Hello everybody and a warm welcome to the Vår Energi fourth quarter 2021 results. My name is Melissa and I will be your operator. If you would like to ask a question on today's call, that will be star followed by one on your telephone keypad. You can also type your questions using the question box on the webcast. I now have the pleasure of handing over to our host today, Ida, Head of Investor Relations. Please go ahead, Ida.
Great. Thank you and a warm welcome to Vår Energi's fourth quarter 2021 results webcast and conference call. Joining us today will be our CEO, Torger Rød, and our CFO, Stefano Pujatti. Torger and Stefano will present the fourth quarter and full year results, and afterwards, we will open up to questions. I will now turn the call over to Torger.
Thank you, Ida. On behalf of Vår Energi, the entire organization, Stefano and I welcome you to our first quarterly presentation as a listed company. Stefano, I have to say it is both a proud and exciting moment for us. With us today, we bring strong performance and good numbers. However, let me start by saying that we, like everyone else, are deeply concerned with the recent developments in Ukraine. I would like to give our heartfelt support to the Ukrainian people and all of those affected by the crisis. This is really putting things into perspective. I am sure you appreciated our short film expressing our proud history, key milestones, and strategy. It has happened a lot in Vår Energi the last years, and this really continue bringing value to our shareholders. It is an exciting times ahead for all of us in Vår Energi.
The recent Oslo Stock Exchange listing, being the largest upstream oil and gas IPO in Europe the last 15 years, is a natural next step in realizing our full potential as a leading upstream oil and gas company on the Norwegian continental shelf. Today we take the opportunity to say that we are happy and honored to welcome more than 90,000 new shareholders to our company, including the significant support from our employees that more than 80% now owns in the company. Welcome to all of you. We are committed to deliver a better future and long-term value creation. We bring large and a diversified resource base. Our hub strategy maximize value creation by enabling CapEx efficient investments, low OpEx and declining emissions, combined with world-class capabilities and a tangible high value growth.
With strong cash flow and investment-grade balance sheet, we are committed to deliver attractive and resilient shareholder returns. We are committed to be an industry leader on emissions and safety, and by this becoming Norway's leading energy company measured by safety, sustainability, value creation, and employee satisfaction. We are proud of our company being a leading pure-play independent on NCS, and this is based on key assets, our people and our diversified and robust portfolio with a substantial gas position. Based on our core hub, the Barents Sea area, Åsgard Area, Tampen, and Valhall, Grane, we have four solid legs to stand on for high-value creation and continued growth. We have scale with full year 2021 production of 246,000 bbl. With 35% gas for the full year, we are the second-biggest gas seller on the NCS.
This means that we are well-positioned to capture value in the current commodity price environment and for the future as the role of gas and energy transition fuel will continue to grow. In the last 12 months alone, Vår Energi has generated $4.4 billion in cash flow from operations after tax and $1.9 billion in free cash flow, as well as to pay a material dividend. This is all-time best for Vår Energi and represents strong performance, stable production and high commodity prices. Let's go to the highlight which shows the strong performance of Vår Energi for the quarter. Here we are talking about record earnings. We have a strong operation performance. We had no actual serious incidents in 2021, which is very important for us being our number one priority.
Production increased from the third quarter on improved production efficiency of 92%, and we delivered a very strong quarter with 259,000 bbl in production. We experienced record cash flow generation and a material distribution. We had all-time high cash flow from operations, $4.4 billion for the full year and $1.9 billion before tax and working capital in the fourth quarter. Realizing higher oil and gas prices, average weighted hydrocarbon price above $103 for the quarter. Natural gas representing 37% of the production and 52% of the revenue in the quarter, with our gas revenue of $1.2 billion alone. We maintain the 2022 dividend guidance to pay a minimum $800 million in dividends. We have a solid financial position.
