Golar enters into swap arrangements for Q4 2022 and 2023 Dutch Title Transfer Facility exposure

Rhea-AI Summary

Golar LNG Limited has secured two hedging arrangements for its Dutch Title Transfer Facility (TTF) linked production on the FLNG Hilli. For Q4 2022, Golar has hedged approximately 50% of TTF production at $70.0/MMBtu, anticipating a Distributable Adjusted EBITDA of $56 million. For the full year 2023, the company has hedged 50% of production at an average price of $50.0/MMBtu, projecting a total Distributable Adjusted EBITDA of $150 million. These hedging transactions are expected to enhance cash flow visibility and generate significant free cash flow.

Positive

• Q4 2022 hedging at $70.0/MMBtu secures $56 million Distributable Adjusted EBITDA.
• Full year 2023 hedging at an average price of $50.0/MMBtu projects $150 million Distributable Adjusted EBITDA.
• Hedging transactions will enhance cash flow visibility for the company.

Negative

• Exposure of 50% of Q4 2022 TTF production remains unhedged.

Golar LNG Limited (“Golar”) announces today that it has entered into two swap arrangements for its Dutch Title Transfer Facility (“TTF”) linked production on the FLNG Hilli:

• Q4 2022: Hedged approximately 50% of TTF linked production at $70.0/MMBtu. Golar’s share of the TTF linked Distributable Adjusted EBITDA for Q4 at $70.0/MMBtu is expected to be $56 million, of which $28 million is hedged. We remain exposed for the remaining 50% of our Q4 2022 TTF linked production. A TTF price of $70.0/MMBtu is the energy equivalent to a Brent oil price of approximately $412/bbl.
• Full year 2023: Hedged 50% of 2023 TTF linked production at $50.5/MMBtu. As announced on our Q2 earnings results on 11 August, we have previously hedged 50% of 2023 TTF linked production at $49.5/MMBtu. Hence Golar is now fully hedged for its 2023 TTF price exposure at an average price of $50.0/MMBtu. We expect to generate 2023 Distributable Adjusted EBITDA from TTF linked production of $150 million. A TTF price of $50.0/MMBtu is the energy equivalent to a Brent oil price of approximately $294/bbl.

The hedging transaction secures cash flow visibility at attractive historical levels for TTF gas prices and will generate significant free cash flow to equity for Golar.

FORWARD LOOKING STATEMENTS

This press release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflects management’s current expectations, estimates and projections about its operations. All statements, other than statements of historical facts, that address activities and events that will, should, could or may occur in the future are forward-looking statements. Words such as “may,” “could,” “should,” “would,” “expect,” “plan,” “anticipate,” “intend,” “forecast,” “believe,” “estimate,” “predict,” “propose,” “potential,” “continue,” or the negative of these terms and similar expressions are intended to identify such forward-looking statements.

These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Golar LNG Limited undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise, unless required by applicable law.

Hamilton, Bermuda

September 2, 2022

Enquiries:

Golar Management Limited: + 44 207 063 7900

Karl Fredrik Staubo - CEO

Eduardo Maranhão - CFO

Stuart Buchanan - Head of Investor Relations

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

FAQ

What is the significance of Golar LNG's recent hedging arrangements for Q4 2022?

Golar LNG has hedged approximately 50% of its TTF linked production at $70.0/MMBtu, securing an expected Distributable Adjusted EBITDA of $56 million, which stabilizes cash flows.

How much TTF production has Golar LNG hedged for the full year 2023?

Golar LNG has hedged 50% of its TTF linked production for 2023 at an average price of $50.0/MMBtu, projecting a total Distributable Adjusted EBITDA of $150 million.

What is the cash flow impact of Golar LNG's hedging strategy?

The hedging transactions are expected to provide significant free cash flow and enhance visibility of cash flows at historically attractive levels.

What risks are associated with Golar LNG's unhedged production for Q4 2022?

The remaining 50% of Golar's TTF linked production for Q4 2022 is unhedged, exposing the company to market volatility and price fluctuations.