Golar LNG 2Q Income at USD 59.0 Mln (Bermuda)

Golar LNG 2Q Income at USD 59.0 Mln

Golar LNG reported second quarter 2013 net income of $59.0 million (including a non-cash gain of $47.9 million on interest rate swaps).

Highlights

  • Golar LNG second quarter 2013 net income of $59.0 million (including a non-cash gain of $47.9 million on interest rate swaps).
  • EBITDA generated in the quarter amounts to $8.2 million.
  • Underlying dividends received from Golar LNG Partnersduring the second quarter 2013 increase to $16.0 million from the first quarter level of $14.4 million.
  • Spot market remains volatile and inefficient, as a result the Hilli and Gandria enter layup in Indonesia.
  • Board maintains dividend at $0.45 for the quarter.

Subsequent events

  • Golar concludes $1.1 billion funding facility for eight of its thirteen newbuilds.
  • Ten year FSRU time charter for the Golar Eskimo concluded with the Hashemite Kingdom of Jordan.
  • Five year FSRU time charter for the Golar Igloo concluded with the Kuwait National Petroleum Company.
  • Golar Tundra shipbuilding contract amended to include FSRU capability with new delivery date of November 2015.
  • Golar Viking continues to trade in the spot market.

Financial Review

Following the IPO of the Partnership by the Company (together “Group wide”) and subsequent multiple dropdowns of a large portion of Golar’s operating fleet, within the Group wide operations, the majority of the vessels now reside in Golar Partners. Based on the Group wide second quarter operating results, 76% of the aggregate net time charter revenue is now sourced from vessels that are operating within Golar Partners’ corporate structure. Vessels remaining within Golar’s deconsolidated operating results are represented by the five vessels which have not yet been dropped down to Golar Partners, including Golar Arctic and Viking (both modern operational vessels), Gandria and Hilli (both first generation vessels currently in lay up pending conversion projects) and Gimi (first generation vessel which recently came off an existing charter during the second quarter). Costs incurred by Golar in its deconsolidated operating results include, primarily, direct operating costs of those five vessels, general and administration costs, as well as expenses related to the build-up in officer ranks for its newbuilding fleet and project related expenses for prospective FLNG and FSRU projects. As the operating performance of Golar Partners has such a material impact on the Company’s over-all financial outcome, the review for the second quarter considers Group wide results as well as the deconsolidated results.

To assist investors with prior quarter comparisons and assessments of underlying performance of the Group wide operations, the Company is also presenting in a table below, some consolidated operating performance metrics.

Floating Liquefaction (FLNG)

Golar’s FEED study with Keppel Shipyard and its liquefaction topside partners is nearing completion. The FEED is for the conversion of an existing 125,000 cubic meter Moss LNG Tanker into a Floating Storage and Liquefaction Vessel (FSLV). The FSLV will have 1 to 4 liquefaction trains with each train being approximately 0.6 Million Metric Tonnes per Annum (MMTPA) of liquefaction capacity. This will allow Golar to pursue projects with approximately 0.6 to 2.4 MMTPA of capacity. Total cost for the FEED study is expected to reach $5.2million which is broadly in line with the original budget. The Company is optimistic that the FEED results will verify the FSLV as being one of the lowest cost liquefaction solutions in the market with a capital cost which is extremely competitive against traditional solutions, and an execution window of approximately 30 months from financial commitment. The preliminary price indications for the project clearly confirms the competitiveness, however some more work needs to be done in order to draw the final conclusion.

The modular nature of Golar’s solution will allow the FSLV to be cost competitive across a wide range of reserve sizes and associated production capacity. This scalability allows Golar to pursue both large scale projects based on 4 train FSLVs or “stranded” reserves as small as 500 Billion Cubic Feet (BCF).

In addition to Douglas Channel, The Company is pursuing another project in the Americas to export pipeline quality gas. Golar is also in discussions with producers and host governments in four different West African countries for both large scale and stranded gas projects.

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LNG World News Staff, August 29, 2013