Golar LNG Limited Preliminary fourth quarter and financial year 2024 results
Maintained her market leading operational track record and exceeded her contracted 2024 production volume resulting in the recognition of $0.5 million of 2024 over production accrued revenue. Q4 2024 Distributable Adjusted EBITDA1 was $68 million excluding overproduction revenue. FLNG Hilli has offloaded 128 cargoes to date.
In December 2024, Golar acquired all remaining third party minority ownership interests in FLNG Hilli for $60 million in cash and a $30 million increase in Golar’s share of contractual debt. The acquisitions included a total of 5.45% common units, 10.9% Series A shares and 10.9% Series B shares. The transaction was equivalent to ~8% of the full FLNG capacity. Following this, Golar has a 100% economic interest in FLNG Hilli.
The acquisition is immediately accretive to Golar’s cash flow. Annual Adjusted EBITDA1 from the base tolling fee is expected to increase by approximately $7 million. The Brent oil linked commodity element of the current FLNG Hilli charter will increase from $2.7 million to $3.1 million in annual Adjusted EBITDA1 attributable to Golar per dollar for Brent oil prices between $60/bbl and the contractual ceiling. The TTF linked component of the current tariff will similarly increase annual Adjusted EBITDA1 generation attributable to Golar from $3.2 million to $3.7 million per $/MMBtu of European TTF gas prices above a floor price that delivers a base annual TTF fee of $5 million. The acquisition of the minority ownership interests is also accretive to Golar’s Adjusted EBITDA backlog1, with an ~8% shareholding of the 20-year charter in Argentina starting in 2027* increasing the backlog by approximately $0.5 billion, before commodity exposure.
Golar expects to release significant capital from a contemplated refinancing of FLNG Hilli following completion of the conditions precedent in the SESA 20-year charter.
FLNG Gimi: Following the commercial reset with bp announced in August 2024, accelerated commissioning commenced in October 2024 using gas from a LNG carrier. In January 2025, gas from the carrier was replaced by feedgas from the bp operated FPSO which allowed full commissioning to commence. This milestone triggered the final upward adjustment to the Commissioning Rate under the commercial reset. LNG is now being produced, and subject to receipt of sufficient feed gas, the first LNG export cargo is expected within Q1 2025. Assuming all conditions are met, the Commercial Operations Date (“COD”) is expected within Q2 2025. COD will trigger the start of the 20-year Lease and Operate Agreement that unlocks the equivalent of around $3 billion of Adjusted EBITDA backlog1 (Golar’s share) and recognition of contractual payments comprised of capital and operating elements in both the balance sheet and income statement.
A debt facility to refinance FLNG Gimi is in an advanced stage, with credit approvals now received. The transaction is subject to customary closing conditions and third party stakeholder approvals.
MKII FLNG 3.5MTPA conversion: Conversion work on the $2.2 billion MK II FLNG (“MK II”) is proceeding to schedule. After discharging her final cargo as an LNG carrier in January 2025, the conversion vessel Fuji LNG entered CIMC’s Yantai yard in February 2025. Golar has spent $0.6 billion to date, all of which is equity funded. The MK II is expected to be delivered in Q4 2027 and be the first available FLNG capacity globally.
As part of the EPC agreement, Golar also has an option for a second MK II conversion slot at CIMC for delivery within 2028.
FLNG business development: In July 2024, Golar announced that it had entered into definitive agreements for the deployment of an FLNG in Argentina. In October 2024, Golar received a notice reserving FLNG Hilli for the 20-year charter. During November 2024, Pampa Energia joined the SESA project with a 20% equity stake, in December 2024 Harbour Energy joined with a 15% equity stake and in February 2025 YPF joined with a 15% equity stake. Pan American Energy (“PAE”) remains with a 40% equity stake and Golar with its 10% equity stake. SESA will be responsible for sourcing Argentine natural gas to the FLNG, chartering and operating FLNG Hilli and marketing and selling LNG globally. The addition of leading natural gas and oil producers in Argentina further strengthens both the project and Golar’s charter counterparty.
Following the end of FLNG Hilli’s current charter in July 2026 offshore Cameroon, FLNG Hilli will undergo vessel upgrades to maintain 20-years of continuous operations offshore. Operations in Argentina are expected to commence in 2027. FLNG Hilli is expected to generate an annual Adjusted EBITDA1 of approximately $300 million, plus a commodity linked element in the FLNG tariff and commodity exposure through Golar’s 10% equity stake in SESA.
The project remains subject to defined conditions precedent (“CP”), including an export license, environmental assessment and Final Investment Decision (“FID”) by SESA. Workstreams for each CP are advancing according to schedule and are expected to be concluded within Q2 2025.
Golar’s position as the only proven service provider of FLNG globally, our market leading capex/ton and operational uptime continues to drive interest in our FLNG solutions. The MKII under construction is now the focus of multiple commercial discussions. Advanced discussions are taking place in the Americas, West Africa, Southeast Asia and the Middle East. Once a charter is secured for the MKII under construction, we aim to FID our 4th FLNG unit. In addition to the option for a second MKII at CIMC Raffles shipyard, we are now in discussions with other capable shipyards for this potential 4th unit, focused on design, liquefaction capacity, capex/ton and delivery.
