Eni's Vaar again postpones first oil from Norway's Balder X (updated)

Fastighets AB Balder

21/08/2024 12:02

(Adds analysts in paragraphs 5-6, share price in 10th
paragraph)
       OSLO, Aug 21 (Reuters) - Norway's Vaar Energi  VAR.OL 
has again postponed the start of its North Sea Balder X oil and
gas project, pushing back production to the second quarter of
2025 from the end of this year, the company said on Wednesday.
    Plagued by cost overruns and delays, Balder X had originally
been set to start production in 2023. 
    This, however, was later postponed to the third quarter of
2024 and subsequently to the fourth quarter of this year, due to
delays in the completion of the production facility, in
particular the floating production, storage and offloading
vessel (FPSO) that will be deployed to the field.
    The delay causes an additional project cost of around $400
million pre-tax of which about 75% will be incurred in 2025,
said Vaar, which is majority owned by Italy's Eni  ENI.MI .
    Vaar maintained its goal for production this year to total
280,000-300,000 barrels of oil equivalent per day (boed) and
rise to around 400,000 boed by the end of 2025.
    Broker DNB Markets trimmed its share target price for Vaar
Energi to 39 Norwegian crowns ($3.71) from 40 crowns due to the
delay, and cut its 2025 production estimate to 359,000 boed from
377,000 boed previously.
    However, it kept its  "buy" recommendation on the stock,
saying that Vaar's free cash flow in 2025-2026 should be
sufficient to keep dividend payments at $1.1 billion per year.
    Balder X will secure production from the Balder area beyond
2045, unlocking an expected 150 million barrels of oil
equivalent and with peak production of 80,000 boed, Vaar said in
a statement.
    "There remains significant additional resource upside in the
area and further exploration drilling and tie-back development
phases are being planned," it added.
    Vaar holds a 90% stake in Balder X while Britain's Kistos
 KIST.L  owns the remaining 10%.
    Vaar's Oslo-listed shares traded down 0.6% by 1024 GMT,
lagging a 0.1% rise in the broader European oil and gas index
 .SXEP .


($1 = 10.5075 Norwegian crowns)

 (Reporting by Terje Solsvik and Nerijus Adomaitis, editing by
Stine Jacobsen and Tomasz Janowski)
 ((terje.solsvik@thomsonreuters.com; +47 918 666 70;))