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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Golar LNG Limited | NASDAQ:GLNG | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.08 | 0.20% | 39.37 | 38.90 | 39.88 | 39.94 | 38.84 | 39.22 | 577,956 | 22:00:00 |
Highlights and subsequent events
FLNG Hilli: Maintained market leading operational track record, generating $73 million of Q3 Distributable Adjusted EBITDA1, of which Golar’s share was $68 million. 122nd LNG cargo export in progress.
FLNG Gimi: Following the commercial reset reached in August 2024, Golar is now contractually entitled to receive daily payments for the period from January 10, 2024 until the Commercial Operations Date (“COD”). Under the new arrangements and based on the operator's latest timeline, Golar expects to receive approximately $220 million across 2024 and 2025 in pre-COD compensation inclusive of milestone bonuses, of which approximately $130 million will be invoiced in 2024. Of this, $78 million has been received in 2024 to date. This pre-COD compensation, net of $110 million of liquidated damages already paid to bp, will be deferred on the balance sheet.
Golar, bp and Kosmos Energy Ltd. agreed to use an LNG cargo to accelerate the commissioning schedule. In October 2024 the LNG carrier British Sponsor started to introduce gas to the FLNG Gimi. FLNG commissioning is now underway and will continue to utilize gas from the accelerated commissioning cargo until the bp FPSO is ready to send gas to the FLNG Gimi. Commissioning activity will then further ramp up.
Based on the latest project schedule, COD is expected within 1H 2025. COD will trigger the start of the 20-year Lease and Operate Agreement that unlocks the equivalent of around $3 billion of Adjusted EBITDA Backlog1 (Golar’s share) and recognition of contractual payments comprised of capital and operating elements in both the balance sheet and income statement.
The contemplated refinancing of the FLNG Gimi is progressing, targeting a new increased debt facility with a lower margin and improved amortization profile versus the current vessel debt facility and potentially releasing significant liquidity to Golar. Credit approvals are being received and detailed documentation has started. Execution of the facility will be subject to remaining credit approvals and finalizing documentation.
FLNG business development: In July 2024, Golar and PAE entered into definitive agreements for a 20-year FLNG deployment project in Argentina. The project will tap into the Vaca Muerta shale deposit in the Neuquén Basin, the world's second largest shale gas formation and is expected to commence LNG exports within 2027. The fully executed agreements include a Gas Sales Agreement from PAE for the supply of gas and an FLNG charter agreement with Golar. The definitive contracts are subject to satisfying defined conditions precedent, including an export license, environmental assessment and FID by PAE. Work on the conditions precedent is progressing with their satisfaction and FID expected within Q1 2025. PAE issued a reservation notice reserving the FLNG Hilli to the project in October 2024. This includes a reservation fee should the project not materialize, and ends Golar’s option to nominate an alternative FLNG to service the contract.
Hilli is expected to generate an annual Adjusted EBITDA1 of approximately $300 million, and a commodity-linked pricing element. Golar will also hold a 10% stake in recently established Southern Energy S.A., a dedicated joint venture with PAE, responsible for the purchase of domestic natural gas, operations, and sale and marketing of LNG volumes from Argentina. The management team of Southern Energy has been appointed and is now focused on securing the requisite regulatory and environmental approvals and working to attract additional Vaca Muerta gas resource owners to part-take in the project.
The FLNG Hilli project will initially utilize spare capacity in Argentina's existing pipeline network. Work to construct a dedicated pipeline connecting the FLNG terminal location directly to the Vaca Muerta shale formation is also being pursued. This could support a multi-FLNG vessel project in Argentina, including opportunities for our MKII FLNG(s).
We continue to make significant positive progress on our other FLNG commercial opportunities on the back of Golar’s position as the only proven provider of FLNG as a service, our market leading operational performance, our competitive construction cost advantage and the earliest available FLNG capacity globally. We are progressing commercial and technical work on FLNG projects in the Americas, West Africa, the Middle East and Southeast Asia. These commercial opportunities are at various stages of development. We target to secure a charter for our MKII FLNG within 2025. Once a charter is secured for the MKII FLNG under construction Golar will seek asset level debt financing for the unit, targeting ~4-6x contracted EBITDA.