In Q4 we obtained a strong investment grade credit rating, and we financed our reserve-based lending facility with a $6 billion unsecured loan. Our leverage ratio reduced to 1.1 at year-end from 3.2 at end 2020. This on lower net debt and stronger cash flow. In the end, we are en route to delivering on our high-value production targets of about 350,000 bbl by end 2025. 2021 represents also all-time high activity level for Vår Energi, and we have a strong focus on safety being a prerequisite in all we do. Focus is Always Safe, and we are very pleased and glad that no one got seriously injured when working for Vår Energi in 2021. People is our focus, and our clear target is zero serious incidents and injuries.
We have a continued focus on emissions reductions. The CO₂ total emissions intensity for operated fields in the fourth quarter is estimated to 7.1 kilo p bbl, down from 11.7 in the previous quarter. This mainly driven by higher production in the fourth quarter. Full year 2021, the CO₂ emissions intensity was 8.8 kilo p bbl. Relatively unchanged compared to the 8.5 kilo in 2020. Improved production efficiency underpinned strong operations performance and led to high production in the quarter of 259,000 bbl. When it comes to the production and transportation costs, this is somewhat higher than we like in the quarter. Plus we are on track to deliver on production cost guidance for 2022, and Stefano will cover this in more details later in the presentation.
We had a very strong cash flow generation, but tax payments and increased receivables from higher gas sales impact the cash flow for the fourth quarter of $923 million. We are committed to continue attractive shareholder returns. We paid $262 million for the quarter, reflecting the strong performance and high commodity prices. In total, $960 million for the full year 2021. This really shows our commitment and mindset for strong shareholder returns. We confirm our $225 million dividend communicated for Q1 2022. We will grow with high value.
We have a tangible growth which makes us stand out to deliver a production of more than 350,000 bbl by end 2025, representing 10% average annual growth the coming years. This is based on development of our sanctioned forward portfolio with a break-even price less than $30 on average. With a CapEx profile that allows for continued attractive and resilient shareholder distribution. This growth is achieved by five key growth levers. We have a significant resource base, 1.7 billion of long-lived resources. We see that our major fields have a long tradition of increasing in size, both due to increased recovery, but also due to infrastructure-led exploration. Most of our major fields have a long tradition of growing in size. Here some example can be given, like the Valhall, the Snøhvit, Draugen, and Oseberg.
This will really give life to new projects utilizing existing infrastructure. We also see improved recovery by employing leading technology. For instance, the 4D seismic. This gives us a new view on the Norwegian continental shelf. We have a significant pipeline of sanctioned and unsanctioned projects, which is expected to come on stream in the coming years. We have as well best-in-class exploration capabilities with a distinguished track record, which I will come back to later in the presentation. In the end, we have selective and value-driven M&A in the NCS, which aims to drive value, utilize synergies, and enhance recovery. We bring material cash flow generation and dividends.
Over the next five years, we expect to generate a material cash flow from our business at oil price above $30 p bbl, as you can see from the illustration on to the left on this slide. Important to note, in these calculations, we have assumed a gas price at 65% of the oil price equivalent. As you all know, the current gas prices are significantly above that level, and as such, represents an upside. This assumes as well that the proposed tax regime is being implemented. From the right chart, you can see that our strong cash flow enable us to pay attractive dividends.
For 2022, we intend to pay a dividend of minimum $800 million, of which $225 million are expected for the first quarter in 2022, and this will be paid in May this year. From 2023 onwards, our dividends will be linked to the cash flow the business generates. Our dividend policy is to return between 20%-30% of operational cash flow after tax to our shareholders. Let's turn our view to operations. Vår Energi's highest priority is to carry out our activities without causing harm to people and environment. We had a significant increase in activity in 2021 due to production activities, large turnarounds, and drilling operations.
The company's key performance indicators related to safety being Serious Incident Frequency, SIF, and Total Recordable Injury Frequency, TRIF, developed positively in 2021 compared to 2020. Very important, in 2021, there were no incidents with actual serious consequence, hence, no serious personal injuries, meaning that the actual SIF was zero throughout 2021. We want to ensure always safe and zero incidents and to further strengthen the culture and focus on safety and to improve further Vår Energi will continuously drive for implementation of key initiatives such as the Always Safe annual wheel, the lifesaving rules, and the company's internal key tool, Take Time, Involve, and Report. We achieved high production in Q4, driven by production efficiency across all our assets with an increase to 92% in the fourth quarter.
