Golar LNG Limited

Good morning from our head office in Bermuda. Welcome to GOLAR's Q3 2025 earnings results presentation. My name is Carl Fredrik Staabo, the CEO of GOLAR, and I'm accompanied today by our CFO, Eduardo Marnau. Before we get into the presentation, please note the forward-looking statements on slide two. Starting on slide three and an overview of GOLAR. Following our announcement on October 23rd, our existing fleet of three FLNGs are now fully contracted on 20-year charter durations with a total EBITDA backlog of 17 billion before commodity upside and inflationary adjustments. Now that the existing fleet is fully contracted, the key focus of the company is now on developing our fourth FLNG unit. During the quarter, we've made significant technical and commercial progress in deciding on size and design of our next unit. As you can see on the bottom half of the slide, we have three different growth designs, the mark one, two, and three, which differ in liquefaction size, ranging from 2.5 million tons all the way up to 5.4 million tons. We're on track to decide on the next FLNG project in the coming months. Over the course of the last five months, we've also concluded just over 1 billion in new corporate debt facilities and retired our October Norwegian bond maturity of 190 million. Following these developments, we now have a cash position of $1 billion and a net debt position of around 1.4 billion. Over the last 12 months, we generated $221 million of adjusted EBITDA, mainly from the operations of the Hyli. Our EBITDA generation is set to quadruple from contracted EBITDA once our existing fleet is fully delivered during 2028. Turning to slide four and the highlight of the quarter is for sure the final FID and successful fulfillment of all CPs for Mark II's 20-year charter in Argentina. We now have earnings visibility for all our assets through 2045 and beyond. The total earnings backlog stands at 17 billion before commodity upside and inflationary adjustments, and this creates a very solid base to add further attractive FLNG projects to the portfolio. Turning to slide five, we highlight some of the key characteristics of our FLNG charter agreements. GOLAR aims to structure our long-term contracts as solid infrastructure cash flow with meaningful contractual protections. Some of the key attributes to these protections include that all of our contracts are paid in US dollars, all cash flows are paid offshore and net of any local taxes in the country where we operate, all of our contracts are on English law, and for all our long-term contracts, operating costs and maintenance capex is either passed through or reimbursable by our counterparts. In addition to these strong protections, we have further fiscal protections for our two contracts in Argentina, including 30-year non-interruptible export licenses, environmental assessment approvals, and protection from any changes to fiscal or regulatory terms, including taxes, etc., through the large investment protection under the RIGI framework in Argentina. We furthermore have corporate guarantees from the parent companies of our counterparts for a significant portion of the contract backlog to safeguard the cash flows. Our mission is to identify attractive gas reserves globally and utilize our FLNG technology to monetize these assets together with strong upstream partners. We tried to structure the contract in a manner where we reduced the country risk by creating the mentioned strong contractual and regulatory protections, as well as creating a buffer between GOLARS operations and the country where we operate. These buffers are essentially the charters of the unit, which in turn includes Perenco in Cameroon, BP, offshore Mauritania and Senegal, and the CESA consortium in Argentina, where we have the pro-rata corporate guarantees from the shareholders, which comprise Pan American Energy, YPF, Pampa, and Harbor. Turning to slide seven and a business update for the quarter. Q3 was one of the strongest quarter in the history of Golar, now adding $8 billion of firm EBITDA backlog through the lifting of all CPs and FID for the 20-year charter of Mark II to Argentina. In addition, we entered the U.S.-rated unsecured market with Golar's first-ever U.S.-documented $500 million bond with a five-year duration carrying a 7.5% coupon. In the quarter, we also retired a Norwegian bond with a net outstanding amount of $190 million at maturity in October. We've also signed the hilly redeployment scope in between her contracts in Cameroon and before starting the contract in Argentina, where the vessel will return to her original construction shipyard at SeaTrium in Singapore. We've also approved the ordering of long lead items for the fourth FLNG, and we've approved a new $150 million buyback program in line with our track record of buying back over 9 million shares over the course of the last five years. Turning to slide eight and focus on Hilly. Hilly maintains her market leading operational track record with another quarter of 100% economic uptime. We've now delivered 142 cargoes in startup or producing more than 9.8 million tons of LNG. During the quarter, the unit generated $51 million of adjusted EBITDA to GOLAR. Turning to slide two and focus on the GIMI. GIMI started her commercial operations date under the 20-year contract for BP, offshore Mauritania, and Senegal in June this year. We're very pleased to see that operations are stabilizing and continuously improving in