In September 2024 Golar signed an Engineering, Procurement and Construction (“EPC”) agreement with CIMC Raffles (“CIMC”) for its first 3.5mtpa MK II FLNG. The MK II design uses the same topside equipment as its MKI FLNG predecessor but incorporates further efficiency and operability advances. Inclusive of the EPC contract, conversion vessel, yard supervision, spares, crew, training, contingencies, initial bunker supply and voyage related costs to deliver the FLNG to its operational site, the budget for the MK II FLNG conversion is estimated at US$ 2.2 billion. Of this, Golar has spent $0.4 billion as of September 30, 2024. The MK II FLNG is expected to be delivered in Q4 2027 and be the first available FLNG capacity globally.
As part of the EPC agreement, Golar has secured an option for a second MK II FLNG conversion slot at CIMC for delivery within 2028. In view of the tight global shipyard situation created by large shipping and FPSO orders, Golar sees availability of early yard slots at credible shipyards as a significant competitive and strategic advantage.
Other/Shipping: Operating revenues and costs under corporate and other items are comprised of two FSRU operate and maintain agreements in respect of the LNG Croatia and Italis LNG. The non-core shipping segment is comprised of the LNGC Golar Arctic, and Fuji LNG which is trading on a multi-month charter. Fuji LNG is expected to enter the CIMC yard at the end of her current charter in Q1 2025.
Macaw Energies has now delivered its first ISO containers to industrial customers with LNG produced from flare-to-gas at its field-testing location in Texas, US. We continue to optimize the unit to cater for fluctuating quality of the flare gas input.
Shares and dividends: As of September 30, 2024, 104.4 million shares are issued and outstanding. Golar’s Board of Directors approved a total Q3 2024 dividend of $0.25 per share to be paid on or around December 2, 2024. The record date will be November 25, 2024.
$74.1 million of the approved share buyback scheme of $150.0 million remains available.
Financial Summary
(in thousands of $) | Q3 2024 | Q3 2023 | % Change | YTD 2024 | YTD 2023 | % Change |
Net (loss)/income | (35,969) | 113,880 | (132)% | 65,756 | 28,221 | 133% |
Net (loss)/income attributable to Golar LNG Ltd | (34,782) | 92,462 | (138)% | 46,345 | (13,946) | (432)% |
Total operating revenues | 64,807 | 67,252 | (4)% | 194,455 | 218,750 | (11)% |
Adjusted EBITDA 1 | 59,029 | 74,559 | (21)% | 181,332 | 241,522 | (25)% |
Golar’s share of Contractual Debt 1 | 1,465,334 | 1,171,848 | 25% | 1,465,334 | 1,171,848 | 25% |
Financial Review
Business Performance:
2024 | 2023 | ||
(in thousands of $) | Jul-Sep | Apr-Jun | Jul-Sep |
Net (loss)/income | (35,969) | 35,230 | 113,880 |
Income taxes | 208 | 140 | (159) |
Net (loss)/income before income taxes | (35,761) | 35,370 | 113,721 |
Depreciation and amortization | 13,628 | 13,780 | 12,473 |
Unrealized loss/(gain) on oil and gas derivative instruments | 73,691 | 16,050 | (33,908) |
Interest income | (8,902) | (8,556) | (11,509) |
Interest expense | — | — | 135 |
Losses/(gains) on derivative instruments, net | 14,955 | (107) | (7,018) |
Other financial items, net | 470 | 54 | (318) |
Net losses from equity method investments | 948 | 2,125 | 983 |
Adjusted EBITDA 1 | 59,029 | 58,716 | 74,559 |
2024 | ||||||||
Jul-Sep | Apr-Jun | |||||||
(in thousands of $) | FLNG | Corporate and other | Shipping | Total | FLNG | Corporate and other | Shipping | Total |
Total operating revenues | 56,075 | 6,212 | 2,520 | 64,807 | 56,120 | 5,444 | 3,125 | 64,689 |
Vessel operating expenses | (20,947) | (7,403) | (3,373) | (31,723) | (22,765) | (5,056) | (3,453) | (31,274) |
Voyage, charterhire & commission expenses | — | — | (888) | (888) | — | — | (1,711) | (1,711) |
Administrative (expenses)/ income/ | (568) | (6,498) | (7) | (7,073) | 34 | (5,882) | (4) | (5,852) |
Project development expenses | (1,249) | (1,894) | — | (3,143) | (1,300) | (2,226) | — | (3,526) |
Realized gain on oil and gas derivative instruments (2) | 37,049 | — | — | 37,049 | 36,390 | — | — | 36,390 |
Adjusted EBITDA 1 | 70,360 | (9,583) | (1,748) | 59,029 | 68,479 | (7,720) | (2,043) | 58,716 |
(2) The line item “Realized and unrealized (loss)/gain on oil and gas derivative instruments” in the Unaudited Consolidated Statements of Operations relates to income from the Hilli Liquefaction Tolling Agreement (“LTA”) and the natural gas derivative which is split into: “Realized gain on oil and gas derivative instruments” and “Unrealized (loss)/gain on oil and gas derivative instruments”.
