So we have to put together, I believe, a few elements that we have to consider are quick time to market, continued sustaining of profit and cash generation for the dividend. And at the same time, the leverage that, as we've shown, is well below where we want to be. We have a lot of flexibility. You have seen [indiscernible] presented at even lower price, we still remain very well within -- so you're going to have -- there's an ample flexibility when it comes to investing and sustaining the dividend. So there's no sort of contradiction of competition. It's actually an enhancing circle where you invest quick time to market, quick returns and continued shuffling capital and the cash generation. That's the model.

And then to the $500 million. I think we have really, let's say, net what we said, but it's -- and I will try to explain it. We talked about exploration and look at it, that we are then reducing the exploration expenditures. We were around 400 for last year. We are 250 to 300 this year and then for the longer term, around 200 following the improvement in efficiency and the focus on quality. So that's one. I also talked about the OpEx where we are taking out USD 400 million over the period '26 to '30 which comes in addition to the [indiscernible] and then comes to CapEx. And this is where it comes a little bit complicated because really, we have been able to improve all our projects and that includes that we are improving the income side and reducing the cost side. But that also means that we are able to move products closer to us. So really, we've taken out a lot of cost, but you don't see it in the sense that we are, in a way, self-funding our projects.

In addition to that, comes also the previous produced fields where we increased our equity so that is also coming in there. So all in all, we have been really prudent on taking down and out cost but that is also meaning that we have an ability to improve our -- and accelerate our value equation through the early phase projects and the projects that we're going to sanction this year.

Any further questions? One here from Teodor here at the front. Thank you.

Thank you. We saw high gas prices in January, have you been able to take [indiscernible] either selling gas to high prices or looking in some of the price? And if I may, one -- a second question also the status of the [indiscernible] gas pipeline?

Okay. I'll just take the first one.

And then I'll get the second then.

As [indiscernible] we are doing [indiscernible] we are, as usual, quite active when it comes to -- in regards to trading our gas. So we are -- 14% of our production has already been locked at $75 is the result of the Gas [indiscernible] previous year. We are taking some position also leveraging on the high gas price that we saw in January. As you see, this is an example of the volatility. There's been a few days very high, then 10% less, then 5% up. So we are anyway taking active position already locking some interesting sale of [ express ] transaction, yes.

And then on the balance to Gas, I mean, I think everyone knows we spent some money together with others, Equinor and [indiscernible] exploring over recent years with the aim to try and move the understanding of the gas resource forward. I mean there's -- clearly, there's a lot of gas there, but not quite enough for about half and as much as enough needed to develop a new export route. And I think we've drilled a few wells last year. And then I think we need to sit back, we've got reduced activity there this year, but I think next year, we'll have some more wells and I think we just need to see how this progresses over time. It's clear today we don't have enough gas to develop an export route. But let's see where it progresses over time. And I think there's still some big prospects there, and we have one or two prospects that could be, themselves, be big enough, and we need to work them up for...

One final question here.

You said in the presentation that the CapEx will be slightly higher in '27 and '28. And now you gave a figure from '27 to '32, which is a pretty long period. So could you give some more clarity on the '27, '28 figure? Is it 50% above or 100% above?

It's not 100%.

Yes, you can assume around 15% to 20% above the average for a couple of years. It's still a preliminary figure. We're working on the plan and the number of activities here.

[indiscernible] me and the CFO is fighting a little bit because this is what -- as it stands today, slightly bigger. But of course, we are going to work to make things better. And maybe we will see it back to the numbers.

But yes but in the context of CapEx [indiscernible].

Not. It's 10% to 15%.

This is really immaterial in the overall scheme of things given the tax system here.

Thank you. That concludes the Q&A and the Capital Markets update. Thank you all for joining, and we wish you a good rest of your day.

Good morning, everyone. It's a real pleasure to welcome you all to Vår Energi's Third Quarter 2025 Presentation Results. The presentation today will be given by our CEO, Nick Walker; and our CFO, Carlo Santopadre.

I will hand the word over to Nick before we open up for questions.

Well, thank you, Ida, and good morning to all, and thank you for joining us today for our third quarter '25 results presentation. I'm pleased to report strong results for the quarter. We've delivered transformational growth ahead of schedule and a pipeline of new projects is being progressed for long-term value creation. With our major projects complete, the company has derisked and has a strong resilience to a lower price environment. We also have significant flexibility with the majority of our capital spend uncommitted to 2030, and we'll use this flexibility to optimize our investment program through this lower price period. Vår Energi has never been in a stronger position to continue to deliver high value and attractive shareholder returns.

So now let us look at the highlights for the quarter. Our production milestones have been met ahead of schedule. We delivered production of 370,000 barrels of oil equivalent per day in the third quarter. And the Jotun FPSO at the Balder field reached peak production ahead of expectations in September. We're adding around 180,000 barrels per day at peak from new projects in 2025 with 7 out of 9 projects on stream. We expect to average around 430,000 barrels per day in the fourth quarter. And the outlook for the company is derisked with our key projects delivered.

And we delivered solid financial performance with CFFO post tax in the quarter of $1.2 billion. We have a strong financial position with reduced net debt and $3.6 billion of available liquidity. We maintain our strong cost focus with reduced operating costs on track to be around $10 per barrel in the fourth quarter. And our gas sales strategy continues to create value with 18% of our volumes sold in the third quarter at $90 per BOE. And with our portfolio of high-value early phase projects, we're unlocking long-term future value creation. We will sustain production at 350,000 to 400,000 barrels per day towards 2030 and beyond, which will be achieved by delivering our portfolio of 30 early phase projects with 10 of these projects set to be sanctioned by year-end. And we increased our ownership in the Ekofisk Previously Produced Fields project, adding high-value barrels at an attractive price.

