DNB downgrades Var Energi to on output decline and dividend risk

Var Energi ASA

13/01/2026 07:32

** DNB Carnegie downgrades Norwegian oil and gas producer Var Energi VAR.OL to "sell" from "hold", citing risks from a multi-year production decline and potential dividend cuts

** The broker notes key projects are past their peak and forecasts production to fall 12% from 2026 to 2028

     ** DNB adds that weaker gas prices and lower output will hit free cash flow, which is forecast to cover only about half of the current $1.2 bln dividend post 2025

** DNB believes the stock's high 14% dividend yield does not fully account for this risk

** The brokerage cuts its PT to NOK 25 from NOK 31, implying the shares will trade on a yield of around 10% on future FCF

(Reporting by Agnieszka Olenska)

((Agnieszka.olenska@thomsonreuters.com))