Q1 2024 Golar LNG Ltd Earnings Call

May 28, 2024

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[music].

Okay.

Speaker Change: Welcome to the Golar and G limited quarter, one 2020 full presentation.

Speaker Change: The slide presentation by C E O call Fredric Stahl, though I'm CFO Eduardo loving home that will be a question and answer session installation on the high to ask a question will be provided then.

Speaker Change: At this time all participants are in listen only mode. I would now pass you I bet you called Frederic <unk> co. Please go ahead.

Karl Fredrik Staubo: Thank you, operator, and welcome to Golar LNG's Q1 2024 earnings results presentation. My name is Karl Frederik Staubo, CEO of Golar LNG, and I'm accompanied today by our CFO, Eduardo Maranhao, to present this quarter's results. Before we get into the presentation, please note the forward-looking statements on slide 2. We will start with slide three and an overview of Golar today. We own two FLNG assets; Hilli, the world's first FLNG with a market-leading operational track record of 100% economic uptime since operations started in 2018, and the FLNG GIMME recently delivered to the GET hub. GTA Hub Offshore Senegal and Mauritania to start a 20-year contract for BP.

Karl Fredrik Staubo: We are contemplating ordering our third FLNG, a Mk2, with an annual liquefaction capacity of 3.5 MTPA. During the first quarter, we took delivery of the FLNG conversion candidate, the LNG carrier Fuji LNG. We also own a legacy shipping LNG carrier, the Golar Arctic, which we are now considering for long-term charter or an opportunistic sale of the vessel. We have two financial investments, Macau Energies, a small-scale land-based solution for the capturing and monetization of flare gas, as well as a small-scale LNG carrier company called Avenir LNG, where Golar was a founding shareholder together with Stolt Nielsen On the right-hand side of the slide, we've summarized some of the key stats of Golar.

Karl Fredrik Staubo: We have a strong financial position with a market cap of $2.8 billion, a cash position of approximately $700 million, net debt of 550 million, and significant financial flexibility in debt optimization of existing assets. For 2023, we had an EBITDA of $356 million, and this is before the start-up of GIMI under its 20-year charter with BP, expected to add approximately $150 million of EBITDA to Golar on an annual basis. We have meaningful cash flow visibility with an EBITDA backlog standing at about $5 billion, with further upside once we recontract Hilli and move ahead with a contemplated FID on our MkII FLNG project. We have a strong focus on shareholder returns. Last year, we reintroduced a quarterly dividend and accelerated a share buyback program.

Speaker Change: Thank you operator, and welcome to Golar Lng's Q1, 'twenty 'twenty four earnings results presentation My.

Speaker Change: My name is Karl Fredrik Sabo, CEO of Golar, LNG and I'm accompanied today by our CFO Eduardo Martin Yao, 2% this quarter's results.

Speaker Change: Before we get into the presentation. Please note the forward looking statements on slide two.

Speaker Change: We start at slide three and an overview of Golar today.

Speaker Change: We own two ethylene D assets. He led the world's first LNG with a market leading operational track record of 100% economic uptime since separation startup in 2018.

Speaker Change: And the F O N D.

Speaker Change: Recently delivered to the G T hub.

Speaker Change: G to a hub offshore Senegal, and Mauritania, just started 20 our contract for BP.

Speaker Change: We are contemplating to order, our third eye for Lindy and Mark Chu with an annual liquefaction capacity of $3 five M Tpa.

Speaker Change: During the first quarter, we took delivery of the <unk> conversion candidates the LNG carrier Fuji LNG.

Speaker Change: We also own a legacy shipping LNG carrier Golar, Arctic, which we are now considering for long term charter or an opportunistic sale of the vessel.

Speaker Change: We have two financial investments Macau entities are small scale land based solution for capturing and monetize monetization of FLIR guests.

Speaker Change: As well as a small scale LNG carrier company called Avenir, LNG, where golar was a founding shareholder together, we'd stolt Nielsen and <unk>.

Speaker Change: On the right hand side of this slide we've summarized some of the key stats for Golar.

Speaker Change: We have a strong financial position with a market cap of $2 8 billion the cash position of approximately 700 million.

Speaker Change: Net debt of $550 million.

Speaker Change: And significant financial flexibility in desktop to my station of existing assets.

Speaker Change: For 2023, we had an EBITA of 356 million and this is before the startup of give me under her 20 air charter with BP expected to add approximately $150 million of EBITDA to golar on an annual basis.

Speaker Change: We have meaningful cash flow visibility with an EBITA backlog standing at about $5 billion with further upside once we re contract Hilli and move ahead with a contemplated.

Speaker Change: On a mark to ethylene new projects.

Speaker Change: We have a strong focus on shareholder returns.

Speaker Change: Last year, we reintroduced our quarterly dividend and accelerated our share buyback program.

Karl Fredrik Staubo: We're very enthusiastic about the state of the business and the progress made on attractive FLNG growth prospects during the quarter. Turning to slide 4, Golar remains the only provider of FLNG as a service, and we own the largest FLNG fleet by production capacity. This is relevant as gas resource owners of proven reserves, either stranded, re-injected, or flared gas, look to monetize proven reserves whilst maintaining meaningful ownership and exposure to these

Speaker Change: We're very enthusiastic about the state of the business and the progress made on attractive LNG growth growth prospects during the quarter.

Yeah.

Speaker Change: Turning to slide four Golar remains the only provider of F. <unk> as a service and we own the largest <unk> fleets by production capacity.

Speaker Change: This is relevant as gas resource owners of proven reserves, either stranded re injected or flared gas lifts to monetize proven reserves, whilst maintaining meaningful ownership and exposure to these resources.

Karl Fredrik Staubo: Golar's position as the only proven service provider of maritime liquefaction enables us to offer a unique value proposition to these gas resource owners and governments. We own and operate the largest fleet by number of units, at par with ENI and Petronas, and the largest in the world by liquefaction capacity. Golar pioneered the FLNG concept with the construction and delivery of HILI.

Speaker Change: Golar <unk> position as the only proven service provider of maritime liquefaction enables us to offer a unique value proposition to these gas resource owners and governments.

Speaker Change: We own and operate the largest fleet by number of units at par with Eni and Petronas and largest in the world by liquefaction capacity.

Speaker Change: Golar pioneered the <unk> concept with the construction and delivery of Hilli.

Karl Fredrik Staubo: And we've also demonstrated the lowest capex per ton of liquefaction capacity and a market-leading operational track record. Based on current yard discussions for the contemplated MkII FLNG project, we expect to maintain this attractive capex per ton of around 600 million dollars per MTPA of production capacity. Turning to slide 5, demand for LNG remains strong with a healthy output. We continue to be constructive on the LNG market as the demand outlook remains robust, with an expectation of close to 70% growth in traded volumes between 2023 and 2040.

Speaker Change: And we've also demonstrated the lowest capex per tonne of liquefaction capacity and market, leading operational track record.

Speaker Change: Based on current yard discussion for the contemplated Mark two F. LNG project, we expect to maintain this attractive capex per ton of around $600 million her M tpa of production capacity.

Speaker Change: Okay.

Speaker Change: Turning to slide five demand for LNG remains strong with a healthy outlook.

Speaker Change: We continue to be constructive on the LNG markets as demand outlook remains robust with an expectation of close to 70% growth in traded volumes between 2023 and 2040.

Karl Fredrik Staubo: LNG is the second fastest growing source of energy behind renewables. From a geographical perspective, Asian nations drive LNG demand and make up more than 85% of expected demand growth through 2014. LNG demand is driven by decarbonization efforts in energy-intensive industries such as steel, cement, and fertiliser. LNG is favored due to its emission and flexibility benefits over other fossil fuels.

Speaker Change: LNG is the second fastest growing source of energy after renewables.

