Golar LNG Ltd. Q4 FY2024 earnings call

• Transitioned into a pure FLNG company by selling non-core assets like Avenir LNG and Golar Arctic. • Acquired the remaining 8% minority interest in FLNG Hilli for $90 million, which brings immediate cash flow accretion and increased earnings visibility. • Hilli was under contract with Perenco until July 2026, then redeployed to Argentina for a 20-year contract, with three leading gas producers in Argentina joining the project. • Gimi is in commissioning, with first LNG cargo expected in Q1 2025 and full contract startup in Q2. • Mark II FLNG conversion is progressing, with the donor vessel Fuji delivered to the shipyard, and advanced discussions for its deployment. • Strong interest in FLNG solutions, with advanced discussions for Mark II deployment and a potential fourth FLNG unit.

The company's segment performance is centered around its FLNG assets. The Hilli vessel generated $277 million of EBITDA during 2024. It has an EBITDA backlog of $11 billion before commodity exposure. The Gimi is under commissioning for a 20-year contract with BP offshore Senegal and Mauritania, with the first LNG cargo expected in Q1 2025. The Mark II FLNG conversion is progressing according to schedule, with the donor vessel Fuji delivered to the shipyard. The company's liquefaction capacity from FLNGs is 8.6 million tons per annum, making it the largest FLNG owner and operator.

• EBITDA backlog is expected to continue increasing once the MKII FLNG secures a long-term charter. • Refinancing of the FLNG Gimi is in the final stages. • Target to secure a charter for the MKII FLNG under construction in 2025 and target asset-level financing for it. • Plan to optimize debt structure and accelerate growth with the development of the FLNG fleet.

• Exposure to Brent and TTF prices which can affect earnings. • Pipeline infrastructure development in Argentina as a potential gating item for additional FLNG units in the country. • Inflationary pressure on capital expenditures for FLNG projects, which could impact project costs.

Q: About the Mark II and fourth vessel, how is the company thinking about options versus alternative yards?

A: The commercial developments are progressing on multiple fronts. The company may build a Mark I or Mark III depending on commercial development, and it's not mutually exclusive to build a Mark II at a different shipyard.

Q: On the Gimi, how does the extra capacity work?

A: For incremental production above the base capacity of 2.4 mtpa per year, there's proportionate payment in line with the $215 million annual EBITDA. For 100% utilization of the 2.7 mtpa nameplate capacity, annual EBITDA could increase to $241 million.

Q: On the fourth FLNG vessel, have they started identifying conversion candidates?

A: Yes, they've started inspecting vessels. The LNG carrier market has downward price pressure, but there are suitable vessels available, and they keep a close eye on them.

Q: On Argentina, about infrastructure for a second FLNG unit, any FEED study or timelines?

A: Hilli uses existing pipeline network in Argentina. A gas pipeline from Vaca Muerta to San Matias gulf is co-dependent with gas producer commitments and liquefaction capacity. The pipeline construction timeline isn't a gating item for Mark II in Argentina.

Q: On the Mark II prospective fields, what are the hallmarks looked at?

A: Need at least 40 CF of reserve and sufficient gas flow to feed the FLNG. Lead time of resource development should be at par or shorter than Mark II's delivery window. There are projects with stranded reserves and favorable fiscal regimes.