Highlights
· Main
material commercial terms agreed with Perenco for employment of
Hilli in Cameroon.
·
Construction of Hilli on track and within budget.
·
Binding Heads of Terms signed with Ophir to support 20 yr. 2.2mtpa
Equatorial Guinea FLNG project.
· Weak
market for chartering of LNG shipping and low fleet
utilization.
·
Underlying EBITDA* in the quarter decreased to a loss of $25.3
million compared to 1Q loss of $4.3 million.
· Board
maintains dividend at $0.45 per share for the quarter.
* Adjusted EBITDA is defined as
earnings before interest, depreciation and amortization equal to
operating income plus depreciation and amortization.
Subsequent events
·
Received financing commitment for GoFLNG Hilli.
·
Entered into agreements for design and construction of a third
floating liquefaction facility.
·
Placed order for additional FSRU newbuild with Samsung.
·
Entered into agreement to establish an LNG Carrier pool "The Cool
Pool" with Gaslog and Dynagas.
Financial Review
Underlying Business
Performance
|
2015 |
2015 |
(in thousands of $) |
Apr-Jun |
Jan-Mar |
Time and voyage charter revenues |
16,922 |
28,835 |
Vessel and other management fees |
3,222 |
3,323 |
Vessel operating expenses |
(14,801) |
(14,537) |
Voyage and commission expenses |
(21,424) |
(23,707) |
Administrative expenses |
(9,214) |
(6,952) |
Depreciation and amortization |
(18,118) |
(17,697) |
|
|
|
Total Operating Losses (excluding
gain/loss on disposals) |
(43,413) |
(30,735) |
Add back
Non-recurring items - Golar Grand charter loss contingency |
0 |
8,757 |
Depreciation and amortization |
18,118 |
17,697 |
Underlying EBITDA |
(25,295) |
(4,281) |
* Underlying EBITDA is defined as earnings before
interest, depreciation and amortization, impairments and
non-recurring items.
In line with guidance in the Q1
report, the market for chartering of LNG shipping deteriorated
further during the second quarter. 2Q operating results were
negatively impacted by lower utilization and underlying revenue net
of voyage expenses. Utilization of the Golar fleet declined
from 46% in 1Q to 33% in 2Q. With no further carriers scheduled for
delivery, 2Q represented the first full quarter of operations for
the entire fleet of carriers. Significant adverse performances
relative to 1Q were observed by the Golar Seal, Glacier, Celsius,
Bear and the Arctic, the latter having been on hire for the first
part of 1Q at 2012 market rates. Partially mitigating this were
improved performances from the Golar Crystal, Frost and Snow.
Overall, 2Q revenues at $16.9 million were sharply down on 1Q
revenues of $28.8 million. Vessel and other management fees at $3.2
million are consistent with 1Q and represent the revenue Golar
receives for managing the Golar Partners' fleet together with
recharges to Golar Wilhelmsen in respect of Golar employees
seconded to this joint venture ship management company.
2Q voyage costs decreased $2.3
million from $23.7 million in 1Q to $21.4 million. The cost of
chartering in the Golar Eskimo and the Golar Grand from Golar
Partners contributed $13.2 million to voyage expenses, down from
$19.1 million in 1Q. The elevated 1Q cost included a fair value
accounting provision of $8.8 million in respect of the Golar Grand
that stems from the Company guaranteeing Golar Partners that it
would charter back the vessel in the absence of BG exercising their
own option to extend the Golar Grand charter. During 2Q, $1.5
million of this provision was released and credited to voyage and
commission expenses.
Vessel operating expenses
increased $0.3 million to $14.8 million in 2Q. Additional costs
during 2Q from a full quarter of operating the Golar Ice, Kelvin
and Snow which were delivered during 1Q were offset by no operating
costs incurred against the Golar Eskimo and the Golar Viking which
were sold to Golar Partners and PT Equinox on January 20 and
February 16, respectively. Administration costs increased $2.3
million over 1Q to $9.2 million in 2Q. Project related cost
increases were dominated by legal and professional fees incurred in
respect of current and future FLNG projects. Depreciation and
amortisation in 2Q amounted to $18.1 million, an increase of $0.4
million over 1Q. A full quarter's depreciation for the 1Q delivered
Golar Ice, Kelvin and Snow was substantially mitigated by savings
in respect of the Golar Eskimo and Viking, both of which were sold
during 1Q.