2023 | ||||
Jul-Sep | ||||
(in thousands of $) | FLNG | Corporate and other | Shipping | Total |
Total operating revenues | 56,391 | 5,532 | 5,329 | 67,252 |
Vessel operating expenses | (17,726) | (4,813) | (2,048) | (24,587) |
Voyage, charterhire & commission expenses | (150) | — | (540) | (690) |
Administrative (expenses)/income | (354) | (8,021) | (22) | (8,397) |
Project development income | (956) | (576) | 29 | (1,503) |
Realized gain on oil and gas derivative instruments | 42,484 | — | — | 42,484 |
Adjusted EBITDA 1 | 79,689 | (7,878) | 2,748 | 74,559 |
Golar reports today a Q3 net loss of $36 million, before non-controlling interests, inclusive of $90 million of non-cash losses1, comprised of:
The Brent oil linked component of FLNG Hilli’s fees generates additional annual cash of approximately $3.1 million (Golar share equivalent to $2.7 million) for every dollar increase in Brent Crude prices between $60 per barrel and the contractual ceiling. Billing of this component is based on a three-month look-back at average Brent Crude prices. During Q3, we recognized a total of $37 million of realized gains on FLNG Hilli's oil and gas derivative instruments comprised of a:
Further, we recognized a total of $74 million of non-cash losses in relation to FLNG Hilli’s oil and gas derivative assets, with corresponding changes in fair value in its constituent parts recognized on our unaudited consolidated statement of operations as follows:
Balance Sheet and Liquidity:
As of September 30, 2024, Total Golar Cash1 was $807 million, comprised of $732 million of cash and cash equivalents and $75 million of restricted cash.
On September 5, 2024 the Company priced $300 million of senior unsecured bonds in the Nordic bond market. Proceeds net of fees and $10 million of 2021 bonds rolled into the 2024 bond amounted to $284 million. The bonds will mature in September 2029 and bear interest at 7.75% per annum. Net proceeds from the bond issue will be applied towards MK II capital expenditure, refinancing of debt and general corporate purposes.
Inclusive of the new bonds, Golar’s share of Contractual Debt1 as of September 30, 2024 is $1,465 million. Deducting Total Golar Cash1 of $807 million from Golar’s share of Contractual Debt1 leaves a debt position net of Total Golar Cash of $658 million.
Following the MKII FLNG FID, $255 million of investments in related long-lead items and engineering services were reclassified from Other non-current assets to Assets under development. Assets under development now amounts to $2 billion, comprised of $1.7 billion in respect of FLNG Gimi and $0.3 billion in respect of MKII FLNG. The carrying value of LNG carrier Fuji LNG, currently included under Vessels and equipment, net will be transferred to Assets under development when the vessel enters the shipyard in early 2025. Of the $1.7 billion FLNG Gimi investment, $630 million was funded by the current $700 million debt facility ($615 million outstanding on September 30, 2024). Both the FLNG Gimi investment and outstanding Gimi debt are reported on a 100% basis. All capital expenditure in connection with 100% owned MK II FLNG is equity financed.
Non-GAAP measures
In addition to disclosing financial results in accordance with U.S. generally accepted accounting principles (US GAAP), this earnings release and the associated investor presentation contains references to the non-GAAP financial measures which are included in the table below. We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business and measuring our performance.
