Good day, and thank you for standing by. Welcome to the Golar LNG Limited Third Quarter 2024 Presentation. After the slide presentation by CEO, Karl Fredrik Staubo; and CFO, Eduardo Maranhao, there will be a question-and-answer session. Information on how to ask a question will be provided then. At this time, all participants are in listen-only mode. I will pass you over to Karl Fredrik Staubo. Karl, please go ahead.

Thank you. Hello, and good morning and welcome to Golar LNG's Q3 2024 earnings results presentation. My name is Karl Fredrik Staubo, the CEO of Golar LNG, and I'm accompanied today by our CFO, Mr. Eduardo Maranhao, to present this quarter's results. Before we get into the presentation, please note the forward-looking statements on Slide 2. We start on Slide 3 and an overview of Golar. During Q3, we ordered our third FLNG, a Mark II FLNG with an annual liquefaction capacity of 3.5 million tonnes per annum. This represents a 70% increase to Golar's own liquefaction capacity and the Mark II FLNG will deliver within 2027. This will be the first available FLNG for a charter globally. We will provide further information on the value proposition of the Mark II FLNG later in the presentation. We've also seen positive progress for our two existing FLNGs on the water. Hilli continued her market leading operational performance during the quarter and positive progress have been made on the conditions precedent for her redeployment under a new 20 year charter in Argentina, following expiry of our existing contract in Cameroon ending in July ‘26. During the quarter, we agreed a commercial reset of pre-COD contractual arrangements for the FLNG Gimi under her 20-year contract with BP. An accelerated commissioning has now started and based on the latest schedule from BP, we anticipate commercial operations date starting the full cash flow from the 20-year contract to occur in Q2 next year. We maintain two LNG carriers in the fleet. One is the Golar Arctic, which is our legacy assets that we consider for long term charter or sale. The second carrier, the Fuji is currently on charter until Q1 2025 and following that charter, she will enter CIMC Shipyard in China for conversion…

Thank you, Karl and good morning everyone. I'm pleased to provide an overview of Golar's financial performance for the third quarter of 2024. Moving to Slide 13, I would like to walk you through some of the key financial highlights for the quarter. We achieved total operating revenues of $65 million with FLNG tariffs reaching $89 million, a slight increase from $88 million in Q2. This growth reflects higher realized variable earnings linked to Brent and TTF prices. We consider FLNG tariff to be the most accurate measure of all realized liquefaction revenues, including gains from our oil and gas linked-fees from Hilli operations. Total adjusted EBITDA reached $59 million, remaining largely consistent with last quarter despite the recognition of some pre operational expenses associated to commissioning activities of Gimi, as we progress towards COD. This quarter we report a net loss of $35 million primarily due to non-cash adjustments in the value of embedded TTF and Brent derivatives within the Hilli contract, reflecting lower oil and gas prices compared to Q2. These movements accounted for approximately $90 million. Additionally, mark-to-market changes in our interest rate swap portfolio impacted results by about $16 million. While these factors affected our quarterly results, we remain strategically well-positioned to benefit from future market improvements and continue to focus on building our strong long-term earnings backlog. Following the issuance of our $300 million bonds in September, our share of contractual gross debt reached just under $1.5 billion at quarter-end. Despite substantial commitments to the Mark II project which has been fully equity funded until today with around $400 million invested so far, our liquidity position remains robust with approximately $807 million of cash on hand. Based on that, our net debt position at the end of the quarter stood at $646 million. This gives…

Thanks Eduardo. Turning to Slide 19 and some of the key milestones for ‘24 and our focus for ’25. So this year have seen some major milestones in the development of Golar. We delivered our second FLNG unit to BP offshore Mauritania and Senegal in January this year. As the project was not ready to start sending us gas at that time we entered into negotiations with BP to agree a commercial reset of pre-COD contractual arrangements. We're pleased to say that that reset was met in August with the benefits that Eduardo just explained. In July we reached another key milestone for the company in signing definitive agreements for a 20 year charter with Pan American Energy in Argentina. In light of the recently received reservation notice, this will utilize Hilli with an adjusted EBITDA backlog of $6 billion before commodity exposure. In September we issued a $300 million unsecured bond and just after we FID-ed our third FLNG, the Mark II FLNG with a 3.5 mtpa capacity. Our action list or focus for ‘25 is to refinance the Gimi, as just explained by Eduardo to conclude the conditions precedent under the 20 year contract with Pan American to secure a charter for the Mark II FLNG and thereafter secure asset level financing for the vessel. Once that is locked in, we are planning to execute on our option for a second Mark II to provide further FLNG growth. So turning to Slide 20, the last slide of the presentation and to explain what this could mean in numbers based on our target to secure a charter for the Mark II on order, Golar could double our FLNG earnings and EBITDA backlog within next year. Based on the 20 year contracts in place for Gimi for BP and Hilli…

[Operator Instructions] And now we're going to take our first question, and it comes from the line of Ben Nolan from Stifel.

