Golar announces interim Results to September 30, 2021
Total operating revenues of $106.6 million and Adjusted EBITDA of $74.5 million, up 12% and 30% YoY respectively
FLNG Hilli achieved another quarter of 100% commercial uptime. Capitalizing on record gas prices, Golar recently hedged half of its Q1 2022 Dutch Title Transfer Facility (“TTF”) exposure from the 0.2mtpa of additional 2022 production at a TTF price of $28/MMBtu, implying additional earnings to Golar for the quarter of $21.2 million (for each $1.00/MMBtu change in TTF, earnings realized by Golar will move by $0.4 million for unhedged volumes during Q1 2022). This implies a gross tolling fee of $11.4/MMBtu for the incremental production.
The TTF linked production will, together with the Brent linked fees from trains one and two, see significant increased earnings from Hilli during 2022, with no further capital expenditure required by Golar. The strong commodity price backdrop has also incentivized the current customer of FLNG Hilli to expand its ongoing drilling program, which if successful will allow it to take advantage of its option to increase production by up to 0.4mtpa from 2023-2026.
FLNG Gimi is 75% technically complete. The unit is now around two years from the scheduled start-up date for the 20-year lease and operate agreement with BP that will unlock around $3.0 billion of earnings backlog1 to Golar. We expect Adjusted EBITDA generation from our FLNG segment to quadruple from current levels over the next 2-3 years on the back of contracted earnings from Gimi and increased earnings from our commodity exposure on Hilli.
The current strength of LNG prices and favorable price outlook further increases the attractiveness of our FLNG solutions. This is driving momentum for potential new FLNG projects. We are continuing constructive discussions with an existing customer for use of a five-million-ton Golar Mark III newbuild design and rapid progress is being made on potential integrated projects. Our portfolio of prospective FLNG customers across different geographies increased during the quarter.
Q3 Highlights and recent events
Financial and corporate:
Profitability: Net loss attributable to Golar of $91.0 million, and Adjusted EBITDA1 of $74.5 million for the quarter, including:
$157.5 million non-cash mark to market loss recognized on New Fortress Energy Inc. (“NFE”) shares based on September 30, 2021 discounted carrying value of $27.75 per share.
$64.1 million non-cash gain recognized on Hilli Brent oil and TTF natural gas linked derivative instruments.
$8.9 million realized gain on Hilli Brent oil derivative. This is expected to increase to around $13.0 million in Q4 2021.
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