And lastly, we continue to provide predictable and attractive dividends. We confirm a dividend distribution for the third quarter of $300 million, which means we've paid stable or growing dividends for the last 15 quarters. And we reconfirm our dividend guidance of $1.2 billion for the full year 2025 and also the same level for 2026. And given our resilient financial outlook and strong level of liquidity, we're able to maintain this dividend guidance under any realistic price scenario.

So now let us look at some of the details. For Energy, the third largest oil and gas producer in Norway as a high-quality diversified asset base in all areas of the NCS with interest in around 50% of all producing assets and a large exploration footprint. We've also balanced commodity mix with gas making up around 30% of our production volumes, making us one of the largest exporters of gas from Norway. This tremendous portfolio, which provides lots of optionality is driving our long-term sustained production and value creation. And as you will see, we're continuing to step up the pace to realize the value from our portfolio.

And now with our major projects complete and now ramped up to full production, we have delivered transformational growth ahead of schedule. We're set to produce around 430,000 barrels of oil equivalent per day in the fourth quarter this year, which you can see is double 2023 levels. 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 350,000 to 400,000 barrels per day towards 2030 and beyond.

Now looking at 2025 production, where we're on track to meet around the midpoint of our full year guidance range of 330,000 to 360,000 barrels of oil equivalent per day. Third quarter production, as you can see, came in at 370,000 per day, which was at the top end of our expectations due to the faster ramp-up to peak production from the Jotun FPSO. We continue with excellent performance at our operators' assets with strong production efficiency at 92% for the first 9 months of the year, which is inclusive of planned turnarounds. The third quarter was impacted by around 15,000 barrels per day of reductions due to planned turnarounds. And entering the fourth quarter, all of our turnarounds are behind us for the year.

Our current production potential is over 440,000 barrels per day, and this will grow towards the end of the year as new wells are brought on stream at Balder, Ringhorne, Grane, Njord, Halten East and Sleipner. And so we expect to produce approximately 430,000 barrels per day in the fourth quarter, which means we're on track to meet around the midpoint of the production guidance range for the year. And as I said, we've derisked the production outlook for the company. Our transformational growth this year is driven by 9 project start-ups, adding around 180,000 barrels per day of new volumes at peak. 7 of the 9 projects are on stream and are performing as to expectations. The remaining 2 projects, Balder Phase V and the Asgard Low Pressure Production facilities are both expected to come on stream towards the end of the year. This has been a pivotal year for the company for new project start-ups. And overall, we've delivered what we said we would do. Hence, the outlook for the company is derisked, and we've never been in a stronger position.

Turning now to our 2 major projects that are the main catalyst for delivering our transformational growth. Production through the Jotun FPSO, which started up in June, achieved peak production of 80,000 barrels per day gross ahead of plan in September. The wells are performing on average as expected, and we've already achieved high production efficiency from the FPSO with low operating costs of around $5 per barrel. This project, together with Phases V and VI is developing gross reserves of 200 million barrels. Two Phase V wells have been completed with results better than expectations, and a third well is currently drilling. All 3 wells will come on stream towards the end of the year. Phase VI, a fast-track development is progressing and is on target to start up in the fourth quarter next year.

And additionally, there are material further resource development opportunities in the Balder area, and we are progressing what we're calling our Balder Next project towards sanction. The Balder Next project consists of 4 elements: firstly, decommissioning the Balder FPU. It's about transferring selected FPU wells to the Jotun FPSO, accelerating production through debottlenecking the FPSO and then drilling new production wells.

And this rationalization of the facilities in the Balder area will drive significant OpEx and carbon emissions reductions. We will sanction the debottlenecking element of this project at the end of this year, which involves increasing the capacity of the FPSO gas compression and water handling systems, and this will be implemented in 2026. And this is a key enabler to decommission the Balder FPU. And we're progressing a plan to have a continuous infill well program starting from 2027, following completion of the Phases V and Phase VI drilling programs. We've already committed to the subsea production equipment and we will shortly commit to the flow lines required to make this happen. The initial commitment will be for 6 multilateral wells with the design to allow expansion up to a total of 15 wells. And so with the Jotun FPSO serving as a new area host, production from the Balder area is expected to remain at 70,000 to 80,000 barrels a day gross towards 2030.

And if we now look at Johan Castberg, we see very strong performance with the field producing at plateau levels of 220,000 barrels of oil per day gross, with Vår Energi's net share being around 66,000 barrels per day. Production efficiency is already stable at 95% and production costs in the third quarter were less than $3 per barrel. The reserves and resource potential of the area is around 1 billion barrels and the full development of this, we anticipate will keep the facilities full towards 2030. Drilling of the planned development wells will be complete at the end of 2026. And immediately following this, an infill well program is being planned, which is targeted to sanction at the end of this year. And this program will include the development of the recent Drivis Tubåen discovery. Additionally, the Isflak tieback development is expected to also sanction at the end of 2025. So we see Johan Castberg as a key driver to sustain our production long term.

And now looking at operational performance. You can see that we're incrementally improving how we run our business. Overall, we have a good safety record with 0 actual serious incidents so far in 2025. However, we have recently had too many near miss incidents where we have a strong improvement focus. On carbon emissions intensity, we're top quartile in the industry globally, and our methane emissions continue at the near-zero level.