Great. Thanks. I appreciate you guys having me. I wanted to for my first question, I wanted to just dig in a little bit on what's happening in Argentina, if you could. Specifically, it sounds like the Hilli is definitively going, and there's not really an option to move it elsewhere, just to clarify that. But then also, there has been a lot of movement between Pan American and YPF and the various projects. Can you maybe just sort of level set how you see the Argentina LNG development playing out from your perspective?

Hi, Ben. As we explained, the Vaca Muerta is the second largest shale discovery in the world with 300 Tcf. Local consumption in Argentina is around 1 Tcf a year. So there's plenty of capacity to provide for export and the 300 Tcf are currently hostage to the Argentinian domestic market. In light of the new government in place, there's now a strong drive to enable LNG exports. You're right that, there's a lot of different talks in terms of how big you should lead it and so forth. What seems to be clear to everybody is that, the Pan American contract utilizing Hilli will be the first outlet for Argentinean LNG exports. As explained earlier in the presentation, both Pan American and Golar would welcome other welcome other multi gas resource owners to partake in the project to give further gas supplies, but also to provide for FLNG growth. We also think that, if we were to source the Mark II on order that would be the second fastest available liquefaction capacity to Argentina only beaten by Hilli. So, if they are true to the ramp up of their ambitions of exports, both of those assets should see a home in Argentina. But first and foremost, Hilli is now locked in through the reservation notice received in October.

Okay. And there's no option for that to move somewhere else. Correct?

That's correct. The reservation notice has been given.

My second question maybe is for Eduardo. You are talking about -- first of all, continuing to progress on the refinancing of the Gimi that would bring cash out. And then, you're talking about potentially after getting a contract on the Mark II being able to finance more than you're paying for it really. Maybe could you talk to your capital allocation thinking? If you are able to do those, then, you're going to have a whole lot more cash coming in than going out. How are you thinking about sort of what's the right thing to do with that capital? How do you see it playing out?

Yes. Hi, Ben. So I think just starting with the first point here. So when you look at the Gimi refinancing, you're right. We're making further progress on the proposed refinancing that we have been discussing for the last quarter. Right now, we are targeting at $1.4 billion of total financing, and we are in advance of the discussions with potential lenders. When we look at the Mark II financing and I think the statement we made on the presentation of between 4x to 6x the contracted EBITDA. I think this is largely driven by the reference or the data points that we have on the current Gimi financing. So if we're targeting $1.4 billion based on a $215 million EBITDA, I think that falls within that range. And we believe that once we have a charter in place for the Mark II, we could be in a position to reach such amounts. We also have received, as we also stated on the presentation, in indicative terms for a proposed $1.2 billion asset level financing for the Mark II. However, this financing would be based on the situation as is so basically on a situation without a contract. So we believe that once we secure a charter, we could be in a position to also significantly improve the commercial terms of that facility. And I think the last point with regards to capital allocation, I think Karl touched on that one during the presentation as well. We continue to -- we have plans to maintain our dividend policy as we have today and we expect to further increase the dividend payments as soon as we de-risk our existing projects. So we are progressing with the commissioning of Gimi and as soon as we reach COD or around that time we could be in a position to further increase our dividend payments. And I think our ambition is to further grow our FLNG portfolio. So we have an option to further develop a second Mark II, which I think provided that we have visibility on earnings of that contract and we continue to execute on our commercial strategy, we would have the financial ability to take on that project.

And the question comes from Chris Robertson from Deutsche Bank.

Hi guys. I was wondering if you could speak a little bit more on the option you have for a second Mark II at the CIMC Raffles yard. I think at one point you had communicated that the option had an expiry at the end of the first quarter. But it now sounds like you have some greater flexibility there, which is good. So I guess could you talk around when that particular option expires? Is it just throughout the full year of 2025 and a little bit more around what exactly you would need in place to move ahead with conversion of a second Mark II asset?

