OSLO (Reuters) -Norwegian oil firm Vaar Energi on Tuesday reported a lower-than-expected operating profit for the second quarter, and said it plans to cut costs while maintaining full-year dividend
Vaar Energi Plans Spending Cuts Amid Lower-than-Expected Profits
By Nerijus Adomaitis
OSLO (Reuters) -Norwegian oil firm Vaar Energi said on Tuesday it plans to cut costs and maintain full-year dividend payments of $1.2 billion this year and next, as it reported smaller-than-expected profit growth for the second quarter.
Vaar's earnings before interest and tax for the April to June quarter rose to $1.2 billion from $992 million a year earlier, lagging the average $1.34 billion forecast in a company-compiled poll of nine analysts.
The company expects its output to rise to about 430,000 barrels of oil equivalent per day in the fourth quarter as new fields ramp up from some 350,000 boepd currently, aiming for "transformative growth" in 2025, CEO Nick Walker said.
Vaar, which is majority owned by Italy's Eni, said it plans to cut spending by $500 million over the period of 2025-2026.
"All our big projects have come to an end, and 65% of our future projected capital spend is uncommitted, so we have choices, if (there are) lower prices, to slow things down or to make the projects better," Walker told reporters.
The industry faces less inflationary pressure than six months ago, with some costs, such as drilling rig rates, going down, he told analysts in a separate call.
Walker also said the oil market had remained strong, despite rising supply and international trade disputes, and that Vaar has a portfolio of some 30 new projects it can start in the coming years, including more than 10 to be approved in 2025.
North Sea oil was down 63 cents, or 0.91%, at $68.58 a barrel by 0810 GMT on Tuesday amid concerns over a brewing trade war between major crude consumers the U.S. and the European Union.
Vaar's Oslo-listed shares were up 1.9% by 0854 GMT, outperforming a 0.4% decline in European energy stocks.
(Reporting by Nerijus Adomaitis; Editing by Terje Solsvik and Jan Harvey)
