Golar LNG Limited

Welcome to the GOLA LNG Limited Q3 2022 results presentation. At this time, all participants are in a listen-only mode. After the slide presentation by CEO Karl Fredrik Staubo and CFO Eduardo Maranhao, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I will now pass you over to Karl Fredrik Staubo. Karl, please go ahead.

Thank you, Operator, and good morning and good afternoon to all. Welcome to Goal RLNG's Q3 earnings results presentation. My name is Karl Fredrik Staubo, CEO of Goal RLNG. I'm accompanied today by our CFO, Mr. Eduardo Maranhao, to present this quarter's results. Please note our forward-looking statement on slide 2. Slide 3 provides an overview of Golar. We own two SLNGs, the Hille, operating for Perenco in Cameroon, and the Gimmi that will start a 20-year contract for BP next year. We are focusing our efforts on SLNG growth projects, and we have developed three different FLNG designs. All three designs are based on the same proven liquefaction technology and maritime interface, but differ in liquefaction capacity. During the quarter, we have placed orders for long lead items for a new Mark II FLNG with a total liquefaction capacity of 3.5 million tons. The most notable change in the company overview since our last quarters are share sales totaling $430 million, reducing our cool co-shareholding from 31.3% to 8.3%, and the sale of NFE shares reducing our shareholding from around 6% to just shy of 3%. Turning to slide four and the highlights of the quarter. Hylli generated an EBITDA to Golar of 64.1 million, a 2.6 times increase from Q3 last year. Perenco declared its 0.2 million tons of production increase from Jan 23 to end of contract in July 2026, meaning that we will maintain production at 1.4 million tons per annum for the period. The incremental volume has a tariff linked to TPF gas prices. During the quarter, we entered into hedges for 50% of our Q4 2022 exposure at $70 per MMBTU. We hedged 100% of our 2023 exposure at $50 per MMBTU. And we hedged 50% of our 2024 gas exposure at $51.2 per MMBTU. In total, these hedges provide a cash flow visibility for EBITDA to GOLAR of around $260 million. As of today, the TPS hedges are currently about $75 million in the money. Turning to Gimmi, she is now 90% complete and remains on schedule. We have engaged our pre-operations and will have a maritime crew of about 120 persons mobilized on board the vessel by year-end. On FL&D growth, we continue to see increased client interaction and strong progress on potential new FL&D projects. During the quarter, we have been working with an upstream partner for a very attractive potential integrated FL&D project. We have also signed two development agreements, one with a super major and another with an independent EMT company. Under these development agreements, Both parties commit to deliver a defined scope of work within set deadlines to progress potential new FLNG opportunities and agree on key steps to reach FIBs. We believe that securing attractive delivery of our next FLNG unit will increase Lollar's ability to drive value with prospective FLNG clients. This is the reason why we have ordered a long lead item to secure Delivery within 2025. On corporate activities, we have sold 8 million cold core shares and 6.3 million NFE shares. The share sales resulted in net proceeds to GOLAR of 430 million and is in line with our communicated strategy to reduce our shareholding in financial investments to fund EPPO and DIGO. We also bought back 400,000 shares in the quarter at an average price of $23.25 per share, and our share count now stands at 107.5 million shares. We have committed to invest up to $10 million in Macaw Energy, a newly established small-scale LNG liquefaction company, targeting land-based stranded gas and associated gas resources, as well as biogas. We're excited about the strong track record of the Macau Energies team and believe Golard's liquefaction expertise, combined with the small-scale land focus of Macau, can create a successful combination for small-scale liquefaction opportunities. We are also opportunistically considering strategic partnerships, or M&A, throughout the LNG value chain. I will now hand the call over to Eduardo to present our Q3 results.

Thanks, Karl, and good morning, everybody. Very pleased to provide an update on our group results for the third quarter of 2022. Turning over to slide number six, I wanted to show some of the financial highlights of this quarter. Our operational performance continues very strong. We recorded total FLNG tariffs of $109 million, up 81% compared to Q3 of 2021 on a year-on-year basis. FLNG Terrace is comprised of total revenue from liquefaction services and also realized gain on oil and gas derivative instruments. This quarter, we recorded an adjusted EBITDA of $85 million. When compared on a year-on-year basis, this represented an increase of 63% compared to Q3 2021. We recorded net income of $141 million for this quarter. including $51 million of unrealized gains on NFC shares, $25 million of unrealized gain on interest rate swaps and other derivative instruments, $12 million of unrealized gains on TTF-linked derivatives, as well as $10 million in net earnings from other equity method investments. Our share of contractual debt at the end of Q3 was $993 million, a significant reduction when compared to the same quarter of the last year, when we had $2.1 billion of gross debt. So moving on to slide number seven, we continue to strengthen our balance sheet, which will allow the company to pursue future LNG growth projects. Our cash position currently stands at more than $1 billion today. Total cash at the end of Q3 was $612 million. Further to the end of the quarter, we sold, as Karl mentioned before, 8 million Cool Company shares and 6.3 million NFE shares, raising additional net proceeds of around $430 million. We now have total cash in hand of more than $1.04 billion. When we take into account the value of our listed securities in NFE, Cool Company, and Avenir, our total liquidity position stands just as shy at $1.5 billion. When considering our contractual debt, as I said before, of $993 million, we now have a net cash position of $452 million. As you can see on the right-hand side of the slide, we have no significant debt maturities until 2025, which is when our $300 million bonds mature. So turning to slide number eight, we'd like to provide some further insight into our earnings from Healy. and I think just by way of recap. So the Healy Tariff is comprised of three main components. We receive a fixed tolling tariff. We also have a Brent-linked tariff, as well as a TTF-linked tariff, which has started in the beginning of this year. Also, as Karl mentioned before, we have managed to hedge our TTF production at a very attractive level. And as a result of that, we continue to see a very strong increase in Healy's EBITDA generation. which this quarter totaled $64.1 million, which is 2.6 times the same amount that we had a year before. So moving on to slide number nine, I wanted to provide some further updates regarding our hedging arrangements. We have entered into swap arrangements to hedge our exposure to TTF, including 50% of Q4 2022 at the level of $70 per million BQ, which have secured $28 million of distributable EBITDA to GOLAR. We have also hedged 100% of 2023 and 50% of 2024 TTF-linked production at levels of around $50 per million BTU and $51 for 2024, which in total have secured an additional $233 million of distributable adjusted EBITDA to GOLAR. Based on that, Our share of Healy's EBITDA generation is expected to reach $295 million in 2023. When we consider that our share of the debt service for next year is expected to be around $50 million, we see an expected free cash flow to equity of around $245 million just from Healy. I'll now hand over the call to Karl, who will talk a bit more about our future FLNG projects.