Collectively the above resulted in
a $21.0 million decrease in underlying EBITDA from a loss of $4.3
million in 1Q to a loss of $25.3 million in 2Q.
Net Income
Summary
(in thousands of $) |
2015 |
2015 |
|
Apr-Jun |
Jan-Mar |
Total Operating Loss (excluding gain/loss on
disposals) |
(43,413) |
(30,735) |
Net gain on disposals (includes amortization of deferred
gains) |
126 |
97,840 |
Loss on
sale of Golar Partners Common Units |
0 |
(3,011) |
Impairment
on asset held for sale |
(1,032) |
0 |
Dividend
income |
3,914 |
3,581 |
Net
interest expense |
(15,722) |
(15,037) |
Other
financial items |
50,802 |
(31,951) |
Taxes |
742 |
1,061 |
Equity in
net earnings of affiliates |
4,406 |
2,819 |
Net (loss) / income |
(177) |
24,567 |
In 2Q the Company generated a net
loss of $0.2 million, driven by a poor operating result
substantially offset by significant non-cash financial gains linked
to mark to market valuation of interest rate and Total Return
Swaps.
The contribution to the Company's
2Q dividend income derived from the Company's share of common
units, its general partner stake and incentive distribution rights
("IDRs") in Golar Partners increased by $0.3 million to $3.9
million. This increase follows the increase in Golar Partners
distribution from $0.5625 declared in respect of 4Q and paid and
recognised in 1Q to $0.5775 declared in respect of 1Q, paid and
recognised in 2Q. The Company also received a cash dividend of $9.2
million in respect of its ownership of Golar Partners' subordinated
units and this is accounted for using the equity accounting method.
The Company has accounted for its share of Golar Partners' 2Q
earnings (based on its ownership interest in the subordinated units
only) through the Equity in net earnings of affiliates line item in
the income statement. In 2Q this amounted to $4.4 million, an
increase of $1.6 million from 1Q due primarily to a full quarter's
contribution by both the FSRUs Golar Igloo and Eskimo party offset
by reduced earnings from the Golar Freeze which was drydocked
during the quarter. When all classes of ownership are taken into
account, the aggregate underlying cash dividend from Golar Partners
received in 2Q was $13.1 million compared to $12.6 million in
1Q.
Net interest expense increased
from $15.0 million in 1Q to $15.7 million in 2Q. The increase is
largely due to a full quarter's use of debt facilities designed to
fund the three carriers delivered during 1Q. Deemed interest on
equity invested in the remaining newbuilding program which is
capitalised and credited to interest expense was in line with 1Q at
$0.8 million. Included in the Other Financial Items gain of $50.8
million is a $9.2 million non-cash mark-to-market valuation gain on
interest rate swaps due to increases in long term interest rates in
the period, a $46.7 million total return swap gain on the Company's
shares and $3.9 million of swap interest charge on undesignated
hedges.
Commercial
Review
LNG Shipping and
FSRU Performance
Chartering activity and rates both
remained low for much of April and May. During the latter half of
May and into June the number of fixtures did increase, however
these were not accompanied by material improvements in rates.
Seasonal LNG demand in the Middle East, South America and in
Japan/Korea/Taiwan paved the way for some incremental shipping
demand. Pricing in these markets meant that a small arbitrage
opened up against European pricing, allowing re-exports to increase
again, relative to the very few witnessed in 1Q.
Although charter rates in the
short-term market generally decreased and remained low for 2Q, some
fluctuations within a certain band were noted. Charter rates
were recorded on average in the low/mid $20,000's per day for steam
vessels while TFDE vessels noted average headline rates in the low
$30,000's per day, mostly with Ballast Bonus equivalent to fuel
cost only to the nearest of Singapore, Gibraltar or Fujairah. Much
of the spot business concluded has revolved around cargo tenders
from both sellers and buyers.
July through to the present date
has progressed in a similar manner to the end of 2Q. Albeit at low
levels, there is a steady flow of fixtures which are being serviced
by ample tonnage and this is keeping rates under pressure.