We produced 259,000 bbl in the quarter, compared to 247,000 bbl in the third quarter. We have obtained strong realized prices for our product with an average realized price of above $103 p bbl. Our four strategic hubs provided 74% of the total production in the quarter. Full year production in 2021 was 246,000 bbl compared to 265,000 bbl in 2020. The decrease reflects partly the impact of turnarounds originally planned for in 2020, which we postponed to 2021 due to the COVID pandemic.
As you can see from the right top of this chart, gas makes up a significant share of our production with 37% of the produced volumes in the quarter and 35% for the full year, meaning that we had a significant exposure to gas. We are a reliable and secure supplier of gas to Europe and U.K., and have full exposure to the current strong price environment. We have flexible gas-based agreements. In the current market, we have up to 85% of our gas production exposed to short-term market position. Since 2018, our unit production cost has reduced from $14 p bbl to $12 p bbl. In this regards, Vår Energi maintains its full year 2022 guidance for production cost per barrel at $12.5-$13.5 p bbl.
Looking further ahead, our medium-term production cost ambition is $8 p bbl, and we will achieve this through ongoing projects with strong economy and very competitive production cost per barrel coming on stream. Upstream improvements, cost sharing and strategic partnership with our suppliers, ensuring economy of scale, cost-efficient operations, portfolio optimization and cost reduction programs, and active portfolio management. To become a leader in ESG is at the core of our strategy. In January 2022, we received an indicative environmental, social, and governance, ESG assessment from Sustainalytics. The indicative score is very good and places Vår Energi as number 14 out of 155 or in the ninth percentile among E&P companies assessed by Sustainalytics. This is a clear confirmation that Vår Energi have established a complete and solid plan for our ESG work.
It serves as a motivation to improve even further, and we are on the right track to reach our ambition. We believe decarbonization of oil and gas production is a prerequisite to ensure our resilient business model and long-term value creation. We have established operational action to actively reduce and minimize our environmental impact with a target of becoming a net zero producer for our Scope one and two by 2030. The strategy for emission reduction is based on electrification from a renewable energy, portfolio optimization and energy management, as well as measures related to carbon offsetting and R&D activity. We have a very attractive and resilient portfolio of growth projects as presented here. This is underpinning our production target of more than 350,000 bbl by end 2025. This high-value growth is based on already sanctioned projects, which is well into execution.
The major sanctioned projects are Balder, Breidablikk, and Johan Castberg. There are also quite a few others starting up within the next few years, as you can see from this slide. The main development projects saw a good progress in the fourth quarter and are moving ahead according to established plan and in line with the latest communicated estimates, which were updated as part of the Norwegian national budget in October. We are an industry leader in exploration with a success rate of 75% last year. That means that 2021 was a fantastic exploration year for Vår Energi, which we are all very proud of. Six discoveries, all in our defined hub areas, generated 135 MMb in net new resources, split by 75% oil and 75% gas. We were part of the biggest discoveries, King, Prince.
King and Prince and Gråsel. In accordance to Rystad Energy, no one discovered more resources in 2021 on the NCS than Vår Energi. King and Prince were obviously two outstanding discoveries in a mature value area. In total, the new resources exceed our production for 2021 by a factor of 1.5. 2021 was also an active year with regards to licensing activity. A total of 16 new exploration licenses were acquired, 10 in the APA license round, five operated, and six from business development activity and portfolio optimization. At year-end, the Vår Energi robust portfolio counted 148 licenses, of which 37 operated. This represents an increase in operatorship by around 50% the last three years. The plan for 2022. We replicate the success recipe from 2021, targeting more high-value barrels.
We plan for a similar level of investment pre-tax as for the 2021 campaign, the nine wells to be spudded during 2022. Four of these wells in the Barents Sea. We're also having one well that we define as a high-risk, high-reward, being the Ormen Lange Deep. With all this exploration excitement, I end my presentation, and I am very, very happy to hand over the word to Stefano and for Stefano to elaborate on our strong financial results. Please, Stefano.
