Total Q4 operating revenues of $115.0 million and Adjusted EBITDA1 of $93.5 million.
FLNG Hilli: Increased earnings from Brent Oil linked production, realized income increase of 45% on prior quarter to $12.9 million in Q4. Further 2022 earnings upside from Dutch Title Transfer Facility (“TTF”) linked production.
Formation of Cool Company Limited (“CoolCo”) will reduce Golar’s Contractual Debt1 by approximately $833 million and will improve Golar’s cash and marketable securities position by $342 million.
Entered into a new $250.0 million undrawn corporate bilateral facility with Sequoia Investment Management to further increase financial flexibility and facilitate FLNG growth.
Simplification process concluded, focus shift to FLNG growth projects.
Awarded 2021 winner of North America Best ESG Energy Business Strategy by Capital Finance International.

The formation and funding of LNG shipping pure-play CoolCo marks the last major step of Golar LNG Limited’s (“Golar” or “the Company”) corporate simplification process. Over the last 12 months that process has involved the sale of assets and subsidiaries for a total enterprise value of approximately $6.2 billion and the refinancing of around $1 billion of debt. This has crystalized underlying value and significantly strengthened our cash and marketable securities position to more than $1.1 billion, facilitating attractive future growth. Golar will now focus on further increasing the value generated by FLNG Hilli and delivering FLNG Gimi to BP. We will seek further FLNG growth projects, leveraging on our market leading track record of FLNG development, construction and operations. We continue to make significant progress on new FLNG projects with existing and new prospective clients and expect a contract award within 2022.

The FLNG Hilli achieved another quarter of 100% commercial uptime. As announced in July 2021, production has seen a 0.2MTPA increase, effective Q1 2022, where the tariff for the incremental production is linked to TTF gas prices. Based on expected TTF linked earnings for Q1 of $22.1 million, $19.0 million for each of Q2 and Q3, and a current Q4 TTF forward price of $29/MMBtu, Golar’s share of Hilli’s 2022 TTF linked income is expected to be approximately $80 million. This can be expected to increase (or decrease) by $0.9 million for each $1.00/MMBtu change in the TTF forward price. Current customer of FLNG Hilli, Perenco is progressing with its drilling campaign with the purpose to take advantage of its one-time three year option expiring in July 2022 to increase production by up to 0.4mtpa from 2023-2026 on the same TTF linked tolling agreement.

FLNG Gimi is 80% technically complete. Pre-commissioning and testing of multiple systems is now underway with construction on track to meet the scheduled 2023 start-up date for the 20-year lease and operate agreement with BP. This will unlock around $3.0 billion of earnings backlog1 to Golar. Assuming current Brent oil and TTF prices prevail and Perenco is able to support production of 1.6mtpa from 2023, Golar’s share of annual Adjusted EBITDA1 generation from Hilli and Gimi could exceed $400 million within 3 years, a quadrupling of 2021 FLNG related earnings.

The formation of CoolCo enables an attractive business separation of Golar’s 8 TFDE1 vessels, creating a leading market player for LNG shipping. By separating shipping activities from the FLNG segment, we allow for pure play exposures that may facilitate faster and more attractive growth for both business segments. Golar shares the enthusiasm of 38% CoolCo owner EPS Ventures Ltd. for further consolidation in the sector and sees some interesting near-term opportunities. As a result of the CoolCo transaction Golar will de-consolidate approximately $832.9 million of year-end Contractual Debt1 associated with the 8 TFDE1 vessels upon closing, expected during Q1 2022. Golar also expects to receive a cash settlement of approximately $217 million, whilst retaining meaningful exposure to an expected continued strengthening of LNG shipping fundamentals. Golar will equity account for its approximate 31% interest in CoolCo upon closing of the sale and purchase agreements.

The Company will continue to explore conversion, sale, or charter alternatives for its remaining steam turbine vessel Golar Arctic, and TFDE1 FSRU Golar Tundra. Golar Tundra is one of the highest-spec large FSRUs available in the market for potential charterers looking to secure a rapid backup source of gas. Recent political developments have enhanced the attractiveness of this position.

Q4 highlights and recent events

Financial and corporate:

Profitability: Net income attributable to Golar of $6.8 million, and Adjusted EBITDA1 of $93.5 million for the quarter, including:
A $51.6 million non-cash mark-to-market loss recognized on New Fortress Energy Inc. (“NFE”) shares based on a December 31, 2021 carrying value of $24.14 per share.
A $32.9 million non-cash gain recognized on Hilli Brent oil and TTF natural gas linked derivative instruments.
A $12.9 million realized gain on the Hilli Brent oil derivative. This is expected to further increase to around $16.5 million in Q1 2022.
Hedges: Entered into swap arrangements to hedge 100% of Golar’s exposure to Q2 and Q3 incremental Hilli TTF linked 2022 production at an average TTF price of $25.375/MMBtu.
Financing facilities:

Unsecured Bond: Successfully placed USD $300.0 million Norwegian Bonds in October 2021.
Convertible Bond: $315.6 million net outstanding balance of 2.75% $402.5 million Convertible Bonds as of December 31, 2021 redeemed on February 15, 2022.
Credit Facility: $100.0 million December 2021 maturing Revolving Credit Facility (“RCF”) repaid in November 2021. $131.0 million of new $200.0 million 3-year corporate RCF drawn on February 4, 2022.
New Corporate Facility: Executed a new $250 million 7-year bilateral corporate facility with Sequoia Investment Management on February 11, 2022, secured by Golar’s shareholding in FLNG Hilli and Gimi.
Golar Tundra Loan: $158.0 million 5-year Golar Tundra facility that can be increased to $182.0 million executed in December 2021.
CoolCo financing: agreed a new sustainability linked $570 million bank facility to finance the acquisition of 6 of the 8 carriers that CoolCo is acquiring from Golar. $240 million of existing lease financing on two vessels will be transferred to CoolCo.
FLNG:

Utilization: Industry leading operations maintained with 100% commercial uptime by FLNG Hilli.
FLNG Hilli now producing additional 0.2mtpa of agreed TTF linked 2022 production. Customer drilling campaign in progress to prove up additional reserves.
Construction: FLNG Gimi conversion project 80% technically complete. Over 16-million man-hours worked with very strong safety record.
Commercial: Continued progress on new FLNG projects with existing and new prospective clients. The Company expects a further contract award before year end 2022.
Hilli earnings insulated from inflation by virtue of Brent oil and TTF commodity links. Gimi earnings protected by operating cost pass through provisions in contract.

Shipping:

Shipping Rates: Q4 2021 TCE1 of $57,300 for the fleet, up 16% on Q3 2021 and 17% on Q4 2020.
Utilization: Fleet utilization at 99%, in line with Q3 2021 and up on the 77% realized in Q4 2020.
Time Charter: Fixed a carrier on a 12-month charter at around $100,000 per day in October 2021.
Outlook: Attractive longer term rates hold up on the back of limited available tonnage despite near-term weakness in spot rates due to seasonality and fluctuations in regional LNG prices.
Source: Golar LNG