Golar LNG Limited (GLNG) Earnings

Management highlights

### Strategic Growth and Fleet Expansion - Finalized a firm order for the fourth GOLAR-controlled Mark II FLNG unit, to be constructed at CMC Raffles Shipyard in China (the same yard building the existing FLNG Esperanza), with delivery scheduled for 2029. This order increases GOLAR's total controlled liquefaction capacity from 8.6 million tons to over 12 million tons per annum, a 41% increase. - Secured an option for an additional incremental Mark II FLNG at CMC Raffles, and signed a letter of intent (LOI) with Citrium Shipyard in Singapore to reserve slots for further Mark I or Mark II FLNG units, creating a clear replicable pathway to expand the fleet to up to 7 total units. - Regained the position as the global market leading owner of FLNG capacity, with higher total controlled capacity than peer ENI, and remains the only proven provider of FLNG as a service. ### Operational Performance Highlights - The Hilli FLNG unit completed its 8-year contract offshore Cameroon with 100% economic uptime over the full contract term and 156 total cargoes delivered; it is now in transit to Singapore for modifications ahead of its 20-year contract in Argentina, scheduled to start in H2 2027. - The Gimi FLNG unit continues to outperform, producing 15% above contracted capacity in Q2 2026, with 41 total cargoes delivered to date; full-year 2026 production is expected to remain meaningfully above contractual levels. - The FLNG Esperanza (third Mark II unit under construction) is 74% complete, remains on schedule and on budget, with over 15 million man-hours completed with no lost-time incidents; it remains on track for sailaway at the end of 2027 and startup in Argentina in H2 2028. GOLAR has invested $1.3 billion in cash equity in the conversion project, against a total budget of $2.2 billion. ### Balance Sheet and Capital Allocation - As of Q2 2026, GOLAR has approximately $1.5 billion in total available liquidity, including a new $600 million undrawn revolving credit facility secured in July 2026. Total cash at quarter end was $900 million, with net interest-bearing debt of $1.8 billion. - Optimizing financing for the Hilli unit and locking in long-term financing for the Esperanza could release up to $2.3 billion in incremental liquidity, providing sufficient capacity to fund the fourth FLNG unit while preserving flexibility for further growth. GOLAR declared a Q2 2026 quarterly dividend of $0.25 per share, consistent with its capital allocation framework focused on shareholder returns. ### Market Position and Industry Dynamics - GOLAR management projects the global LNG industry will grow 40% between 2026 and 2031, with supply concentration increasing as the US and Qatar expand their combined global market share from 40% to 53%. Geopolitical uncertainty has created strong demand for supply diversification, and FLNG enables new exporting countries to monetize stranded gas reserves, with 6 current LNG exporters relying entirely on FLNG technology. - The fourth FLNG unit will be the earliest available new liquefaction capacity globally, 1-2 years ahead of competing alternatives, as other major shipyards (Samsung, Wiesen) are fully booked into the 2030s, and long-lead critical equipment faces significant industry-wide delivery delays and competition from other sectors including AI data centers and aerospace. ### Earnings and Contract Backlog - GOLAR currently holds a total EBITDA backlog of $17 billion before commodity upside and inflation adjustments, across the Hilli, Gimi, and Esperanza units contracted through 2045. If the fourth unit is contracted on terms similar to the Esperanza, annual run-rate EBITDA could increase 50% to over $1.2 billion by 2030 (before commodity upside). - GOLAR's contracts include meaningful commodity price upside: GOLAR receives 25% of FOB LNG prices above $8 per million BTU on the Hilli and Esperanza charters, plus additional exposure via its 10% stake in CESA (the Argentine project counterparty). Every $1 per million BTU above $8 generates up to $100 million in incremental annual earnings, with recent LNG price strength potentially adding up to $500 million per year in incremental upside during the first three years of CESA operations.