Increased activity in the spot market is illustrated by the fact
that the number of spot cargoes traded in the 8-months to date is
in line with the total cargoes traded for the whole of 2014. Some
charterers have started to consider their options for covering
requirements from 4Q this year through 2016 and certain term deals
have been concluded. The start-up of projects in 4Q is expected to
boost shipping demand with APLNG, Gladstone LNG and Cheniere's
Sabine Pass expected to initiate operations. Indonesia's
Senora-Donggi project has now commenced operations and the second
train of BG's Queensland Curtis project is also now ramping up. The
immediate issue to contend with is the sporadic and unpredictable
availability of charter opportunities in different parts of the
world. These can be difficult to capture without vessels nearby and
result in prolonged periods of offhire for vessels as a
result. To help address this, with the target to increase the
efficiency of the fleet, Golar will enter into a pooling
arrangement with Gaslog and Dynagas. An LNG Carrier Pool, initially
consisting of 14 LNG carriers (Golar 8 vessels; Gaslog 3 vessels;
Dynagas 3 vessels) will allow the participating owners to optimise
the operation of the pool vessels through improved scheduling
ability, cost efficiencies and common marketing. In so doing, the
pool will better serve the transportation requirements of the LNG
shipping market by providing customers with reliable, more
flexible, and innovative solutions to meet their increasingly
complex shipping requirements. Each vessel owner will continue to
be fully responsible for the manning and technical management of
their respective vessels.
Golar's existing fleet of 6
operating FSRU's, all of which reside within Golar Partners,
continue to operate reliably with 99.9% availability (excluding
scheduled drydocking).
Investment
Review
Conversion
Contracts
As of end-July, overall Hilli FLNG
project progress remained on schedule and expenditure for the
quarter was in accordance with the approved budget. During the
quarter sponson construction, assembly, blasting and painting work
progressed. Fabrication of piping and pipe supports continued
and good progress was made with the repair and life extension work
for the vessel. Significant activities undertaken during the last
quarter included addressing specific design and operation issues
(Perenco/Cameroon) and the overall project at the end of July is
calculated to be 60% complete.
On July 21, the Company executed
agreements for the conversion of the 126,000m3 LNG carrier Gandria
to a Golar floating liquefaction facility (GoFLNG). The Gandria
conversion will now be dedicated to satisfy the commitments to
Ophir in Equatorial Guinea, covered by the agreement announced in
May this year, requiring delivery of facilities in 2019. This move
will release the Gimi (conversion contract signed in December 2014)
to cover the potential emerging demand for a 2018 GoFLNG project.
Provisions in the Gimi and Gandria contracts give Golar the
flexibility to adjust project timing and to limit expenditure. The
objective for Golar is to ensure that it does not remain
financially exposed in any material manner to more than one
speculative GoFLNG. Golar's ability to deliver fast track GoFLNG
solutions by having a pipeline of key long-lead components on order
is a critical part of the business strategy.
The Gandria conversion contract is
on target to become effective by the end of September this year.
This contract provides similar beneficial cancellation provisions,
which if exercised before December 2016 will allow termination of
the contracts after deduction of a set cancellation fee.
FSRU
Newbuild
On July 17, Golar placed an order
for a further FSRU newbuild with Samsung Heavy Industries. This new
vessel will be a sister vessel to the Golar Tundra with LNG storage
of 170,000m3 and a continuous regasification capacity of 500mmscfd
(750 mmscfd peak). This latest order is also accompanied by
fixed-price options for two further FSRUs. The contract price is
attractive reflecting the weak shipbuilding market. The contract
also provides for a tail-heavy instalment plan and only 5 % initial
down payment. Delivering in late 2017, the first FSRU is timed to
meet the requirements of a number of specific FSRU opportunities
that Golar is currently pursuing. This addition to the
current fleet of 7 Golar group owned and operated FSRUs,
strengthens the Company's position in this important market
segment.
Business Development
Review
FSRU
activities
Golar Eskimo arrived off Aqaba on
May 25, commenced its charter on June 24 and completed its
commissioning for the Hashemite Kingdom of Jordan on July 12.
