INTERIM RESULTS FOR THE PERIOD ENDED SEPTEMBER 30, 2012
LONDON -- (Marketwire) -- 11/28/12 --
* Golar LNG ("Golar" or the "Company") reports operating income of $70.2
million for the third quarter of 2012, an increase of 21% from the
* Golar reports consolidated net income of $44.7 million for the third
quarter of 2012.
* Golar LNG Partners L.P. ("Golar Partners") raises net proceeds of $223
million from its first post-IPO equity issue and applies funds to the
Nusantara Regas Satu purchase.
* Vendor financing provided in respect of the Freeze sale is repaid after
Golar Partners places a five year NOK 1,300 million unsecured bond.
* Quarterly dividend increased by $0.025 to $0.425 per share, driven by
improved cash flow and market fundamentals. Golar also resolves to
distribute an accelerated dividend of $0.425 per share for the fourth
quarter of 2012 in December 2012.
* Golar and LNG Partners LLC (Houston, Texas) sign option agreement for
prospective long term charter of two of Golar's newbuild carriers to
service Douglas Channel LNG project.
* Golar signs agreement with Keppel for the development of the Company's
first floating liquefied natural gas vessel ("FLNGV").
* Golar Partners raises a further $181 million following a second
follow-on equity issue.
* Golar sells its interests in the companies that own and operate the LNG
carrier Golar Grand(1) to Golar Partners for $265 million.
Golar LNG Limited reports consolidated net income of $44.7
consolidated operating income of $70.2 million for
the three months ended
September 30, 2012 (the "third quarter").
Revenues in the third quarter were
$121.1 million as compared to
$107.0 million for the second quarter of 2012 (the
(1) Golar LNG Partners is a subsidiary of the Company. Accordingly,
of the dropdown of the Golar Grand to Golar LNG Partners
was financed through
the $175 million proceeds from the Golar
Partners' equity offering and the assumption of its $90 million
debt, will be eliminated on consolidation other
than the impact of
movement in non-controlling interest for t
he purpose of the
consolidated financial statements.
The increase is primarily as a result of a full quarter's earnings
from NR Satu and Golar Viking whose new charters
commenced during the second
quarter and this is reflected in an
improved average Time Charter Equivalent
("TCE") rate for the third
quarter at $98,473 per day compared to $97,118 for the second
As expected, operating costs in the third quarter at $19.4 million
than the second quarter at $17.8 million. This is
mainly due to the NR Satu
being operational throughout the quarter.
Following repayment of the long-term debt due to related parties in
July and a small drop in LIBOR, net interest expense for the third
quarter fell to $7.8
million from $8.5 million in the second quarter.
Other financial items decreased from a loss of $4.4 million in
quarter to a third quarter loss of $3.2 million. This is
mainly due to reduced
negative mark-to-market valuation movements in
respect of currency and interest
Tax expense is higher this quarter at $1.7 million compared to $0.4
million in the second quarter. This is due to tax provisions
made in respect of the NR Satu, for which the Company is fully
reimbursed by the charterer.
Golar LNG Partners first follow-on equity offering
Golar Partners closed a public offering of 5,500,000 common units on
July 16 at a price of $30.95 per common unit. In addition, the
Underwriters exercised in full their option to purchase a further
825,000 common units bringing the total
number of units sold to
6,325,000. Golar GP LLC, the Partnership's general
maintained its 2% general partner interest in the Partnership and
subscribed to 969,305 common units in a private placement at
a price of $30.95
per unit. Golar Partners raised net proceeds of
approximately $223 million as a result of the offering. Following
the private placement Golar's interest in the Partnership (including
the general partner stake) was diluted from 65.4% to 57.5%.
Nusantara Regas Satu(2)
As previously announced and subsequent to the successful
acceptance by its Charterer on July 13 the Company completed its
sale of the FSRU, NR Satu to Golar Partners on July 19, 2012 for
$385 million. Golar Partners financed the acquisition using the
proceeds from the July 16 equity offering, cash from
and making use of $155 million of vendor financing provided by
The vendor financing is expected to be refinanced shortly
when Golar Partners
enters into bank financing in respect of the NR
Settlement of Freeze Vendor Financing
On September 28 Golar Partners successfully concluded a five
million bond issue in the Norwegian Bond market that
was closed and settled in October 2012. The aggregate principal
amount of the bonds is equivalent to approximately $227 million and
has been swapped to USD with an all-in fixed rate
of 6.485%. Golar
Partners applied $222 million of the net proceeds against the
equivalent outstanding vendor financing provided by Golar in
respect of the Golar Freeze(2). This facility which accrued
interest at 6.75% in favour of Golar was extinguished on October 12.
