PRELIMINARY FOURTH QUARTER AND FINANCIAL YEAR 2010 RESULTS
(Thomson Reuters ONE) -
Highlights
· Golar LNG Energy reports a net loss of $14.6 million for the fourth quarter
of 2010
· Good progress with West Java FSRU project; Khannur en route to the shipyard
for conversion
· FSRU market activity remains strong with Golar short listed for a number of
projects
· Golar Energy charters out 4 vessels at attractive rates for periods between
12 and 18 months
· Further tightening of spot and short-term LNG shipping market during the
quarter
Financial Review
Golar LNG Energy Limited ("Golar Energy" or the "Company") reports a net loss of
$14.6 million and operating loss before depreciation and amortisation of $2.3
million for the three months ended December 31, 2010 (the "fourth quarter").
Revenues in the fourth quarter at $16.1 million decreased from $19.1 million for
the third quarter of 2010 (the "third quarter"). The reduction was primarily due
to no revenue in the fourth quarter for the Gimi and Khannur the charters for
which ended in the third quarter. However, this was partly offset by an improved
performance from the vessels operating in the sport market. Overall utilisation
for the fourth quarter was up at 90% as compared to 71% for the third quarter
and fourth quarter average daily time charter equivalents ("TCEs") were $29,819
as compared to a second quarter TCE of $27,036.
Voyage expenses of $3.1 million were $1.4 million lower than the third quarter
due to improved utilisation and therefore lower fuel costs incurred by the
Company.
The loss arising on transfer of asset to parent is a non-cash item and relates
to the completion of the transfer of the Golar Freeze back to Golar LNG Limited
as a result of the ending of the leasing arrangements. The lease obligation,
capital lease asset and restricted cash have now been removed from the Company's
balance sheet. The loss arises as a result of the effective reversal of previous
credit to amortisation.
The other operating expense of $2.9 million represents realised losses on
physical cargo trades, financial derivative contracts and proprietary trades
transacted by Golar Commodities that primarily relate to cargo transactions
entered into in the third quarter.
Net interest expense for the fourth quarter of $2.0 million was down from $2.8
million in the third quarter.
Impairment of long term investments of $3 million represents a write down of the
Company's cost of investment in TORP LNG AS.
The net gain on sale of investee of $2.4 million represents the sale of the
Company's remaining 7.1 million LNG Limited shares for a total consideration of
$4.2 million.
The Company has entered into arrangements during the quarter to end the leasing
arrangements in respect of the Hilli, Gimi and Khannur via the acquisition of
the companies that lease the vessels to Golar Energy. The lease obligation and
the related restricted cash have therefore been removed from the Company's
balance sheet.
For the twelve months ended December 31, 2010 Golar Energy reports net loss of
$45.5 million, operating loss of $30.3 million and operating revenues of $64.2
million as compared to, a net loss of $2.2 million, operating loss of $1.1
million and operating revenues of $33.9 million for the period ended December
31, 2009. The Company was however dormant until August 12, 2009 and so 2009
comparable numbers only reflect trading from this date.
Financing, corporate and other matters
At the time of the Company's IPO in August 2009 12,000,000 warrants were issued
to subscribers of which a total of 9,421,440 were exercised on December
15, 2010. The Company subsequently issued the same number of shares, at $2.00
per share, on December 22, 2010. After the issuance of these new shares, the
total number of shares outstanding is 237,764,540. The Company owns a total
483,627 of its own shares.
The Company has a debt maturity on the financing in respect of the vessels
Hilli, Gimi and Khannur in April 2011 with a final payment due of $30 million.
The Company has received refinancing offers for this debt and is currently
considering various options.
During the quarter Golar Energy sold its remaining 7.1 million LNG Limited
shares giving rise to a gain in the fourth quarter of $2.4 million.
Golar Energy announces that Oscar Spieler is to step down from his capacity as
CEO and that Doug Arnell will take over the role of CEO of Golar Management
Limited with effect from March 1, 2011. Mr. Arnell is currently Chief Commercial
Officer and Deputy CEO of Golar Management having joined the Company from BG
Group in September 2010. Mr. Spieler will remain involved in Golar as an advisor
to the Board and Management. The Board wishes to thank Mr. Spieler for
his solid contribution to the success of Golar Energy from its inception as a
public company in 2009.
Shipping
Over the last quarter of 2010, the LNG shipping market tightened dramatically.
Surplus tonnage was reduced as new production projects started-up. Charterers
have therefore opted to declare any available options, due to option period rate
advantage and a need to cover forward positions in a tightening market.
Vessel availability has now reached a level of tightness not seen in the market
for several years. In the spot market, charterers have had to secure tonnage on
a round trip cost basis and are currently chartering on a rate nearly three
times more than that which existed for summer spot fixtures.
The bullish shipping sentiment is also apparent in mid-term shipping with rates
having improved further and a number of vessels, including some of Golar
Energy's vessels, having been fixed on charters of between 12 and 18 months at
attractive rates. For Golar Energy this has been an opportunity to lock in cash
flow at good rates whilst maintaining exposure to a further improving market in
2012.
