Golar LNG Ltd. Well positioned in a high growth shipping market. Lehman Brothers European Oil Company Seminar, 17th March 2003 Tor Olav Trøim, CEO

Transcription

1 Golar LNG Ltd. Well positioned in a high growth shipping market Lehman Brothers European Oil Company Seminar, 17th March 2003 Tor Olav Trøim, CEO

2 GAS/LNG A Growth Commodity Trillion Cubic Feet Average Annual Change in Gas Consumption = 3.2% World LNG Trade (MTPA N. America W. Europe Ind. Asia EE/FSU Developing Source : Energy Information Administration : International Energy Outlook BP Case for LNG Growth (7%) High LNG Growth Case

3 The U.S. Gas Problem Production vs. consumption growth (three-month rolling, y-o-y) Consumption > production production = high high natural natural gas gas prices prices Natural gas production is currently 8% below last year s levels Natural gas demand is currently 10% above last year s levels (colder than normal winter + improved industrial demand) Productio n growth, Con su mption growth (% y-o-y, 3-month rolling) 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% -12% -14% -16% Jan-00 Mar-00 May-00 Jul -00 Sep-00 No v -00 Jan-01 Mar-01 May-01 Jul -01 Sep-01 No v -01 Jan-02 Mar-02 May-02 Jul -02 Sep-02 No v -02 Jan-03 Mar US natural g as price (Price per MMBtu) Natural gas prices (Henry Hub) Natural Natural gas gas prices prices currently currently at at at at USD USD 6.84/MMBtu 6.84/MMBtu Source: DOE, Enskilda Securities 3 months rolling YOY production growth 3 months rolling YOY consumption growth US natural gas price (per MMBtu) month future prices at USD 5.5/MMBtu. US na tural gas prices last 10 years US na tural gas prices since M ay MM Btu Natural Gas Henry Hub (monthly figures) Future prices 10 year average price USD per MMBtu year av erage /1/01 7/1/01 9/1/01 11/1/01 1/1/02 3/1/02 5/1/02 7/1/02 9/1/02 11/1/02 1/1/03 3/1/03 Source: Bloomberg, AGA (American Gas Association), Enskilda Securities - 5 -

4 The Solution - LNG LNG Projects 2002 US Natural Gas Consumption (tcf) USD/MmBtu % 98.9% Source US EIA. Estimated quantities for 2002 Natural Gas Consumption Total Gas Consumption LNG Imports Trinidad II & III Nigeria IV & V Venezuela Algeria Indonesia Arun Qatar Egypt LNG LNG Projects Alaska PL Snohvit Current Henry Hub 2008 US Natural Gas Consumption (tcf) 11.8 Total Gas Consumption LNG Imports 88.2% Estimates for 2008 Natural gas consumption based on 3% p.a. growth

5 Golar LNG Ltd. World s largest independent LNG shipowner (10 ships including 4 on order) One of the pioneers in the LNG Industry with 30 years experience Market capitalization USD 340 million Gross value of firm contracts USD 1380 million Listed on Oslo stock exchange in May 2001, listed NASDAQ December 2002 Actively pursuing additional opportunities upstream and downstream in the LNG chain (trading, regas) Owned 50% by Seatankers Group (controlled by John Fredriksen)

6 The Business Gas transported in Liquid Kværner Moss LNG Tank System C Expensive part of the chain Ships built to high standards Double Hulls with high containment integrity Three basic types of containment system High demand for operational Reliability Crew - proficient in normal marine skills and LNG specific skills LNG - One of the fastest growing parts of the energy business

7 Fleet List and Employment Contract status Capacity Ship Ow nership Built m3 Charterer 2025 Golar Mazo 60% ,000 CPC (BB) Golar Spirit 100% ,013 Pertamina/KOGAS (BB) Golar Freeze 100% ,862 British Gas (TC) Khannur 100% ,003 British Gas (TC) Gimi 100% ,872 British Gas (TC) Hilli 100% ,890 British Gas (TC) BG N/B 100% Mar ,000 British Gas (TC) New b 100% Nov ,000 Free New b 100% Mar ,000 Free New b 100% Oct ,000 Free NGSCO 1 0% (mgmt.) Abu Dhabi NGSCO 2 0% (mgmt.) Abu Dhabi Under construction Firm Options NGSCO 3 0% (mgmt.) Abu Dhabi NGSCO 4 0% (mgmt.) Abu Dhabi Source: Golar LNG