Since commencement, the FSRU has been producing at close to peak
capacity and with 100% availability. Earnings received prior to
June 30 and approximately $9.2 million in late start fees also
received from Jordan are for Golar's account. After June 30, Golar
Partners will receive all future revenue earned by this FSRU. In
accordance with the Eskimo sale and purchase agreement Golar paid a
$12.4 million time charter fee during 2Q for the use of the vessel.
No further time charter payments are due to Golar Partners and no
further revenue in respect of the Eskimo will be receivable by
Golar.
Although progress continues to be
made with the Ghana FSRU project, a number of contractual items
remain outstanding. As a consequence, the Company is actively
pursuing alternative projects. The lower gas price
environment has increased general and specific interest in FSRUs.
As of today, including Golar's two new buildings, 4 FSRUs are under
construction without firm employment. These vessels will be
delivered between now and the end of 2017. Approximately 115
million tonnes of new LNG production capacity is expected to come
on stream before 2018, equivalent to a 45% increase on current
production capacity. This will result in an increase in utilisation
of existing regas capacity and also create a need for additional
capacity. Based upon current customer inquiries and expected
demand, the Company is confident that demand for FSRUs in this
period will absorb these four units.
GoFLNG - Business
Development Progress
Agreement has now been reached
with the support of the Boards of both Golar and Perenco on the
material commercial terms and conditions for the approximate 1.2
million tonne, 8-year Cameroon FLNG project scheduled to commence
operations in 2Q 2017. The Tolling Agreement which defines the
material commercial terms and conditions for the project is now
subject to finalisation with SNH. The Midstream Gas Convention
setting out the regulatory and fiscal regime governing the FLNG
operations in Cameroon is now only subject to finalisation with the
government. All parties including the government of Cameroon remain
on track and are confident of approving the Tolling Agreement and
the Midstream Gas Convention by the end of September 2015. Signing
of these agreements will formalise FID for Golar's first GoFLNG
project.
The Company expects the project in
Cameroon to deliver an EBITDA for Golar in the first full year of
operation, based on the utilisation of 2 of the available 4
liquefaction trains, in the range of $170 million to $300 million,
with a flexible tolling structure which correlates to Brent crude
oil prices ranging from a floor of $60/bbl to a cap of
$102/bbl.
Golar announced on May 5 that it
had signed a binding Heads of Terms with Ophir Energy Plc for the
provision of the GoFLNG vessel Gimi or alternate. Subsequently the
Gandria was nominated for the Equatorial Guinea project so that
Gimi can be available in time for potential GoFLNG projects
starting operations in 2018. The agreement for Gandria will be
structured as a 20-year tolling contract, commencing commercial
operations in the first half of 2019.
Golar, with its partners Keppel
Shipyard and Black & Veatch, committed to the Gimi FLNG
conversion in December 2014. Gimi and Gandria will both benefit
from utilising the same configuration of utilities and liquefaction
facilities as sister ship Hilli, with variations to Gandria to
accommodate production direct from the deep-water reservoir. During
the quarter, additional detailed engineering studies (FEED) were
commenced for Gandria with the objective of finalising the design
and budget for the deep water variations. The integrated
Ophir/GEPetrol/Sonagas/Golar project remains on schedule to take
FID during the first half of 2016.
The Cedar LNG Project development
activity for the quarter included continued support of the NEB LNG
export application as well as focus on solidifying arrangements for
gas transportation service into the Douglas Channel area. The
Company continues to monitor development activities for the
relevant large scale pipeline projects upon which the first phase
of Cedar LNG is dependent. Golar is currently anticipating FID for
Cedar Phase I to be achieved by the end of 2016 assuming such
third party pipelines maintain their current schedules.
New GoFLNG business development
activity has been focused on maturing projects that have the
potential to commence operations in 2018. A shortlist of 4
potential projects is currently subject to active discussions.
Interestingly, each of these projects is located in a completely
separate geographic region. In each of these projects the
competitive tolling fees and flexible commercial structures have
the potential to generate very attractive economics, even at
today's low oil and LNG prices.