Currently available shipping does not necessarily provide the flexibility
required to meet charterers needs. Those parties used to fixing short term
shipping deals will struggle, particularly during periods of peak demand and
instead have to focus on DES deals.
At the quarter-end the fleet stood at 366 vessels including FSRUs and regas
vessels with a further 27 on order. The limited order book and the increased
production coming on stream in the next few years supports a tight supply /
demand balance with interesting opportunities for open shipping capacity.
Regasification
Negotiations are progressing smoothly between Company and Nusantara Regas to
finalize the FSRU time charter party for the West Java FSRU project. The project
represents Golar's fourth FSRU project and is for a period of approximately 11
years with an approximate contract value of $500 million. The project scope
involves the conversion of Golar Energy's 1977 built LNG carrier Khannur into an
FSRU with 500 MCFD (million cubic feet per day) regasification capacity
(approximately 3.8 MTPA) and the provision of associated mooring infrastructure.
Since being selected for the project in October 2010, the Company has entered
into a Letter of Intent and Project Continuation Agreement which provide the
Company the financial security from Nusantara Regas to proceed with detailed
engineering and procurement activities of long lead items in order to maintain
the scheduled delivery date while finalizing charter party negotiations.
FSRU and mooring detailed engineering, procurement and construction related
activities are well underway. Detailed engineering is progressing according to
schedule. The majority of critical long lead items have been ordered.
In general, activity within the FSRU market is becoming more firm. Over the last
quarter Golar Energy has been pre-qualified for the both the Medan LNG FSRU
project in Indonesia and the Bahrain Petroleum Company (BAPCO) LNG project.
Additionally, a number of discussions are underway with credible project
developers with the possibility of new tenders in the coming quarter. Based on
the current market the Company believes that it should be in a good position to
secure at least one further FSRU contract over the next 12 months.
Golar Commodities
Golar Commodities spot activity during the fourth quarter was limited to
residual transactions from its third quarter cargoes as well as building on
existing customer relationships and establishing new ones. Golar Commodities
continued to actively pursue spot market trades but poor risk and reward
characteristics of opportunities during the period hampered further trades. A
number of potential transactions involving short and mid-term LNG supply, short
and mid-term off-take as well as asset optimization opportunities are currently
being advanced. These opportunities would be under non-standard structures for
the industry that create value and/or significantly reduce physical and
financial risk for Commodities' prospective customers.
Given the risks, uncertainties and illiquidity associated with LNG trading,
Golar Commodities will take a measured approach to its trading activities;
especially during its ramp-up phase. A prudent approach to selecting its
initial positions in a highly deliberate manner should ensure more certain
success and avoid large risks.
Tremendous expected growth of LNG, though still with significant structural
inefficiencies, coupled with the industry achieving a certain critical mass and
fungability is providing numerous opportunities to create value and reduce risk
for Golar Commodities' customers. Expected growth of over 60% in LNG volumes
over the next decade affords a patient, methodical approach to increasing
activity within a highly disciplined framework.
The earnings and prospects of Golar Commodities have been negatively influenced
by the tightening of the LNG shipping market. However, the Board still sees good
opportunities for solid economics for longer term cargo deals.
Golar Commodities has recently added shipping exposure with the target of using
this capacity to secure cargo trades. Results from this activity should be
recognisable in the second quarter of 2011.
Market
Qatar completed two additional liquefaction trains during the quarter and now
has a total production capacity of 77 million tonnes per annum (MTPA). Qatar is
now the world's largest LNG supplier but by 2015 increasing coal-bed methane
(CBM) projects in Australia should lead incremental supply as Qatari volumes
stabilise. In late October, approval was given for two CBM projects led by BG
and Santos providing for an additional 16 MTPA to be commissioned by 2015.
In 2011 and 2012 the new Qatari trains will continue to ramp up as will new
additions in Angola, Australia (Pluto), Peru, Yemen and Tangguh - which are
envisaged to reach full production in 2012. Whilst Nigerian volumes will
continue their recovery it is anticipated that Algeria, Egypt, and Indonesia
will continue to face production difficulties.
Many of the new LNG projects had contracts to supply the U.S. however the rising
importance of shale gas in the U.S. has forced these projects to find new
markets for their LNG. This is positive for floating regasification as new
markets will need regasification solutions. Shale gas is now also driving
potential production projects in the U.S. with existing import facilities now
being developed as projects offering bi-directional flow using increased
domestic reserves to target more lucrative international LNG markets.
Extreme cold weather in both Northwest Europe and Northeast United States and
outages at Bonny, Nigeria, and Hammerfest, Norway, have ensured that demand
reached high levels during the fourth quarter in the Atlantic Basin. However,
Asian buyers continued to resist increasing bids to compete with Atlantic
buyers.