So we're already doing very well, but we want to decarbonize our operations further from 3 main levers: firstly, electrification with power from shore; secondly, portfolio optimization; and lastly, through energy management. From further assessment of the Halten and Snorre power from shore projects, these will be discontinued due to challenging economics. This will reduce our capital spend guidance by $500 million over the period to 2030. This shows our strong cost discipline. However, we will continue to mature the Grane Energy project prior to possible project concept select in the early part of next year, where our focus is on creating a project with sound economics.

And in addition to emissions reductions, Vår Energi aims to become carbon neutral in our net equity operational emissions by 2030 through removals in the voluntary carbon market. And we continue to be recognized for our ESG leadership with Sustainalytics ranking us as a top-rated company. This puts us in the top 15% of the global oil and gas industry. For production efficiency, our operated assets, as you can see, have a strong improving trend, which was 92% in the first 9 months of the year and ahead of our target. On production costs, we achieved $10.6 per barrel in the third quarter. And for the full year, we expect to be at the lower end of the guidance range of $11 to $12 per barrel. This performance is driven by reduced costs.

And looking forward, we're on track to reduce production costs to around $10 per barrel in the fourth quarter this year, and we will target to sustain at this level long term. And I think these elements go hand-in-hand. Strong safety and environmental focus drives good operational discipline, creating significant value. And you've seen this chart before, Vår Energi has an amazing portfolio with lots of optionality and growth opportunities. And our 2P reserves, you can see stand at 1.2 billion barrels. This is either in production or under development. 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 650 million barrels of this.

And we also have an exciting exploration portfolio of around 1 billion barrels of net risk resources, where we expect to drill out about 50% over the next 4 years. And so putting this together, we have around 3 billion barrels of resource potential, but with 60% yet to be developed. I'll repeat that 60% is yet to be developed, and that is how we will organically sustain production long term. And we're working at pace to create value from this opportunity.

So looking now at how we will do that. We have a flexible and resilient portfolio of around 30 early phase projects that we are progressing towards development. Delivering on this program will achieve our production target of 350,000 to 400,000 barrels per day towards 2030. And these are mostly subsea tiebacks to existing infrastructure with low cost, short time to market and strong economics. And you can see average breakevens of around $35 per barrel. And we've built significant momentum with 4 projects sanctioned so far this year, and we expect to sanction in total 10 projects by year-end.

As we announced a few weeks ago, we've increased our ownership in the Ekofisk Previously Produced Fields project, adding high-value barrels from 2028 at an attractive purchase price of below $4 per barrel. This transaction does not close until the project is sanctioned, which is expected at the end of the year. And with around 65% of our capital spend to 2030 uncommitted, we have significant flexibility to optimize our investment program through the current lower price period.

And now turning to our exploration program where we have a leading track record. Since 2019, we've added around 300 million barrels of contingent resources with a success rate of 50% and a finding cost of less than $1 per barrel post tax. Over 70% of these volumes are already in production or in the development process, demonstrating we are turning discoveries into value. This success has continued with 5 commercial discoveries so far this year, adding 40 million to 70 million barrels of net resources. And as we announced earlier in the year, we continue to build on the Goliat Ridge success in the Barents Sea, where we're the operator with a material 65% interest. With estimated gross discovered plus prospective resources above 200 million barrels, the Goliat Ridge is potentially as big as the original Goliat development.

And to assess this exciting opportunity, we're currently drilling a 2-well appraisal program where we'll see results before the end of the year. We're then able to think about how we go forward with a tieback development to the Goliat FPSO, where there's plenty of available capacity. And the Vidsyn ridge discovery is also significant with potential to hold gross recoverable resources of up to 100 million barrels of oil equivalent and where Vår Energi is again the operator with a material 75% interest. We're progressing plans to appraise Vidsyn in 2026.

And we've drilled 3 successful infrastructure-led exploration wells this year in the Johan Castberg, Fram and Asgard areas. These have short time to development, and the Asgard area well is already in production, contributing over 6,000 barrels per day net. This is good value creation. So we're making significant progress maturing our upside resource potential into value through committing to new projects and making new commercial discoveries.

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. I would like to start by summarizing the key financial highlights of the third quarter. We have achieved robust realized price compared to spot with a weighted average price of $68 per BOE in the quarter. We generated strong revenues on the back of transformational production in the quarter and strong operating cash flow after tax of $1.2 billion. We maintain a strong and resilient balance sheet, reducing net debt and increasing available liquidity at $3.6 billion. The leverage ratio at 0.9x net debt to EBITDAX is flat from previous quarter, remaining well below our target. We confirm the third quarter dividend of $300 million, and we are showing confidence in our business by planning to pay the same level for the remaining of 2025 and 2026. In summary, we have a strong and resilient financial position, and we're successfully progressing in what is a transformational year for Vår Energi.

I'll now go into more details of our third quarter financial performance. We obtained robust pricing for our products in the quarter, both relative to spot and to our peers. In the quarter, we generated more than $2.1 billion of revenues, up compared to the previous quarter, driven by production increase. The realized oil price in the quarter was $69 per BOE. The realized gas price was $70 per BOE, $6 above spot pricing as a result of fixed price contracts and flexible gas sales agreement, allowing for optimization of index. Starting 1st of October, we have locked in around 15% of volumes with a pricing at around $78 per BOE until third quarter 2026. We continue to have a robust sales portfolio with access to several markets, and we will have flexibility in the contracts to decide the split between month ahead, day ahead and fixed contracts.

I would like also to mention that our oil production is fully hedged on a post-tax basis for the remaining of 2025 with a monthly put options at a strike price of $50 per BOE. Vår Energi generated solid cash flow in the quarter. Cash flow from operation after tax in the quarter was $1.2 billion, an increase from the previous quarter, mainly due to higher production and lower OpEx. Our CapEx for the quarter, including exploration, was $726 million, while Balder Next and Johan Castberg continues to be the largest contributor of the total spend. The 2025 development CapEx is expected to be in the upper end of the USD 2.3 billion to USD 2.5 billion guidance.