To meet potential customers'
demand for early commencement, Golar has initiated discussions with
Keppel Shipyard and Black & Veatch. The target is to achieve a
fourth conversion with a delivery in late 2018/early 2019. A
commitment will be dependent on Golar firming employment
opportunities within 1Q 2016.
The recent weakness in oil and gas
prices has highlighted the benefits of a fast track FLNG solution
versus large, capital intensive greenfield LNG developments. In
addition to reduced capital expenditure and accelerated start up,
the Company's counterparts appreciate the flexibility the floating
toll creates with respect to term and volume. Several of the
business opportunities currently being discussed are based on
stranded, associated or flared gas with limited commercial value
without monetization through LNG production.
Capital expenditure for new, large
scale Greenfield LNG developments shows a cash breakeven level from
$10 per mmbtu and upwards. The cash breakeven level for a turnkey
GoFLNG development can be significantly lower.
The Company is confident that a
GoFLNG solution supplied with African or Asian gas reserves
generates a reasonable return both for producers and Golar even
with European and Asian gas prices at current levels. Significant
upside can be monetized if gas prices recover. Golar is further
confident that with respect to feed gas price, capital cost,
transportation cost and flexibility, it has a competitive advantage
over US export projects.
Financing and Liquidity
Review
FSRU Tundra financing
The Company is progressing
discussions on facilities that presuppose the Tundra will be
unchartered at the time of delivery. In terms of leverage and cost,
the Tundra financing is expected to be concluded on terms
comparable to other facilities secured by Golar on vessels
unchartered at the time of delivery. The facilities under
discussion are expected to cover the remaining delivery instalment
and create extra liquidity.
FLNG
financing
As at June 30, including the value
of the original vessel, Golar has invested $411 million in the
Hilli conversion project. Today this investment sits at $424
million. From the end of September when the tolling agreement
and the midstream gas convention have been approved by SNH and the
Cameroon government, respectively, all remaining conversion and
site specific costs for the GoFLNG Hilli will be satisfied by a
fully documented and underwritten facility provided by CSSC (Hong
Kong) Shipping Co. Ltd. ("CSSCL"). This will fund up to 80% of the
GoFLNG Hilli.
The financing structure will be
split into two phases. Phase one enables Golar to draw down up to
$700 million from the facility to fund the ongoing project cost
once Golar and its minority partners have spent $400 million of the
estimated $1.2bn project cost. Phase two is triggered upon delivery
of the converted GoFLNG Hilli from Keppel Shipyard and the
satisfaction of certain milestones. This will provide for the
drawdown of a further $260 million giving an aggregate $960
million. This final tranche is expected to satisfy the
remaining conversion costs outstanding at that time and the
remainder will be a release of the Company's equity.
The CSSCL financing has a tenor of
10-years, a 15-year amortisation profile and contemplates the
eventual sale of GoFLNG Hilli to Golar Partners. The expected
cost of the financing during the conversion period is 6.25% while
the long term financing is projected to cost less than 6% on a
fully swapped ten year basis.
Liquidity
The Company maintains a good
liquidity position notwithstanding the current weak operating
results. The cash balance at the end of 2Q is $375 million and a
further $100 million is receivable from Golar Partners in respect
of the Eskimo sale. Additionally, the Company will receive $50
million in yearly distributions from Golar Partners. The capital
expenditure for Gimi and Gandria over the next twelve months is to
a large extent dependent on progress with contractual employment
discussions. As at June 30, 2015, $50 million has been invested in
the Gimi and Gandria conversions. If no progress is made
firming up employment opportunities, the total cash expenditure
will have increased to $65 million for these two vessels in the
period up to June 30, 2016, of
which $30 million is recoverable in the case of termination.
Corporate and
other matters
The recent collapse of oil and gas
prices has increased interest in LNG fueled combined cycle power
generation. A shortage of power in areas like Brazil, Indonesia,
India and South Africa and strong power prices in these areas
together with lower gas prices have dramatically improved the
economics of gas fuelled power generation. Simultaneously, we
see stranded and associated gas reserves that can be acquired at
attractive valuations. The lack of near term liquidity in the LNG
market to a certain extent prevents resource holders from
developing reserves before they have firm off take contracts.
