Thank you and welcome everybody to today's Flex LNG webcast. I'm Oystein Kalleklev CEO of Flex LNG Management. And I will once again be joined by our CFO, Knut Traaholt who will talk you through the numbers a bit later in the presentation. As always we will conclude with a Q&A session. Before we start the presentation, I will remind you of the disclaimer as we will provide some forward-looking statements, use some non-GAAP measures and there are limitations to the completeness of detail we can provide in this webcast. So we recommend that you also review our earnings report. So okay let's kick off with the highlights and a short summary of them. It's fair to say that while the first quarter has been a fantastic period for cargo owners given the global energy shortage with elevated LNG prices worldwide. It has not been as good for shipowners with ships in the spot market. The spot freight market has been challenging due to the rather rapid shift in trade pattern. The shift in trade pattern started in late 2021, well-ahead of the wall in Ukraine and occurred as European buyers started to mop up the spot cargoes to ensure how they got supply given the low gas inventory levels. The pull to Europe instead of Asia resulted in a sharp up in sailing distances and thus freeing up more ships in the market. With significant lower activity in the spot market, this adversely affected the earnings on the three index ships as well as approximately 1.5 ship, which we have traded in the spot or short-term TC market during the first quarter. In any case despite a challenging spot market, we were able to deliver revenues of $74.6 million in line with our guidance presented in February. Revenues were…

Thank you, Oystein, and let's turn to slide eight and the financial highlights. We delivered revenues just shy of $75 million and within the revenue guidance of $72.5 million to $80 million. This translates into a time charter equivalent of $63,000 per day. The quarter-on-quarter lower revenues is due to the weaker spot market in the first quarter, impacting our three vessels on variable hire contracts and the performance of Flex Volunteer and Flex Aurora as explained by Oystein. The background for the softer market will be covered more in detail later in the presentation. The operating expenses was $14.4 million or $12,300 per day in OpEx. For Q1, we have made a one-off accounting adjustment relating to previous periods and this is explained more in detail in the earnings report. The adjustment had a positive effect of $2.9 million on the operating expenses. Except for this adjustment the operating expenses were higher quarter-on-quarter due to higher number of crew rotations and handovers in Q1 versus Q4. Crew rotations for the vessels traded in the Pacific are more costly due to the continued severe COVID restrictions and quarantine requirements. In addition, ordering of spares supplies associated services for the full year were expensed in the first quarter, thus this should result in lower operating expenses for the rest of the year. Our main change this quarter is the gain on derivatives of $31.9 million, which relates to our interest rate derivative portfolio. As a result of increased long-term interest rates, this portfolio has continued to develop positively for us. I will come back and cover more on our interest hedging and derivative portfolio later in the presentation. In conclusion, net income for the quarter was $56 million and adjusting for the gain on derivatives the adjusted net income was $24…

Thank you, Knut. I mentioned that fight against inflation with a higher interest rate. And as Knut has explained, we are well protected against higher interest rates through our derivatives and fixed-rate leases. When it comes to inflation, keep in mind, our asset base consists of Turin Ultra Modern LNG carriers, with higher raw material prices like steel, aluminum, nickel and energy, scarce yard capacity and increasing wage cost -- it should not come at a big surprise that the cost of building a modern LNG carrier, has increased a lot. We bought 11 LNG carriers at the bottom of the new building cycle in 2017 and 2018, which we have now taken delivery of. Similar vessels today are quoted at $225 million by [indiscernible] and they have also been reported newbuilding at closer to $230 million. In addition, you would have to cover newbuilding supervision costs and bulk costs. Keep in mind these prices are for ships delivery in 2026 as most of the 2025 slots have now been filled. So if you are making this investment, you will have zero income for the next four years and to replicate our fleet you will have to spend about $3 billion. If you then deduct our net debt of around $1.4 billion, you end up with an equity requirement of close to $1.6 billion and this equity will be yielding zero [ph] for the next four years or so. So not only are we well hedged against higher interest rates but our assets also provide our investors with good inflation inspection. So okay. Then finally turning to the market. In our market section in our February presentation we illustrated the high growth of US LNG exports, with US exports growing $23 million tonnes in 2021, representing 120% of the global…

Thank you. Dear participants, we will now begin the question-and-answer session. [Operator Instructions] We have the first question comes from the phone from Climent Molins from Value Investor's Edge. Please ask your question.

Gentlemen and thank you for this comprehensive presentation. Strength in gas pricing has exacerbated the difference in realized rates between modern XDF or MEGI engines relative to TFDEs and especially to steamers. Could you provide some commentary on where do you see the current spread in performance given prevailing market conditions?

Yes. Thank you for the question. And I guess you are working with J Mintzmyer, who is also in Value Investor's Edged.

Indeed.

I think we touched upon it. We have a graph here on the spot market, where we are showing the rate for modern tonnage quoted slightly above 80,000 in the spot market around 30,000 spread to titers and the spread is due to you are consuming less fuel. And under a time charter fuel is a cost for the charters account as you are consuming part of the cargo as fuel. And with the high prices today of course the fuel spread is higher. And then additionally, you can carry more cargo and the cargo is pretty valuable today. So we do see this $30,000 spread and on to steam it's even more. It's more than $50000. And if you were to calculate on this theoretically on like a desktop exercise – would probably be even higher. So this a bit dependent on the price of fuel more efficient ships. You have a lower unit freight costs for those ships when you're taking into account the cargo size and the fuel cost. I hope maybe that will explain.

Indeed, that's helpful. Turning to your balance sheet. You have now completed the balance sheet optimization program which further solidifies your already strong balance sheet position. In past conference calls you reverted some commentary regarding where you could potentially allocate these funds? Could you provide an update? And if you were to acquire vessels, which vintage would you offer what kind of vessel would you expect to generate the highest returns?