Other/shipping: Operating revenues and costs under corporate and other items are comprised of two FSRU operate and maintain agreements in respect of the LNG Croatia and Italis LNG. The non-core shipping segment was comprised of the LNGC Golar Arctic, and Fuji LNG. During February 2025, Fuji LNG entered CIMC’s yard for her FLNG conversion and Golar Arctic was sold for $24 million. This concludes Golar’s 50-year presence in the LNG shipping business.
In January 2025, Golar also agreed to sell its non-core 23.4% interest in Avenir. The transaction closed in February 2025 upon receipt of $39 million of net proceeds.
Shares and dividends: As of December 31, 2024, 104.5 million shares are issued and outstanding. Golar’s Board of Directors approved a total Q4 2024 dividend of $0.25 per share to be paid on or around March 18, 2025. The record date will be March 11, 2025.
Golar reports Q4 2024 net income of $3 million, before non-controlling interests, inclusive of $29 million of non-cash items1, comprised of:
- A $23 million impairment of LNG carrier, Golar Arctic;
- TTF and Brent oil unrealized mark-to-market (“MTM”) losses of $14 million; and
- A $8 million MTM gain on interest rate swaps.
The Brent oil linked component of FLNG Hilli’s fees generates additional annual cash of approximately $3.1 million for every dollar increase in Brent Crude prices between $60 per barrel and the contractual ceiling. Billing of this component is based on a three-month look-back at average Brent Crude prices. During Q4, we recognized a total of $34 million of realized gains on FLNG Hilli’s oil and gas derivative instruments, comprised of a:
- $14 million realized gain on the Brent oil linked derivative instrument;
- $12 million realized gain on the hedged component of the quarter’s TTF linked fees; and
- $8 million realized gain in respect of fees for the TTF linked production.
Further, we recognized a total of $14 million of non-cash losses in relation to FLNG Hilli’s oil and gas derivative assets, with corresponding changes in fair value in its constituent parts recognized on our unaudited consolidated statement of operations as follows:
- $12 million loss on the economically hedged portion of the Q4 TTF linked FLNG production; and
- $2 million loss on the Brent oil linked derivative asset.
Balance Sheet and Liquidity:
As of December 31, 2024, Total Golar Cash1 was $699 million, comprised of $566 million of cash and cash equivalents and $133 million of restricted cash.
Golar’s share of Contractual Debt1 as of December 31, 2024 is $1,515 million. Deducting Total Golar Cash1 of $699 million from Golar’s share of Contractual Debt1 leaves a debt position net of Total Golar Cash of $816 million.
Assets under development amounts to $2.2 billion, comprised of $1.7 billion in respect of FLNG Gimi and $0.5 billion in respect of the MKII. The carrying value of LNG carrier Fuji LNG, currently included under Vessels and equipment, net will be transferred to Assets under development in Q1, 2025.
Following agreement by the consortium of lenders who provide the current $700 million FLNG Gimi facility, Golar drew down the final $70 million tranche of this facility in November 2024. Of the $1.7 billion FLNG Gimi investment as of December 31, 2024, inclusive of $297 million of capitalized financing costs, $700 million was funded by the current debt facility. Both the FLNG Gimi investment and outstanding Gimi debt are reported on a 100% basis. All capital expenditure in connection with the 100% owned MK II is equity funded.
Non-GAAP measures
In addition to disclosing financial results in accordance with U.S. generally accepted accounting principles (US GAAP), this earnings release and the associated investor presentation contains references to the non-GAAP financial measures which are included in the table below. We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business and measuring our performance.
This report also contains certain forward-looking non-GAAP measures for which we are unable to provide a reconciliation to the most comparable GAAP financial measures because certain information needed to reconcile those non-GAAP measures to the most comparable GAAP financial measures is dependent on future events some of which are outside of our control, such as oil and gas prices and exchange rates, as such items may be significant. Non-GAAP measures in respect of future events which cannot be reconciled to the most comparable GAAP financial measure are calculated in a manner which is consistent with the accounting policies applied to Golar’s unaudited consolidated financial statements.
These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures and financial results calculated in accordance with GAAP. Non-GAAP measures are not uniformly defined by all companies and may not be comparable with similarly titled measures and disclosures used by other companies. The reconciliations as at December 31, 2024 and for the year ended December 31, 2024, from these results should be carefully evaluated.
Adjusted EBITDA backlog: This is a non-GAAP financial measure and represents the share of contracted fee income for executed contracts or definitive agreements less forecasted operating expenses for these contracts/agreements. Adjusted EBITDA backlog should not be considered as an alternative to net income / (loss) or any other measure of our financial performance calculated in accordance with U.S. GAAP.
Non-cash items: Non-cash items comprised of impairment of long-lived assets, release of prior year contract underutilization liability, mark-to-market (“MTM”) movements on our TTF and Brent oil linked derivatives, listed equity securities and interest rate swaps (“IRS”) which relate to the unrealized component of the gains/(losses) on oil and gas derivative instruments, unrealized MTM (losses)/gains on investment in listed equity securities and gains on derivative instruments, net, in our unaudited consolidated statement of operations.