This report also contains certain forward-looking non-GAAP measures for which we are unable to provide a reconciliation to the most comparable GAAP financial measures because certain information needed to reconcile those non-GAAP measures to the most comparable GAAP financial measures is dependent on future events some of which are outside of our control, such as oil and gas prices and exchange rates, as such items may be significant. Non-GAAP measures in respect of future events which cannot be reconciled to the most comparable GAAP financial measure are calculated in a manner which is consistent with the accounting policies applied to Golar’s unaudited consolidated financial statements.
These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures and financial results calculated in accordance with GAAP. Non-GAAP measures are not uniformly defined by all companies and may not be comparable with similarly titled measures and disclosures used by other companies. The reconciliations as at September 30, 2024 and for the nine months period ended September 30, 2024, from these results should be carefully evaluated.
Non-GAAP measure | Closest equivalent US GAAP measure | Adjustments to reconcile to primary financial statements prepared under US GAAP | Rationale for adjustments |
Performance measures | |||
Adjusted EBITDA | Net income/(loss) | +/- Income taxes + Depreciation and amortization+/- Impairment of long-lived assets +/- Unrealized (gain)/loss on oil and gas derivative instruments+/- Other non-operating (income)/losses+/- Net financial (income)/expense+/- Net (income)/losses from equity method investments+/- Net loss/(income) from discontinued operations | Increases the comparability of total business performance from period to period and against the performance of other companies by excluding the results of our equity investments, removing the impact of unrealized movements on embedded derivatives, depreciation, financing costs, tax items and discontinued operations. |
Distributable Adjusted EBITDA | Net income/(loss) | +/- Income taxes + Depreciation and amortization+/- Impairment of long-lived assets +/- Unrealized (gain)/loss on oil and gas derivative instruments+/- Other non-operating (income)/losses+/- Net financial (income)/expense+/- Net (income)/losses from equity method investments+/- Net loss/(income) from discontinued operations - Amortization of deferred commissioning period revenue- Amortization of Day 1 gains- Accrued overproduction revenue+ Overproduction revenue received- Accrued underutilization adjustment | Increases the comparability of our operational FLNG Hilli from period to period and against the performance of other companies by removing the non-distributable income of FLNG Hilli, project development costs, the operating costs of the Gandria (prior to her disposal) and FLNG Gimi. |
Liquidity measures | |||
Contractual debt 1 | Total debt (current and non-current), net of deferred finance charges | '+/-Variable Interest Entity (“VIE”) consolidation adjustments+/-Deferred finance charges | During the year, we consolidate a lessor VIE for our Hilli sale and leaseback facility. This means that on consolidation, our contractual debt is eliminated and replaced with the lessor VIE debt. Contractual debt represents our debt obligations under our various financing arrangements before consolidating the lessor VIE. The measure enables investors and users of our financial statements to assess our liquidity, identify the split of our debt (current and non-current) based on our underlying contractual obligations and aid comparability with our competitors. |
Adjusted net debt | Adjusted net debt based onGAAP measures:Total debt (current andnon-current), net ofdeferred financecharges- Cash and cashequivalents- Restricted cash andshort-term deposits(current and non-current)- Other current assets (Receivable from TTF linked commodity swap derivatives) | Total debt (current and non-current), net of:+Deferred finance charges+Cash and cash equivalents +Restricted cash and short-term deposits (current and non-current)+/-VIE consolidation adjustments+Receivable from TTF linked commodity swap derivatives | The measure enables investors and users of our financial statements to assess our liquidity based on our underlying contractual obligations and aids comparability with our competitors. |
Total Golar Cash | Golar cash based on GAAP measures: + Cash and cash equivalents + Restricted cash and short-term deposits (current and non-current) | -VIE restricted cash and short-term deposits | We consolidate a lessor VIE for our sale and leaseback facility. This means that on consolidation, we include restricted cash held by the lessor VIE. Total Golar Cash represents our cash and cash equivalents and restricted cash and short-term deposits (current and non-current) before consolidating the lessor VIE. Management believe that this measure enables investors and users of our financial statements to assess our liquidity and aids comparability with our competitors. |
(1) Please refer to reconciliation below for Golar’s share of contractual debt
Adjusted EBITDA backlog: This is a non-U.S. GAAP financial measure and represents the 100% basis of estimated contracted fee income for executed contracts less forecast operating expenses for these contracts. Adjusted EBITDA backlog should not be considered as an alternative to net income/(loss) or any other measure of our financial performance calculated in accordance with U.S. GAAP.