Our resilient and strong liquidity position continued to improve in the quarter. Here, we see the development of our cash position from Q2 2025 to the end of Q3 2025. We generated approximately $1.8 billion in CFFO before tax and working capital movements. We paid taxes in the quarter amounting to around $530 million. We had a cash outflow of $740 million in investment in our high-value growth projects. We distributed as planned $300 million in dividends related to the second quarter 2025. In summary, we have a solid liquidity position and a diversified long-term capital structure aligned with our business needs. At the end of the quarter, we have a cash balance of $840 million and an overall liquidity of around $3.6 billion.

Earlier in 2025, we strengthened our financial position through the successful refinancing of credit facilities and issuance of senior notes. By doing that, we reduced the cost of debt, increased our available liquidity, extended the maturity profile and strengthen our core bank group. Our leverage ratio, net interest-bearing debt on EBITDAX ended at 0.9x, which is flat from the previous quarter, but continues to be well below our over-the-cycle target of below 1.3x, and we expect to reduce this further.

Our debt portfolio is well diversified with a weighted average time to maturity of 5 years when excluding the 60 years hybrid. This is supporting the execution of our growth strategy towards 2030 and beyond. We have a Baa3 rating from Moody's and a BBB rating for Standard & Poor's, both with a stable outlook, and we are committed to maintain our investment-grade rating. Our strong financial position and our resilient flexible project portfolio lay a solid foundation for continued and material shareholder distribution and growth and is a unique investment proposition that Vår Energi offers.

Now let's look at the tax guidance for 2025 estimated profits, where half is paid this year and half will be paid the next year. Note that from third quarter this year, we went from paying 6 installments per year to 10 installments per year. In the third quarter, we paid NOK 5.4 billion in cash taxes. For the fourth quarter of 2025, we expect to pay around NOK 8 billion. We have included a tax sensitivity for the first half of 2026, which is giving the cash tax estimates a different price scenario, but the middle case is giving around $1.6 billion, while the sensitivity is between $1 billion and $2.1 billion according to the indicated price ranges.

Vår Energi has a strong track record of delivering value to our shareholders. Since the IPO, we have paid more than $4.1 billion in dividend, maintaining stable payments over the last 15 quarters. With transformative growth delivered in the third quarter of 2025, strong financials, a solid operational outlook with a resilient and flexible project portfolio, we can continue to support attractive and predictable dividends going forward. On the back of this, I'm pleased to confirm a dividend of $300 million for the third quarter and a total dividend distribution of $1.2 billion for the full year 2025 and $1.2 billion for the full year 2026.

Finally, I will summarize our full year 2025 long-term guidance. For 2025, our production guidance is 330,000 to 360,000 barrels per day, reaching around 430,000 barrels per day by Q4 2025. We expect to reach around the midpoint of the guidance for the full year. We will maintain approximately 400,000 barrels per day in 2026. and further, we will sustain 350,000 to 400,000 barrels per day until 2030. 2025 production cost is expected to come at $11 to $12 barrels, down to around $10 per barrel by Q4 as we ramp up production. CapEx is estimated to be in the upper range of our $2.3 billion to $2.5 billion guidance in 2025. Going forward, we are expecting to be in the range of $2 billion to $2.5 billion thereafter.

Exploration expenses and OpEx will be in the range of $200 million to $300 million and $150 million, respectively, in the medium to long term. For this year, we plan to invest around $400 million in exploration activities and expect abandonment expenditures to be around $100 million. We are guiding $300 million in dividend for Q4 2025, resulting in a full year dividend of $1.2 billion. Demonstrating strength, we're also guiding dividend for 2026 at $1.2 billion to be paid quarterly.

With that, I hand it back to Nick for concluding remarks. Thank you.

Well, thank you, Carlo. And I have just one final slide to summarize. Our production milestones have been met ahead of schedule. And with our major projects now complete, we've derisked the company. In the quarter, we delivered solid financial results, and the company is resilient with significant flexibility to navigate through this lower price period. We're making good progress on our pipeline of new projects that will provide long-term value creation. And on back of this strong performance, we continue to provide predictable and attractive dividends. So we're delivering on our strategy for growth and value creation, and Vår Energi has never been in such a strong position. These are our third quarter 2025 results and other reasons to be invested in Vår Energi.

I'd like to thank you for your time. We would now like to open up for your questions. Thank you.

We'll hand it over to the operator. Thank you.

[Operator Instructions] Our first question today comes from the line of Teodor Sveen-Nilsen from SB1M.

Congrats on a strong report. A few questions from me. First, on the lifting sales for Q3. As far as I understand, you delivered on Snøhvit [ cargo ] more than what you said in your operational update. I just wondering, is that something that we should expect to be reversed in Q4, meaning that we should model underlift for Q4? So that's the first question.

Second question is on production cost. You reported very low production cost for third quarter and it was down around $100 million quarter-on-quarter. I just want to understand what drives that reduction? And third and final question, that is on production. You guided for 430,000 barrels per day in Q4. I just wonder what has the production been this far in the quarter?

Good. I think maybe Carlo will take the first question, Teodor, and then I'll cover off the latter 2.

Teodor, when it comes to the question you raised, yes, we have done a small change compared to the trading update, and you don't have to expect this cargo to be reversed in Q4, simply through the closing process, the bill of lading that was actually realized on the very last day of September was considered, and it was updated as soon as we completed our closing process, as simple as that.