Speaker Change: From a geographical perspective Asian Nations drive LNG demand and makeup more than 85% of expected demand growth through 2040.

Speaker Change: LNG demand is driven by de carbonization efforts in energy intensive industries, such as steel cement and fertilizer.

Speaker Change: LNG is favored nutrients emission and flexibility benefits over other false fears and.

Karl Fredrik Staubo: And the switch from coal and oil to LNG and natural gas is an important driver of the target reduction in energy-related emissions towards 2050. This supports long-term offtake demand for our FLNG units. Moreover, the focus on data centers and AI is increasing, pushing energy demand in both the eastern and western hemispheres and offsetting some of the reduced energy demand from increased efficiency of other energy consumers. We also see an overall growth in power consumption in developing nations.

In coal and oil switch to LNG and natural gas is an important driver of the target reduction in energy related emissions towards 2015.

Speaker Change: This supports long term offtake demand for RF Linda units.

Speaker Change: Moreover, the focus on data centers and AI is increasing pushing energy demand in both the eastern and western hemisphere, and offsetting some of the reduced energy demand from increased efficiency of other energy consumers.

Speaker Change: We also see an overall growth in power consumption in developing nations.

Karl Fredrik Staubo: Witnessing expansion in industrial production as outsourced overseas production moves from China to other low-cost regions, countries such as Thailand and Bangladesh rapidly boost LNG consumption with anticipated demand growth from 20 to 60 million tons through 2040. Turning to slide 7 and the highlights for the quarter.

Speaker Change: Witnessing expansion in industrial production is outsourced overseas productions news from China to other low cost regions.

Countries, such as Thailand, and Bangladesh rapidly boost LNG consumption, we would anticipate the demand growth from 20 to 60 million tons through 2040.

Speaker Change: Yes.

Speaker Change: Turning to slide seven and the highlights for the quarter.

Karl Fredrik Staubo: Hilly continued her operational excellence, having now delivered 112 cargoes since start-up and more than 7 million tonnes of LNG produced. GIMME is moored at the GTA hub and ready to commence operations. The GTA-FPSO remains on the critical path for LNG production on this megaproject. We have progressed the contemplated MkII growth project closer to FID with strong progress across the three parameters for FID to be fulfilled. Those three are a final yard EPC contract, construction financing that Eduardo will elaborate on later on, and commercial opportunities for FLNG deployment.

Speaker Change: Hilli continued her operational excellence, having now delivered 112 cargo since startup and more than 7 million tonnes of LNG produced.

Speaker Change: Give me is more to the GTA hub and ready to commence operations.

Speaker Change: The GTA F. P. S O remains on critical path for ethylene deep for LNG production on this Mega project.

Speaker Change: We have progressed the contemplated mark two growth projects closer to FY <unk> with strong progress across the three <unk> for FY <unk> to be fulfilled.

Speaker Change: Those three are a final yard EPC contract.

Speaker Change: Construction financing that Eduardo will elaborate on later on.

And commercial opportunities for <unk> deployments.

Karl Fredrik Staubo: If we FID the MkII within 24, we expect to take delivery of the FLNG within the second half of 27. The framework agreement for potential FLNG deployment announced during Q4 has now progressed to detailed document negotiations for an up to 20-year potential FLNG charter with a 2027 startup. We'll elaborate on that later in the presentation. On corporate and other, I'll let Eduardo cover the quarterly results later on.

Speaker Change: If we <unk> the mark to within 24, we expect to take delivery of therefore energy within the second half of 'twenty seven.

The framework agreement for potential <unk> deployment announced during Q4 has now progressed to detailed document negotiations for an up to 'twenty are potential FL, Indeed charter with a 2027 startup.

Speaker Change: We will elaborate on that later on in the presentation.

Speaker Change: On corporate and other I'll, let Eduardo cover the quarterly results later on.

Karl Fredrik Staubo: For Macau Energies, we've now successfully developed the pilot LNG Production Unit named F2X. The F2X unit has already produced LNG during testing and is currently being mobilized to a flare gas site in Texas for live testing and commercial use. Once the Macau technology is fully proven, we will evaluate alternatives to separate Macau into a separate entity and build up a portfolio of F2X units. Turning to slide 8 and an update on the FLNG gimmick. On the right-hand side of the slide, you can see GIMME moored to the GTA hub.

Speaker Change: For Macau energies, we've now successfully developed the pilots LNG.

Speaker Change: LNG production unit named <unk>.

Speaker Change: The <unk> unit has already produced LNG during testing and is currently being mobilized to flare gas site in Texas for live testing and commercial use.

Speaker Change: Once the Macau technology is fully proven we will evaluate alternatives to separately Macau into a separate entity and build up a portfolio of <unk> units.

Speaker Change: Turning to slide eight and an update on the <unk> gaming.

Speaker Change: On the right hand side of the slide you can see give me more to the GTA hub.

Karl Fredrik Staubo: The vessel sits behind a 1.2 km breakwater and is moored to the steel infrastructure which makes up the hub itself. On the right-hand side, you can see the BP-owned FPSO departing Tenerife on its way to its offshore location. The hookup and commissioning of the FPSO are now on the critical path to first gas and expected to occur in Q3-24. Meanwhile, whilst we wait for first gas, Golar has now started to receive standby day rates.

Speaker Change: The vessel sits behind a one two kilometer breakwater and there's more to the steel infra structure, which makes up the hub itself.

Speaker Change: On the right hand side, you can see the BP owned F BSO the parking Tenerife on our way to our offshore location.

Speaker Change: The hookup and commissioning of the F. P. S O R. Now on critical path to first gas.

And expected to occur in Q3 'twenty four.

Speaker Change: Whilst we wait for first gas Golar has now started to receive standby day rates.

Speaker Change:

Karl Fredrik Staubo: We're also pleased to announce that we've made positive progress with the GTA operators BP and Cosmos to resolve the disputed pre-COD contractual mechanisms as well as aligned interests and cooperation to work up alternatives to shorten the scheduled six-month commissioning period. We continue to build on the constructive cooperation between the partners to optimize time to COD. Slide 9 further highlights the key steps for GIMME and the GTA field to reach COD.

We're also pleased to announce that we've made positive progress with the GTA operators BPM Cosmos to resolve the dispute did pre CODI contractual mechanisms as well as the aligned interests and cooperation to work up alternatives to shorten the schedule six months commissioning periods.

We continue to build on the constructive cooperation between the partners to optimize time to CRB.

Speaker Change: Slide nine further highlights the key steps for give me and the GTA field to reach C O D.

Karl Fredrik Staubo: As you can see, the first two milestones have been concluded, and we're waiting to embark on LNG production. As explained, the commissioning period is expected to be approximately six months, with commercial operations anticipated thereafter. As explained, we now receive a standby day rate and daily commissioning payments ahead of COD. COD triggers the start of a 20-year lease and operates agreement that unlocks the equivalent of around $3 billion of adjusted EBITDA backlog for Golar or about $150 million per year. Changing to slide 10 and Healy.

As you can see the first two milestones have been concluded and we're waiting to embark on LNG production.

Speaker Change: As explained the commissioning period is expected to be approximately six months with commercial operations anticipated thereafter.

Speaker Change: As explained we now receive a standby day rates and daily commissioning payments ahead of Sidoti.

Speaker Change: C O D triggers the start of a 20 year lease and operate agreement that unlocks the equivalent of around 3 billion of adjusted EBITA backlog to golar or about $150 million per year.

Speaker Change: Changing to slide 10 and Healy.