throughput. We're now fine tuning operations with daily production frequently exceeding base capacity. In addition, we're actively working with the GTA partners to identify and develop value enhancing initiatives for the GTA project. These initiatives include operational efficiencies and the bottlenecking of production capacity to improve unit economics and overall throughput, which will then benefit the potential earnings of GIMMI overall and beyond the base EBITDA. We're also pleased to announce that we're in very advanced stages of entering into a new credit-approved $1.2 billion bank refinancing facility of the GIMMI. We expect this facility to close within this quarter and Eduardo will explain this in further detail in the later section. Turning to slide three and a focus on the mark two. As already explained, the key highlight of the quarter was the FID reached in August and the CP satisfaction met in October. The project remains on schedule for delivery in Q4 27, and we expect to commence operations in Argentina during 28. To date, we have spent $1 billion out of the total conversion budget of 2.2, and the $1 billion has been fully equity funded by Golar to date. You can see on the pictures some of the progress made on the shipyard in China. To the left, you can see the ship, which is divided in two parts and now sits on land. In the middle, we have had the key laying ceremony to construct the new mid-ship section, which will be 80 meters long and 63 meters wide and will house the liquefaction plant of the units. And you can see the model structural assembly ongoing to the far right. This is part of the equipment that will be injected into the midsection. Turning to slide 11, year-to-date, we've secured $14 billion in adjusted EBITDA backlog across HILI and the Mark II, where all of the FID and CPs for HILI was met in May and for the Mark II between August and October. We see the combination of these two contracts as a very strong addition to Golar's portfolio, generating a base EBITDA of $685 million over 20 years before meaningful commodity upside and inflationary adjustment, both of which Eduardo will explain in further detail later on. Turning to our key focus going forward is adding unit number four, where we explain Further details on slide number 12. As we explained on our Q2 call, we made commitments to the three shipyards to come up with updated pricing, delivery, and payment terms if we were to go ahead with one of the three designs. We have now obtained search pricing and delivery times from all the three shipyards. The Mark 1 design is the same design of both the Hilly and Gimmi. It's a proven design, we know it well, and the current pricing works and aligns with some of the commercial discussions ongoing. The Mark 2 would be a repeat of the vessel currently under construction, and we are pleased to reconfirm time and price with the shipyard. We've also spent a considerable amount of time getting an updated price, time and schedule for the Mark III. And we continue to see yard pressure for attractive slots and delivery times. And we do think that timing is of the essence if you want to lock in attractive delivery. The key pressure item for the delivery of all three assets are long lead items. These long lead items see significant pressure both on delivery and price, mainly driven by the AI data center boom in the US. We now see relatively new entrants into some of these suppliers where companies like Google, Alphabet, Meta and so on are ordering gas turbines in large quantities, putting price pressure and delivery pressure. Being an existing large and long-term client of these sub-suppliers helps us in securing attractive slots despite the increased competitive landscape. We have therefore gotten board approval to enter into long lead items during this quarter and we expect to do so in the coming weeks and months to safeguard the delivery times now confirmed by the shipyards over the course of the last few months. So what do we mean when we say we're going to go ahead ordering unit number four? Well, we think the case study of the Mark 2 over the course of the last 12 months is relevant and what's highlighted on slide 13. The Mark 2, we placed the order in September 24 on speculation. Even if we had very strong commercial lead, the order was initially on speculation. In May 25, we signed the 20-year charter with CESA FID was met in August and all conditions met in October. What we clearly saw from ordering the unit on speculation alongside the redeployment of Hili was that we were able to drive considerable commercial value in Golar's favor by having a firm delivery and several commercial opportunities available. We are planning to follow the same recipe for unit number four There were several commercial interests both on the HILI redeployment and on Mark II that lost out to the Argentinians. We have obviously maintained those discussions and we've also developed incremental units, incremental projects. Therefore, we plan on using the same methodology to drive commercial value in our favor with a similar timeline expected for a new project. The CAPEX II EBITDA for the Mark II was five and a half times for a 20-year contract before the commodity upside and the inflationary adjustments. We continue to see a strong development in the commercial pipeline for new projects, and we're therefore comfortable to go ahead with ordering the long leads imminently. Turning to page 14, we made further advances for the next