Thank you, Torger, and good morning, everyone. We have had a good year and a strong fourth quarter, delivering record earnings for both periods, driven by solid operational performance, a significant gas share, and increased realized commodity prices. Let me say that I'm truly happy in our first results presentation to show what I consider a fantastic quarter and a fantastic year. This slide shows some of our key financials. I will now move on to explain in more depth the company fourth quarter and full-year performance. Let me say before that as a general comment, we had a very strong quarter performance in terms of revenues, EBIT, and cash flow from operations, that coupled with strong production performance in the quarter, was able to deliver record high profit and cash flow in the last quarter of 2021.
In October, also, we were able to fully refinance the $6 billion RBL with an unsecured structure that leveraging on our investment-grade balance sheet has also seen a strong improvement in the leverage metrics, going from 3.2 net debt to EBITDAX at the end of 2020 to 1.1 at the end of 2021. Let me add that I'm glad to say that Vår in Q4 and overall in 2021 was in a unique position to be able to fund our development, which are the fuel for our growth, deleverage substantially, pay an attractive dividend to shareholders, while at the same time achieving an improved, more flexible and competitive capital structure, which will serve well the company future needs. 2021 has been a record year with strong operational performance and very favorable market conditions.
Petroleum revenues from sale of liquids, $1.1 billion, and that was roughly 48% of the total petroleum revenues, whereas the revenues from the sale of gas were $1.2 billion, which is around 52% of the total revenues. That was in line with what we previously guided. During 2021, the company also diverted gas from injections to sales, and that was to capture high gas prices and generate additional revenue. The average oil price realized in the fourth quarter was $80.4 pbbl , up from $71.8 pbbl in the third quarter.
As far as gas is concerned, the average realized gas price in the quarter was $148.3 pbbl , which is roughly 79 EUR/MWh, up from $76.3 pbbl in the previous quarter. Important to state also that the weighted average price for oil exceeded $100 pbbl in the fourth quarter. As a result of these strong realized oil and gas prices, the full year 2021 petroleum revenues amounted to $6 billion, up from $2.7 billion in 2020. 100% higher than 2020. Sold volumes in 2021 were 85 MMbbl , down from 92 MMbbl in 2020, and that was driven by a combination of natural decline from producing fields and maintenance activities that were postponed from 2020 to 2021 due to the COVID-19 pandemic.
Total production costs on sold volumes in the quarter decreased 14% from the third quarter, mainly due to an over-lift position in the third quarter versus an under-lift position in the fourth quarter. In the fourth quarter, when compared to the third quarter, we see higher cost of operations, and that is due to one-off restructuring costs, and also restructuring costs billed from partners, revised bonus provision estimates, cost estimate revisions related to gas lift removal provisions, and also higher environmental taxes. Now, looking at the full year total 2021 production costs, it rose 25% year-over-year. The increase is mainly due to the foreign exchange rate effect. There was an appreciation, sensible appreciation of the NOK versus dollar in 2021 versus 2020, higher electricity prices, higher environmental taxes, and also the shift of turnaround and maintenance activities from 2020 to 2021.
Transportation and processing costs and insurance costs were lower year-over-year. In addition to the factors I just mentioned, the increase reflected also a higher over-lift position and increased costs related to crude put option premiums. The full year guidance for 2022 is between $12.5-$13.5 pbbl , so it is maintained with a target to $8 by 2025. We had a record net cash flow from operating activities in 2021 amounting to $4.4 billion, so it's an increase of 154% compared to $1.7 billion in 2020, which was driven mainly by higher product prices.
The cash flow from operating activities was $900 million in the fourth quarter, a reduction from the third quarter due to higher taxes that we paid in the last quarter. We paid $572 million versus a tax cash income in Q4 of 2020 and in the first nine months of 2021. In addition to this, the working capital increased in the fourth quarter due to an increase in trade receivables from higher oil and gas sales at year-end and lower funding of the trade receivables through the credit discount facilities at year-end. CapEx was marginally lower when compared to the third quarter, and year-on-year CapEx increased from $1.8 billion-$2.5 billion.