(2)Golar LNG Partners is a subsidiary of the Company. Accordingly,
the effect of the dropdown of the NR Satu and the Golar Freeze to
Golar LNG Partners, will be eliminated on consolidation other than
the impact of movement in non- controlling
interest for the purpose
of the consolidated financial statements.
Golar Partners second follow-on equity offering
Golar Partners closed a further public offering of 4,300,000
common units on November 7, 2012 at a price of $30.50 per
common unit. Golar GP LLC, the Partnership's general partner,
maintained its 2% general partner interest and Golar subscribed to
1,524,590 common units in a private placement at a price of $30.50
per unit. The net proceeds to the Partnership from this offering
approximately $181 million. Following the closing, the Company
common units and 15,949,831 subordinated units
representing an approximate
52.1% interest in the Partnership. By
virtue of its ownership of the General
Partner which owns
1,065,225 units, the Company's total interest in the
now stands at approximately 54.1%.
On November 8, the Company completed its sale of interests in
which own and operate the LNG carrier Golar Grand to
Golar Partners for $265
million. Golar Partners financed the
purchase by using $175 million of the $181
million proceeds from the
equity offering that closed on November 7. As part of the sale,
Golar Partners also assumed a $90 million finance lease
(net of the associated cash deposit) in respect of the
As a result of the above transactions and assuming Golar Partners
repays the remaining $155 million vendor loan with a bank
facility, as at the end of November, the Company would have
approximately $500 million in cash which it will mainly use for
funding the remaining equity portion
of its newbuilding
Corporate and other matters
The Board has proposed that the cash dividend be increased by $0.025
to a total
of $0.425 a quarter based on another quarter of
increased earnings and strong
fundamental outlook. The Board has
noted that a significant part of Golar's U.S.
shareholder base may be
subject to increased dividend taxation for 2013. In view
of this, the
Board has decided to accelerate the dividend payment for the
quarter of 2012 such that the dividend can be paid out
together with the third
quarter dividend. This advanced dividend for
the fourth of 2012 is also set at $0.425 per share. The total
dividend payment due will therefore be $0.85 per share. The record
date for the dividend will be December 7, ex-dividend date is
December 5 and the dividend will be paid on or about December 21. In
view of the acceleration of the fourth quarter 2012 dividend payment,
no additional dividend
payment can be expected prior to the
declaration of the first quarter dividend
As previously announced, Golar was awarded the Gas Atacama
FSRU Project ("Gas Atacama") on July 5, 2012,
subject to certain contractual
conditions related to Gas Atacama
achieving a threshold of new power sales
agreements prior to 31
December 2012. The Company is expecting that these
are not likely to be met within December 31 and the parties
discuss a possible extension of the deadline.
British Columbia LNG project
On October 10, Golar entered into a 90 day Vessel Charter Option
LNG Partners LLC (Houston, TX) for the provision of
two newbuild LNG carriers
under long term contract to deliver LNG
production from the Douglas Channel LNG Project in British Columbia
The Douglas Channel Project, in which LNG Partners is an equity
owner, is a proposed liquefaction facility on the west bank of the
Douglas Channel, within
the district of Kitimat, BC. In
addition to prospectively providing two vessels, the agreement
confers certain preferential rights for Golar to participate in
the project with LNG Partners LLC by way of
investment or LNG offtake.
Floating Liquefaction ("FLNG")
On October 31, Golar entered into an agreement with Keppel
("Keppel") to develop the Company's first
floating liquefied natural gas vessel. The agreement is based
on the conversion of one of the Company's
existing Moss type
vessels and includes options for two further
conversions. Keppel has previously worked with Golar
converting comparable Moss
type vessels into FSRUs.
The Company is targeting projects with pipeline quality gas and
natural gas reserves such as coal bed methane and
shale gas or lean gas sourced
from offshore fields, which thereby
limits the gas processing equipment needed.