unit. We've confirmed between 36 and 38 months of construction time, both for the Mark I and the Mark II, and around 48 months for the Mark III. The primary reason for the longer lead time on the Mark III is that for that unit, we are not starting with a donor vessel, but purpose building from the get-go, and it's also larger in size and requires longer time. As already explained, we received updated pricing, delivery and payment terms, which are broadly satisfactory to the project economics that we're targeting. We have identified and inspected donor vessels, and given the state of the current LMG shipping market, we're very pleased with the levels in which we can source attractive conversion units. We're now working to narrow commercial opportunity sets and upstream timing and decide on FLMG design. We will target long-term infrastructure contracts, and we have positioned the balance sheet to facilitate to add one more unit. We're now on track to decide on the fourth LNG vessel in the coming months, but starting with long lead items imminent. Turning to slide 15 and to elaborate a bit on the market opportunity and what we see ahead of us. It's tempting to look to the FPSO industry's development, which started in 1985 with its first unit and grew very quickly to around 20 units 10 years later. We see it today stands at more than 250 units globally, with 10 to 15 projects added annually. We see a similar development taking place in the FLNG industry. We're very pleased to see the increasing adoption by the industry that FLNGs are the cheapest, quickest, and most efficient way of monetizing stranded and associated and flare gas resources globally. GOLAR pioneered this business with the first delivery in 2018, and the fleet now stands at 14 units with several planned incremental projects in development. We're pleased with our position as the only proven provider of FLNG as a service, and we plan on maintaining an active growth strategy for as long as we can secure economics along the lines of our existing contracts for 20-year durations. We will, however, maintain our policy of having maximum one unchartered FLNG at the time. As we've explained over several calls with still the key premise of our business. Gas liquefaction has three cost drivers. The cost of lifting the gas, the cost of liquefying the gas, and the shipping distance from where the gas is produced to where it's consumed. The largest current exporter in the world of LNG is the US. They also happen to be the largest source of growth of incremental supply over the coming five to 10 years. And they also happen to be the most expensive producer, so the incremental producer. Hence, if we can source projects where we can produce the gas significantly cheaper than Henry Hub, we know we have an attractive cost competitive advantage in constructing the liquefaction units. And more often than not, our projects are closer to end users and therefore have a shipping advantage. And if we have this or continue to develop projects with the three significant cost advantages over the largest and incremental producer in this market, we believe we have a very strong business and one that we will continue to grow. Turning to Eduardo for group results.

Thank you, Carl, and good morning, everyone. I'm pleased to give an overview of Golosh financial performance for the third quarter of 2025. Moving to slide 18, let's review the key financial highlights of the quarter. Following Gimi's COD in June, this was the first quarter with full operations of both of our units. I'm pleased to share that Gimi has been performing extremely well and daily production is now frequently exceeding base capacity. We achieved total operating revenues of $123 million in the quarter and net FLNG tariffs of $132 million in this quarter. HILI contributed $51 million to our EBITDA, while GIMI added $48 million this quarter. In connection with the startup of operations of GIMI, we incurred in certain one-off expenses, which are expected to be normalized in the next quarters. When accounting for the corporate and project development expenses this quarter, our total adjusted EBITDA reached $83 million. Total EBITDA for the last 12 months ended in Q3 was $221 million. This quarter, we report a net income of 46 million. This figure is inclusive of 12 million of non-cash items, such as adjustments in the value of embedded TTF and Brent derivatives within the HILI contract, as well as changes in our interest rate swaps. In October, we raised $500 million under our first U.S.-rated senior unsecured bonds with a new five-year note at a cost of 7.5%. Following that, we repaid $190 million of our unsecured Norwegian bonds issued back in 2021. Our liquidity now stands at approximately $1 billion of cash on hand. So following that, our net debt position right now stands at just under $1.4 billion. Lastly, we're pleased to declare a dividend of $0.25 per share this quarter with a record date of November 17 and payment scheduled for November 24. Moving to slide 19, we continue to focus on accretive growth while maintaining a sustainable policy of shareholder returns. As our units come online, we plan to return most of operating cash flow after debt service to shareholders, while we'll continue to recycle capital through asset-level financings and existing debt optimization to fund accretive growth. These are not mutually exclusive. Over the last five years, we returned more than $800 million to shareholders. including dividends