The strong operating cash flow, both in the fourth quarter and for the year, more than covered the company investment, which as you can see, are quite relevant in both Q3, Q4, and in the full year. The CFFO to CapEx coverage was 1.7 for the full year 2021. Full year project investments are nearly $2.6 billion, with main development projects progressing as per plan. This is really fueling our high value production growth. CapEx in the fourth quarter amounted to $700 million, and the split between the largest development projects are shown in the table, and you can see that Valhall X, Johan Sverdrup, and Breidablikk are accounting for 53% of the total investment in the year.
2022 guidance is between $2.3-$2.6 billion in development CapEx and roughly $200 million in exploration and abandonment CapEx. The guidance is the same we provided earlier. We had record cash flow from operating activities in the fourth quarter, amounting to $1.9 billion before changes in working capital and taxes, driven mainly by higher product prices. The cash flow from operating activities after tax was $900 million in the fourth quarter, a reduction versus the third quarter due to the working capital changes and the taxes we paid that I mentioned earlier.
Cash flow to investment amounted to $700 million in the quarter, and the company distributed $262 million to each shareholder during the fourth quarter of 2021. Total dividend in 2021 amounted to $950 million and was paid in quarterly installments. Total cash at year-end was $224 million. The combined undrawn credit facilities amounted to $2.3 billion of available liquidity. End of October, we also obtained a strong investment grade credit rating from S&P and Moody's with stable outlook, which we are proud of and confirms the strong financial basis of Vår Energi. In late 2021, we refinanced our capital structure by replacing the reserve-based lending facility with the $6 million senior unsecured multi-currency facility.
We had strong interest in the banking market with a syndicate comprising 12 major international banks. The combination of the strong cash flow refinancing and reduced net debt led to a leverage ratio of 1.1 at the end of 2021 compared to 3.2 a year earlier. The strengthening of our balance sheet will continue to support material shareholder distribution also going forward. Dividend guidance for Q1 of 2022 is confirmed at $225 million, and the dividend for Q1 is expected to be paid in May 2022. Total dividend for the year currently is estimated to $800 million, but could increase if market continues to be favorable throughout 2022.
The dividend policy from 2023 is to distribute a range between 20%-30% of the cash flow from operations after tax. Finally, I would like to sum up in this section with our forward-looking guidance elements. These are unchanged since the IPO process. I just want to highlight the following. Production is expected in a range between 230,000-245,000 bpd , increasing gradually towards 350,000 in the medium term. We are targeting OpEx for 2022 in a range between $13.5 pbbl , with a target to decline towards $8 as new projects come on stream.
CapEx is targeted in a range between $2.3 billion-$2.6 billion, and that is excluding exploration and abandonment, which will add roughly $200 million. At the end of 2021, we will have returned $3 billion in dividends to our shareholders, and we intend to pay dividends of minimum $800 million in quarterly installments for 2022 and a Q1 dividend of $225 million. With that, I leave the floor back to Torger for some concluding remarks. Thank you.
Yeah. Then it's time for some concluding remarks. Thank you, Stefano, and it's good to see you both smiling and proud of this strong result. To summarize, 2021, and in particular Q4, has given us all-time high results. We have delivered record results driven by solid operational performance, a significant gas share, and increased realized commodity prices. All-time high cash flow from operations, $4.4 billion for the full year, and $1.9 billion before tax in the fourth quarter. We see a continued supportive commodity price environment, which together with our strong balance sheet, scale of production, and cash flow generation, and our firm commitment to deliver on our three-year 2022 shareholder distribution of a minimum $800 million.
The development projects which support our midterm production target progressed as planned, and we maintain focus on safe operations with zero serious accident recorded. With that, I conclude the first quarterly presentation as a listed company and open up for questions. Thank you so much.
We will take our first question today from James Hosie of Barclays. James, over to you.
Hi. Good morning. Thank you for the call. I've got a couple of questions. I guess, firstly, are you able to talk a little about your track record, adding reserves, improving production, reducing costs at the hubs since you acquired the asset? I guess in particular, I'm thinking about the Balder area asset you've now operated for 4 years. Then just in your midterm OpEx target of $8 pbbl , should we be expecting gradual progress from $13 to $8 between now and say 2025? Or is the current OpEx rate likely to persist until you get that material uptick in production in 2025? Thank you.
