Golar LNG Limited

Ladies and gentlemen, thank you for standing by and welcome to GOLAR LNG Limited Quarterly 2021 Resource Call. At this time, all participants are in list and holding mode. After the speaker presentation, there will be a question and answer session. To ask a question, you will need to press star 1 on your telephone. I would now like to end the conference. Our speaker today, Karl Staubo. Please go ahead, sir.

Thank you and welcome to Goal RLNG's Q4 earnings results presentation. Thank you for taking time to dial in. My name is Karl Fredrik Staubo, CEO of Goal RLNG. Before we get into the presentation, please note the forward-looking statements on slide two. I am accompanied today by Eduardo Maranhao, our CFO. Given that this is a Q4 presentation, we would like to start today's presentation by a review of the key events that occurred in 2021 as laid out on slide 4. The year started with the announced sale of Golars 2 subsidiaries, GMOP and Hygo Energy Transition to New Fortress Energy in January of last year. The transaction closed in April, realizing $130 million in cash proceeds to Gola, as well as 18.6 million shares in New Fortress Energy, equivalent to an ownership in NFE of 8.9%. Following the sale of the two subsidiaries, in May-June, we then undertook a corporate reorganization, started off with changes to corporate management. I moved from being the CFO of Golar to the CEO of Golar, whilst Eduardo transitioned from being the CFO of Hygo to the CFO of Golar. Furthermore, we right-sized our shore-based organization to the renewed company structure, reducing run rate GNA by approximately $5 million, of which the effects will be effective into 2022. due to redundancy packages for the majority of 2021. In July, we announced increased capacity utilization of the FLNG HILI of 1.2 million tons of incremental production effective from 1st of January this year. The increased production has a tariff linked to TTF gas prices. At current TTF prices, This announcement represents increased earnings for HILI for 2022 of approximately 80 million dollars at no incremental capex the goal are. In Q3 we announced the refinancing of 682 million dollars of new and refinancing debt facilities at improved terms from retiring facilities and also extending our debt maturities. Lastly, in December, we announced the formation of Cool Company, a business separation of our eight LNG carriers. We then raised $275 million in external equity for that outfit, and $570 million of new bank debt for the shipping kit. In total, these activities involved the sale of assets and subsidiaries for a total enterprise value of approximately $6.2 billion and a refinancing of around $1 billion of debt. Together, these activities have simplified Golar, crystallized underlying value of our asset portfolio, and significantly strengthened our balance sheet. Turning to slide five, Golar's new corporate structure consists of our two FLNGs, Hille, which is in production, Gimmi, which is 80% technically complete, and scheduled to start its 20-year contract for BP in the second half of 2023. We remain with two LNG midstream assets. The goal are Arctic, which is a steam carrier, and Golar Kundra, one of the most modern available FSRUs in the market today. She is currently operating as an LNG carrier. We have furthermore developed three different FLNG designs using the same liquefaction technology and design concept, but with differences in liquefaction and storage capacity to cater for different sized potential new FLNG projects. As a result of the transactions undertaken during 2021, we have three sizeable holdings in publicly listed LNG infrastructure companies. As explained, we own about 9% of New Fortress Energy, around 31% of Cool Company, and around 24% of Avenir LNG. and combined these three investments have a total value of around 600 million dollars. On slide six we have highlighted some of the key balance sheet effects of the actions undertaken in 2021. We now have cash and marketable securities of more than 1.1 billion dollars. We have contractual net debt of approximately half a billion. If you include the total remaining capex on the FLNG GIMI, the net debt plus remaining capex is just under one billion. And we expect EBITDA development from our existing FLNGs to quadruple over the next three years. On the right-hand side, You can see that we have rearranged all of our death facilities and we have no material death maturities until 2025, well after GIME's expected startup in 2023. So turning to slide seven, we believe we're now uniquely positioned for FLNG growth. We have a proven FLNG design. We have a market-leading operational track record with a 100% commercial uptime since Healy started its contract in 2018. And we have now delivered 5 million tons of LNG, more than any other FLNG globally. To the bottom left, we have a market-leading carbon footprint and a market-leading capex per ton of liquefaction. Lastly, the gas price environment is supportive of upstream investments. We are very encouraged by the progress made for new FLNG projects with existing and prospective new clients, and we expect to be awarded a new FLNG contract within 2022. Our FLNG technology is competitive down to a tolling fee in the region of $2 to $3 per MMBTU. This enables monetization of stranded and associated gas fields. As previously announced, we are exploring alternatives to obtain commodity upside exposure while maintaining a base tariff similar to the structure that we have in place for the FL&D Hille.

In the current commodity price environment, Hille is making a tariff in the region of $6 to $7 per MMBTU liquefied.