Golar LNG Limited reports Q1 2024 Net income attributable to Golar of $55 million inclusive of $6 million of non-cash items1, and Adjusted EBITDA of $64 million.
FLNG Hilli maintained 100% economic uptime and market leading operational track record.
FLNG Gimi on standby day rate ready to commence operations for BP.
Framework Agreement announced in our Q4 2023 earnings report now progressed to detailed contractual negotiations for FLNG deployment. Additional FLNG deployment opportunities in advanced development.
0.7 million shares repurchased during Q1 at an average price of $20.87 per share.
Declared dividend of $0.25 per share for the quarter.
FLNG Hilli: Maintained her market leading operational track record, generating $68 million of Q1 Distributable Adjusted EBITDA1, of which Golar’s share was $64 million, a $20 million decrease compared to Q4 2023. Most of the decrease is attributable to a reduction in realized TTF commodity swap gains and lower Brent oil prices.
FLNG Gimi: Moored at the GTA Hub offshore Mauritania and Senegal, ready to commence operations. During April, Golar received its first standby day rate cash payment from March 13, 2024 onwards, paid monthly in arrears. Pre-Commercial Operations Date contractual cash flows are expected to be deferred on the balance sheet and released over the contract term from the Commercial Operations Date (“COD”). The operators, BP and Kosmos, and Golar have reached an agreement in principle to resolve the disputed amounts for pre-COD cash flows from January 10, 2024, subject to final documentation and stakeholder approval. If made effective this agreement will provide Golar with progressive stage payments from January 10, 2024 until COD.
The client’s FPSO has now arrived at the project site. Hookup and commissioning of the FPSO are on the critical path to first gas and are expected to complete in the third quarter of 2024. Commissioning of FLNG Gimi can commence thereafter. FLNG Gimi’s commissioning period is expected to be approximately six months, concluding with COD. Together with the client we are making positive progress in exploring options to bring forward parts of the commissioning process that could shorten this six-month commissioning period. COD triggers the start of the 20-year Lease and Operate Agreement that unlocks the equivalent of around $3 billion of Adjusted EBITDA Backlog1 to Golar and recognition of the contractual day rate comprised of capital and operating elements in both the balance sheet and income statement.
A potential refinancing facility with agreed indicative terms between prospective lenders and Golar is advancing to term sheet and syndication. Golar targets a facility with a higher debt amount, lower margin and improved amortization profile versus the current vessel debt facility.
FLNG business development: Focus on re-deployment of Hilli following the end of her current charter in July 2026, and thereafter ordering and securing commercial terms for a contemplated MKII FLNG.
The framework agreement for potential FLNG deployment (as announced in our Q4 2023 earnings release), has now progressed to detailed contract negotiations for an up to 20-year FLNG deployment. The next steps of the project development include (i) signing of definitive detailed agreements, (ii) obtaining necessary third-party approvals including governmental and environmental, amongst others, and (iii) a mutual Final Investment Decision (“FID”). The FLNG development has a planned start-up during 2027.
We continue to advance additional FLNG developments and see increased prospective client interaction for our FLNG offering. Geographically, most of the activity remains in West Africa and South America, however we are pleased to see other regions with proven stranded and associated gas reserves seek FLNG development. Based on the increased FLNG business development activity we have recruited Federico Petersen as Chief Commercial Officer, and a further two highly experienced maritime and upstream development team members will join later this year. Together they have a combined 70+ years of experience and a successful business development track record.
The MKII FLNG project development continues, with previously ordered long lead items now 58% complete and the LNGC conversion candidate Fuji LNG delivered to Golar on March 4, 2024. Fuji LNG will trade on a multi-month charter ahead of her expected transfer to the yard for FLNG conversion. Work between the topside manufacturer, shipyard and Golar continues to move the project towards a FID. Detailed negotiation for a debt financing facility to be available during the construction period of the contemplated MKII FLNG also continues with prospective lenders and made solid progress during the quarter.
Other/Shipping: Operating revenues and costs under corporate and other items is comprised of two FSRU operate and maintain agreements in respect of the LNG Croatia and Golar Tundra. The non-core shipping segment is comprised of the LNGC Golar Arctic, and Fuji LNG which is now trading on a multi-month charter. Per above, Fuji LNG is a MKII FLNG conversion candidate, whilst Golar Arctic remains a candidate for sale or long-term charter.
Share buyback and dividends: The company continues to see attractive value in its shares and purchased and cancelled 0.7 million shares during the quarter at an average cost of $20.87 per share. As of March 31, 2024, 104.0 million shares are issued and outstanding. Of the $150.0 million approved share buyback scheme, $74.1 million remains available.
Golar’s Board of Directors approved a total Q1 2024 dividend of $0.25 per share to be paid on or around June 17, 2024. The record date will be June 10, 2024.