Yeah. It's a good question. We get a lot of question about why are we piling up such a big chunk of cash. And to be frank it's about also we're getting – as we have de-risked our portfolio through a lot of these longer time charters the terms we are getting from financers have improved. So then it makes financial sense to lock in new financing at better terms for longer durations. But what we are incorporating in one of the bank financing here is to have some more added financial flexibility, by adding a $250 million bullet revolver. So this enabled us to not having to lend all the money at all time, we can repay the loan and draw it back. And this saves us for a lot of financial costs. When we are utilizing the revolver, we're only paying a 0.75% commitment fee per annum to having that liquidity available. So we can kind of improve our cash management profile. We certainly do have more cash than we need to have. I think this is also to evidence that people can sleep good at night that our dividend is stable given our backlog and our financial resources available. We also like to not necessarily have a lot of cash available, because I do think if we find transactions that could be accretive, we don't mind using the market to kind of vet those transactions by raising capital if needed. So yes, we are a bit long cash right now given how the financial markets are today quite broadly and volatile. I feel that's a good position to have. And our aim is to return all the cash to shareholders. As we have done in the past, we paid as I show on the dividend graph, we have been returning all the earnings as dividend and actually a bit more than that because we have also had some CapEx last year. In terms of acquisitions, yes we are looking all the time to find accretive deals. I think it's hard to run to the at these days ordering up to 25 to 30, waiting for four years, having debt capital on the balance sheet. So I think you need to find some good deals in order for it to make sense. It also a bit dependent on where our stock is being priced. Recently, we are trading above $30. I think we are below 25% today. So the share price also matter in relation to the accretiveness of acquisitions. When it comes to asset type, we prefer the new ships because we do think a lot of the older ships will not be efficient and they will not be able to meet the future regulation in terms of carbon emissions. So we certainly are not looking for older ships when we are looking at potential acquisitions.

That's very helpful. And certainly having additional flexibility is definitely a positive as you mentioned in the present. Sorry..

Yeah, our corporate name is Flex LNG.

As you mentioned in the presentation, you have a very little number of vessels coming open through the end of 2023, assuming extension options are exercised. Given current market strength, is it a fair assumption to assume these options will effectively be exercised? And if so would that be at a higher rate?

I think we have the two ships coming up in the near term, is two ships where there are valuable higher time charters. So that variable higher time charter is linked to the spot rates. So that's why we're also saying that we think it's likely there will be a big exercise, because the charters is basically going to pay what they will pay in the spot market. So the rates are for such extension would be that you are taking another year with market exposure which we are happy with given the state of the spot market and the outlook.

All right. Thank you for taking my questions. That’s all for me.

Thank you. Dear speakers, there are no further questions over the phone.

Okay. I think we have some -- maybe you can say you have your glasses on...

We have two questions from the web. Can you comment on the decreasing OpEx before COVID-19 they used to be around 15,000 per day and now they are much lower?

Yeah. It's -- actually, we have guided in the past OpEx level $13,000 per day. We have delivered on that. Actually, we have been delivering OpEx slightly below that prior to COVID. Last year when we have these COVID challenges and also in 2020 they have been slightly higher. Correct me if I'm wrong, Knut, I believe the OpEx last year was 13,300. So it's -- we are delivering OpEx at the level which we have guided, 13,000. They are slightly higher in Q1 because we have quite a lot of Russian and Ukraine crew. It has been difficult to do crew rotations zero tolerance policies for COVID in China is causing a lot more testing and requirements and longer quarantine of crew rotations. So kind of the COVID challenges two years now, more than two years since we had this problem are still something we have to deal with every day. But in general, we are guiding our OpEx to be at the 13,000 level.

Then we have a question on China and reopening and how that might increase current income expectation for Flex. I assume that would be rate levels and revenues.

Yes. China, of course -- China don't need to buy any spot cargoes this year. China has signed up a lot of new LNG offtake agreements and they did so last year and most of these are linked to oil price. They're also signing up quite a few agreements now in U.S. linked to more Henry Hub basis. So China will be able to source LNG rather cheaply and also to cover all their needs. So that's why we've also seen some Chinese buyers trying to sell cargoes in the market to the Europeans or people in Latin America. So we're not really dependent of course if China comes back rolling back, I wouldn't rule out that after some COVID quarantines that China will follow the path of U.S. and Europe stimulating their economy with a lot of fiscal stimuli and then also maybe monetary stimuli. And that usually result in demand picking up. And when demand picking up, you need more energy to fuel that demand. So once China comes back, I would expect that to be on steroids and then probably they will be sourcing spot cargoes again and might drive ton mileage and spot rates. But again, three of our ships are now linked to the spot market the rest are to the -- on fixed rate higher. So it doesn't have a huge impact. But of course, China is the biggest LNG importer. So we hope that China will be able to solve their issues with COVID, go back a bit more to normality like we have done in Europe and U.S. and return to normality also means growing their LNG demand, which they have grown quite a lot in the last 10 years or so.

So that concludes the questions on the web.

I think there's one question here, it's the same question. It's what are we going to do with all the cash? And I think that was the headline of the Pareto research note this morning. I can tell you one thing. We're not going to do stupid things with the cash. Right now we're just going to finish the balance sheet optimization program, get this other $99 million on the account. We're going to use the revolver to optimize our cash management not paying too much interest to the banks. And then we will just continue returning reduce the dividends to our shareholders. And we might -- we are still looking for opportunities to grow the company, but we won't do stupid acquisition just because we have too much money. We'd rather pay dividends than buying assets at too high prices. So, I think, that's it. Okay. Thank you everybody for joining today and we will be back in August then with the second quarter presentation. Have a good day.