The first unit which will be developed through stages according
requirements will have a capacity of up to two million
tonnes per annum. This
strategy is designed to put Golar in a
stronger position to utilise its own LNG carrier fleet and to
provide gas for existing and potential FSRU customers. The FEED study
has commenced and conversion is expected to be underway by June 2013.
De-listing from Oslo Bors
The company completed its delisting from the Oslo Bors on August 30
Golar continues to maintain a VPS register and
completed the Norwegian OTC registration of Golar LNG Limited on
August 31 so that Norwegian shareholders
can continue to hold and
trade their shares in Norway.
Shares and options
During the quarter a total of 83,309 options were exercised. In
this, the Company issued 83,309 new shares. The
total number of remaining
options is 676,720. As at September
30, 2012 the total number of shares
outstanding in Golar excluding
options is 80,407,061.
Although an optimistic sentiment within the shipping market
continues in the longer term, a bearish cargo market prevailed in the
third quarter with falling
prices and weak demand in the Far East.
Chartering activity remained thin and lacked direction and
consequently, short-term charter rates experienced a correction
from rates seen earlier in the year.
Looking to the fourth quarter, weak Far East demand may result in
vessels being released into the market, however, with
limited available modern
undedicated vessels a resumption in
interest from buyers could very easily pull
rates upward again.
The worldwide LNG fleet currently stands at 365 vessels including
FSRUs, with a further 87 on order including FSRU's/FPSO's. Seventy
nine vessels have been
ordered since January 1, 2011,
including 22 vessels ordered in 2012.
Approximately 59% of the
order book is already committed. Delivery of most of this order
book is not scheduled to commence until Q3 2013 at which
increased exports, fleet renewals, new sales contracts
and active trading
interests provide solid support for attractive
long term charter rates.
The chartering market is beginning to differentiate between shipping
technologies by creating a tiered pricing environment where TFDE
command a premium against all other types of tonnage. As
such, market references are moving away from steam turbine units and
towards the ultra- modern
highly efficient 160-162,000m3 TFDE ship.
The efficiencies of ultra-modern TFDE, as compared to steam turbine
propulsion systems, generate a recognized
operational savings of
anywhere between US$20-40,000/day given the cost of various
considerations (bunkers and LNG; the greater the price the greater
Despite tightening supply from minor production issues reported
Qatargas and Yemen LNG, downward pressure on pricing was
due to high inventory levels that persisted East
of Suez. This reduced arbitrage
trade opportunities and negatively
impacted the spot market.
Spot cargo prices fell from around $15.00 per mmbtu in July to the
per mmbtu levels by the end of the quarter. There are
however signs that the price decline has reached bottom with
spot price indicators increasing for winter cargoes.
Towards the end of the quarter European spot prices declined in the
absence of re-export/diversion opportunities, ample pipeline gas
and low demand. Trading
opportunities diminished as NBP and Far East
price spreads fell below $3.00 per mmbtu for prompt deliveries.
During this period Europe's re-exports declined by more than 50% from
the second quarter.
New LNG supply will soon be coming to the market with the
commissioning of Angola LNG in the Atlantic Basin. Despite delays
at the West African project
during the third quarter, exports are
expected to start early in the New Year.
This represents a set-back
of about ten months from the original target date for the country's
first LNG project.
In the Far East, ConocoPhillips and Origin Energy announced the
sanctioning of a second train at its Australia Pacific LNG project.
The project is planning to bring the first train on la
te in 2015 with
the second train following in 2016.
Both trains will be sized at
4.5 million tonnes. Additionally, during the quarter Chevron made
positive statements about proceeding with a fourth train at its
Gorgon LNG project in Barrow Island, Western Australia. There are
three trains at Gorgon under construction totalling 15.6
In addition to Angola, given imminent start-up of the project,
under construction in both the Atlantic and Pacific
Basin have reached close to 100 million tonnes, with construction
officially beginning at Cheniere's Sabine
Pass LNG export facility.
Golar is currently working on multiple FSRU opportunities and
shortlisted for five projects. FSRUs have become an
solution for most new LNG importers and
Golar's speculative FSRU orders have
positioned the Company to meet
demand for projects with short lead times. The Company notes that
there appears to be an increased emphasis placed on operators,
such as Golar, who can demonstrate prior success in fast-track
project execution and operational experience.