Non-cash losses: Non-cash losses comprise of impairment of long-lived assets, release of prior year contract underutilization liability, MTM movements on our TTF and Brent oil linked derivatives, listed equity securities and interest rate swaps which relate to the unrealized component of the gains/(losses) on oil and gas derivative instruments, unrealized MTM (losses)/gains on investment in listed equity securities and gains on derivative instruments, net, in our unaudited consolidated statement of operations.
Abbreviations used:
FLNG: Floating Liquefaction Natural Gas vesselFSRU: Floating Storage Regasification UnitMKII FLNG: Mark II FLNGFPSO: Floating Production, Storage and Offloading unit
MMBtu: Million British Thermal Unitsmtpa: Million Tons Per Annum
Reconciliations - Liquidity Measures
Total Golar Cash
(in thousands of $) | September 30, 2024 | December 31, 2023 | September 30, 2023 |
Cash and cash equivalents | 732,062 | 679,225 | 727,133 |
Restricted cash and short-term deposits (current and non-current) | 92,025 | 92,245 | 132,462 |
Less: VIE restricted cash and short-term deposits | (17,463) | (18,085) | (18,539) |
Total Golar Cash | 806,624 | 753,385 | 841,056 |
Contractual Debt and Adjusted Net Debt
(in thousands of $) | September 30, 2024 | December 31, 2023 | September 30, 2023 |
Total debt (current and non-current) net of deferred finance charges | 1,422,399 | 1,216,730 | 1,177,612 |
VIE consolidation adjustments | 233,964 | 202,219 | 191,480 |
Deferred finance charges | 24,480 | 23,851 | 24,941 |
Total Contractual Debt | 1,680,843 | 1,442,800 | 1,394,033 |
Less: Keppel’s and B&V’s share of the FLNG Hilli contractual debt | (30,884) | (32,610) | (33,185) |
Less: Keppel’s share of the Gimi debt | (184,625) | (189,000) | (189,000) |
Golar’s share of Contractual Debt | 1,465,334 | 1,221,190 | 1,171,848 |
Less: Total Golar Cash | (806,625) | (753,385) | (841,056) |
Less: Receivables from the remaining unwinding of TTF hedges | (12,360) | (57,020) | (49,439) |
Golar’s Adjusted Net Debt | 646,349 | 410,785 | 281,353 |
Please see Appendix A for a capital repayment profile for Golar’s Contractual Debt.
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 “if,” “subject to,” “believe,” “assuming,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “plan,” “potential,” “will,” “may,” “should,” “expect,” “could,” “would,” “predict,” “propose,” “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 based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. 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. Other important factors that could cause actual results to differ materially from those in the forward-looking statements include but are not limited to:
As a result, you are cautioned not to rely on any forward-looking statements. Actual results may differ materially from those expressed or implied by such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise unless required by law.
Responsibility Statement
We confirm that, to the best of our knowledge, the interim unaudited consolidated financial statements for the three and nine months ended September 30, 2024, which have been prepared in accordance with accounting principles generally accepted in the United States give a true and fair view of the Company’s unaudited consolidated assets, liabilities, financial position and results of operations. To the best of our knowledge, the interim report for the three and nine months ended September 30, 2024, includes a fair review of important events that have occurred during the period and their impact on the interim unaudited consolidated financial statements, the principal risks and uncertainties and major related party transactions.
November 12, 2024The Board of DirectorsGolar LNG LimitedHamilton, Bermuda
Investor Questions: +44 207 063 7900Karl Fredrik Staubo - CEOEduardo Maranhão - CFO
Stuart Buchanan - Head of Investor Relations
Tor Olav Trøim (Chairman of the Board)Dan Rabun (Director)Thorleif Egeli (Director)Carl Steen (Director)Niels Stolt-Nielsen (Director)Lori Wheeler Naess (Director)Georgina Sousa (Director)
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act
Attachment
1 Year Golar LNG Chart |
1 Month Golar LNG Chart |
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