Good. And I think the number is very small anyway. And so on production costs, I mean, we've set out for some time that our production costs are going to come down, and there's 2 components to this. One is that we're bringing some new volumes in, which have relatively speaking, low cost. I mean, I quoted 2 of those, which is Balder and Johan Castberg, Johan Castberg below 3 and Balder around 5. So obviously, that makes the unit production cost much better. And then we said we are focusing on costs as a company.

And where we are today, we're going to come in at the bottom end of the range of $11 to $12 for the full year, and all of that is driven by cost reductions across our portfolio. And I think -- so $10.6 in Q3, and we expect to be around $10 in Q4. And we believe we can sustain this longer term. We're also working on things to be able to perhaps do a bit better than that, too. So there's a big focus on achieving this and sustaining this. And I think I'm very pleased that we've got to where we are.

The $100 million that you talked to, this is about moving from a period where we have turnarounds, planned turnarounds in the summer period to a period where we have fewer of them. And so that's a sort of natural seasonal change, I think, that you would expect. So hopefully, that gives you enough color, Teodor, to understand that.

And then on the production outlook, we announced in September that we had achieved 400,000 barrel a day milestone. We've been saying for some time that we can average around 430,000 in Q4. Where we sit today, our production potential is around 440,000 barrels a day, and we've been up towards those levels. That's with everything running. And we're going to bring on, and I listed quite a number of them in -- when I spoke as quite a few new wells between now and the end of the year, and there's a decent amount of volume to come with that. So we will see production grow -- potential grow from these levels through the quarter.

And so we're confident of being able to deliver around on average, about 430,000 and probably exit the quarter above that level when we end the year. So that's sort of how we look at the production volumes, too. Hopefully, that answers the questions.

The second question today comes from the line of Tianhong Bi from Citi.

I've got quite a few questions, please. The first one...

We seem to have lost connection of Tianhong Bi. So the next question today comes from the line of Mark Wilson from Jefferies.

Really good delivery and congratulations on getting these projects to this point. My question, Nick and Carlo, is on those realistic price -- oil prices for 2026 and the $1.2 billion dividend. It's really good to see that confidence in returns for the coming year, considering there are fears over the commodity price. Your production mix is or has more oil now with Balder and Castberg on stream. So could you speak to, let's say, the lower range of oil prices for the coming year that would maintain that dividend?

Mark, we're not going to provide guidance on pricing, but the way we look at this, if you think about it, I mean, we've had transformational production growth this year. We've set out to bring on 9 new projects, major undertaking. 7 of those are online, and the last 2 will come online at the end of the year. So we see a significant growth in production, and we exit this year very strong, and we've guided around 400,000 barrels per day next year, and I'm very confident we're going to be able to deliver that. So that's a significant step-up in production.

And at the same time, our capital spend is dropping off. And we have a lot of flexibility in the business as we look forward. So we've set out that between now and 2030, 65% of our capital future expected capital spend is uncommitted. And we have many choices to slow it down, speed it up to work to make the projects better, and we will use that flexibility. As a company, we're also free cash flow breakeven on average between now and 2030 at around $40 a barrel. And I think that shows the resilience of our company. New projects, they need to meet $35 breakeven and infill wells $30 breakeven, and we're able to maintain those metrics. And so we have a very resilient, robust, flexible business. We also have significant liquidity at $3.6 billion of available liquidity.

And so when you look at it, we have got flexibility and resilience as a company. And then if you look at the oil price range, yes, OPEC+ has announced it's going to produce more volumes. What we also see is that maybe OPEC+, not all the members can produce all the volumes that they perhaps say they've got. And secondly, I think when you look forward, the world needs a lot of oil, and it needs to develop a lot of oil. It needs to spend a lot of capital to maintain the volumes. So yes, we have a shorter-term period maybe of weaker prices. But I am very positive about the longer -- medium- to longer-term outlook for oil prices because I think a lot of investment is required.

And if you just look at the U.S. business, 50% of U.S. production today came from wells drilled in the last 2 years. And that declines extremely quickly. And at these prices, the U.S. is -- unconventional business is largely uneconomic. So I think we'll see a slowdown in investment and some of that adjustment will happen very quickly. And so our view is that there is long term, the prices -- we have a shorter-term lower price. But longer term, we see a good outlook for oil prices. And as a company, we're resilient to work through this.

If I may ask a follow-up on that, and I love the point about the U.S. new wells, by the way. Could I just ask the -- on the leverage within all that discussion, the leverage target of 1.3x or to be below that, should we use that if we're predicting forward as being a potential point that you might maintain dividends to?

Yes. Actually, when it comes to leverage, it's probably what I was about to add. Our starting point is 0.9x is well within our 1.3x. And we are committed to maintain an investment-grade balance sheet as we have been said a lot of time. So the whole point is that 1.3x is our target. We don't want to go above that. But given our starting point, which is 0.9x and if you model it, you will see that it's very, very resilient to lower price scenario. So our starting point to give us the confidence that we will not be in the condition to push the leverage close or higher than our target, while still being able to sustain 2026.

Let us go back to Tianhong Bi from Citi.

Can you hear me okay?

Please go ahead.

I've got a couple, please. The first one, you're still guiding for 10 project FIDs in 2025, but that's down from the 13 you flagged at 2Q with now 3 being pushed to 2026. Can you just clarify whether that's purely sequencing or if that reflects a more cautious spending stance given the lower price environment? And how should we think about the potential for further slippage?