The Middle East continues to be extremely active as countries
developing gas shortages with more than five
projects currently in various
phases of development. South Asia and
South America are also areas with multiple
All of these regions are, almost exclusively, focused
regasification solutions and the Board feels that the
economics of FSRUs will allow Golar to continue to expand
its franchise in the future.
The Company has in the last nine months raised approximately $0.9
billion in cash through drop down sales to Golar Partners and
financing efforts (inclusive
of the refinancing of the remaining
Golar Partners vendor loan). The target has been to fully finance the
existing new building program and continue to grow the dividend
without raising additional equity or realising any of its $825
investment in Golar Partners. The Board is pleased with the
The remaining capital expenditure of the thirteen ship new building
program is approximately $2.3 billion. The Company has received
several proposals from its core banks which support the Company's
view that, through a combination of its existing cash position,
positive cash flow and the proposed financing it is able
this target. Any additional dropdowns or long term charters for the
new buildings will further improve this situation.
The negative development in the spot charter market in the third
quarter has shown that the present shipping market and market
balance are sensitive to any set back in production volumes. The
Board expects that this situation will
gradually improve in the
coming three to four years, as large new LNG production
come to the market. A significant part of these volumes have at
present not secured shipping capacity.
The Board is excited about the progress made and the prospects
for the FSRU
business as well as the FLNG business. However
significant work is outstanding
in order to convert this progress
into additional earnings.
Due to the successful growth in the dividend in Golar Partners, Golar
LNG is now in a position where its wholly owned subsidiaries Golar
GP LLC and Golar LNG Energy Limited, are expected to start to
receiving incentive distribution
payments from the Partnership.
Following the drop down of the Golar Grand this
amounts to $2.5
million on an annual basis.
The results for Q4 will be negatively influenced by the planned dry-docking for the Golar Spirit as well as reduced revenue for Golar
Maria trading in the spot
market. For the remaining vessels
earnings are likely to be in line with the third quarter.
Further growth in earnings will come when the first new building is
delivered in August next year.
The Board remains confident in the way the Company is positioned
to meet the high growth in LNG consumption expected in the years to
Forward Looking Statements
This press release contains forward looking statements. These
statements are based upon various assumptions, many of which are
based, in turn, upon further
assumptions, including examination of
historical operating trends made by the management of Golar.
Although Golar believes that these assumptions were
when made, because assumptions are inherently subject to
uncertainties and contingencies, which are difficult or
impossible to predict
and are beyond its control, Golar LNG cannot
give assurance that it will achieve
or accomplish these expectations,
beliefs or intentions.
Included among the factors that, in the Company's view, could
results to differ materially from the forward looking
statements contained in this press release are the following:
inability of the Company to obtain
financing for the new building
vessels at all or on favourable terms; changes in demand; a material
decline or prolonged weakness in rates for LNG
political events affecting production in areas in which
natural gas is produced
and demand for natural gas in areas to
which our vessels deliver; changes in demand for natural gas
generally or in particular regions; changes in the financial
stability of our major customers; adoption of new rules
regulations applicable to LNG carriers and FSRU's; actions
taken by regulatory
authorities that may prohibit the access of LNG
carriers or FSRU's to various
ports; our inability to achieve
successful utilisation of our expanded fleet and inability to expand
beyond the carriage of LNG; increases in costs including:
wages, insurance, provisions, repairs and maintenance; changes in
domestic and international political conditions; the
current turmoil in the global financial markets and deterioration
thereof; changes in applicable
maintenance or regulatory
standards that could affect our anticipated dry-docking or
maintenance and repair costs; our ability to timely complete our
conversions; failure of shipyards to comply with delivery
schedules on a timely
basis and other factors listed from time to
time in registration statements and reports that we have filed
with or furnished to the Securities and Exchange
including our Annual Report on Form 20-F and
announcements and reports. Nothing contained in this
press release shall
constitute an offer of any securities for sale.
November 28, 2012
The Board of Directors
Golar LNG Limited
This information is subject of the disclosure requirements acc. to
Section 5- 12 vphl (Norwegian Securities Trading Act)
Golar LNG Limited 3rd Quarter 2012 Results:
This announcement is distributed by Thomson Reuters on behalf of
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Source: Golar LNG via Thomson Reuters ONE
Questions should be directed to:
Golar Management Limited
+44 207 063 7900
Chief Executive Officer
Chief Financial Officer
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