Hi. Sorry. Thanks a lot for your question here. Let's start with the track record when it comes to adding reserves. As you can see from our presentation, you know, we had a really good year last year when it comes to adding reserves through exploration. We had a discovery rate of 75%. Also for the three years of existence in Vår Energi, we have a good track record and our discovery rate is around 50% for those three years. That is, let's say, adding a significant volumes in that regard. You also talked specifically about Balder. You're right, Balder, we have a proud history when it comes to adding reserves.
Balder started up in, I think it was 1997, then it was planned in the PDO to produce around 170 MMbbl . Today, that number is around 500. As you know, we are extending the lifetime of Balder to 2045 and beyond. You know, we won't be surprised if we are passing 1 Bbbl of production from the Balder area. Balder area really serves as a very good example how we are adding reserves. As you also know, the big discovery, King and Prince, were done in the Balder area. That is part of that, the next step from the 500 MMbbl to the 1 Bbbl I talked to. OpEx or production costs.
We are, you know, working this in two dimensions. You know, of course, the continuous improvement that we are doing every day, that goes to production efficiency. It goes to economy of scale, working closely with our partners and our suppliers. That is one part, relentlessly working on that. The second part here is the production cost improvement that will follow additional barrels coming. Really what will bring this down is the three big developments, Balder Future, Breidablikk, and Johan Castberg, which will come on stream, you know, from Q4 2023 until Q4 2024. All of these developments have a very competitive production cost per barrel in and around $3 pbbl. T hat will be the big part of it, and around 70% of that improvement towards $8 pbbl by end 2035.
Okay. Thank you very much.
Thank you, James. We'll be taking our next question from Mark Wilson of Jefferies. Mark, over to you.
Hi. Thank you very much. It's along a similar theme, actually. I'd like to ask about appraisal wells in 2022, particularly, King and Prince, whether there is any further appraisal you think is required there or it is simply a case of development concept. Could you talk about the appraisal program, both of those specific discoveries and any other discoveries that will be appraised in the coming year? Thank you.
Thank you. The question was related to the King and Prince discovery and our plans there. You know, how we are working the King and Prince is that we are looking on a phased development, and we are currently working King and Prince phase one, as we call it. That is really covering the area that we explored last year. You know, it is really a horseshoe area where we have a pretty good confidence in the volumes and the reservoir. So that is really the main focus now to take it as a phase one, which we are working with as we speak.
I think there will be an appraisal for the other area coming, you know, not this year, but next year. That means 2023. But we are well on track on the development of the King and Prince discovery. Actually, that was one of the things that we started that work before we really knew it was a discovery. So that was how we started working with the King and Prince. More on the general when it comes to exploration. You know, as I also stated in the presentation here, we are very much focusing this to our hubs area, where we have existing infrastructure, where we have a deep insight in the reservoir and the geology.
As we did in 2021, the wells for 2022 will be in the same areas that we have infrastructure in. That means that we will continue drilling around Goliat, Johan Castberg where we did very well last year. Also in the Norwegian Sea and two wells in the North Sea. Really building on those hub areas. That is really the short-term plans there. It will really be exciting to see if we can replicate the success from last year.
Okay, very good. Very clear. May I ask you, would that King and Prince phase one conceivably be submitted to PDO before the end of 2022 and therefore get the benefit of the current Norwegian temporary tax regime?
You know, these are things that we are working as we speak. It's difficult to be too concrete on the plans. You know, I think for us what is really important is, you know, we drive for value and we would like to ensure that we have a mature project, you know, well-developed, and that is really the focus on get the basics right, as we say in Vår Energi. When that's done, we will also make the timeline accordingly. These are things that we will rework on later when we have more and better insight exactly into the timing.
Okay. Thank you very much. I'll hand over.
Thank you, Mark. As a quick reminder, if you would like to ask a question, that would be star followed by one on your telephone keypad, or star followed by two if you change your mind. We'll be taking our next question from James Thompson of JP Morgan. James, over to you.