The second one relates to Goliat Gas. So the contract selection for gas export solution was cleared in 2023 with the original FID targeted in second half 2024, but that's now been pushed again. Can you just clarify what the current timing assumptions are and what are the key remaining gating items are? So just yes, what is holding up the FID at this stage?

The third one relates to your 2025 exploration program, which has delivered 40 million to 60 million barrels net so far this year with another 7 wells to drill. Does this exploration success year-to-date get you where you need to be in terms of your resource replacement target? Yes, that's my question.

Good. I think good questions. In terms of the project sanctions, we guided at our CMU that we would sanction around 8 projects this year. And we've been working on a number of these projects, and we're now confident that we're going to sanction 10 of them by the end of this year. We have a number that might sanction in the early part of next year, and we're not guided what those are going to be yet. So I think we've more than met what we set out to do as a company in terms of the projects that we've got -- that we're moving forward.

In terms of Goliat Gas, it's a good question. I mean we have a commitment to develop the gas in the field. And I think there's about 100 million BOEs of resource there. And the way to do this is to produce it through the Snøhvit facilities. And -- but of course, they're full until 2045. But there may be periods of time where they're not full. And so we're working up a commercial arrangement where we can put it through Snøhvit. Also developing the gas releases more oil production. So that's part of the story here about making this project economic. And if we progress with the Goliat Ridge development, we will need to do something with the gas. And it's cheaper to export it than to reinject it.

So there's a number of motivations for this. We're in the middle of commercial negotiations with the Snøhvit license at the moment. And our target is to sanction this project in the early part of next year. It's quite simple really. It's basically a short pipeline to the pipeline for the Snøhvit facilities. And a riser at Goliat and it creates and unlocks a lot of opportunity. So I'm hopeful that we can move that forward.

And in terms of our exploration success, we'd always like more. But I think so far, it's a good outturn this year. And we've got some exciting wells to come, particularly the wells we're drilling in the Goliat Ridge and I think some other things that we have. So we've got a high-impact well [ Veacon Ship ] in the Barents. And I'm actually quite like the Prince Updip in Ringhorne because that could unlock quite a few things and it can be put straight on to production because it's through the platform. And so we've got a number of wells, and let's see where we are at the end of the year.

But overall, on a resource replacement ratio this year, I think we're in a good place on a 2P basis to be above 100% reserve replacement ratio this year. It's a bit early to give you some numbers, but we're going to be somewhat above that, I think, when we get to report the numbers in the early part of next year. So hopefully, that answers your questions.

Very clear. Is it possible to just add one more question in?

Go ahead.

Yes. So perhaps this question is more for [ E&I ], but also interested in your view as well because last week, they talked about boosting liquidity in Ithaca its other E&P satellites by selling down more shares. So I was just wondering if -- is there any similar discussions or consideration for Vår as well?

I think this is a question you need to direct to our major shareholder. It's theirs, but I think they made it clear that they're a long-term industrial holder of the company. They've made it clear on a number of times. And so -- but this is a question you have to direct to them.

[Operator Instructions] The next question comes from the line of Victoria McCulloch from RBC.

A couple more from me. So just firstly, on Balder, you highlighted the Phase V start-up in Q4. Can you just remind us the phasing and the number of wells with Phase V? And then subsequently, what's the timing expected for adding Phase VI in?

And then second question, just following up on the highlight of the project portfolio. Is there any risk of these slipping into next year?

Okay. Victoria, good questions. And Balder Phase V, so that's 6 wells is in the plan there, and that uses all the remaining subsea well slots in the facilities that we've developed with the Balder-Jotun FPSO development. And so we will have 3 wells online by the end of the year. 2 wells will then be drilled in the first half of next year and come online sometime in the middle of the year because we have to put the subsea equipment of trees and flow lines in place once they're drilled. And then phase -- so that's 5 wells on Phase V will be done by then.

And then we'll see Phase VI being drilled and installed in the -- and start up towards the end of next year. And that's a trilateral well in the field. And that needs a new flow line and subsea equipment to do that, but we've got that all in place to happen. And I think the final Phase V well will come in the early part of 2027 is what we've currently set out. So you'll see a continuous program of wells being added.

I might say that these are all much longer and they're multilateral wells than the wells we've drilled in the past. So we get, I mean a dual-lateral delivers twice as much resource and production than a single well, and they're much longer as well. And so these are very economic and productive activity. And as I said, we then plan to continue. So we plan to install new subsea facilities, and we're designing for up to 15 new wells to follow on from this. And what we want to do is create a continuous drilling program here to allow us to sustain production long term through Balder.

And then on the project portfolio, as I say, we've sanctioned 4 developments so far this year, and we have line of sight to sanction 6 more, so 10 for the year. And where we sit today, I think they will all get sanctioned this year. These things don't happen overnight. They take a long time to build up to it. And so we've got quite a number of approvals coming in the latter part of the year to move this forward. So I think we're in a good shape to move those forward. Hopefully, that answers your question, Victoria.

That's helpful. Can I just have one follow-up on Balder. I noted you talked about the -- in your comments about the retirement of the FPU on Balder and that only certain wells will then be transferred over to the Jotun FPSO. What -- I guess, is anything like being less stranded, what sort of production do you think then you're looking at that in a potentially 2028, 2029 time line? Is that sort of a production then that's going to drop off, so to speak?

No. I mean this is what we've considered into the whole thing. And of course, we don't want to leave reserves in the ground. So some of the wells are of a scale and still productivity that you would want to transfer them across. And some are quite high water cut and nearing end of sort of economic usefulness. So in some of those, we're going to redrill them because they've been lower in the structure. So we have the opportunity to redrill and move the well up dip and recover more oil. And so it's a bit of both. So we will not be losing reserves through this whole process. We'll be actually adding quite a lot of resource.