8 Fixed Contracts Build Value 250 $16,0 $14,0 200 $12,0 Annual Revnue ($M) USD per share $10,0 $8,0 $6,0 $4,0 $2,0 50 $0,0 ($2,0) 5 % 6 % 7 % 8 % 9 % 10 % 11 % 12 % ($4,0) Discount Factor Spirit Mazo Freeze Khannur Gimi Hilli Methane Princess Uncommitted NBs Fixed Contracts Options & Remaining Life Residual Value Tax Lease

9 Golar Project Participation Baja California LNG Import Terminal Floating Storage & Regasification Unit Import Capacity = 6MTPA 2 X 140,000M3 LNG Storage Tanks Total Send-out = 1000 MMCFD Power Plant up to 1000MW Need up to 8 ships Unincorporated Joint Venture established with Saipem to provide floating regasification facility in Italian waters using a Moss type LNG Carrier Currently investigating commercial viability of 2 sites in the North via leasing arrangement Framework Agreement signed with Crossenergy re. development of LNG supplies to FSRU

10 Source : Fearnleys Golar has Strong Strategic Position No. of LNG vessels Maritima Del Norte Louis Dreyfus AP Møller BG Group Elcano/GasOcean Denholm/Anglo Eastern Mngt Ceres Hellenic (for BG) Marathon Oil Co. Chemicalien S.T. Knutsen/Marpetrol GasOcean/GdF Korea Line N. Tapias/ Dorchester M. SNAM Hanjin Shipping ALSOC K - Line SK SHIPPING Leif Høegh SNTM-HYPROC Hyundai MM Bonny Gas Transport Exmar PRONAV BP Bergesen DY NYK GOLAR LNG STASCO MISC MOL Orderbook Existing

11 Limited Open Capacity Deliveries 2003 Ship / Hull Owner Charterer Duration Trade (Yrs) IZAR 319 Naviera Tapias Repsol 20 Trinidad - Spain IZAR 087 Elcano Repsol 20 Trinidad Spain IZAR 321 Knutsen Enagas 20 Trinidad - Spain AOS/Marpetrol DAEWOO 2207 Bergesen Tractebel 20 Trinidad - Everrett Methane Princess GOLAR BG 20 Trinidad US/Europe DAEWOO 2212 Bergesen Tractebel 20 Trinidad Everett DAEWOO 2213 Exmar/MOL El Paso 20 DAEWOO 2216 Shell Bermuda Shell N/A Shell Portfolio DAEWOO 2210 MOSK/NYK/K-L Petronet 20 Oman - India KAWASAKI 1520 Tokyo Gas Tokyo Gas N/A Australia - Japan LNG Bayelsa BGT Nigeria LNG 20 Nigeria - Europe HYUNDAI 1444 GOLAR Uncommitted MITSUBISHI 2173 Shell Bermuda Shell N/A Shell Portfolio MITSUBISHI 2169 MISC MLNG III 20 MLNG T1 - Japan MITSUBISHI 2176 Toyo Electric Tokyo Electric N/A LNG to Japan British Innovator BP BP 4 Abu Dhabi - Spain SAMSUNG 1405 IINO KAIUN KOGAS/SK Shipping 20 LNG to Korea British Merchant BP BP 3 Qatar - Spain SAMSUNG 1428 Exmar/MOL RasGas 25 Qatar Italy/Spot Deliveries 2004 Ship / Hull Owner Charterer Duration Trade (Yrs) IZAR 103 Knutsen Union Fenosa 20 Egypt - Spain AOS/Marpetrol IZAR 105 Naviera Tapias Enagas 20 Trinidad - Spain De L Atlantique Gaz de France Gaz de France N/A Algeria France DAEWOO 2220 GOLAR Uncommitted DAEWOO 2214 North West Shelf North West Shelf N/A Australia - Asia DAEWOO 2209 Naviera Tapias Union Fenosa 20 Egypt Spain DAEWOO 2217 Bergesen/Sonatrach Sonatrach 20 Algeria - US DAEWOO 2208 Exmar/MOL El Paso 20 Energybridge DAEWOO 2217 MOSK/NYK/K-L Petronet 20 Oman - India KAWASAKI 1527 MOL/Oman Oman N/A Oman Spain MITSUI 1507 MISC MLNG III T2 20 MLNG III - Asia, but as yet unsupported by sales MITSUI 1561 QS/MOL/NYK/K-L RasGas 20 Qatar Japan HYUNDAI 1460 GOLAR Uncommitted HYUNDAI 1469 BGT Nigeria LNG 20 Nigeria Europe MITSUBISHI 2183 Shell Bermuda Shell N/A Shell Portfolio MITSUBISHI 2177 MISC MLNG III T2 20 MLNG III Export, but as yet unsupported by sales SAMSUNG 1425 A. P. Moller RasGas Qatar - Italy SAMSUNG 1428 BG Group BG N/A Trinidad - US

