Vår Energi and BlueNord have agreed to combine their businesses in a transaction expected to create the largest independent oil and gas producer in Europe. The deal will add BlueNord’s producing assets on the Danish Continental Shelf to Vår Energi’s existing operations in the North Sea.
The transaction will be structured as a statutory merger between BlueNord and a newly established, wholly owned subsidiary of Vår Energi. BlueNord shareholders will receive approximately 248.4 million newly issued Vår Energi shares and NOK 1.964 billion, or about $204 million, in cash.
For each BlueNord share held, investors are expected to receive 9.7153 Vår Energi shares and NOK 76.83 in cash. The new shares will represent an issuance equal to approximately 9.95% of Vår Energi’s current share capital.
Following completion, existing Vår Energi shareholders are expected to own approximately 90.95% of the combined company, while BlueNord shareholders will hold about 9.05%. Eni is expected to remain the company’s long-term strategic majority shareholder with approximately 57.33% ownership.
The combined business is expected to have long-term production of approximately 450,000 barrels of oil equivalent per day. Its portfolio would include about 2.4 billion barrels of oil equivalent in reserves and resources, representing an estimated resource life of approximately 15 years.
Vår Energi expects the combined production mix to remain approximately 65% oil and 35% gas. The transaction would also provide access to the Nybro and Den Helder gas delivery points, expanding the company’s ability to supply European energy markets.
BlueNord’s portfolio includes interests in the Tyra, Halfdan, Dan and Gorm production hubs on the Danish Continental Shelf. These assets are expected to contribute approximately 45,000 barrels of oil equivalent per day of net production beginning in 2026 and include about 195 million barrels of oil equivalent in net reserves and contingent resources.
The assets are part of the Danish Underground Consortium, which is operated by TotalEnergies. Their proximity to Vår Energi’s existing Norwegian Continental Shelf operations and similarities between the Danish and Norwegian offshore basins are expected to support integration.
Vår Energi expects the transaction to increase production, reserves, operating cash flow and free cash flow on a per-share basis. The company also plans to maintain its dividend policy of distributing between 25% and 30% of after-tax cash flow from operations over the business cycle.
The company intends to increase its dividend for the second quarter of 2026 to $350 million, subject to specified conditions and shareholder approval. Vår Energi also plans to distribute a $350 million dividend for the third quarter to shareholders of the combined company.
Vår Energi estimates the combination will generate between $250 million and $300 million in accumulated post-tax synergies from 2027 through 2032. These benefits are expected to come primarily from lower financing and overhead costs, along with BlueNord gaining access to Vår Energi’s investment-grade balance sheet.
The transaction has been approved by the boards of both companies but remains subject to BlueNord shareholder approval, regulatory and governmental clearances, license and partner approvals, and other customary conditions. Completion is expected around the end of 2026.
SB1 Markets is serving as lead financial adviser to Vår Energi, with Barclays also acting as financial adviser. Schjødt is providing legal advice, and KPMG is advising on financial and tax matters.
Jefferies is acting as financial adviser to BlueNord, while BAHR and Gorrissen Federspiel are providing legal counsel. Standard Chartered Bank delivered a fairness opinion to BlueNord’s board.
KEY QUOTES:
“This transaction marks a significant milestone in Vår Energi’s growth journey, creating the largest independent producer of oil and gas in Europe with a long-term production target of approximately 450 thousand barrels per day and reinforcing our role as a reliable and secure supplier of energy to Europe.”
“As Vår Energi continues to grow it is a natural evolution of our strategy to step outside of Norway, and Denmark offers a low risk, stable operating and fiscal regime, with similar characteristics to the NCS. BlueNord brings high-quality, long-life assets on the Danish Continental Shelf with stable production, limited near-term investments and strong cash flow generation.”
“Together, we are creating a stronger, more diversified company with increased scale, resilience and cash generation. The combination increases production, reserves and resources, underpinning our ability to deliver long-term value to our shareholders and we look forward to welcoming BlueNord’s shareholders to Vår Energi’s enlarged shareholder base.”
Nick Walker, CEO of Vår Energi
“The transaction is expected to be accretive to Vår Energi’s cash flow from operations after tax and free cash flow per share, while increasing our long-term dividend capacity. It adds resilient cash generation and portfolio diversification, delivers meaningful synergies, increases the share free float and creates additional commercial opportunities for value creation across an enlarged portfolio.”
Carlo Santopadre, CFO of Vår Energi
“The combination with Vår Energi creates a North Sea company of real scale and resilience. One that continues what BlueNord has always stood for: reliable supply of energy to Europe and meaningful returns to shareholders.”
“Since 2019, our shareholders have supported BlueNord through the delivery of the Tyra Redevelopment and benefited from a period of outsized distributions of close to USD 800 million. This transaction is the natural next phase: it gives our shareholders ownership in an investment grade company with greater scale and diversification, and the balance sheet to sustain long-term returns.”
Euan Shirlaw, CEO of BlueNord
“The Board has carefully evaluated this transaction, together with our advisors, and has unanimously concluded that it is in the best interests of BlueNord and its shareholders.”
“It delivers meaningful value today by a combination of cash and Vår Energi shares while also giving our shareholders continued exposure to the upside of a larger, more diversified company.”
“With Vår Energi’s material resource base, oil concessions running up to 2060, and investment grade credit profile, shareholders can look forward to continued value creation and attractive returns from a highly cash generative business committed to long-term dividends.”
Glen Ole Rødland, Chair of BlueNord