The next question comes from the line of Nash Cui from Barclays.

I have 2 on cost, if that's okay. So the first one is on unit production cost. I think Vår did $10.6 this quarter, which is really good. And with your production volume growing significantly into Q4, do you feel that your $10 per barrel guidance is quite conservative?

Then my second question is, I wonder if you can give us an update on the $500 million cost saving plan, especially given that you increased your exploration CapEx a little bit. Does that mean you need to find extra savings from somewhere else?

Good. And thanks for joining and the good questions. On unit production costs, yes, $10.6 in Q3, which is very good. And as I said, we guided $11 to $12 for the year, and we expect to be around $11 at the end of the year, which -- and production being flat, this is all about cost reductions. And there's 2 aspects, as I pointed out earlier, this is about the lower unit cost production from the new barrels that we're bringing in, but it's also about cost reductions. And I have to say, yes, we've guided approximately $10, but I think there is a case that we could become a bit lower than that. So something to look out for when we get to our Q4 results.

And then on the $500 million, look, we set out that we were going to use some of our flexibility. If you look forward between now and 2030, we have around 65% of our future capital uncommitted. And depending on how this price environment continues, we will use some of that flexibility. But we have a big opportunity to optimize our portfolio to maintain the production outlook to reduce the cost base and to manage through this cycle. And I think we're not stuck with some massive projects that you have to invest into. We have lots of choices and flexibility, and we will use that. And we guided that we would take $500 million out of '25 and '26, and we will update you on what our 2026 capital program and spend program is going to be at our Capital Markets update in February. Another good example of this is in my speaking notes, I talked about the fact that we are discontinuing the electrification projects at Snøhvit and Halten. That will take out $500 million out of our future capital program between now and 2030. So that's a component.

So there's lots of aspects to this, and I can't guide on a specific item because there's many, many things that make this up. But we're focused on cost discipline, delivering what we say we're going to do, delivering our production, driving down operating cost and using the flexibility in the company to make sure that we're robust and can meet all of the objectives that we've set out.

I just wanted to add that when it comes to the $500 million cost saving program, if you remember, this is mostly on 2026. So 2025 was actually marginally impacted by it, mostly in 2026. So the slight overspend, for example, you referred to the exploration is not really impacting that opportunity for containing cost because it's mostly on 2026.

The next question comes from the line of John Olaisen from ABG.

Two questions, if I may. Firstly, if Balder -- if the Jotun FPSO is at peak production capacity now, I just wonder how is this going to be -- is there going to be space for the new wells from Balder V? Is depletion like so strong in a month or 2? Or is it going to be produced at one of the other 2 facilities? And maybe if you could add on that, what is the underlying depletion at Balder?

And my second question is regarding the free cash flow breakeven. Is it possible to say what is the free cash flow breakeven for Vår in 2026 before and after dividends, please?

So in terms of -- I'll take the first question, and Carlo can deal with the second one. John, Balder, first of all, these wells are quite peaky. So we -- they have a long life, but they decline from peak rate quite quickly because we're quite thin oil column and we get water quite quickly. So today, we're producing 80,000 barrels a day gross, and our share is 90%. And if we are going to sustain production through Jotun FPSO, we have to continually add wells over time to be able to sustain that.

And so that's what -- and as we bring new wells on, we can optimize the production through the facility. We're also working to see whether we can get more through it. That's something to think about also in time both on oil production and also when we debottleneck to improve the gas handling capacity and the water handling capacity.

So it's about sustaining production here long term, it's about continuing to drill and there's loads of subsurface opportunity. And that's what we're going to do. Phase V is the first step, Phase VI is the next piece. And then Balder Next will bring -- we're going to create the opportunity for up to 15 wells. And then there's many other opportunities in the area as well. So I think that's the way to look at this.

And then Carlo, do you want to address the other question?

It comes to the breakeven for 2026. You know that we guided our breakeven at $40 for the cycle, so 2026, 2030. If you look at 2026 only, you will see that and we already guided 2026 will be approximately 400,000 barrels per day in production and the CapEx guidance we gave for the entire period is between $2 billion to $2.5 billion. So the breakeven you can expect in 2026 is actually in this range of $40 because it's actually the year where production will be at 400,000, not just the rest, 350,000 to 400,000.

Okay. So $40 before dividends, and after dividends in '26?

We've not guided that.

And sorry, Nick, the underlying depletion rate at Balder, is it possible to give like a range or some numbers on that?

I'm guessing it's about 10% to 15%, but it depends a little bit. I mean we've got a lot of new wells at the moment, so you don't see it quite that way. We've got -- we are limited actually on the -- we've got more well capacity than we have production facilities capacity. So it's not quite at that point yet.

All right. But you can confirm that the 3 new production wells for the ones going to be set in production from Balder V is going to be hooked up and produced from the Jotun FPSO?

Yes, they will. I mean we're not drilling any more wells to hook up to the Balder FPU. All future wells will be drilled in connected to the Balder FPSO. And the point about our Balder Next project is actually to decommission the Balder FPU, which reduces our operating cost by around $130 million per annum gross and significant reduction in annual CO2 amount. So we're going to replumb some of the good wells from Balder FPU into the FPSO.

We currently have no questions coming through in the queue. [Operator Instructions]

The next question comes from the line of Alejandra Magana from JPMorgan.

You've sanctioned 4 of the 30 early phase projects in the pipeline and expect around 10 by year-end. You've given some detail on Fram Sør and Balder Phase VI with Fram Sør more of a '29 story and Balder Phase VI, starting out by the end of '26. Could you just add a bit more color on how the remaining 2025 sanctions are expected to line up in terms of timing and sequencing?

