Oslo-listed Vaar Energi, majority-owned by Italy's Eni, on Tuesday reported a stronger than expected third-quarter operating profit and guided for lower costs in 2024, boosting its shares in early trade.
Its earnings before interest and tax (EBIT) for the April-June quarter fell to $740 million from $907 million a year earlier, but exceeded the $702 million average forecast in a company-provided poll of 13 analysts.
Vaar's Oslo-listed shares were up 3.8% at 0748 GMT, outperforming the European oil and gas index which was down 0.3%.
"We're showing strong cost discipline, lowering capital spend and production cost guidance for the year, as we enter a more volatile price environment," CEO Nick Walker said in a statement.
Vaar now expects its production costs for the full year to be below $13 per barrel of oil equivalent (boe) compared to previous guidance of $13.5-$14.5 per boe.
Meanwhile, the company confirmed plans to increase its output to around 400,000 barrels of oil equivalent per day (boed) by the end of 2025, up from 280,000-290,000 boed seen in 2024.
"We're set for significant growth in the next three quarters," Walker said on a call with journalists.
Vaar expects to add a net 150,000 barrels of oil equivalent per day (boed) in production from several new fields coming on stream within the period.
Equinor-operated Johan Castberg, where Vaar has a 30% stake, was on track to start production in the fourth quarter and expected to add over 60,000 boed net output to Vaar.
The field could ramp up to its plateau level within three to four months after coming onstream, Walker said.
Vaar plans to approve up to eight new oil and gas projects by the end of 2025 to sustain production longer term, including the $620 million Balder Phase V sanctioned on Tuesday, he added.
Vaar maintained a quarterly cash dividend of $270 million, or around $0.11 per share, for the fourth quarter.
(Reuters - Reporting by Nerijus Adomaitis; editing by Terje Solsvik and Jason Neely)