Flex LNG - Time Charter for Flex Courageous extended by 2 years from 2025 to 2027

Rhea-AI Summary

Flex LNG Ltd. announces the extension of the Time Charter for Flex Courageous, following the recent extension of Flex Resolute. The charterer has the option to extend the period until 2029, providing firm charter coverage for the company. CEO Øystein Kalleklev expresses satisfaction with the decision.

Insights

Market Analyst

The extension of the Time Charter for Flex Courageous until the first quarter of 2027 by a super major represents a significant vote of confidence in Flex LNG Ltd. from a key customer. This development is indicative of stable and predictable revenue streams for Flex LNG over the medium term. The company's high charter coverage of approximately 94% for the remainder of 2024 demonstrates robust demand for its services and provides a cushion against market volatility. Furthermore, the timing of the Flex Constellation coming open aligns with the seasonal tightening of the freight market, potentially allowing Flex LNG to capitalize on higher rates.

From a market perspective, this extension could be interpreted as a bullish signal for the LNG shipping sector, suggesting that super majors are expecting continued demand for LNG transport over the next several years. This may also reflect broader trends in the energy market, such as the growing reliance on LNG as a transition fuel amidst global decarbonization efforts.

Financial Analyst

The financial implications of the charter extension for Flex Courageous are multifaceted. On one hand, the extension provides revenue visibility and financial stability, which is favorable for the company's cash flow projections and debt servicing capabilities. On the other hand, the fixed nature of a Time Charter can limit upside potential should market rates increase significantly beyond the agreed charter rate. Investors should consider the balance between stability and potential opportunity cost associated with such long-term contracts.

Additionally, the final option for a further extension until 2029 introduces an element of contractual flexibility that may be advantageous for Flex LNG in terms of long-term planning and fleet utilization. It is important for investors to monitor the utilization rates and day rates for the company's fleet, as these are critical indicators of financial health in the shipping industry.

Energy Sector Analyst

The decision by a super major to extend the Time Charter for an LNG carrier like Flex Courageous reflects broader trends in the energy sector, particularly the increasing global demand for liquefied natural gas as countries seek to diversify their energy mix. The extension suggests that LNG will continue to play a pivotal role in the energy transition and shipping companies that can provide reliable transport will benefit. It is also indicative of the strategic importance of securing LNG shipping capacity in advance, given the long lead times and capital-intensive nature of the industry.

The LNG shipping market is sensitive to fluctuations in LNG supply and demand, geopolitical developments and changes in trade patterns. As such, the charter extension is a positive sign for the stability of the sector, but stakeholders must remain vigilant to the dynamic factors that could impact the industry in the long term.

HAMILTON, Bermuda, Feb. 23, 2024 /PRNewswire/ -- Flex LNG Ltd. («Flex LNG» or «Company») (NYSE: FLNG) (OSE: FLNG) has received notice that the charterer of Flex Courageous, a super major, has exercised its first extension option. Flex Courageous was fixed on a three-year Time Charter on November 1, 2021, together with Flex Resolute which was also recently extended by two years until 2027. The commencement of the Time Charter for Flex Courageous was February 2022. Under the Time Charter, the charterer has the option to extend the period by two consecutive two year periods. Following this first option declaration, Flex Courageous will be firm until first quarter of 2027. The charterer will then have a final option to extend the Time Charter by another two years until 2029.

Please find the updated contract overview attached.

Øystein Kalleklev, CEO of Flex LNG Management AS, commented:

"We are pleased that the charterer of Flex Courageous has decided to extend the Time Charter in line with what was recently done for Flex Resolute. This means that earliest redelivery for the ship is 2027 where the charterer has a further option to extend her until 2029. Flex LNG has approx. 94% charter coverage for the remaining part of 2024, so we remain well positioned with only one ship, Flex Constellation, coming open during the second quarter which is usually when the freight market starts to tighten again after the seasonal adjustment coming out of the winter."

For further queries, please contact:

Media contact:
Øystein Kalleklev, CEO Tel: +47 23 11 40 00

Investor and Analyst contact:
Knut Traaholt, CFO Tel: +47 23 11 40 00

About Flex LNG

Flex LNG is a shipping company focused on the growing market for Liquefied Natural Gas (LNG). Our fleet consists of thirteen LNG carriers on the water and all of our vessels are state-of-the-art ships with the latest generation two- stroke propulsion (MEGI and X-DF). These modern ships offer significant improvements in fuel efficiency and thus also carbon footprint compared to the older steam and four-stroke propelled ships. We have built up a significant contract backlog, having fixed 11 of our 13 vessels on long term fixed-rate charter contracts and one vessel on variable hire time charter.

Flex LNG is listed both on the New York Stock Exchange (NYSE) and Oslo Stock Exchange (OSE) under the ticker "FLNG".

For more information, go to: www.flexlng.com 

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act

 

The following files are available for download:

https://mb.cision.com/Main/22886/3934377/2623655.pdf

Flex LNG - Contract Overview February 23 2024

 

View original content:https://www.prnewswire.com/news-releases/flex-lng--time-charter-for-flex-courageous-extended-by-2-years-from-2025-to-2027-302069665.html

SOURCE Flex LNG

FAQ

What is the recent announcement made by Flex LNG Ltd. regarding its charter vessels?

Flex LNG Ltd. announced the extension of the Time Charter for Flex Courageous, following the recent extension of Flex Resolute.

When was Flex Courageous fixed on a three-year Time Charter?

Flex Courageous was fixed on a three-year Time Charter on November 1, 2021.

What percentage of charter coverage does Flex LNG have for the remaining part of 2024?

Flex LNG has approximately 94% charter coverage for the remaining part of 2024.

Who can be contacted for media inquiries at Flex LNG Ltd.?

For media inquiries, Øystein Kalleklev, CEO, can be contacted at Tel: +47 23 11 40 00.

Who is the CFO of Flex LNG Ltd. for investor and analyst contacts?

For investor and analyst contacts, Knut Traaholt, CFO, can be contacted at Tel: +47 23 11 40 00.