Guidance

- Base annual run-rate EBITDA of approximately $800 million by 2028 (before commodity upside and inflation adjustments) once Gimi, Hilli, and Esperanza are fully operational. If the fourth FLNG unit is contracted on terms comparable to Esperanza, annual base EBITDA is projected to increase 50% to more than $1.2 billion by 2030 (before commodity upside). - Commodity price upside adds significant incremental earnings: at $10 per million BTU, annual EBITDA would reach ~$1.4 billion; at the current 2027 forward price of $15 per million BTU, annual EBITDA would reach ~$1.9 billion. - The Hilli unit's refurbishment and redeployment to Argentina has a unchanged capex budget of $350 million, with the unit scheduled to start its 20-year contract generating $285 million of annual EBITDA (before commodity upside) in H2 2027. - Management maintains its target return profile of 5-6x capex to EBITDA for new FLNG units, and maintains its policy of only ordering one open (uncontracted) FLNG unit at a time, with leverage (net debt to EBITDA) expected to remain in the 3-3.5x range after adding the fourth unit, consistent with prior targets.

Segment performance

GOLAR LNG operates as a pure-play FLNG infrastructure company, having completed its final legacy O&M contract for the FSRU Italis LNG in Q2 2026. Total operating revenue for Q2 2026 was $130 million, and total EBITDA increased 20% quarter-over-quarter to $127 million, up from $106 million in Q1 2026. Net income for Q2 was $56 million, bringing year-to-date 2026 net income to $158 million. The only operating revenue generating segment is FLNG services, which contributed 100% of total revenue in the quarter. The FLNG Gimi unit delivered 15% above contracted base rate earnings in Q2, while the Hilli unit generated $37 million in commodity-linked earnings during the quarter, up from $10 million in Q1 2026.

Risks & headwinds

- Long lead critical equipment for FLNG units faces significant cost inflation and delivery delays, driven by competition for supply from AI data centers, shipbuilding, and the aerospace industry, which could increase costs and extend delivery timelines for future units. - Geopolitical instability in major LNG exporting regions creates market uncertainty, though GOLAR frames this as a driver of demand for FLNG-led supply diversification. - Securing long-term charters for new FLNG units requires navigating regulatory hurdles, including export licenses, environmental permitting, and tax regime clarification in new exporting countries, which can delay project launch. - Cost inflation for construction and equipment has already pushed the fourth FLNG unit's capex 10% higher than the Esperanza's budget, though management notes this increase is lower than broader industry cost inflation over the past two years.

Analyst Q&A

• Q: What is the path to securing a long-term charter for the fourth FLNG, what is the target return profile for the unit, and how fast could GOLAR grow to a 7-unit fleet? /

  A: Management ordered the Mark II design to align with the strongest charter interest, with a target 20-year contract duration and 5-6x capex to EBITDA returns. The key milestones to a signed contract are: 1) signing a term sheet/framework agreement, 2) signing a definitive contract, 3) satisfying all conditions precedent including regulatory approvals. GOLAR maintains the policy of not ordering the next uncontracted unit until a long-term charter is secured for the current open unit, with capital recycled from asset-level financing of de-risked units to fund subsequent expansion. GOLAR already has optionality locked in for up to 3 more units beyond the fourth, at CMC and Citrium, in any sequence.

• Q: What drives shipyard selection for future units, and what explains the $250 million capex increase between the Esperanza and the fourth Mark II unit? /

  A: Management is comfortable with both CMC and Citrium, so selection will ultimately depend on price, payment terms, delivery timing, and any charter counterparty preference. The 10% capex increase is driven primarily by 40-60% cost inflation for long-lead equipment, plus smaller impacts from steel prices and currency fluctuations. The $2.45 billion capex for the fourth unit is all-in delivered cost to the project site, including EPC, crew training, transport, and mooring systems, and the 10% increase is far lower than broader industry construction cost inflation.

• Q: Why did GOLAR select the Mark II design for the fourth unit, and when do the expansion options expire and what is their delivery timeline? /

  A: The Mark II was selected because it has the strongest charter engagement for near-term deployment, offers the most attractive capex per ton and opex per MMBTU, and aligns with current market demand from prospective charters. Management does not disclose expiration dates for the options for commercial sensitivity, but delivery for any additional ordered units would take approximately 38-40 months from order.

• Q: What is the status of the ongoing strategic review, and can multiple units be deployed to the same geographic region? /

  A: Multiple FLNG units can absolutely be deployed to the same region, with Argentina already planning for additional capacity beyond the two contracted units, and Mozambique also progressing two-unit projects. The strategic review remains ongoing, with the dual goals of addressing the public market valuation discount and accelerating FLNG growth. Today's growth announcement advances the acceleration goal; management will not comment on timing or outcome until there is material information to share.