In order to develop Golar further
and accelerate the implementation of the GoFLNG concept, the
Company has in recent months been negotiating with Brazilian power
partners. These partners have been awarded a 25 year PPA contract
with Brazilian authorities to build and operate a 1.5 GWha LNG
fuelled combined cycle power station in Sergipe, Northern Brazil.
Golar has negotiated a right to participate in up to 25% of this
project and has the exclusive right to provide the FSRU. In
addition to supplying the power station with gas, the FSRU would
also have excess capacity to deliver gas to the Brazilian grid. The
partners are currently working through the permitting process and
are in negotiations with LNG providers, contractors and financiers.
The capacity payment achieved in the PPA contract was awarded at a
historically high level. If Golar proceeds, it would do so on the
basis of an expected unleveraged project return in excess of 15 %.
Further upside is available based on usage.
Golar intends to establish a
stand-alone, non-recourse subsidiary, Golar Power Ltd. to hold this
investment. The Company's total commitment to this subsidiary will
initially be $5 million in liquidity lines and $24 million in
non-performance guarantees, effective from 2020. Further equity
investments would be needed if the project gets a final go ahead.
It would be Golar's intention to bring additional partners into
Golar Power. In addition to the solid project return, Golar would
use this position to accelerate its GoFLNG activities by creating a
natural partnership with power producers and traders. The target is
to offer a more integrated LNG solution to resource holders.
Golar has approached several leading trading companies with this
idea and has received encouraging feedback. A final clarification
around this structure should be expected before year-end.
The size of Golar's investments in
Golar Power will be relatively small compared to the Company's
commitment to FLNG, FSRUs and LNG shipping. Golar's business model
remains to be a midstream gas company focussed on tariff based FLNG
production. It is the Company's intention to separate Golar Power
from the rest of the activities over time. This can take place
through a spin off to Golar's shareholders.
Changes to the
Board
Chairman, Sir Frank Chapman, has
decided not to stand for re-election at the forthcoming AGM.
In addition, Board member Kate Blankenship has decided not to stand
for re-election. Both members have contributed significantly
to the rapid expansion that currently takes place in Golar. Of
special importance has been Sir Frank's deep understanding of the
LNG market and his strategic thinking, and Miss Blankenship's solid
finance and accounting skills. The Board has nominated Dan Rabun to
succeed Sir Frank Chapman as non-executive Chairman. Former
Chairman of Ensco plc until May 2015, Mr Rabun has a strong energy
background from Ensco and as managing partner in Baker McKenzie's
Dallas office. He is also currently a Board member of Apache
Corporation.
Dan Rabun will assume Chairmanship
from August 27 while Sir Frank Chapman and Kate
Blankenship will continue as ordinary Board members until
their term ends at the shareholder meeting on September
23.
Niels Stolt-Nielsen has also
accepted to be nominated as a candidate to become a Board member.
Mr Stolt-Nielsen is a major owner and Chairman of the world's
leading chemical carrier company, Stolt Nielsen. He is also the
Chairman and founding investor of the LPG Company, Avance Gas. His
extensive shipping, customer relations and logistical experience
will benefit Golar in the years to come.
Share and
Convertible Bond Buybacks
As at June 30, 2015, Golar had
forward contracts to repurchase 3.5 million of its own shares at an
average price of $40.39 per share. No further shares were
repurchased during the quarter and none have been purchased since
June 30. The forward contract was marked to market as of June 30
(GLNG share price $46.80) which resulted in an unrealised gain of
$46.7 million for the quarter. On August 4, Golar also announced
that it had approved a unit purchase program under which the
Company may purchase up to $25 million worth of publicly held Golar
Partners common units. Yielding 11% at the time, the Company viewed
this as an attractive investment opportunity. To date 167,000
shares have been purchased outright at a cost of $3.5 million.
Shares and
options
As at June 30, 2015, the total
number of shares outstanding in Golar including the 3.5 million
shares repurchased by the Company is 93.4 million. Additionally,
there are currently 2.4 million outstanding stock options in
issue.