Prices at UK NBP rose past $10 per MMBtu in December on the back of a cold spell
that broke records for gas demand. UK LNG terminals reached an all time high,
but with temperatures easing, prices softened and demand switched to the Far
East. Nonetheless, in the first 15 days of January, an unprecedented 15 cargoes
arrived in the UK.
Despite the influence of shale gas production in the U.S. going forward North
American markets will continue to be the swing destination for LNG due to the
size, liquidity and storage capability that allow it to absorb cargoes on short
notice. As new LNG projects come on-stream, U.S. markets will be needed to
absorb some of the excess production.
However, there are also strong emerging markets (in Asia and South America for
example) that continue to underpin future demand growth. Petrobras imported 36
cargoes last year and in Argentina 11 cargoes will be taken over their off-peak
period. With the second Argentinean LNG import terminal, Escobar, starting in
mid 2011 it is envisaged that ENARSA will need upwards of 50 cargoes for their
2011/12 contract year.
Outlook
The time charter rates achieved for Golar Energy's four modern LNG vessels will
result in a combined annualized EBITDA contribution of all four vessels derived
from these time charters of approximately $80 million per annum based on assumed
levels of operating cost per year.
All four charters have terms which will result in the vessels coming off hire
during 2012 when the Company is optimistic that the LNG shipping rates will have
shown further improvement.
Golar Energy vessels Gimi, Hilli and Gandria will remain in layup through the
first part of 2011. The Company is considering the possibility of re-introducing
these vessels into the shipping market in addition to them being prime
conversion candidates for the long list of potential marine-based LNG
infrastructure opportunities. Golar LNG Energy also continues to seek
opportunities for deployment of its older vessels as LNG storage candidates and
is progressing on the development of floating integrated LNG power solutions.
The Company does not foresee any let up in the growth trajectory of potential
FSRU projects. Active developments are on-going in literally every corner of
the globe. Golar's FSRU execution model which offers competitive price certainty
and fast-track conversions should encourage successful investment decisions for
project developers. The strong development in oil prices and the delinking of
oil and gas prices makes gas projects financially very attractive.
In view of the improved market situation the Company has started an evaluation
of different growth strategies. This evaluation includes organic growth as well
as acquisition of additional capacity. Golar Energy is currently actively
looking at several ways to increase the size of the Company. A decision and
implementation of this strategy is targeted for the first half of 2011.
One of the Company's vessels is due to be drydocked in the first quarter of
2011 however, this is expected to be more than offset by improved earnings from
the Company's four modern vessels operating in a much strengthened spot market
and delivering to their new charterers during the first quarter.
The Board therefore expects the operating results for the first quarter of 2011
to show solid improvement and is excited about the current underlying
strengthening of the fundamentals in the LNG market.
Forward Looking Statements
This press release contains forward looking statements. These statements are
based upon various assumptions, many of which are based, in turn, upon further
assumptions, including examination of historical operating trends made by the
management of Golar LNG. Although Golar LNG believes that these assumptions were
reasonable when made, because assumptions are inherently subject to significant
uncertainties and contingencies, which are difficult or impossible to predict
and are beyond its control, Golar LNG cannot give assurance that it will achieve
or accomplish these expectations, beliefs or intentions.
Included among the factors that, in the Company's view, could cause actual
results to differ materially from the forward looking statements contained in
this press release are the following: inability of the Company to obtain
financing for the new building vessels at all or on favourable terms; changes in
demand; a material decline or prolonged weakness in rates for LNG carriers;
political events affecting production in areas in which natural gas is produced
and demand for natural gas in areas to which our vessels deliver; changes in
demand for natural gas generally or in particular regions; changes in the
financial stability of our major customers; adoption of new rules and
regulations applicable to LNG carriers and FSRU's; actions taken by regulatory
authorities that may prohibit the access of LNG carriers or FSRU's to various
ports; our inability to achieve successful utilisation of our expanded fleet and
inability to expand beyond the carriage of LNG; increases in costs including:
crew wages, insurance, provisions, repairs and maintenance; changes in general
domestic and international political conditions; the current turmoil in the
global financial markets and deterioration thereof; changes in applicable
maintenance or regulatory standards that could affect our anticipated dry-
docking or maintenance and repair costs; our ability to timely complete our FSRU
conversions; failure of shipyards to comply with delivery schedules on a timely
basis and other factors listed from time to time in registration statements and
reports that we have filed with or furnished to the Securities and Exchange
Commission, including our Registration Statement on Form 20-F and subsequent
announcements and reports. Nothing contained in this press release shall
constitute an offer of any securities for sale.
February 28, 2011
The Board of Directors
Golar LNG Energy Limited
Hamilton, Bermuda.
Questions should be directed to:
Golar Management Limited - +44 207 063 7900
Doug Arnell - Chief Executive Officer
Graham Robjohns - Chief Financial Officer
Brian Tienzo - Group Financial Controller / Investor Relations
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Golar LNG Energy Limited via Thomson Reuters ONE
[HUG#1493271]
Datum: 01.03.2011 - 08:46 Uhr
Sprache: Deutsch
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