Karl Fredrik Staubo: Hilly continued its market-leading operational performance with another quarter of 100% economic uptime. In addition to the economic benefits to Healey stakeholders, including the host government, upstream partners, and Golar shareholders, our FLNG operations have significant environmental benefits to the areas we operate in, especially if the source gas is being flared. We also serve the communities where we operate through a series of initiatives, including local purchasing and hiring domestic staff. On Hilly today, we have 90% of onshore support staff and 40% of offshore staff being Cameroonians.

Haley: Haley continue their market, leading operational performance with another quarter of a 100% economic upturn.

Karl Fredrik Staubo: We have local education programs and infrastructure support projects such as water wells, street slides, and other initiatives that benefit the communities we operate in far beyond the contract duration of FLNG operations. Healy enabled Cameroon to become the world's 20th LNG exporting country upon startup of operations in 2018, and remains the only LNG facility in the country. Today, there are several nations with proven or associated gas reserves that would like to access these benefits and currently drive demand for Healy recontracting at the end of our current charter in July 2026.

Haley: In addition to the economic benefits to helix stakeholders, including the host government upstream partners and Golar shareholders. Our <unk> operations have significant environmental benefits to the areas we operate in.

Haley: Especially if the source gas is being flared.

Haley: We also serve the communities, where we operate through a series of initiatives, including local purchasing power.

Haley: Hiring of domestic staff.

Angel: Angel. It today, we have 90% of onshore support staff and 40% of offshore staff being cameroonians.

Angel: We have local education programs and infrastructure support projects, such as Walter wealth streets lights, and other initiatives that benefit the communities we operate in far beyond the contract duration of Exelon, India operations.

Angel: Healy enabled Cameroon to become the worlds 20th LNG export in country upon startup of operations in 2018.

Angel: And remains the only LNG facility in the country.

Angel: Today, there are several nations with proven or associated gas reserves that would like to access these benefits.

Currently drive demand for Healy re contracting at the end over our current charter in July 2026.

Speaker Change: Turning to slide 11, and Mark too.

Karl Fredrik Staubo: We continue to develop MkII towards FID. As previously guided, we have committed more than $400 million to our planned next FLNG vessel, where $266 million have been spent to date, all of which is currently covered by equity. Long lead items are now 58% complete.

Speaker Change: We continue to develop mark too towards F. I D.

Speaker Change: As previously guided we have committed more than $400 million towards planned next LNG vessel.

Were $266 million have been spent to date.

Speaker Change: All of which is currently covered by equity.

Speaker Change: Long lead items are now 58% complete.

Karl Fredrik Staubo: During the quarter, we have continued to work with the topside provider and the shipyard to reconfirm the yard slot and price. We still expect an all-in FLNG price to be in the industry-leading range of around $600 million per MTPA of production capacity. Should we order the vessel within the summer of 2024, we expect to sail away in the second half of 2027. Turning to slide 12 and the business development update. Our focus remains on redeploying the FLNG Hilly following the end of our current charter on July 26, and thereafter order and secure commercial terms for a contemplated Mark II FLNG.

Speaker Change: During the quarter, we have continued to work with the top side provider and the shipyard.

Speaker Change: To reconfirm the yard slots and pricing.

Speaker Change: We still expect an all in ethylene price.

Speaker Change: To be in the industry, leading range of around $600 million per M. Tpa of production capacity.

Speaker Change: Should we ordered a vessel within the summer of 'twenty four we expect sail away in the second half of 2027.

Speaker Change: Turning to slide 12 and business development update.

Speaker Change: Our focus remains on redeploying the <unk> hilli following the end of our current charter in July 26.

Speaker Change: And thereafter order unsecured commercial terms for a contemplated mark to <unk>.

Karl Fredrik Staubo: We are very positive about the developments of the framework agreement announced in our Q4-23 earnings release that has now progressed to detailed contract negotiations for an up to 20-year FLNG deployment. We see strong alignment with the potential charter, host government, and site selection for the deployment of FLNV production. In addition to that specific opportunity, we continue to advance additional FLNG developments where most of the activity remains in West Africa and South America, but we're also pleased to see other geographies actively pursuing FLNG development.

Speaker Change: We are very positive to the developments of the framework agreements announced in our Q4 'twenty three earnings release that has now progressed to detailed contract negotiations from up to 20 are ethylene need appointments.

Speaker Change: We see strong alignment with the potential charter host government and site selection for the deployment of.

Speaker Change: <unk> production.

Speaker Change: In addition to that specific opportunity, we continue to advance additional ethylene developments, where most of the activity remains in West Africa, and South America, but we're also pleased to see other geographies actively pursuing F LNG developments.

Karl Fredrik Staubo: On the back of this increased FLNG business development activity, we have now recruited a chief commercial officer, Federico Peterson, and two further highly experienced maritime and upstream development colleagues. And combined, the three of them have more than 70 years of business development experience, and we're very pleased to have them on the team, and we already see benefits in terms of building the FLNG pipeline. We expect to continue to update the market once we have material news on this. On page 13, we switch gears to Macau Energy. On the right, you can see the F2X unit, mounted outside of the factory where the unit is constructed in Texas, US.

Speaker Change: On the back of this increased ethylene business.

Speaker Change: Business development activity, we have now recruited a chief commercial officer Federico Peterson.

Speaker Change: And the further two highly experienced maritime and upstream development colleagues.

Speaker Change: And combined the three of them have more than 70 years of business development experience and were very pleased to have them on the team and we already see benefits.

Speaker Change: In terms of building the <unk> pipeline.

Speaker Change: We expect to continue to update the market once we have material news on this front.

Speaker Change: On page 13, switching gears to Macau entities.

Speaker Change: On the top right you can see the <unk> units.

Speaker Change: Wanted outside of the factory, where the unit is constructed in Texas U S.

Karl Fredrik Staubo: This is a modularized system that enables capturing and monetization of flare gas for Land Wealth, specifically targeting markets in the US, South America, and Middle East. We're pleased to say that the first unit was delivered on time and budget and has proven to already produce LNG from natural gas input. The unit is currently being mobilized to a site in Texas for commercial demonstration of the technology. We see the business opportunity as a very attractive time from capex to cash flow. We take approximately 10 to 12 months to build one unit.

Speaker Change: This is a modernized system that enables monitor capturing and monetization of <unk>.

Speaker Change: Flare gas.

Speaker Change: For land wealth spin.

Speaker Change: Specifically targeting markets in the U S South America and Middle East.

Speaker Change: We're pleased to say that the first unit was delivered on time and budget and is proven to already produce LNG from natural gas inputs.

Speaker Change: The unit is currently being mobilized to site in Texas for commercial demonstration of the technology.

Speaker Change: We see the business opportunity is very attractive time from Capex to cash flow were approximately 10 to 12 months to build one units.

Karl Fredrik Staubo: Based on the current planned commercial model, we see a capex to EBITDA of around three to four times based on the existing commercial opportunities that we have identified. We currently have several large potential clients in Macau and the F2X technology doing due diligence on the company, and some of them have expressed interest in offtake of multiple units. As explained earlier in the presentation, we will consider separating out Macau as a standalone entity during 2024 to roll out the business model and build a portfolio of F2X units.

Speaker Change: Based on the current planned commercial model, we see in Capex to EBITA of around three to four times based on the existing commercial opportunities that we have identified.

Speaker Change: We currently have several large potential clients of Macau and the <unk> technology doing due diligence on.

Speaker Change: On the company and some of them have expressed interest for offtake of multiple units.

Speaker Change: As explained earlier in the presentation, we will consider to separate out Macau in a standalone entity during 2024.

Speaker Change: <unk> rollout the business model.

Speaker Change: And build a portfolio of <unk> units.

Karl Fredrik Staubo: Turning to slide 14, earlier today, Golar released its 2023 ESG report. The ESG report highlights some of the key achievements conducted over the course of the last 12 months, including the completion of GIMME with 38 million man-hours worked without any lost time incident. The de-risking of Golar from a single asset FLNG company to two FLNGs in operation with a further third unit contemplated. We elaborate on the benefits of the F2X system in Macau and some of the developments on our carbon capture investments in Aqualung.

