Interim results for the period ended September 30, 2022

Hamilton, Bermuda - 16 Nov 2022

• Golar LNG Limited ("Golar" or "the Company") reports Net income of $141.1 million and Adjusted EBITDA1 of $85.2 million for Q3 2022 ("Q3" or "the quarter").

• FLNG Hilli customer elected to exercise optional capacity of 0.2 million tons per annum ("MTPA") of Dutch Title Transfer Facility ("TTF") linked production from 2023 to 2026.

• Entered into swap arrangements to hedge approximately 50% of Golar's exposure to TTF linked FLNG Hilli production for Q4 2022, 100% of Golar's exposure to 2023 TTF linked production, and 50% of Golar's exposure to 2024 TTF linked production.

• Sold 8.0 million shares in Cool Company Ltd. ("CoolCo") and 6.3 million shares in New Fortress Energy Inc. ("NFE"), raising net proceeds of $430 million in November.

• Strong customer development for FLNG growth projects, including working with upstream company for potential integrated FLNG project, and paid development agreements with a supermajor and an independent E&P company for new FLNG opportunities.

• Ordered long-lead items for a new Mk II 3.5MTPA FLNG for delivery in 2025.

FLNG operations
Distributable Adjusted EBITDA1 from FLNG Hilli increased by $1.9 million from $92.5 million in Q2 2022 to $94.4 million in Q3, of which Golar's share was $64.1 million, compared to $62.5 million in Q2. FLNG Hilli's scheduled maintenance window during the quarter was extended by several days as a result of unscheduled maintenance work. Accruals for overproduction during Q1 and Q2 2022 amounting to $14.4 million were reversed and an estimated $0.9 million of revenue reduction due to demurrage delays was incurred in Q3. After receiving instruction that FLNG Hilli should continue to produce 0.2MTPA of TTF linked production from 2023 until the end of the current contract in July 2026, Golar entered into three swap transactions collectively securing, subject to vessel availability, around $250 million of incremental earnings attributable to Golar:

• August 9, 2022: Hedged 50% of Golar's 2023 exposure to FLNG Hilli's TTF linked production at a TTF price of $49.50/MMBtu, the energy equivalent of $291 Brent oil.

• August 24, 2022: Hedged 50% of Golar's 2024 exposure to FLNG Hilli's TTF linked production at a TTF price of $51.20/MMBtu, the energy equivalent of $301 Brent oil.

• September 2, 2022: Hedged the remaining 50% of Golar's exposure to FLNG Hilli's 2023 TTF linked production at a TTF price of $50.50/MMBtu and 50% of its Q4 2022 exposure at a TTF price of $70.0/MMBtu, the energy equivalent of $297 and $412 Brent oil respectively.

Including the Brent oil forward curve for 2023 ($88/bbl), the hedged TTF exposure, and the fixed tariff, Golar's share of Distributable Adjusted EBITDA1 from FLNG Hilli is expected to be approximately $295 million in 2023. Golar's share of forecast 2023 total annual debt service for FLNG Hilli's contractual debt is approximately $50 million (debt amortization of approximately $29 million and interest of approximately $21 million). This should therefore generate free cash to Golar of approximately $245 million.

FLNG Gimi construction
Conversion of FLNG Gimi for its 20-year contract with BP scheduled to commence in Q4 2023 was 90% technically complete on November 15, 2022, on track for a 1H 2023 sail away. Pre-commissioning of equipment has commenced. Once commissioned and delivered to the customer in Q4 2023, FLNG Gimi is expected to unlock around $3 billion of Earnings Backlog1 to Golar, equivalent to $151 million in annual Adjusted EBITDA1.

FLNG business development: Golar continues to experience strong customer engagement for new FLNG projects. This includes working with an upstream company for a potential integrated FLNG project, and paid development agreements, one with a supermajor that is exploring FLNG for a proven large gas reserve, and another with an independent E&P company. Under the 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 Final Investment Decisions.

We believe that securing attractive delivery of our next FLNG unit will increase Golar's ability to drive value with prospective FLNG clients.

On the back of a growing opportunity set for new FLNG growth projects, and noting the premium available to providers for early delivery of liquefaction solutions, Golar has placed orders for long-lead items targeted for a 3.5MTPA Mark II FLNG, that can also be interchangeably used on our other FLNG designs. Representing a total commitment of approximately $300 million, ordering of these long-lead items, primarily comprised of compressors, gas turbines, cold boxes and heat recovery steam generators, puts Golar in a position to deliver an FLNG during 2025.

FSRU
Following the sale of FSRU Tundra to Snam in May 2022, Golar agreed to charter the vessel back from Snam until November 2022. Hire received from sub-chartering the vessel to a third party, net of operating costs and hire paid to Snam, amounted to $3.1 million in Q3, recorded under Net income from discontinued operations. Golar also entered into a services agreement to assist Snam with drydocking, site commissioning and hook-up. The total scope of the upgrades to Tundra is expected to amount to $23.5 million between Q3 2022 and 1H 2023, including an administrative fee to Golar. $5.1 million of the total services amount was recognized in Q3.

Prior to receipt of a Notice-to-Proceed to convert the Golar Arctic into a FSRU followed by its sale to Snam as a converted FSRU, the vessel remains under Golar's ownership and continues to trade as a carrier. During the quarter Golar secured a 12-month charter commencing mid-September which is expected to generate around $16.0 million of annual Adjusted EBITDA

Financial Summary


Full report

Golar LNG Limited press release