Great. Thanks very much. Hi, Torger and Stefano . Congratulations on the first set of results. Just a couple of questions from me. Firstly, just in terms of the 2022 production guidance, obviously 4Q, pretty strong there at nearly 260,000 bpd . I just wondered if you could kind of walk us through how you expect production to evolve, you know, this year. Is it a case of just gradual sort of natural declines given there's no project startups? Or are there any kind of significant turnaround that we should look for in any of the quarters, in terms of thinking about our models?
You know, in terms of the growth projects, I mean, clearly Balder X and Castberg delivery is fundamental here. Just if you could give us some, you know, maybe some data points that we can look for in 2022, in terms of delivery of those projects and effectively keeping an eye that those are on schedule. That would be very helpful.
Yeah. Thanks a lot for the question. Also, yes, it is exciting to be here for the first quarter as such. When it comes to the production and you are right, you know, 259,000 bbl in Q4 was a very strong performance, and we are very pleased with that. Of course, that is something that we are working hard every day to achieve, and we will do the same for 2022. When it comes to the guidance, that is, as you are saying, it is really reflecting the natural decline, as you also have been talking to previously.
That is the, you know, the reason why we are then guiding to a 230-245 production. When it comes to the main turnarounds that you know we could be good for you to be aware of is that we are planning for turnarounds on Balder/Ringhorne. That will be happening in Q3, and then the Goliat in Q2. When it comes to the growth in production, also there you're right. You know, the project that you know is in our portfolio with sanctioned projects that I also shown on the presentation this you know today is starting to come on stream in 2023. That is really when the production will start picking up.
When it comes to the data points for Johan Castberg and Balder Future or Balder X as we call it, you know, I think there is some key and important milestones that we have achieved now lately. You know, we concluded an inspection program on the Balder, the Jotun FPSO. So that is positive. That happened in accordance to plan before Christmas. So that gives us a higher degree of certainty in the scope of work and so on. So that is good, and it's also helping us to confirm the schedule going forward. When it comes to Johan Castberg, also there it was an important milestone that we just recently saw.
It was well presented on YouTube by the operator Equinor when the whole vessel was sailing from Singapore in accordance to the revised schedule. That will be coming to the Stord in the next 60 days. Therefore, both Balder Future and for the Johan Castberg development, you know, the subsea part is going well and substantially complete. This is also important. Those are the things that is also confirming what we said in the presentation there.
Okay. Thanks. Thanks, Torger. Just separately, if I may, just very quickly. In terms of the dividend, is the plan to set the dividend level, you know, with the quarterly numbers going forward? Just so we understand, you know, I guess the flow of news flow around reporting how much you're gonna pay on a quarterly basis, or do you intend to sort of set it for the rest of the year?
Yes. Thanks for your question. The dividend for 2022 is set to a minimum of $800 million. Let me say that at the prices that we are currently seeing, there is room, all other things being equal in terms of CapEx and production performance to raise it further. To some extent, you can already see this in the Q1 dividend, which is $225 million. If you run the run rate, you see that this gives already $900 million for the year, indicating some, let's say, somewhat higher level than the $800 million.
What would be done is that on a quarterly basis, we will assess the dividend and assess, let's say, the conditions and then guide on the dividend. One thing we would like to do is also in the first quarter of 2022 presentation also guide on the next quarter dividend. Let me also add the fact that this has been very much in line with what has been done in 2021. In 2021, as you know, we paid a dividend of $950 million. Let me say that the ambition at the time was lower and then, as we saw that macro scenario we're improving and performance was good, then in Q2 and Q4 of 2021, we increased the dividend. That is a bit the methodology and the way we also want to go by in 2022.
Okay, thank you very much. That's helpful.
Maybe one-
Yep.
Yeah. Maybe one sentence in addition here is that, you know, we mentioned it in the presentation that the dividends for Q1 will be in May. I think it's 12th of May, so you can update. That is not that far away. Yeah. Thanks.
Thank you very much. Hand over.
Thank you, James. As that was our final question registered via the telephone line, I'd like to hand back to Ida. Over to you.