Hi Chris. So you're right, I understand what you're referencing when you say Q1. So what we did say at that point in time is that in order to meet the ‘28 delivery, the critical item is some of the long-lead items. So similar to what you saw we do on the first Mark one is that we started committing to some long-lead items before FID-ing the project. And this is just for us a little bit of cautiousness in terms of securing an attractive delivery slot without taking on the full risk of the EPC before we've secured a charter on the first Mark II. So there is more flexibility in terms of the EPC contract with the shipyard than Q1. But you do want to see some commitment on long lid items starting within Q1. And that's really the gating item. Obviously, when you're a repeat buyer of the same equipment. Because we're building two units or could be building two units in relative parallel, there are some advantages with the equipment suppliers as well in terms of lead times versus what we received when we did the first Mark I. So it's obviously always easier to be a repeat customer than a new customer, but within Q1 we should make some long-lead commitments. And I think in terms of the EPC contract itself, we have more flexibility than your [P1].

Okay, great. That's helpful. And then, my second question is just turning to the Tortue project for a moment. I believe BP and Kosmos were evaluating other types of LNG technology beyond FLNG for the Phase 2 development. Just given the recent commercial reset and the possibility that a second Mark II asset could be available by 2028, and could potentially fit into that Phase II ambition, are you guys in discussions at all with the Torch View partners around potentially taking an FLNG asset as opposed to some of the other technologies that they were considering at one point?

We normally don't comment on specific projects like that, other than when we've signed contracts that have been made public. The only thing I'd say is that, for the first phase, Kosmos and BP found FLNG to be the most economical and best viable way of monetizing that unit. Since then, I think the FLNG market has proven to become even more of an industry standard and more people like BP and Kosmos have found FLNG to be the best way of monetizing gas reserves. Certainly, many of the neighboring countries in West Africa are utilizing FLNG technology. So I would think it's very natural that FLNG is at least one of the options they consider and there are benefits in utilizing the same operator of course. There's many synergies both in terms of offloading, crewing, spare parts, and so forth. But in terms of our discussions, we're not disclosing anything unless our counterparts do.

The next question comes from the line of Kristoffer Barth Skeie from Arctic Securities.

Hello, Karl. Thank you for taking my question. Can you comment please comment a bit on the 10% stake in Southern Energy? What should we expect in terms of CapEx here going forward? And if the CapEx element, if that's the thing, proportionate with the ownership stake? Additionally, what is the fair CapEx assumption for Italy between the existing Perenco contract and the contract with Pan American Energy? I assume there is a cost settlement associated with upgrades and movement there.

Yes. Hi, Chris. So I'll take the first part and then Ed can add on the second leg. The cost element on redeployment, what we're saying is that, you need to disconnect in Cameroon, you then need to physically travel to a shipyard that needs to do overhaul work to provide for 20-year continuous operation. And then, save to Argentina to connect. What we currently estimate is $200 million to $300 million for the total voyage. That includes bunkering, crew, tug and FLNG upgrading work. So that's all in cost of moving is $200 million to $300 million. On the South American Logistics, Eduardo, do you want to cover that one?

Yes, sure. When it comes to Southern Energy, based on our 10% stake, we have entered as part of the definitive agreements into the final forms of the joint venture agreement with Pan American Energy, which stated an indicative budget for the project. That budget is still subject to further review, but as of today we estimate an amount between $50 million to $100 million of CapEx commitments which would be attributable to us.

And the next question comes from the line of Alexander Bidwell from Weber Research and Advisory.

Good afternoon. Thanks for the time. So, taking a look at Mark III, where do plans sit for that new build unit and is there a particular driver that would lead you to select a Mark III over a Mark II?

Hi Alexander. So when it comes to the Mark III, that's a 5 million ton per annum unit and as you correctly point out, it's a new build from scratch and not a vessel conversion. Hence it has a longer construction time, a higher CapEx per ton and it's obviously a very large capacity. Hence we are unlikely to order a Mark III on speculation we would only do that against a firm contract. So there are currently no immediate plans to FID such a unit for the reasons just mentioned that it's expensive, takes longer, and based on the yard capacity of the shipyard we would utilize, would likely deliver at the very end of late ‘29, early-2030 if ordered today. So we see a better value proposition in going for the Mark II. The thing that would change that is if we do a back-to-back contract for the Mark III that we deem to be attractive.

All right, thank you for the additional color there. And then for my second question, looking at Macaw. So back in Q1, you mentioned you guys would evaluate separate listing in sometime towards the end of 2024. What are your plans with Macaw stand right now and is a listing in the cards for 2025.

