Vaar Energi unveils plan for IPO and Oslo listing

Owners Eni and HitecVision are planning an initial public offering for Vaar Energi and a listing on the Oslo stock exchange.

The Italian state-owned oil and gas major and the Norwegian private equity firm own 69.85% and 30.15% respectively of the Norwegian independent oil and gas operator.

Eni and HitecVision said on Monday that they intend to remain active and committed owners following the IPO, and are committed to strengthening Vaar Energi’s position as a leading player on the Norwegian Continental shelf (NCS).

Eni said it intends to retain a majority stake while preserving equity accounting.

Eni chief financial officer Francesco Gattei said Vaar Energi represents Eni’s more than five decades of engagement on the NCS, and the operator has a clear growth strategy and strong partnerships in an attractive region.

“This provides a solid foundation for long-term value creation and shareholder returns, and we look forward to continuing to support Vaar Energi as a majority shareholder in this ongoing success story,” Gattei said.

Vaar Energi’s average net production for the three months ended 30 September 2021 was 247,000 barrels of oil equivalent per day, with gas accounting for 37% of the total, making it the second-largest natural gas exporter from the NCS. Its net proven and probable reserves were estimated at 1.144 billion boe.

The company claims to have a differentiated hub strategy, world-class exploration capabilities and strong organic production growth outlook targeting net production of 350,000 boepd by the end of 2025.

“This is supported by an investment-grade balance sheet and strong focus on shareholder returns. The company’s current shareholders consider the listing to be an important step in the development of Vaar Energi,” the owners wrote.

The IPO will provide access to the Norwegian and international capital markets and is intended to allow the company to diversify its ownership structure and create a strong long-term shareholder base, including employee engagement.

Vaar Energi chief executive Torger Rod said the company’s leading NCS position is founded on a unique track record, scale, operational excellence and strong partnerships.

“We believe oil and gas will continue to be part of the energy mix for decades to come, and the current gas market developments in Europe confirm our view that a reliable and safe supply of natural gas from Norway to Europe will be crucial,” he said.

Rod believes the NCS will remain one of the most attractive regions for exploration and production globally due to cost-competitiveness, a stable regulatory environment and low emissions.

“With a robust and diversified portfolio of operations and assets across all parts of the NCS, we have set ambitious growth targets.”

HitecVision senior partner Tor Espedal commented: “This is a great milestone for Vaar Energi, and the realisation of our ambitions when we started building it to become one of the leading E&P companies in Norway.”

Last October, the shareholders announced their intention to initiate a strategic review of the future ownership structure of Vaar Energi, to better pursue growth and maximise value creation.

The IPO is expected to consist of a private placement and public offering to investors in Norway, Sweden, Finland and Denmark, and a private placement to institutional investors outside Norway and the US.