Speaker Change: Turning to slide 14 earlier today Golar released its 2023 ESG reports.

Speaker Change: The ESG report highlights some of the key achievements.

Speaker Change: Conducted over the course of the last 12 months.

Speaker Change: Including the completion of <unk> with 38 million man hours worked without any lost time incidents.

Speaker Change: The derisking of Golar from a single asset LNG company to two <unk> in operation with a further third unit contemplated.

Speaker Change: We elaborate on the benefits of the <unk> system in Macau and some of the developments on our carbon capture investments and accordingly.

Karl Fredrik Staubo: We expand on some of the initiatives already mentioned under the HILI section that we have conducted in Cameroon, and we would encourage all of you to visit our website to further learn about Golar's ESG performance over the course of the last 12 months. I'll now hand it over to Eduardo to take us through the Q1 group results.

Speaker Change: We expand in some of the initiatives already mentioned under the Heelys section that we have conducted in Cameroon.

Speaker Change: And we would encourage all of you turn to our website to further learn about Golar ESG performance over the course of the last 12 months.

I'll now hand, it over to Eduardo to take us through the Q1 group results.

Eduardo Maranhao: Good morning everyone and thanks Karl. I'm pleased to share an overview of Golar's financial performance during Q1. Turning over to slide 16, I wanted to show some of the highlights of this course. Total operating revenues amounted to $65 million, with total FLNG tariffs reaching $86 million, down from $110 million recorded in the same quarter last year. This reduction can be attributed to lower realized Brent and TTF linked earnings when compared to last year. However, we always look at FLNG tariff as the appropriate metric, which reflects all realized liquefaction revenues, including gains on our oil and gas link.

Good morning, everyone and thanks, Carl I'm pleased to share an overview on Golar financial performance during Q1.

Eduardo Maranhao: Turning over to slide 16, I wanted to show some of the highlights of this quarter.

Eduardo: Total operating revenues amounted to 65 million with total LNG tariffs, reaching $86 million down.

Eduardo: Down from $110 million recorded in the same quarter last year. These.

Eduardo: This reduction can be attributed to lower realized Brent and TTS linked to earnings when compared to last year.

Eduardo: We always look at SMA gene therapy is the appropriate metric, which reflects all realized liquefaction revenues, including gains on our oil and gas meters each.

Eduardo Maranhao: We had a net income of $66 million in Q1. This figure represents a significant improvement on a year-on-year basis. However, adjusted EBITDA came in at $64 million, down 24% when compared to the same quarter in 2023 as a result of lower Brent and TTF prices, which ultimately impacted Healey's earnings. Our liquidity position remains strong, with approximately $700 million of cash on hand and expected receivables from our closed TTF. Based on that, our net debt at the quarter end stood at $550 million.

Eduardo: We had a net income of $66 million in Q1. This figure represents a significant improvement on a year on year basis, adjusted EBITDA came in at $64 million.

Eduardo: Down 24% when compared to the same quarter in 2023, as a result of lower Brent in CTF prices, which ultimately impacted heelys earnings.

Eduardo: Our liquidity position remains strong with approximately $700 million of cash on hand, and expected receivables from our closed CTF hedges.

Eduardo: Based on debt, our net debt at quarter end stood at $550 million.

Eduardo Maranhao: We continue to execute on our share buyback program this quarter, which reduces the number of outstanding shares to $104 million at the end of the quarter. Now moving on to slide 17. Healy maintained 100% economic uptime in its market-leading operational track record.

Eduardo: We continue to execute on our share buyback program this quarter, which reduces the number of outstanding shares to $104 million at the end of the quarter.

Eduardo: So now moving on to slide 17.

Eduardo: <unk> maintained 100% economic uptime in each market, leading operational track record.

Eduardo Maranhao: Here we can see the evolution of Healey's EBITDA contribution over the last quarter. When viewed on a year-on-year basis, Healey generated $64 million in Q1. This number includes $31 million from base tolling fees.

Eduardo: Here, we can see the evolution of heal as EBITDA contribution over the last quarters. We are looking on a year on year basis, Hela generated $64 million in Q1.

Eduardo: This number includes $31 million from base tolling fees.

Eduardo Maranhao: Brent and TTF linked fees were down to $15 and $18 million. We retain exposure to Brent and TTF, so should prices continue to improve in the coming quarters, we should expect increased distributions from Healey until the end of its current. Moving on to slide 18. You can see that we remain exposed to oil and gas prices for the remainder of 2020 while, at the same time, expect to benefit from locked-in gains from our previous DTF launches.

Eduardo: Brent in CTF linked fees were down to 15 and $18 million respectively.

Eduardo: We retain exposure to Brent in TTS, So should prices continue to improve in the coming quarters. We should expect increased distributions from healy until the end of its current contract.

Eduardo: Moving on to Slide 18, you can see that we remain exposed to oil and gas prices for the remainder of 2024, while at the same time expects to benefit from marketing gains from our previous GTS swatch.

Eduardo Maranhao: Based on current forward prices, SEAL is expected to generate approximately $274 million this year, while debt service, including principal amortization, is expected to come down to $87 million in 2021, resulting in total free cash flow to equity of just under $200 million per year.

Eduardo: Based on current forward prices is expected to generate approximately $274 million a year.

Eduardo: <unk> debt service, including principal amortization is expected to come down to $87 million in 2024.

Eduardo: Resulting in total free cash flow to equity of just under $200 million per year.

Eduardo: So moving on to slide 19.

Eduardo Maranhao: We remain committed to shareholder returns and executing on our share-by-debt program. As you can see, in 2023, we paid over $168 million in dividends and share buybacks. With the recently announced dividend of $0.25 this quarter, the total amount of dividends in buybacks in 2024 will exceed $40 million. We've bought back approximately 0.7 million shares this quarter, leaving 104 million shares outstanding at the end of the year. Out of the $150 million which was approved last year, $74 million remains available for further repurchases, which we will continue to opportunistically purchase. This quarter, we are declaring a dividend of $0.25 per share with a record date on the 10th of June and payment on the 17th of June. Now turning over to slide 20.

Eduardo: We remain committed to shareholder returns and executing on our share buyback program. As you can see in 2023 repaid over $168 million in dividends and share buybacks with.

Eduardo: With the recently announced a dividend of <unk> 25, since this quarter, the total amount of dividends and buybacks in 2004, we will exceed for $40 million.

Eduardo: We've bought back approximately <unk> 7 million shares this quarter, leaving 104 million shares outstanding at the end of the quarter.

Eduardo: Also the $150 million, which was approved last year $74 million remained available for further repurchases, which we will continue to opportunistically pursue.

This quarter, we are declaring a dividend of <unk> 25, a share with a record date on the 10th of June and payment on the 17th of June.

Now turning over to slide 20.

Eduardo Maranhao: As we approach the start-up of the 20-year GIMBEC contract with BP, we have the opportunity to improve our current debt structure and release a significant amount of equity which is tied to debt. We have been in close dialogue with various lenders and have recently executed term sheets for refinancing alternatives ranging from around $1 to up to $1.4 billion. As of today, we have drawn $630 million under the existing $700 million facility.

Eduardo: As we approach the startup of the 20 year <unk> contract with BP, we have the opportunity to improve our recurring debt structure and released a significant amount of equity which is tied to that project.

Eduardo: We have been in close dialogue with various lenders and have recently executed term sheets for refinancing alternatives ranging from around one to up to one 4 billion.

Eduardo: As of today, we have drawn $630 million under the existing 700 million facility. So we can run the numbers based on a 70% stake a potential refinancing could unlock more than half a billion dollars niche to golar.

