** Shares in Var Energi VAR.OL rise nearly 5% after the Norwegian oil and gas company said it would combine with BlueNord BNOR.OL, raised its dividend and reported Q2 numbers

** Var said it would buy BlueNord in a transaction valued at around $1.33 billion

** The company also plans to increase Q2 and Q3 dividends to $350 million

** The BlueNord deal supports long-term production, J.P.Morgan notes, adding it now expects 2026 and longer term dividend forecasts to rise and 2027+ production estimates to increase

** RBC sees the combination with BlueNord and dividend hike as positive

** But brokerage says the results were "mixed", with revenue "broadly in line with consensus" and notes a 14% miss on cash flow from operations excluding working capital

** Var's revenue of $3.72 billion compared to company-compiled consensus of $3.58 billion

** "Investors remain concerned about a dividend cut in a lower oil price environment despite the company's guidance," RBC says

** Var Energi shares are among the best performers at pan-European STOXX 600 .STOXX index

** BlueNord's shares opened 3.5% higher