12 LNG Orderbook and Building Capacity Shipyard Yearly Capacity Total on Order For 2003 For 2004 For 2005 For 2006 No account has been taken of pricing at the yards. For 2007 On Order Total Hyundai Samsung Daewoo Mitsubishi Kawasaki Mitsui Izar Hanjin 2 0 IHI 2 0 NKK 2 0 CNA Kvaerner Masa 2 0 Hudong 1 Total Source: Platou NOTE The capacities are based on the yards concentrating on LNG carriers and not many other types. The prevailing market is such that the yards have other alternatives. The capacity given is therefore reflecting a theoretical capacity and not necessarily the available capacity at this point of time

13 Orderbook/Capacity v Demand Shipyard Yearly Capacity No account has been taken of pricing at the yards. LNG Orderbook and Building Capacity Total on Order For 2003 For 2004 For 2005 For 2006 For 2007 On Order Total Hyundai Samsung Daewoo Mitsubishi Kawasaki Mitsui Izar Hanjin 2 0 IHI 2 0 NKK 2 0 CNA Kvaerner 2 0 Masa Hudong 1 Total NOTE The capacities are based on the yards concentrating on LNG carriers and not many other types. The prevailing market is such that the yards have other alternatives. The capacity given is therefore reflecting a theoretical capacity and not necessarily the available capacity at this poin t of time LNG Shipping Requirements to end 2007 *LNG Berths Open 2006 : 16 LNG berths Open 2007 : 21 Total : 37 Shipping Requirements to Q : 59 ships For yard capacity, assume full capacity represented by 2004 orderbook (21) Project Shipping Requirement In Progress(2006) Trinidad IV 4 Tangguh 4 NLNG VI 5 Qatargas 6 Rasgas 10 Total 29 Proposed (2007) Peru/Bolivia 4 Indonesia/Bontang 4 Australia/Timor 4 Sakhalin 6 Venezuela 4 Brass River/Nigeria 4 Angola 4 Total 30 The Boom in other shipping markets may change the pendulum back in the shipowners favour.

14 Large LNG Rate Flexibility MTPA Uncommitted Capacity Uncommited LNG Capacity Qatar Abu Dhabi Oman Algeria ALNG NLNG Source: Poten Assumptions: Nymex = 5.14 usd/mmbtu February 2003 delivery Size of Ship = sm3 Trade = Nigeria to Lake Charles, US Price ex. Ship = 4.37 usd/mmbtu (Nymex-basis diffregas cost) Plant opex = 0.07 usd/mmbtu (cost of running plant) Cost Upstream = 0.60 usd/mmbtu (cost of gas into plant) Net before trsp.= 3.70 usd/mmbtu Marginal trsp. = 0.30 usd Mmbtu (fuel, port charges, boil-off) Net available = 3.40 usd/mmbtu Value from 1 cargo = 9.86 mill/usd Equivalent TC rate for Bonny/L.C. Trade = usd/day

15 A Good Margin Business Based on L.T. Contract Vessel Cost = $170M Hire Rate = $65,000/day Opex = $10,000/day Drydocking Cost = $2,300/Day Period of Hire = 20 years - Interest rate = 5,9 % incl. margin Equity IRR = 80% Debt funding Equity IRR = 90% Debt funding The Actual IRR is likely to improve further as a function of tax lease financing, higher degree of leverage and longer life.

