BlueNord Q2 2025: Key Takeaways

Mixed Results, but Harvesting Strategy Gains Traction

Today we added BlueNord (BNOR.OL) to the Gullinbursti Dividend Portfolio at NOK 502/share, leaning into a post-earnings dip of over 4% and ahead of the company’s imminent share buyback launch. While Q2 came in soft on production and earnings, the long-term cash return story remains firmly intact, and we see this pullback as an opportunity to accumulate exposure to one of the highest-yielding names on the Oslo Børs.

Analyst reactions reflected the mixed bag:

• Fearnley flagged that net production of 37.8 kboepd fell short of guidance (40–46) and their own estimate of 42.5. EBITDA (USD 133m) and net income (USD 19m) missed forecasts by a wide margin, while CFFO of USD 70m was well below the USD 168m expected, driven by a large working capital build.

• Pareto called it a “soft quarter” but emphasised that Tyra has reached ~26 kboepd, with more liquids than expected – a key offset. They also highlighted the 70% CFFO payout as a strong positive.

• Clarksons noted that 98% of Tyra wells are now commissioned, peak output of ~28 kboepd has already been reached, and with 70% payout ratios and USD 50m in buybacks coming, BlueNord is on track to return over 70% of its market cap by end-2026.

• SpareBank 1 Markets reiterated their 30–45% dividend yield forecast for 2025–26 and see a fair value range of NOK 670–950/share depending on resource development visibility.

So yes – production guidance for Q3 was trimmed, and cost inflation surprised – but the company still proposed a USD 49m dividend (70% of CFFO) and is launching buybacks next week. With Tyra approaching steady-state, a de-risked capital structure, and management delivering on its promise of material shareholder returns, we view this dip as a strategic entry point in a long-term harvesting story.

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Index

1. Tyra Ramp-Up: Delivering, But Behind Schedule

2. Distributions: Dividends + Buyback in Motion

3. Costs & CapEx: Workovers Drive Short-Term OpEx

4. Financials: Higher Revenue, Stable FCF

5. Capital Structure: Dilution Risk Eliminated

6. Guidance & Outlook

7. Long-Term Dividend Visibility

8. Long-Term Production Plan

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Tyra Ramp-Up: Delivering, But Behind Schedule

Q2 Tyra production averaged 16.8 mboepd, up nearly 90% from Q1, but still below the 20–24 mboepd guidance.

“We’ve proven we can deliver production rates just below plateau… with only ~70% of the Tyra wells online.” – Miriam Jager Lykke, COO

• Peak rate hit in June: ~28 mboepd net

• Operator TotalEnergies is focused on stabilising uptime: 60% in Q2, guidance is 70–80% for Q3 and 80–90% for Q4

• Long-term plateau target remains ~30 mboepd, underpinned by strong performance from the HEMJ well

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Distributions: Dividends + Buyback in Motion

BlueNord proposed a USD 49m dividend for Q2 – equal to 70% of operating cash flow, the top of its policy range – and confirmed a USD 50m buyback will launch next week.

“Every proposed distribution to date… has been at the top end of our 50–70% policy range. That’s not just a reflection of past performance – it’s a strong signal of intent.” – CEO Euan Shirlaw

• Total shareholder returns (dividends + buybacks) already exceed USD 300m YTD

• Distributions are treated as return of paid-in capital (Norwegian tax-free)

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Long-Term Dividend Visibility

In a May report, DNB Carnegie raised concerns about BlueNord’s post-2026 dividend potential, citing debt covenants that may limit payouts to 50% of net profit, potentially capping annual dividends at NOK 25–30/share.

"A normalised dividend from 2027 and beyond could be materially lower than current levels if limited by net profit caps" – DNB Carnegie

SpareBank 1 Markets offers a different take. In a 27 June note, analyst Teodor Sveen-Nilsen wrote:

“We rolled forward GAV/NAV and added back dividends – with and without derisking 2C resources – and get to a range of NOK 670–950/share.”

The higher end of that range requires no exploration success, no accretive M&A, and no commodity price upside – just visible progress on the 2C resource base.

Meanwhile, management pointedly described BlueNord as entering a "harvesting mode", with capital discipline and production longevity expected to underpin long-term payouts: