Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Golar LNG Limited Q2 2023 Results Presentation. After the slide presentation by the CEO, Karl Staubo; and the CFO, Eduardo Maranhao, there will be a question-and-answer session. Information on how to ask a question will be provided then. [Operator Instructions].

I will now pass you over to Karl Staubo. ahead. go please Karl,

Karl Staubo

welcome name LNG's of is accompanied CFO, and and Results Golar XXXX Presentation. I'm Eduardo. our by My Karl today to everyone, QX Golar Earnings LNG, Hi, Staubo, CEO

presentation, the X. into get we please the on forward-looking note Slide statements Before

X, our company overview. we present Slide On

FLNG was We focused changes in contract XX-year for storage suitable carrier option Italy with now The her, has key FLNG conversion. is younger grading capacity, X the in portfolio reviewing lower and an Hilli therefore option operating more to for high a are and charter and Gimi FLNG for Fuji boil-off Fuji. Gandria Arctic This quarter selling Mark start or our more our intended a to we the asset FSRU. convert LNG into an Cameroon and has and the LNG are about and player alternatives MTPA conversion FLNGs; asset to long-term of deliver sale. BP. Snam significantly the our Golar acquiring lapsed candidate, carrier of age X.X July, in including II

company. sponsor, and a currently Our LNG, and small-scale Energies, LNG Golar Golar a is company construction. under gas independent liquefaction targeting as FLNG founded only carrier investments Macaw land-based proven monetization through with technology business small-scale Avenir include proprietary world's the

earnings generation and the exposed upside in Hilli of operational XXX% we vessel unit. increasingly to Slide FLNG. attractive X for time Cameroon market-leading recontracting XX, commodity July for supported illustrate of our the operate near-term in to the off The further Perenco growth utilization. Hilli economic Turning Mark quarter by its flow another and see cash strong the earnings earnings continues until will II potentially with and

capacity only recharter currently nameplate higher combined potential see we significant is capacity, for vessel for of versus utilized Hilli. and utilization, XX% increased with the However, earnings

vessel Hilli and was customer available beyond current the when is entered to the earliest our was the unproven contract FLNG FLNG into current globally, in positioned contract. The increase technology continues as interest

about Our cash BP. CapEx optimizing also Gimi's Gimi in Seatrium Gimi generation, significantly Singapore potential free once see our and XX-year on is from second from significant to FLNG we the debt to to earnings strengthen contract flow a start will for is shift deliver she facility delivered. in

from of contemplated tons Hence, MTPA capacity vessels. ordered start-up our within recontracting Our Mark ordering Mark FLNG. increase we tons and of chartering the deliver at per X.X the II million X operations 'XX two, shifting 'XX. capacity a second CapEx will early the half be vessel XXXX, to for to margin; this a for vessel increase. number from would X.X third FLNG utilization X earnings; and of flow about delivery annum number cash and operational be and II company, of II about year, a during flow triggers Mark late ready million Gimi will cash increased from and liquefaction see Hilli total If XX% three, or

bottom available $X the U.S. competitive the illustratively, have market XXX we from available to up the earnings for export part on can As suggest with current MMBtu from onwards. of XXXX see you of line in early about capacity. this table, Tariffs charter will billion

undeveloped. of margins monetization should However, Hence, that liquefaction higher obtainable. believe gas enable be stranded remain technology FLNG our reserves significantly we would otherwise

all potential in FLNG various resource West deployment, discussion X with currently of Africa for locations significantly at different geographical charters. are better economic We with than which focused than terms around gas current more owners

the now for off confirm have Hilli pleased XXth debt and profile have terms and that financing, the extending its we continued margin highlights duration. time, economic Turning and X finalized to we reducing cargo. and facility improved to quarter. Slide our for offloaded amortization the XXX% the We're Hilli

is development, now contractual the April have this terms specific business setting year. now sail framework fields deployment. out On developed through with expect for during we a development NNPC be September expanded further FLNG of complete, in technically MOU of further to and towards we heads we away potential XX% Gimi entered into joint gas

line potential announcements continues of of incremental should FLNG interaction any resource operation. Nigeria, work. Development the binding of complexity and highlighted the terms commercial negotiations also owners opportunities It offshore including development outside commercial drives government be term of with that gas for of time potential for in gas countries

guiding have Other corporate also our presentation. and of a But QX. we in for Eduardo dividend other, will as quarter, the $X.XX quarterly cover declared that per in first later most of

During also announced our in we've acquired May, shares. canceled buyback $XXX about the program million about have we of X.X million spent and million quarter, and $XX

remain shareholder our to returns We committed continue earnings grow. as enhancing to

to starting We Slide X. will Gimi now on turn business update with

handover mentioned, impact is already is vessel during arbitration certain precommissioning final The process have XX-year the cash continue, ongoing. System and flows on expect the As sail-away is shipyard and with but underway expected to wider complete, contractual a now September. contract we from testing the not regarding XX% BP.

and X. Moving to at transitioning effects the some for the are been delivery with Gimi, of cash we outflows shipyard The delayed the of to due commenced in for now Gimi and And to construction has vessel. COVID suppliers. XXXX earnings Slide

boost half the growth would from X This cash earnings cash come. earnings to earnings we II, with in increase of years. we is to a currently continued flow commodity and all the in is coming the before see years which key FID Gimi of Mark in potential from have Hilli, further not With company a flow. had around CapEx Given sheet, the a that balance going Golar generating assets

to Turning X. Slide

relationship signed for set NNPC gas working in resources include of development in Abuja The August framework to identified heads our terms Nigeria. expanded on X. have of out with heads We commercial terms a of

discussions X the to independent progressing also potential gas deployment Nigeria. addition we're in FLNG owners NNPC, In resource with with

African see are we commercial of and government currently potential countries we owners developments in deployment similar in more countries, than Nigeria, other where FLNG potential having gas the developments resource negotiations of In addition in operation. X to with interaction West opportunities

Hilli FLNG first charter before and FID for secure and to recharter Our priority vessel. search II Mark then the remains

Moving the done to the XX and we've II Mark in development quarter. on Slide a

As conversion announced progress and contingent financing Chinese on for not debt candidate, the acquiring graded we charter. mentioned up a LNG a of our with significant $X.X call, earlier of have to Gandria. Fuji high made FLNG the disposing on and billion, carrier, We've houses facility

work to shipyard with further derisk line construction and We to will continue pricing. time the

to, to that we project lead mentioned as the within will increased have . we this commitments long about We $XXX engineering pre-FID acquisition if work deliver FID through year, items, and Fuji. combination And alluded of our a million of

normalization robust of to fundamentals stopped of Turning prices Slide From perspective, LNG interest support XX. long-term strong We the in macro not future has a gas in position. securing see prices. the

from is long-term on is XX.X% of the as environment the Asian and SPAs. can graph, importers this 'XX, become contracted. of And buying we are see up interest a to into is the which ranging active record. the The pricing Brent-linked show volume Brent. left-hand in XX.X% level continued between XXXX And what in is consequence graph, you highest we of close deals, total middle saw in currently rising price long-term to to XXXX lining in entering terms of

through that sustainable will players That's Brent there Hence, parity. robust to Slide and is XX% the energy demand Energies, elaborate such Macaw trilemma view term However, reportedly manner. done and long doing energy major in BP in to so facing. land Shell solution deals we the XX. on to been offering between part affordable Balancing a of we currently share trying as what LNG energy is world are the we'll security, have on, on which as access capture shorter-term a of XX% of it remain the and

Macaw and operations in development first Commercial according is commercial in to South America. ongoing the with progressing is building and plan, XXXX. U.S. technical momentum clients alongside targeting

positioning gas opportunity already Additionally, above evaluating order for its facilitate is Macaw the we discussions ongoing represents, and that market to to by the beyond provided liquefaction access with several suppliers. In growth from technology commitment alternatives the capitalize on already Golar. gas are to company

I'll the to QX us over the take to now call results. hand Eduardo through

Eduardo Maranhao

very quarter for group on Thanks, pleased Karl, to our good provide second results morning, everyone. XXXX. I'm and the of an update

#XX. over of show to QX had financial 'XX. revenues So operating this of total to I wanted highlights quarter. $XX some X% versus of the We Slide turning up million,

of of TTF gas Brent XX% total compared on key metric result prices derivatives. a we from realized services, FLNG revenues tariffs quarter. and and including non-GAAP a softer is total oil had liquefaction comprised million, $XX QX, previous FLNG tariff in gains As to down of the

back We on a of expect to quarter of this positive prices. higher this item reversal the Brent and TTF see

fees, commodity-linked million, $XX with an contribution We line pretty as before. from lower much also of QX, in I recorded despite adjusted mentioned EBITDA

has May, costs in and reduced Agreement, contributed to Tundra However, adjusted the in Development with which EBITDA. concluded improvement associated corporate been other

sale income million, our as noncash such million million Gandria. $X rate gas net a the $XX had to improvement gains derivatives, of a we as of million impairment quarter, significant included This interest million oil is and $XX of $X $XX QX. losses well figure items upon total of from unrealized unrealized This in compared as swaps a

close the earlier with year. remains includes position hand other of hedges from and $X cash liquidity. our on this liquidity to Our TTF of billion strong That unwinding receivables

billion, net of leaving $XXX Our stood a total of debt position million. shy contractor $X.X at just us debt with

to X provide is This which QX from quarter. down you a can to from fee down with into million, Hilli's a EBITDA. million over line $XX in Hilli. XX. a of TTF-linked from as shows be also a and And Turning which has see, like our $XX adjusted $XX from recap net been million graph of down in quarter, this fixed last We would million, earnings the fee our of tariff totaling $XX the share tariff of components: quarter, previous Brent-linked Slide broken also main historical XX% can

and As of expect that tariffs rest we before, prices mentioned higher increased XXXX. support should oil gas the for I

the Turning August over and till 'XX December. XX. prices that remain we of to TTF Slide to for remainder can see exposed between We

So $X.X we BTU for idea dollar in increase From expect prices. to improve for per XXXX. make million to until TTF to 'XX, this our of every give dollar million $X.X in can an million prices change an earnings of TTF how this additional every will XXXX

$XX million million should tariff for from around we So TTF just this averaged BTU alone. year, per example, make just next $XX if prices

when contribution above barrel that, to $XX addition incremental dollar every it barrel. is to per Brent, for comes $X.X In million per change the

to last tenor May, on discussed negotiate call debt facility end the margin and terms, with and flow As managed of new a contract of in reduction place and amortization approximately June. including our already we amendment current end the profile. release the have These of changes complete in to Hilli improved become effective the Those free are since $XX in expected mid-XXXX. of are additional of cash the until million terms and extension

Now Slide turning over to XX.

Our balance the at level we requirements receivable FLNG allow and our sheet shareholder amount and great flexibility to from time Mark to including for remains progressive a support the close fully same the billion of construction and have fund strong, cash FLNG. II to hedges program. and liquidity, of growth TTF Current for $X equity returns to development the

liquidity to that, addition we fund have that enhance required and Gimi existing both for we including to in order growth, to of further alternatives equity be unlock could so. In several that refinancing significant debt of amount facilities could potentially Hilli do should further

This current As dividend more startup increasing shareholder room in than million per free of generation increase and for Hilli's discussed slide, previous upon program. the fully cash year the $XXX even returns buyback further future. the Gimi's creating flow supports will on

have we XX. quarter, XX declared of August August date payment This a of a with $X.XX share and a on dividend or about record

million announcement $XX $XX. of XXX we million program Following around After end shares $XXX we shares at average had spent at X.X of buyback repurchasing in the million, our an of outstanding. have price that, the million June, May,

now call over some closing remarks. to Karl the hand I'll for

Karl Staubo

contribution Slide with the from Thank you, our portfolio Gimi to see from on from commodity-linked Eduardo. increased the existing and Hilli. earnings turning earnings summary. off cash from moving And flow for left-hand XX significant growth to future CapEx asset we Starting side,

all can from service, of you the above bars to equates the line, So cash graph, represents total flow free green which to see debt the equity.

attractive an annual pricing X Turning which around million current tons per cost would around million at capacity $XXX in ton, shore-based standing currently the of is half left, have to to over of what we develop projects EV on liquefaction liquefaction U.S. bottom

have a we shy the cash debt to Turning to us right, to $X top billion. enables $XXX at sheet grow sits Current that of company. Total balance around at continue million. net just

million $XX dividends quarterly and shareholder of been during has QX. program, through buyback We $XXX returns have million spent initiated which -- in

namely using distributing for to X.X our II increasing while FLNG free flow our sheet We MTPA plan equity Mark an to growth shareholders on projects, capacity. of of the balance amount with capacity cash FLNG through

capture subject right, an We XXX bottom CapEx if per particular, have deploy West than onwards, in in we available XXXX rates. reserves, gas the to This illustrative discussion. to CapEx in our On to capacity be well areas different stranded the also to versus on we presentation. what positioned monetization at of liquefaction EBITDA more geographical multiple x-axis EBITDA margin MMBtu the in other multiple, MMBtu Africa, QX with believe that from would we're but of earnings concludes various

now any in, hand operator questions. and listening for call for you we'll Thank the the to over

Operator

Instructions]. [Operator

is The from from first Ben Nolan question Stifel.