Eduardo Maranhao: So when running the numbers based on our 70% stake, a potential refinancing could unlock more than half a billion dollars net to go. This is another stepping stone towards our funding plan for Mark II. We have been actively negotiating a new long-term financing package for the Mark II of approximately $1.2 billion. So when considering the expected net proceeds from a potential GME refinancing, plus around $300 million, which Karl mentioned earlier today, which has been fully equity funded until now, which includes the purchases of long-lead equipment and the acquisition of the donor vessel, the LNG-C Fuji, this proposed financing will support our funding strategy to move ahead with the I will now hand over the call to Karl for some closing remarks.

Eduardo: This is another stepping stone towards our funding plan for the Mark II project.

Eduardo: We have been actively negotiating a new long term financing package for the mark to of approximately $1 2 billion.

Eduardo: So when considering the expected net proceeds from a potential give me refinancing plus around $300 million.

Speaker Change: Which Karl mentioned earlier today, which has been fully equity funded until now which includes the purchases of long lead equipment and the acquisition of the donor vessel LNG see Fuji.

Speaker Change: This proposed financing will support our funding strategy to move ahead with Marc II project in the coming quarters.

Speaker Change: I will now hand over the call to Karl for some closing remarks.

Karl Fredrik Staubo: Thanks Eduardo. I'll now turn to slide 22 to outline the summary and the next step. So on Hilly, our utmost focus is to maintain the market-leading operational track record and focus on recontracting the vessel at the end of the current charter. We're very pleased with the developments of the potential 20-year charter, which we are currently in detailed negotiations for. On GIMME, our ambition is to conclude the pre-COD cash flow mechanisms with BP and continue the very positive progress to COD. As Eduardo just explained, we are also focusing on debt optimization through a potential refinancing of these vessels. Turning to mark two, we have spent $270 million today.

Karl: Thanks, Eduardo ill now turn to slide 22 to outline the summary, and the next steps.

Speaker Change: So on Hilli, our utmost focus is to maintain the market leading operational track record and focus on re contracting the vessel at the end of the current charter.

Speaker Change: We're very pleased with the developments of the potential 20 air charter.

Speaker Change: Which we are currently in detailed negotiations for.

Speaker Change: On give me.

Speaker Change: Our ambition is to conclude the <unk> cash flow mechanisms with BP.

Speaker Change: <unk> continued the very positive progress to COPD.

Speaker Change: As Eduardo just explained we are also focusing on the debt optimization through a potential refinancing of this vessel.

Turning to Mark too, we have spent $270 million to date.

Karl Fredrik Staubo: We target FID subject to final yard contract, a construction facility being available, and charter visibility on either Hilly or the Martins. As explained earlier in the presentation, we have gotten reconfirmation of a capex per ton of 600 million per MTPA and a target 2027 delivery if ordered this summer. Under Corporate and Investments, we are targeting a separate listing of Macau energies, the SAIL or Long Term Charter of Golar Arctic, and we remain committed to strong shareholder returns.

Speaker Change: With targets.

Speaker Change: Subject to final yard contract, our construction facility being available and charter visibility on either Healy order Mark too.

Speaker Change: As explained earlier in the presentation, we have gotten the reconfirmation of our capex per tonne of 600 million per M. Tpa.

Speaker Change: And a target 2027 delivery if ordered this summer.

Speaker Change: Under corporate and investments we are targeting a separate listing of Macau entities.

Speaker Change: A sale or long term charter of Golar Arctic.

Speaker Change: And we remain committed to strong shareholder returns.

Karl Fredrik Staubo: Supported by current strong cash flow generation with significant upside both from recontracting of Hilli and ordering and contracting of Mark II. We have significant financial flexibility in that optimisation and continued capacity under the existing share buyback program. That concludes the prepared remarks, and we're happy to open up for any questions.

<unk> bye.

<unk> strong cash flow generation with significant upside both from a re contracting of Hilli.

Speaker Change: Ordering and contracting of Mark too.

Speaker Change: We have significant financial flexibility and debt optimization and continued capacity under the existing share buyback program.

Speaker Change: That concludes the prepared remarks, and we're happy to open up for any questions.

Operator: Thank you. If you wish to ask a question, you need to press star 1 and 1 on your telephone and wait for your name to be announced. Please note we ask you to limit your questions to two per person. To withdraw your question, please press star 1 and 1 again. We will take our first question. Your first question comes from the line of Ben Nolan from Skyfell. Please go ahead; your line is open.

Speaker Change: Thank you if you wish to ask a question you need to press Star one and one on your telephone and wait for your name to be announced.

Speaker Change: Please note we ask you to limit your questions to two per person.

Speaker Change: Joe Your question. Please press star one and one again.

Speaker Change: We will take our first question.

Speaker Change: Your first question comes from the line of Ben Nolan from Stifel. Please go ahead. Your line is open.

Benjamin Joel Nolan: Thank you. And good morning, afternoon, Karl, and Eduardo.

Benjamin Joel Nolan: Thank you.

Speaker Change: And good morning afternoon, Carl Florida, So my first question.

Benjamin Joel Nolan: So my first question, as you've made progress on this framework agreement, and there's, you know, a little bit left to be done, but it seems like it's likely to move forward. Hopefully that's not an overstatement. I was hoping that you maybe could get a little bit more color on a few things.

Speaker Change: <unk> made progress on this framework agreement and theirs.

Speaker Change: Yeah.

Speaker Change: A little bit left to be done, but it seems like it's it's Michael.

Speaker Change: Likely to move forward and hopefully thats not an overstatement I was hoping that you maybe can give a little bit more color on.

Speaker Change: A few things first of all.

Benjamin Joel Nolan: First of all, is it for Mark two? Is that how we should think about it? And then, along with that, could it potentially encompass more than one unit?

Speaker Change: Is it.

Speaker Change: Is it for Mark two is that how we should think about it and then along with that.

Speaker Change: Could it potentially encompass more than one unit.

Karl Fredrik Staubo: Hi Ben. Yes, it could potentially encompass more than one unit over time. (Inaudible) Both us and the client are working on whether Healy or Mark II should be the first one.

Speaker Change: Hi, Ben.

Speaker Change: Yes, it could potentially encompass more than one unit overtime.

Speaker Change: And initially okay.

Speaker Change: Yes.

Speaker Change: Both us and the clients are working on whether Haley or Mark two should be the first one up.

Benjamin Joel Nolan: On the HILI, it comes off contract in the middle of 2026. Is there any potential, or is there a way in which it could start a new contract that same year, or does there need to be a little down time for upgrades and so forth?

Karl Fredrik Staubo: On the HILI, it comes off contract in the middle of 2026. Is there any potential, or is there a way in which it could start a new contract that same year, or does there need to be a little down time for upgrades and so forth?

Speaker Change: Okay, Alright, I appreciate that and then.

Speaker Change: On the Hilli.

Speaker Change: It comes off contract in the middle of 2026.

Speaker Change: Is there any potential or is there a way in which it could start a new contract that same year or does there need to be a little downtime.

Or.

Karl Fredrik Staubo: That's 100% dependent on the location in which we recontract. Of course, if we were to stay on site in Cameroon, we obviously do not need to go to a shipyard. If we go to one of the neighboring countries, subject to water depth, we might not need to go for any vessel upgrade. But it's also linked to the duration of recontracting. And if you're looking for close to 20-year operations, we believe it would be beneficial to have a relatively short yard state to ensure continuous operation in the 20-year period and don't have any need to go for maintenance at that time. Okay.

Speaker Change: Great Thats helpful.

Speaker Change: That's 100% dependent on the location in which we re contract of course, if we were to stay on site in Cameroon, We obviously do not need to go to the shipyard. If we go to one of the neighboring countries subject to Walter depth, we might not need to go for any vessel upgrades.