And then my second question, can you just expand a bit on Goliat Ridge? You've called it a fast-track project. How quickly do you think you can move to FID once the appraisal wells are in? And what needs to line up first?

Okay. I can go through a few of the dates. I don't have them all in my head. But as I say, 4 projects sanctioned this year. We are expecting to sanction 6 by the end of the year, and I'll give you a few examples -- and I did in my speaking notes a little bit. So up in the Johan Castberg area, we're going to sanction an infill drilling program that will start drilling wells immediately following the ongoing development program being complete at the end of next year. So it will start from 2027. That will include drilling and exploration discovery that was made in the area this year. And we're also going to sanction the Isflak tieback development at the end of this year. I think that probably comes in line on 2028, but I couldn't -- we'd have to check that.

And then the Ekofisk Previously Produced Fields project, which is quite a big one. That will -- now that we have increased our working interest in that, that's going to sanction at the end of this year, and we'll start giving production volumes in 2028. Balder Next, there's 4 components to this, as I set out. The first component we will sanction at the end of this year, which is debottlenecking the FPSO. This is to give more capacity of gas handling, water handling capacity through the facility to allow us to get more volumes through it. And this will be implemented during the summer next year.

So there's some shorter-term things and there's some longer-term things in the mix. And the whole aim is -- what we're trying to do with the 30 projects is optimize the delivery of them, to maximize the production outlook for the company and sustain 350,000 to 400,000 barrels a day. And so just delivering on these 30 projects will deliver 350,000 barrels a day towards 2030.

Then Goliat Ridge, where we're at on this is we've made 3 discoveries there already. We set out -- and this is quite a big opportunity. It's potentially over 200 million barrels. It's just a few kilometers away from the Goliat FPSO. And so it would be developed as a tieback into Goliat FPSO. It's the same fluids and everything. So it's very simple in that respect. What we're doing at the moment is we set out that we're going to drill 2 appraisal wells. We started the first one, and we will drill those 2 between now and the end of the year. And so we will have quite a lot more subsurface data.

The other aspect here is one of the reasons this hasn't been drilled is you can't see it on the existing seismic. So in the summer, we shot a new 3D seismic survey over this. This is -- the previous version was 25 years old. So hopefully, new technology will mean that we can look and see the reservoir much better, and I'm confident that, that will do. And so we will have a lot of subsurface information in our hands at the end of this year.

And then we can start to think about how we move forward a development program here. But we can fast track this if it's the right thing to do. We can move it forward very quickly just as we're doing projects in the Balder area and in the Gjøa area. And so let's see where we are at the end of the year, and then we can start to think about the timing for developing this. Hopefully, that answers your questions.

There are no further questions from the phone line. So handing back over to the speaker room to answer 2 questions in writing.

Thank you. I've got a question here from Matt Smith of Bank of America. Last quarter, you discussed CapEx flexibility and the opportunity to rework and improve projects. Two questions. Are you considering further leveraging this CapEx flexibility in 2026? And secondly, are you seeing supply chain pricing as conducive to improving project economics?

Yes, it's a good question, Matt. So I think, yes, we are using the flexibility. We're using the flexibility in a number of ways. First of all, we're very disciplined about making sure we do projects that create value. And the metrics we set out below $35 breakeven and rates of return above 25%, and we're going to be really disciplined about making sure we do that because if we do projects that look like that, we're going to make money in the long term. And so sometimes, the projects need to be reworked. And it's not just about the cost base, it's also about the scope of the project. So we're doing both of these things. And sometimes, we move a project forward quickly and we say, well, we need to reset a bit and go around it again, both on the cost base and on the scope of work. And we're having quite a lot of success at doing that.

And our drive here really is to pick up the pace, which I think we've developed some momentum here and be willing to move things forward quickly, but recognize where we need to rework something and recycle it a bit. And there's a few projects we've done already that's created such success. We slowed down our Gjøa area projects a bit, and we've been able to improve those significantly, both from reducing costs and improving the project. So that's how we will address this. And for sure, we're going to use the market if it offers opportunities for us. So hopefully, that answers your question, Matt.

And the second one, Ida?

We have another question here in terms of hedging policy. You've hedged 100% of your crude oil production after tax for Q4 with productions at $50. Will you continue to hedge against lower crude prices in 2026 as well?

Yes. As we said, we are not continuing for 2026. As we speak, we don't have this program in place. We are monitoring the market, of course, to see whether there is an opportunity. But what we've done is basically a risk-benefit balance analysis, and we saw that the company the way it is now is very different from what it was a few years ago. Production has increased a lot and the company is fully derisked. So as we speak, we don't have any program in place for 2026.

And one last question on operating costs. What are the key factors that give you confidence in maintaining this $10 per BOE cost level on a sustainable basis going forward beyond Q4 this year?

And it's a good question. So it's about 2 things. It's about sustaining production. So if we sustain high production through our facilities, then we can sustain these lower costs. And secondly, it's about being disciplined about the cost base. And I still think as a company, we've got quite a lot of opportunities to reduce operating costs.

And I'll give you one example. In the Balder area, we're going to decommission the Balder FPU in 2028. That represents $130 million gross per annum operating cost, which we will take out of -- and we have 90% of it. So that is a good example where we can take cost out of our cost base and still maintain production at the same levels. And we will continue to work both sides of that equation. And the way we project it, so we can see ourselves around $10 long term.

Great. Thank you. That concludes the presentation and Q&A. Thank you all for dialing in. Wish you a good rest of the day.