Thank you, Melissa. We've got two questions from the chat. One for you, Stefano, and one for you, Torger. To you, Torger, first. Could you please give a split between the gas and oil on your production target towards 2024 and 2025? And to you, Stefano, on your dividend policy, you're saying that it's based on stable prices. Can you give an indication of what they are? Thank you.
Well, thanks a lot. It was about the split between oil and gas for production going forward. As we have been stating here, the production will be growing going forward. Of course, this is really a relative split between oil and gas. You know, for the next couple of years, that means 2022 and 2023, I think the split will be pretty similar to what we see or what we saw in Q4. For the full year, that means you know, around 30%-37%. That is for 2022 and 2023. When the big projects that we talked about is coming on stream, you know, being Valhall Future, Breidablikk, and Johan Castberg.
As you know, the production will increase significantly. That means that the relative portion of gas will go somewhat down. Of course in absolute number, the gas production will still be very high for Vår Energi, and of course contribute significantly when it comes to the value equation. Valhall, Breidablikk, and Johan Castberg is predominantly bringing oil production to our portfolio.
Yes. On the stable commodity price, let's say, that is a level. I mean, in general terms, we don't have an exact, let's say, threshold, because we believe the company is quite resilient and able to cope with this level of dividends that we have been communicating, also at much lower prices than we are seeing today. Just to give a reference, let's say that we feel confident that we can maintain the level guidance at oil prices, let's say of, for example, $70 pbbl . That would be a level which will still be quite okay to go ahead with what we are saying. Yeah.
We, as I said, we have quite a big financial capability and financial resilience, so the dividend, we feel the dividend can be maintained at lower prices than this.
Thank you. A question on hedging. Do you plan to hedge gas prices going forward?
This is Stefano. This is the expert on hedging. When it comes to gas, we don't really plan to hedge the pricing. The reason for that is that we have very, let's say, flexible mechanisms in our gas sales contracts, and that means that our gas sales strategy is really that we are using that flexibility. You know, we can sell a day ahead, a month ahead, quarter ahead, and year ahead. That means really that we can also have, what's it called, spot sell, when we see good opportunities and when we see spikes in the market.
As we also spoke about, you know, when we had our investment presentations at post-IPO and also as we mentioned today, you know, that is something that we really have been taking advantage of. We did that in Q4, and you see that on our numbers. Yeah, we have continued doing that, there. Really, our methodology when it comes to commodity is that we protect our downside and we take full advantage of the upside. That is really how we are working this, both on oil and on gas. We are continuing, you know, utilizing our flexibility in the gas contracts to take full advantage of the volatility in the market. Anything to add, Stefano, from your side?
No, absolutely correct. We are really using the flexibility embedded already in the current contracts for gas to play and really take advantage from the market conditions, which is what really we did in the last quarter, and we are continuing to do it right now.
We have time for the final question today, and it rounds it off quite well. Anything in the quarter that went better than expected in Q4 and the full year 2021? Any comments about that again?
Yeah, I know. Thanks a lot for the question. You know, I think Q4 was a really good quarter, and I think what I really would like to highlight in that regard is number one, starting with safety. You know, that is our prerequisite for everything we do, and it is really good to know for us that we have no serious incidents for the quarter and in 2021. That was one. Number two, I think also what was better than expected, we had a very high production in the Q4. 259,000 bbl, driven by a solid operational performance and high production efficiencies.
That is very positive. Also, we were able to really have a high realization of commodity prices. You know, we had a weighted average of $103.4 pbbl . I think that is really standing out. Of course, in combination with the high production, that brings these good numbers. Then, of course, also the gas position, you know, having 37% in the quarter is really bringing this all together as we talked about. That is what I would like to highlight. Something from you, Stefano?
Oh, maybe I would just add the refinancing, which is really putting the company in a very strong position. This is really adding flexibility and optionalities to the company in terms of going forward. I guess that was also quite an important milestone.
Very good investment grade rating as well.
Great. Thank you. That concludes our call today. In case you were not able to ask your question, you can always contact us at ir@varenergi.no. Thank you very much.