Speaker Change: But it's also linked to the duration of our re contracting and if youre looking for close to 20, our operations, we believe it would be beneficial to us.

Speaker Change: Have a relatively short yard state to ensure continuous operation in the third period and don't have any.

Speaker Change: Need to go for maintenance at that time.

Benjamin Joel Nolan: Okay, all right. I appreciate it. Thank you.

Speaker Change: Okay, Alright, I appreciate it thank you.

Speaker Change: Okay.

Operator: We will take our next question, and your next question comes from the line of Alexander Bidwell from Weber Research and Advisory. Please go ahead; your line is open.

Thank you.

Speaker Change: We will take our next question.

Speaker Change: And your next question comes from the line of Alexander <unk> from Weber Research and Advisory. Please go ahead. Your line is open.

Alexander Bidwell: Good morning, this is Alex on for Greg Wazikowski this quarter. Thank you for taking my questions. Just a quick one here on, [inaudible] on HILI.

Alex: Good morning. This is Alex on for Greg was a cascade this quarter alright. Thank you for taking my questions.

Okay.

Alex: Just a quick one here on.

Alex: Yeah.

Alexander Bidwell: So, could you give us a sense of the, I guess, the general timeline you'd be looking at for redeployment? [inaudible] I'd like a little bit more color on when she comes off in July, what's the, I guess, the path to first gas at whatever the new project is. You mentioned before that you're looking at potentially bringing her into a yard to do some maintenance and some...

Alex: On Hilli so.

Alex: Could you give us a sense of the.

Speaker Change: I guess, the general timeline would be looking at for redeployment.

Alex:

Speaker Change: I'd like a little bit more color on when she comes off.

Alex: July.

Alex: What's the I guess the path to first gas at whatever the new.

Speaker Change: A new project as you mentioned before that Youre looking at potentially bringing our into a yard to do some maintenance on some <unk>.

Speaker Change: Some recent work, but are we expecting sort of a similar type commissioning timeline once she gets on site that you'd see on.

Speaker Change: Jimmy.

Benjamin H. Mohr Mok: Hi Alex. So, provided she does not stay in the country, what you would have to do is to decommission the vessel from its existing site. We would likely then sail to a yard. We do not need to go to a dry dock at all. So that is most likely to be either Dubai Dry Docks, Tenerife, or similar. The primary reason to do it is life extension for a longer-term contract.

Speaker Change: Yes, Hi, Alex.

Speaker Change: So.

Speaker Change: Provided she does not stay in country. What you would have to do is to decommission the vessel from its existing sites.

Speaker Change: We would likely then sale too.

Speaker Change: They are we do not need to go to a dry dock at all so that is most likely to be either Dubai Drydocks Tenerife are similar.

Speaker Change: The <unk>.

Speaker Change: Primary reason to do it as life extension for a longer term contract. We expect the orange state to take plus or minus three months and then you didn't sell down too.

Benjamin H. Mohr Mok: We expect the yard stay to take plus or minus three months, and then you will then sail down to the location of operation. We do not expect a six-month commissioning period once we're on site. We had a significantly shorter than six months commissioning period for Hilly when we first started operations in Cameroon. And given that the vessel has been producing for eight years, we know that all of the systems, pumps, generators, and so forth are working well. So we expect a significantly shorter commissioning period. We would expect it to be more in the tune of one to two months. But through the commissioning period, you are producing LNG, so it's not like the commissioning period is without revenue.

Speaker Change: Location of operation.

Speaker Change: We do not expect a six months commissioning period once were on site, we had a significantly shorter than six months commissioning period over hilli. When we first started operation in Cameroon, and given that the vessel aspirin produced been producing for eight years, we know that all of the systems pumps generators.

And so forth.

Speaker Change: Working well so we expect a significantly shorter commissioning periods, we would expect more in the tune of one to two months, but through commissioning period, you are producing LNG. So it's not like commissioning period this without revenue.

Alexander Bidwell: All right, thank you very much, and one quick question on Mark 2. So what sort of lessons learned have you guys been applying from your Mark 1 designs on this new design? And do you guys expect to see, say, an optimized design for ease of maintenance or lowering your maintenance costs on the facility?

Speaker Change: Alright, Thank you very much and one.

Speaker Change: Quick.

Speaker Change: Quick question on Mark too, so what sort of lessons learned.

Speaker Change: Have you guys been applying from earmark one designs.

Speaker Change: On this.

Speaker Change: This new design and do you guys expect to see.

Speaker Change: Say optimized and optimized design for ease of maintenance or lowering your.

Speaker Change: Your maintenance costs on our facility.

Benjamin H. Mohr Mok: That's a very good question. Dependent on how detailed we should go in this call, I suggest we keep it relatively high level, but the key benefit of Mark 2 over Mark 1 is that the entire liquid fraction plant is built on an entire new midsection. So if you look at the illustrations here, you can see that all of the liquefaction is built on a new unit which is 80 meters long and 60 meters wide.

Speaker Change: That's a very good question.

Speaker Change: So dependent on how detailed we should go in this call I suggest to keep it relatively high level, but the key benefit of marks to over Mark one is that the entire liquefaction plant is built on an entire new mid section.

Speaker Change: So if you look at the illustration is here you can see that all of the liquefaction is built on a new unit, which is 80 meters long and 60 meters wide.

Benjamin H. Mohr Mok: That means that we could modularize the whole construction of the liquefaction plant and then add the storage being the ship. That's the benefit of Mark II. On Mark I, we have the liquefaction on one side of the ship and support vessels on the other. That means that there's far more stick building in a Mk1 than in a Mk2. Hence, on mark two, it's quicker, easier to operate, less space restriction, and enables a modularized build which is, to a larger extent than Mark I, repeatable. So, yes, there are significant learning effects, more space, but the same technology. All right.

Speaker Change: That means that we could marginalize the whole construction of the liquefaction plant.

Speaker Change: And then add the storage being the ship.

Speaker Change: That's the benefit of Mark to Mark one we have the liquefaction on one side of the ship and support vessels on the other.

Speaker Change: That means that it's far more stick building and a mark one then a mark too.

Speaker Change: Hence on Mark it's quicker easier to operate less space restriction and enables modernized builds which is.

Speaker Change: To a larger extent then mark one repeatable.

Speaker Change: So, yes, theres significant learning effects more space.

Speaker Change: Haim technology.

Alexander Bidwell: Alright, thank you very much. That's all from my side.

Speaker Change: Alright. Thank you very much that's all from my side.

Alex: Thanks, Alex.

Operator: We will take our next question, and your next question comes from the line of Chris Robertson from Deutsche Bank. Please go ahead; your line is open.

Alex: Thank you.

Speaker Change: We will take our next question.

Speaker Change: And your next question comes from the line of Christopher <unk> from Deutsche Bank. Please go ahead. Your line is open.

Christopher Warren Robertson: Hey, thank you for taking my questions. Good morning or afternoon, Karlin and Eduardo.

Christopher: Hi, Thank you for taking my question, good morning, or afternoon, Karl and Eduardo.

Christopher Warren Robertson: My questions are centered maybe around more theoretical scenarios here in terms of how you're looking at ideal contract terms, let's say for a recontracting of the hilly. I mean, it's a given that you would potentially want to know the full utilization of the asset, but, as we're thinking here about the choices, kind of with the pricing outlook for LNG here, how much would, in your mind, be ideal for the base tolling arrangement versus commodity price exposure? as it relates to just capacity.

Christopher: My questions are centered maybe around more theoretical scenarios here in terms of how youre looking at.

Christopher: Ideal contract terms, let's say for a re contracting of the Hilli I mean, given that you would potentially want.

