Eni’s Var Energi plans IPO in bet on strong future for natural gas

Lars Erik Taraldsen January 24, 2022

(Bloomberg) --Eni SpA’s Norwegian joint venture, Var Energi AS, will apply for an initial public offering in Oslo on a bet there’s still investor demand for shares in oil and gas companies in Europe.

The company is considering seeking a valuation of about $10 billion in the listing, people familiar with the plan said, cautioning the target may change depending on investor feedback. It comes after several proposed European oil and gas IPOs were paused in the past two years as the pandemic roiled markets, while growing environmental concerns also weakened investor interest. But confidence has gained as recovering energy demand buoys prices.

“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,” said Torger Rod, Var’s chief executive officer. “An initial public offering and listing is a natural next step for Var Energi in realizing our full potential.”

The IPO will comprise a private placement and public offering to investors in Norway, Sweden, Finland and Denmark, as well as a private placement to institutional investors outside Norway and the U.S., Var said Monday in a statement. The offering follows a strategic review of Var by Eni and fellow shareholder HitecVision -- who currently own 69.85% and 30.15%, respectively -- and will consist of a sale of their existing stock.

Italian energy giant Eni intends to retain a majority stake in Var, which has grown into one of the largest independent exploration and production companies in Norway following its emergence from the 2018 merger of Eni Norge and Point Resources AS.

‘Unique Position’

Big Oil’s retreat from the North Sea has caused some concern in the industry, but firms like Var contend that smaller, Norway-focused companies could be better at creating value from older and marginal fields than supermajors spread across the globe. Var operates Goliat, the only oil deposit currently on-stream in the Barents Sea, and is a partner in the Johan Castberg development.

“Var Energi is in a unique position in the Barents Sea, we are positioned where we know there is oil,” Rod said on a conference call. “We are located in the right place.”


The company’s average net production for the three months through September was 247,000 barrels of oil equivalent a day, the statement showed. It’s aiming for 350,000 barrels a day in 2025, Rod said on the call. He didn’t give details on possible IPO pricing or timing.

Var intends to pay a dividend of $200 million for the first quarter of 2022, in line with its policy of distributing a minimum of $700 million over the year, according to the statement.

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