16 The Financials

17 Golar LNG Limited Fourth Quarter 2002 Report (Unaudited) GOLAR LNG LIMITED FOURTH QUARTER 2002 REPORT (UNAUDITED) 2001 Oct-Dec unaudited) 2002 Oct-Dec (unaudited) INCOME STATEMENT (in thousands of $) 2002 Jan-Dec (unaudited) 2001 Jan-Dec (audited) 31,841 33,468 Net operating revenues 130, ,223 7,486 7,822 Vessel operating expenses 28,061 24,537 4,560 1,899 Administrative expenses 6,127 8, Restructuring expenses - 1,894 19,795 23,747 Operating income before depreciation and amortisation 96,423 79,560 7,368 7,686 Depreciation and amortisation 31,300 31,614 12,427 16,061 Operating income after depreciation and amortisation 65,123 47, Interest income 1,073 3,254 (7,038) (5,629) Interest expense (23,553) (32,508) 7,861 1,038 Other financial items (17,887) (12,363) 13,701 11,700 Income before taxes and minority interest 24,756 6,329 4,418 1,641 Minority interest (2,469) 1, (43) Taxes ,135 10,102 Net income 27,137 4,366 $0.16 $0.18 Earnings per share ($) $0.48 $0.08

18 Balance Sheet BALANCE SHEET (in thousands of $) ASSETS 2002 Dec 31 (unaudited) 2001 Dec 31 (audited) Short term Cash and cash equivalents 52,741 57,569 Restricted cash and short-term investments 12,760 14,163 Other current assets 5,240 5,440 Amounts due from related parties Long term Newbuildings 291, ,856 Vessel and equipment, net 617, ,371 Other long term assets 7,659 4,331 Total assets 987, ,991 LIABILITIES AND STOCKHOLDERS EQUITY Short term Current portion of long-term debt 48,437 41,053 Current indebtedness due to related parties 32,703 85,278 Other current liabilities 44,764 28,566 Amounts due to related parties 642 1,049 Long term Long term debt 629, ,276 Other long term liabilities 22,731 16,552 Minority interest 13,349 25,820 Stockholders equity 196, ,397 Total liabilities and stockholders equity 987, ,991

19 Statement of Cash Flows STATEMENT OF CASH FLOWS (in thousands of $) 2002 Oct-Dec (unaudited) 2002 Jan-Dec (unaudited) 2001 Jan-Dec (audited) OPERATING ACTIVITIES Net income 10,102 27,137 4,366 Adjustments to reconcile net income to net cash Provided by operating activities: Depreciation and amortisation 7,686 31,300 31,680 Amortisation of deferred charges ,097 Income (loss) attributable to minority interests 1,641 (2,469) 1,607 Drydocking expenditure - (1,600) (10,222) Change in market value of interest rate derivatives (1,435) 16,459 10,838 Change in operating assets and liabilities (808) (583) 1,677 Net cash provided by operating activities 17,477 71,216 42,043 INVESTING ACTIVITIES Cash paid for Osprey s LNG interests, net of cash acquired - - (530,945) Additions to newbuildings (45,797) (158,815) (132,856) Additions to vessels and equipment (1,762) (5,912) (7,258) Restricted cash and short short-term investments 6,662 1,403 (1,072) Proceeds from maturity of short term investments ,231 Net cash used in investing activities (40,897) (163,324) (657,900) FINANCING ACTIVITIES Proceeds from long-term debt 60, , ,000 Proceeds from long-term debt due to related parties - 16,259 85,278 Repayments of long-term debt (13,142) (41,054) (15,170) Repayments of long-term debt due to related parties (16,259) (68,834) - Financing costs paid (887) (3,424) (3,231) Dividends paid to minority shareholders - (10,002) - Proceeds from issuance of equity ,808 Net cash provided by financing activities 29,773 87, ,685 Net increase (decrease) in cash and cash equivalents 6,353 (4,828) 51,828 Cash and cash equivalents at beginning of period 46,388 57,569 5,741 Cash and cash equivalents at end of period 52,741 52,741 57,569