So yes, you're right that as these things go, there's always some tweaking to the design when you go from design phase to live hydrocarbon testing. As we explained in the presentation, the unit has now sold its first ISO containers from flare gas production. But we are tweaking the unit to better deal with the significant intraday changes in gas quality flows from U.S. shale gas. And once we feel that that's in a more stable territory, we will revisit the thoughts of a separate listing or a business separation of that unit. And that is now a 2025 event. But we have had industrial interests that have been on site to inspect the unit and the technology and express an interest in continuing to or to gain exposure to the technology and Macaw as a business. So that's an alternative to a separate listing.

And the question comes to Liam Burke from B. Riley Financial.

Good. Thank you. You've got the second Mark II slated for 2028. What does the backlog of potential credible inquiries look like, and to give you a sense as to what the cadence would be as you roll out further FLNGs?

There's plenty of stranded gas reserves in the world and I think several of the projects we're in discussions for is for more than one unit, including the discussions we've been having in Argentina. So some of these reserves, it's just a matter of getting to first gas and once you do, you can see expansion. That's true for BP's plans on the Tortue field, whether it's an FLNG or not for the expansion plans. It's true in Argentina and in several other locations that, we're currently in discussions for. So I think in addition to new developments, which there are plenty of, there's also expansion of existing that we see as the biggest potential. As alluded to earlier on one of the previous questions here, there are some operational synergies that has a real cost advantage to the gas resource owner, if you put more than one unit in relative proximity. When it comes to the merge, offloading, crew boats, tug boats, spare parts and so forth that equates to a real saving on $1 per MMBtu basis, which makes the FLNG alternative even more competitive. So we think that, the fact that, there are more people now looking into FLNG and the design and operational track record are growing in acceptance, is one that, we find to support our growth ambitions and also the fact that we're constructing this as around half the cost of where you see incremental capacity being brought on stream in the U.S.

Okay. And just touching on an earlier question, of those inquiries, I mean, are there enough for greater capacity than the 3.5 mtpa?

Yes. It really depends on two things, the size of the reserve and the flow, the gas flow. So the GTA project Phase 1 was originally scheduled to be 10 mtpa, then Gimi is just around 2.5 of production. So then theoretically there's plenty of capacity there. In Vaca Muerta, we're talking, or YPF and LNG Argentina are talking about 15, 20 mtpa. And you have several fields like these not several fields like Vaca Muerta, but several fields like the GTA and around the world. So it's sort of 25 to 30 Tcf that supports easily a 10 mtpa of annual production. So the answer is, yes.

The question comes from the line of Sherif Elmaghrabi from BTIG.

Hi. Thanks for taking my questions. First, in the summer, you signed an FLNG agreement with NNPC. Can you just give us an update on how that conversation is going? And are you still thinking we could see a Nigerian LNG project sanctioned by year-end?

So, you're right that we signed the development agreement with NNPC and the target in the project development agreement was by year-end. That seems less likely to us that the Nigerian projects will move forward within this year, mainly because, I don't think they're having right now a project that's suitable for the FLNGs available. But there's certainly enough reserves in Nigeria and under an NNPC's control that they could utilize a Mark II, but to see that happen within ‘24, we see as unlikely, but they are one of the contenders when we say that we think we'll have the unit contracted within 2025.

Got it. So then thinking about other contenders, back to Argentina, what needs to happen to get the land based infrastructure up to speed to handle a second FLNG unit? And more importantly, do you have a sense of how long that might take?

So what you need is a designated pipeline because Hilli is utilizing spare capacity in the existing network, but it's not sufficient spare capacity in the existing networks to go beyond Hilli. So if you want to expand beyond that, there needs to be a designated pipeline from Vaca Muerta to the FLNG location. Work on such pipeline has started. We estimate together with local pipeline companies a construction time of around two years. The plan would be to make the pipeline alongside an existing oil pipeline that's currently under completion. So right of way the actual location of the pipeline has been identified and it's a matter of getting financing and FID-ing it. It's a bit of a chicken and the egg situation, because there's no pipeline without incremental FLNGs and there's no incremental FLNGs without the pipeline. So they need to be developed in tandem, but it takes shorter time to construct the pipeline than the FLNG.

Thank you. Dear speakers, there are no further questions for today. I would now like to hand the conference over to Karl Fredrik Staubo for any conclusion. Thank you.

Thank you all for dialing in. It's been a very eventful quarter. We're very pleased with the development, and I think we have a very clear, focus for the year ahead. We are working hard to execute. Thanks for dialing in and listening to where we are, and we look forward to talking to you next quarter. Thanks again, and have a good day.

That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.