of over 260 million and buybacks of more than 9.3 million shares at an average price of $125 per share, bringing the total share count to 102 million shares outstanding at the end of Q3. In line with that, I'm pleased to announce that our board has approved a new buyback program of up to $150 million. Now moving to slide 20. Following the announcement of the Mark II FID and CP's fulfillment, we now have full visibility of our earnings for the next 20 years. This gives us a clear path to cash flow growth and increased shareholder returns. By 2028, when our three FLNG units are fully delivered in operation, we expect our EBITDA to grow by more than four times compared to the last 12 months. This can grow even further, subject to further commodity upside from Healy and the Mark II. This incremental free cash flow upside under the CESA charters in Argentina can be estimated at approximately $100 million per year for every dollar per million BTU increase in FOB prices above $8 per million BTU. In 2028, when the Mark II comes online, our free cash flow to equity generation could be around $500 to $600 million or approximately $5 to $6 a share before further commodity upsides. Now moving to slide 21. So how do we plan to fund debt growth? Going forward, we plan to use the liquidity released from debt financing proceeds to be allocated to fund the creative FLNG growth. We have now received final credit approvals for a new $1.2 billion bank facility for FLNG GIME at improved terms, and we expect it to close within Q4. This facility carries improved terms and conditions compared to the current one, and is expected to release net proceeds of over $400 million net to us. At 5.6 times the GIMI's annual contracted EBITDA, this is a good example of what can be achieved on the back of our long-term charters. When looking at our existing debt at Healy and targeting a level four to five times its annual contracted EBITDA, in that case, even at a lower level than the GIMI one, we could release up to $1 billion in proceeds from that by refinancing the existing debt with a new facility. Similarly, if we apply the same multiples to the Mark II, which is currently completely unencumbered, we could be looking to raise up to $2 billion from new financing. Combined, these two transactions could raise up to $3 billion in fresh proceeds, which can be used to fund further FLNG growth. Now moving to slide 22. Following the confirmation of the contract in Argentina with the FIDs of Healy and the Mark II, we now have a total firm EBITDA backlog of more than $17 billion before commodity upside and further inflation adjustment. I wanted to recap how this is built up once all units are in operation. So starting with our share of the GIME earnings, this is expected to add $150 million, followed by the $285 million from Healy, as you can see on the slide, and $400 million from the Mark II, when you deduct our corporate expenses, we're left with a base EBITDA of $800 million fully secured for the next 20 years. As I explained before, changes in LNG prices could significantly give a very high upside to us. And in that case, we have a limited downside with a very significant and uncapped upside. For example, if we assume FOB LNG prices of $10 per million BTU, our EBITDA could be in excess of $1 billion per year. At $15, this number could grow to $1.5 billion. As a reference, if all the units were in operation in 22, and assuming LNG prices during that time, we could be earning close to $3.5 billion on debts given year. This really shows the huge upside potential of our commodity upside. So lastly, on slide 23, I wanted to summarize the different ways our investors can have exposure to GOLOR. Our shares are listed on NASDAQ, and I'm pleased to see increased volumes with daily liquidity exceeding $50 million per day. Following our latest issuance of our new U.S.-rated $500 million unsecured bonds in October, we now have two unsecured bonds trading in the market with a total outstanding amount of $800 million. We have also issued $575 million of convertible bonds back in June. So I think that ends this slide here. I'll now hand the call back to you, Carl.

Thanks, Eduardo. Turning to slide 25 to summarize. We're very pleased with the development of the quarter, and in particular, 2025 year-to-date. We remain the only proven service provider of FLNG as a service, combined between HILI and GIMI, having now delivered more than 150 LNG cargoes. Our earnings backlog now stands at $17 billion of EBITDA before commodity upside and inflationary adjustments. This will further increase as we add additional units. Our EBITDA is set to quadruple between now and 2028, and the pathway to multiple return in shareholder returns is beyond the quadruple as the EBITDA growth is far in excess of that service growth. We remain a strong balance sheet position to provide for additional growth units. Our fully delivered net debt to EBITDA stands at around 3.4 times, with a current cash position of around $1 billion. We're on track to order our fourth FLNG unit, and we're in the process of ordering long lead items during this quarter. Our focus remains on shareholder returns, and we're pleased that the Board approved yesterday a new $150 million buyback program, which is in line with the $812 million returned to shareholders in the last five years. That concludes the prepared remarks of today's presentation, and happy to turn the call back to the operator for any questions. Thank you.