Benjamin Nolan

how a on is with from of how of your know, it a maybe and understanding are contract, a is? change close Or we I that trying move the transition is first is agreement that when to -- me. just, opinion? -- heads do definitive -- had you for the it frame of a to to I terms understand think the a okay, of to in big or moving you final -- in meaningfully the heads memorandum Nigeria don't closer Is hopefully moving terms, that's

Karl Staubo

for Nolan, thanks the question.

recipe is we the independent how have FLNG. one different The were with fix provider with Golar no Perenco one they two of in and contracts, only in on FLNG there and world nature. done So, BP an is and to

side. with you an first, sign NNPC it way NNPC particular resources unlock on is discussions works in MOU the to the ongoing the on However,

a Following and Nigeria, how framework over series -- in a late the framework of named for these unlocking resources in developed commercial London develop to in have meetings April and of together we resources.

agreed to heads framework, We through that's then and the been commercial signed terms. what's have that of up

work, terms, particular, heads we of By these for to signing NNPC unlock develop the projects. allocate then resources of further in further set another to

it's FLNG these that in the it's or nature, but or all Given developing the when difficult in certainly on how different of guide to projects direction. material, are exactly right how

Benjamin Nolan

contract helpful. talk on year, my same a to if able that the before you same reasonable Okay. second on That's on is in about just mind. end the curious a Mark available asset sort of you II the about year then you for stay Hilli of would get before secure being could time it XXXX. II of talked you that you're question, first it contract I'm the if time, think to the XXXX and end -- the In And the think be the Mark that sort of at frame.

Karl Staubo

to will without if contract. just II with we Hilli, we so recharter the And Mark contract proceed clarify,

Hilli You II Mark don't need and to contracted. both see

we II. and increasingly on $X I billion add pipeline, of think Mark just It's the projects having worth before we all for a with matter the have to reward balanced of ourselves on in see of a we confident rechartering Hilli the CapEx. risk attractive both of charter an close

Benjamin Nolan

that implication that think fair? I Is that end year, you guess that the of unreasonable. Okay. don't would the by this be is But,

Karl Staubo

That's what towards, we're yes. working

Operator

from [Operator Chris is Instructions]. And question from Deutsche Bank. the next Robertson

Christopher Robertson

Karl, follow just question Ben's. my to up is a

with looking work Mark that be asset the well with to Hilli at as II there Just as of potential the done NNPC, scope NNPC. might deploy is

Karl Staubo

to have country. deploy in They FLNGs gas Yes. than enough multiple more

Christopher Robertson

that other the in that are all with X countries any conversations looked or those kind in the at in are you're being negotiations resources of involved of or looking then And at? there IOCs right. guess, do All NOC Yes. Okay. or involved I entities now,

Karl Staubo

include but it's them But Yes. on NOCs, mainly of IOCs. some also focused

Operator

Chris Research Tsung from is & Advisory. question from next the Webber And

Chris Tsung

coming West other just or IOC on in how projects NNPC we have? be all Or or tolling NOCs like those And Will a Golar much like partners like Africa. integrated? expect we be up expect, and questions to to your that, it as some up we the could board. follow should how following Just XXX%? see should Will on ownership

Karl Staubo

Okay.

exposure, of none tariff the are fixed Hilli, fully or like but a that like why more a sorry exposed tariff of integrated -- They the pursuing we fixed we're or some to lot commodity you charters The IOCs even all is reason that So commodity. with Gimi. sharing a downside projects if more that to see and in the have to way with structure the the project it's -- we easier get better economics look is with upside in NOCs. that either

can As what as Brent, long always movements as we targeting. JKM that to linkage is pricing paper or done market, such and such derisk that's highly in similar international price liquid we're the indices, with TTF,

owner them, of to as basically shared The offtake it's them, then -- We it's enough upstream you NOC If on life, or case, of In big vessel to have the Golar both then achieve Most and remaining the owner and we Hilli needs on economics resource the some as to whether to slim And well. project be of the the the remains the of economics is that the that the be value possible. treatment. the it charter in project. as same. of chain across FLNG. gas II. share certainly side remains being Mark gas terms depends In discussed to work pricing, for to have

Chris Tsung

the like commissioning, producing first And arise would BP in from up next starts earning on going is Great. taken BP what's Kosmos' calls? vessel contract, for and year keen just contingent Gimi QX on it Okay. site? probably when from Or your the on on

Karl Staubo

the parts there other the infrastructure. as of project once Golar's will to And parts the be of start and responsibility delivered are are the it than possible, site work hub. delivering we status we not however, the running FLNG on And of around Golar FLNG. safely focus actively or the as other taking the incentivized to up be infrastructure. project, fair of to so is site think arrive contract risk of not the into soon irrespective any of other It flow that -- and have the part at cash table for that is, say parts project the mechanisms to the we then that comes to but I deliver everybody When is to

Operator

further for hand Mr. conference no I to will are Staubo questions. back closing remarks. the There

Karl Staubo

Thank you Thank to you I all of hope dialing hope day speak a soon. in. for good you to all have very very, and you.

Operator

That concludes you for the for today. conference participating. Thank

all may You disconnect.

Golar LNG Limited (GLNG) 10 Aug 232023 Q2 Earnings call transcript