Christopher: The full utilization of the asset but.

Christopher: As we're thinking here about the choices.

Christopher: With the pricing outlook for LNG here, how much wood in your mind to be ideal for the base tolling arrangement versus.

Commodity price exposure.

As it relates to capacity.

Karl Fredrik Staubo: Hi Chris, that's an interesting trade-off. So I think it's fair to say that the higher base you ask for, obviously, the less carry you get on the upside, and vice versa. What we tend to see is that potential charter or upstream partners are far more open to sharing on the upside as opposed to covering on the downside. So on the balance, what we want to cover is debt service and sort of a minimal return to equity on the fixed tolling and then have an attractive break even on where we share the upside from.

Chris: Hi, Chris that's an interesting trade off so I think it's fair to say that the higher base. Your score obviously the less carry you get on the upside and vice versa. What we tend to see is that the potential charter our upstream partners.

Chris: Are far more open to share on the upside as opposed to cover on the downside.

Chris: So on the balance what we want to cover debt service.

Sort of a minimal return too.

Equity on the fixed hauling and then have an attractive.

Chris: Breakeven on where we share the upside from.

Christopher Warren Robertson: Karl, you mentioned some other geographies pursuing FLNG beyond the two focus regions that you typically look at in West Africa and South America. Can you go into a little bit more detail on where you're seeing that?

Karl Fredrik Staubo: Karl, you mentioned some other geographies pursuing FLNG beyond the two focus regions that you typically look at in West Africa and South America. Can you go into a little bit more detail on where you're seeing that?

Speaker Change: Okay, that's fair.

Speaker Change: Yes, Carl you had.

Speaker Change: <unk> some other geographies pursuing LNG beyond the two focus regions that you've typically looked at in West Africa, and South America can you go into a little bit more detail on where youre seeing that.

Karl Fredrik Staubo: Other geographies include further north in the Americas and Middle East.

Speaker Change: Okay.

Speaker Change: All other geographies includes.

Further north in the Americas and Middle East.

Speaker Change: Okay got it.

Christopher Warren Robertson: And then last question, follow-up: as you brought in your new commercial officer here as well as development personnel, you said that you've realized some gains so far or at least some help there. Can you go into a little bit more detail on exactly what they bring to the table in terms of their network or expertise or how they are driving the process forward from a day-to-day perspective?

Karl Fredrik Staubo: And then last question, follow-up: as you brought in your new commercial officer here as well as development personnel, you said that you've realized some gains so far or at least some help there. Can you go into a little bit more detail on exactly what they bring to the table in terms of their network or expertise or how they are driving the process forward from a day-to-day perspective?

Speaker Change: And then last question follow up as you brought in.

Speaker Change: New commercial officer here as well.

Speaker Change: Development personnel.

Speaker Change: You said that you've realized some.

Speaker Change: Some gains so far or at least some some help there can you go into a little bit more detail on exactly.

Speaker Change: Yes.

What they bring to the table in terms of their network or expertise or how are they driving the process board from a day to day perspective.

Karl Fredrik Staubo: So with reference to your question on sort of the upside sharing, people with in-depth experience of upstream business development are very helpful to our commercial team because we have further insights into where and how much we can share of the upstream, and obviously with the combined 70 years of successful industry experience. They have significant relationships with potential upstream partners, so they get both the benefits of in-depth knowledge of the upstream part of the value chain and the relationships.

Speaker Change: So we'd referenced to your question on sort of the upside sharing.

Speaker Change: People with in depth.

Speaker Change: Experienced from upstream business development is very helpful to our commercial team.

Speaker Change: Because we have.

Speaker Change: Further insights into.

Speaker Change: Where and how much we can share of the upstream.

Speaker Change: And obviously with a combined 70 ourselves.

Speaker Change: Successful industry experience they have.

Speaker Change: Significant relationships to potential upstream partners. So it's both the benefits of in depth knowledge of the upstream part of the value chain.

Speaker Change: And the relationships.

Christopher Warren Robertson: Got it. That's a great color.

Got it that's great color. Thank you very much for the time I'll turn it over.

Christopher Warren Robertson: Thank you very much for your time. I'll turn it over. Thank you.

Speaker Change: Thank you.

Operator: We will take our next question, and your next question comes from the line of Liam Burke from B. Reilly Financial. Please go ahead. Your line is open. Thank you. Hi Chris.

Speaker Change: Thank you.

Speaker Change: We will take our next question.

Speaker Change: And your next question comes from the line of Liam Burke from B Riley Financial. Please go ahead. Your line is open. Thank you Hi, Karl Hi, Eduardo how are you.

Liam Dalton Burke: Thank you. Hi Karl. Hi Eduardo. How are you? Well, Liam. Karl, in your discussions or in the negotiations on the Mark II, are you talking with multiple parties, or is this competition on the other side for access to the first Mark II, or is it just one potential charterer looking at multiple projects?

Speaker Change: Liam.

Speaker Change: Sure.

Speaker Change: Carl.

Speaker Change: In your discussions are in the negotiations on the Mark to are you talking with multiple parties or is competition on the other side for the access to the to the first part too or is it.

Speaker Change: One potential charter looking at multiple projects.

Karl Fredrik Staubo: from the chartering side, it's more than one for sure. There are several different ones we're talking to on Mark 2. What we see both across Hilly and Mark 2 and in this market in general is... Time to cash flow is important, and therefore, we think it's important to safeguard delivery. Obviously, it's clear to the whole market when Hilly is available, that is, from July 26 onwards, and we think it's important to safeguard a delivery of 27 million tonnes for Mark 2 because that's far ahead of where we think others could introduce liquef We also see a constraint on yard availability in general for maritime assets, and locking in the yard slot, we think, is an important step in also securing attractive commercial results.

Speaker Change: From the chartering side, it's Martin long for charters, there are several different or talking to market, what we see both across helium Mark to you and in this market in general is.

Speaker Change: Time to cash flow is important.

Speaker Change: And therefore, we think it's important to safeguard delivery, obviously, it's clear to the whole market from when he lays available. That's from July 26 onwards, and we think it's important to safeguard a 27 delivery for mark to the costs that are ahead of where we think others could introduce liquefaction capacity.

Speaker Change: We also see a constraint on yard availability in general for maritime assets unlocking in the Orange slope. We think is an important step and also securing attractive commercial results.

Liam Dalton Burke: Great, thank you. And on Avenir, you mentioned it, but are you satisfied with the progress there? Or is that a source of cash that you can reinvest in other projects?

Karl Fredrik Staubo: Great, thank you. And on Avenir, you mentioned it, but are you satisfied with the progress there? Or is that a source of cash that you can reinvest in other projects?

Speaker Change: Got it great. Thank you and on Avenue.

Speaker Change: I mean, you mentioned it but are you satisfied with the progress there or is that a source of cash that you can reinvest in other projects.

Karl Fredrik Staubo: It's fair to say that Avenir was more core to us when we owned Golar Power or later renamed Hygo. We like the investment; Avenir recently added another two new builds to the fleet. So we currently have a fleet of five vessels on the water, and two new builds are under construction. We see that the supply-demand balance for small-scale LNG ships is highly attractive, with a large part of the commercial fleet ranging from cruise liners, container vessels, drywall carriers, tankers, and so forth now being ordered with LNG dual fuel, but very limited LNG bunkering infrastructure.

Speaker Change: It's fair to say that.

Speaker Change: Avenir was more core to us when we owned Golar power or lately later renamed Heiko.

Speaker Change: But.

We liked the investment.

Speaker Change: <unk> recently added another two.

Speaker Change: New builds to the fleet. So we currently have a fleet of five vessels on the Walter and to enable new builds under construction, we see that the.