Dividend
With respect to 2Q, the Board has
decided to maintain the dividend at $0.45 per share. The Board
remains of the view that the current dividend is sustainable for
the next quarters. The size of the dividend for 2016 and going
forward will to a certain extent be influenced by Golar's success
with FLNG and the capital needed to grow this business. It will be
further influenced by the developments in shipping markets. The
Board is of the opinion that a regular and stable dividend is an
important part of the overall return to shareholders.
The record date for the dividend
will be September 10, ex-dividend date is September 8 and the
dividend will be paid on or about September 25, 2015.
Outlook
Golar has in the last twelve
months made significant progress with the development of its new
business portfolio. The first GoFLNG conversion, Golar Hilli, is
progressing well and remains within budget and on schedule.
An attractive financing arrangement for the vessel has been
concluded and the contractual employment arrangement is currently
expected to be signed off before the end of September. The long
lead items and flexible contractual arrangements for a further two
vessels have been committed with a fourth unit currently under
discussion. The economics for the first projects show solid returns
for both resource holders and FLNG providers and confirm the
sustainability of our business model, even in today's low LNG price
environment.
The lower gas price environment is
triggering lower cost LNG production and the Company believes this
will create additional demand for the fast track and flexible
GoFLNG concept. A significant share of growth in the LNG market
over the coming years is expected to come from LNG replacing coal
and oil based power generation.
The LNG shipping market remains
under pressure and rates so far in 3Q have remained at levels
around $25 - 30,000 per day. Utilization of the shipping
fleet has however improved in 3Q versus 2Q. The end of the
commitment linked to Golar Eskimo and an improvement in utilization
is likely to result in a solid improvement in 3Q operating
results.
Forward Looking
Statements
This press release contains
forward-looking statements (as defined in Section 21E of the
Securities Exchange Act of 1934, as amended) which reflects
management's current expectations, estimates and projections about
its operations. All statements, other than statements of
historical facts, that address activities and events that will,
should, could or may occur in the future are forward-looking
statements. Words such as "may," "could," "should," "would,"
"expect," "plan," "anticipate," "intend," "forecast," "believe,"
"estimate," "predict," "propose," "potential," "continue," or the
negative of these terms and similar expressions are intended to
identify such forward-looking statements. These statements
are not guarantees of future performance and are subject to certain
risks, uncertainties and other factors, some of which are beyond
our control and are difficult to predict. Therefore, actual
outcomes and results may differ materially from what is expressed
or forecasted in such forward-looking statements. You should
not place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. Unless
legally required, Golar undertakes no obligation to update publicly
any forward-looking statements whether as a result of new
information, future events or otherwise.
Among the important factors that could cause
actual results to differ materially from those in the
forward-looking statements are: changes in LNG carriers, FSRU
and floating LNG vessel market trends, including charter
rates, ship values and technological advancements; changes in the
supply and demand for LNG; changes in trading patterns that affect
the opportunities for the profitable operation of LNG carriers,
FSRUs; and floating LNG vessels; changes in Golar's ability to
retrofit vessels as FSRUs and floating LNG vessels, Golar's ability
to obtain financing for such retrofitting on acceptable terms or at
all and the timing of the delivery and acceptance of such
retrofitted vessels; increases in costs; changes in the
availability of vessels to purchase, the time it takes to construct
new vessels, or the vessels' useful lives; changes in the ability
of Golar to obtain additional financing; changes in Golar's
relationships with major chartering parties; changes in Golar's
ability to sell vessels to Golar LNG Partners LP; Golar's ability
to integrate and realize the benefits of acquisitions; changes in
rules and regulations applicable to LNG carriers, FSRUs and
floating LNG vessels; changes in domestic and international
political conditions, particularly where Golar operates; as well as
other factors discussed in Golar's most recent Form 20-F filed with
the Securities and Exchange Commission. Unpredictable or
unknown factors also could have material adverse effects on
forward-looking statements.
August 26, 2014
The Board of Directors
Golar LNG Limited
Hamilton, Bermuda
Questions should be directed
to:
Golar Management Limited - +44 207
063 7900
Gary Smith - Chief Executive
Officer
Brian Tienzo - Chief Financial
Officer
Stuart Buchanan - Investor
Relations
Golar LNG Limited 2Q 2015
Results
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Golar LNG via Globenewswire
HUG#1947810
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