Speaker Change: Supply demand balance for small scale LNG ships is highly attractive with a large part of the commercial fleet ranging from cruise liners container vessels drybulk carriers tankers, and so forth now being ordered with LNG.

Speaker Change: But very limited LNG bunkering infrastructure that combined with small scale distribution of LNG.

Karl Fredrik Staubo: That, combined with small-scale distribution of LNG, we think provides a very attractive backdrop for small-scale LNG, but you're right to say that the investment is less strategic to us than it used to be when we were more involved on the downstream side.

Speaker Change: We think is provides.

Speaker Change: Attractive backdrop for small scale LNG, but youre right to say that the investment is less strategic to us than the multi used to be when we were more involved on the downstream side.

Liam Dalton Burke: Thank you, Karl.

Speaker Change: Thank you Carl.

Operator: Thank you. Once again, if you wish to ask a question, please press star 1 and 1 on your telephone. We will take our next question. Your next question comes from the line of Greg Lewis from BTIG. Please go ahead; your line is open.

Carl: Thank you.

Speaker Change: Once again, if you wish to ask a question. Please press star one and one on your telephone.

Speaker Change: We will take our next question.

Speaker Change: Your next question comes from the line of Greg Lewis from <unk>. Please go ahead. Your line is open.

Gregory Robert Lewis: Hey, thanks. Good afternoon, everybody. Hey, Karl.

Gregory Robert Lewis: Hey, Thanks, and good afternoon everybody.

Speaker Change: And Carl I was hoping to get a little bit more.

Speaker Change: Clarity on.

Speaker Change: Sure.

Speaker Change: In the press release or in the prepared remarks in the presentation you talked about that.

Speaker Change: The advanced negotiations.

Gregory Robert Lewis: I was hoping to get a little bit more clarity on the, you know, in the press release or in the prepared remarks in the presentation, you talked about the advanced negotiations. You know, realizing when we did the heli, I guess, about a decade ago, we really just wanted proof of concept and therefore, you know, hey, we had a unit that maybe only had two trains working. Obviously, you did a great job and scaled it up to three.

Speaker Change: Realizing when we did the Hilli I guess about a decade ago, we really just wanted proof of concept and therefore.

Speaker Change: Hey, we had a unit that may be only had two trains working and obviously you did a great job and scaled it up to three.

Gregory Robert Lewis: Is there any way to kind of think about, you know, from lessons learned, if we're going to move forward with a new project? Would we even contemplate doing something where the vessel maybe wasn't fully maxed out, fully utilized, like the heli making sure that that fourth train was up and running?

Speaker Change: Is there any way to kind of think about from lessons learned if we're going to move forward with the new project.

Speaker Change: Would we even contemplate doing something where the vessel maybe wasn't fully Max.

Speaker Change: Fully utilized.

Speaker Change: On a like to help making sure that that fourth train was up and running.

Karl Fredrik Staubo: Obviously, if we build more units, the plan is to fully utilize them for sure. But at the end of the day, as long as the client pays for it, we can use whatever they want to use. But for sure, the target is to fully utilize it. I think part of the reason for the current contract structure of HILI was that it's the first FLNG deployment in the world, and it was a proof of concept. And at the time of entering the facility, the gas reserve and the flow rates from the existing wells did not allow for higher production.

Speaker Change: Obviously, if we build more units the plan is to fully utilize them for sure but at the end of the day as long as the client pays for it.

Speaker Change: We can utilize whatever they want to use.

Speaker Change: For sure to target. This affiliate lies I think part of the reason for that.

Speaker Change: The current contract structure of Hilli.

Speaker Change: It's the first <unk> deployment in the world and it was a proof of concept.

Speaker Change: And at the time of entering into the facility the gas reserve and the flow rates from the existing wells did not allow for a higher production.

Gregory Robert Lewis: Obviously, we are targeting full utilization of all of our units in all commercial discussions.

Karl Fredrik Staubo: Obviously, we are targeting full utilization of all of our units in all commercial discussions.

Speaker Change: Obviously, we are targeting full utilization of all of our units.

Gregory Robert Lewis: Okay, and then I know it's kind of been touched on between the puts and takes between, you know, in any negotiation, you know, do you want a higher base rate? Do you want a higher tolling?

Speaker Change: On all commercial discussions.

Speaker Change: Okay, and then I know, it's kind of been touched on between the puts and takes between in any negotiation do you want a higher base rate do you want a higher tolling.

Gregory Robert Lewis: You know, what kind of upside is there? Is there any reason why, you know, just given that the unit is basically, you know, you know, we can borrow against it. As we think about maybe borrowing against it, is there any kind of floor level we should be thinking about in terms of EBITDA generation, you know, for the Helley Justice? you know, if we think about being able to borrow against it to then go after, you know, the next project.

Speaker Change: Ups, what kind of upside.

Speaker Change: Is there any reason why.

Speaker Change: Just given that the unit is basically.

Speaker Change: No.

Speaker Change: We can we can borrow against that as we think about maybe borrowing against that is there any kind of floor levels, we should be thinking about in terms of EBITDA generation.

Speaker Change: For the <unk>.

Speaker Change: If we think about being able to borrow against it to then go after.

Speaker Change: Yes.

Speaker Change: The next day.

Speaker Change: Next project.

Karl Fredrik Staubo: So our focus is obviously to maximize economic returns based on the resources available to us, and that's our target for all of our projects. We recognize that with a higher firm base, you get more attractive debt financing versus a lower base and more variable earnings. So we're obviously looking at equity returns in what we think are likely gas price scenarios.

Speaker Change: So our focus is obviously to maximize economic returns.

Speaker Change: Based on the resources available to us and that's our target for all of our projects.

Speaker Change: We recognize that with a higher firm base you get.

Speaker Change: More attractive debt financing versus the lower basin and more variable earnings. So we're obviously looking at.

Speaker Change: Equity returns and what we think are likely gas price scenarios.

Speaker Change: And that's how we manage that side.

Gregory Robert Lewis: And that's how we manage that side. When you say guiding on base, we have a base today that is based on 57 or 58% utilisation. I think we wouldn't talk to a new contract if it was less than at least 90% utilisation. So I think it's fair to assume that you will have at least a pro rata increase in the base rates that you see today.

Karl Fredrik Staubo: And that's how we manage that side. When you say guiding on base, we have a base today that is based on 57 or 58% utilisation. I think we wouldn't talk to a new contract if it was less than at least 90% utilisation. So I think it's fair to assume that you will have at least a pro rata increase in the base rates that you see today.

Speaker Change: When you say guiding on on basics, we have a base today, which is based on 57 or 58% utilization.

Speaker Change: We wouldn't talk to a new contract if it was less than at least 90% utilization. So I think it's fair to assume that you will have at least the pro rata increase in the base rates that you see today okay.

Gregory Robert Lewis: Great to hear. Thank you very much for the thought.

Speaker Change: Okay, great great to hear thank you very much for the thoughts.

Operator: Thanks. Great. Thank you. There are no further questions. I would like to hand it back for closing remarks.

Gregory Robert Lewis: Thanks, Greg.

Speaker Change: Thank you no further questions I would like to hand back for closing remarks.

Karl Fredrik Staubo: Thank you all for dialing in. We hope you found the update interesting. We're certainly very pleased with the development of the company. We look forward to speaking to you all soon, and have a great day.

Gregory Robert Lewis: Yes.

Speaker Change #100: Thank you all for dialing in and we hope you found the update the interesting. We're certainly very pleased with the developments of the company.

Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change #100: We look forward to speak to you all soon and have a great day.

Speaker Change #100: Yes.

Speaker Change #101: Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.

Speaker Change #101: Okay.

Speaker Change #101: [music].

Speaker Change #101: Yes.

Speaker Change #101: [music].

Q1 2024 Golar LNG Ltd Earnings Call

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