ID: 1455426
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(Thomson Reuters ONE) -


* EBITDA* in the quarter reported a loss of $17.5 million compared to a 1Q
loss of $21.7 million.
* Golar LNG Limited ("Golar" or "the Company") and Stonepeak Infrastructure
Partners ("Stonepeak") launched Golar Power, a 50/50 joint venture that will
offer integrated LNG based downstream power solutions and infrastructure.
* Golar''s 15.9 million subordinated units in Golar LNG Partners LP ("Golar
Partners" or "the Partnership") converted to common units.
* Refinanced and then closed the sale of FSRU Golar Tundra to Golar Partners
releasing an incremental $102.8 million of liquidity.

Subsequent events

·     Closed Golar Power transaction and received $103.0 million in new
liquidity.  Debt and operating cash burn in respect of two vessels together with
$216.5 million of unfunded capital commitments for the FSRU new-build removed
from Golar''s balance sheet.

·     Golar and Schlumberger formed OneLNG, a joint venture that will offer an
integrated upstream and midstream solution for development of low cost gas
reserves to LNG.

·     Shipping market commences its recovery with improving utilisation, rates
and the re-appearance of round-trip economics.

Financial Review

Business Performance

|  | 2016| 2016|
| | | |
|(in thousands of $) | Apr-Jun| Jan-Mar|
| | 18,370| |
| | | |

|Total operating revenues |  | 16,557|
| | | |
|Vessel operating expenses |(14,064)|(15,573)|
| | | |
|Voyage, charterhire & commission expenses | (9,826)|(10,648)|
| | | |
|Voyage, charterhire & commission - collaborative | | |
|arrangements | (2,331)| (473)|
| | | |
|Administrative expenses | (9,689)|(11,576)|
| | | |
|EBITDA* |(17,540)|(21,713)|
| | | |
|Depreciation and amortization |(19,705)|(19,444)|
| | | |
|Impairment of long-term assets | -| (1,706)|
| | | |
|Net gain on disposals (includes amortization of deferred | | |
|gains) | 126| 126|
| | | |
|Other operating gains and losses (LNG Trade) | -| 16|
|Operating loss |(37,119)|(42,721)|

* EBITDA is defined as earnings before interest, depreciation and amortization.
EBITDA is a non-GAAP financial measure.  A non-GAAP financial measure is
generally defined by the Securities and Exchange Commission as one that purports
to measure historical or future financial performance, financial position or
cash flows, but excludes or includes amounts that would not be so adjusted in
the most comparable U.S. GAAP measure.  We have presented EBITDA as we believe
it provides useful information to investors because it is a basis upon which we
measure our operations and efficiency.  EBITDA is not a measure of our financial
performance under U.S. GAAP and should not be construed as an alternative to net
income (loss) or other financial measures presented in accordance with U.S.

Golar reported today a 2Q operating loss of $37.1 million as compared to a loss
of $42.7 million in 1Q 2016.  Although headline shipping rates remained
relatively unchanged during the quarter there was a modest improvement in
utilisation which increased from 24% in 1Q to 31% in 2Q.  Reflecting the uptick
in utilisation, total operating revenues increased from $16.6 million in 1Q to
$18.4 million in 2Q.  Voyage, charter-hire and commission expenses including
those from the Cool Pool collaboration increased from $11.1 million in 1Q to
$12.2 million this quarter largely due to the cost of positioning the Golar
Tundra from Singapore to Ghana and the two carriers formerly chartered by
Nigeria LNG into the Cool Pool. As in the first quarter, included in voyage,
charter-hire and commission expenses is $5.8 million in respect of the cost of
chartering the Golar Grand.

Vessel operating expenses decreased $1.5 million to $14.1 million.  Operating
costs for the Golar Arctic normalised in 2Q having been unusually high in the
prior quarter when additional storing-up and maintenance costs were incurred in
preparation for the vessels two year charter off Jamaica.  Savings were also
recorded across most of the remaining vessels as a result of a general cost
reduction exercise. Administration costs at $9.7 million were $1.9 million lower
than 1Q 2016 largely due to a normalisation in project support service costs.

Relative to 1Q the above resulted in a $4.2 million decrease in 2Q EBITDA losses
and a $5.6 million decrease in 2Q operating losses.

Net Income Summary

|  (in thousands of $) | 2016 | 2016 |
| | | |
|   | Apr-Jun | Jan-Mar |
| +----------+----------+
| Operating loss | (37,119) | (42,721) |
| | | |
| | 4,089 | |
| Dividend income | | 4,178 |
| |   | |
| | | |
| Interest Income | 196 | 895 |
| | | |
| Interest expense | (13,331) | (6,022) |
| | | |
| Other financial items | (27,471) | (28,880) |
| | | |
| Taxes | 609 | 676 |
| | | |
| Equity in net earnings of affiliates | (17,062) | (5,397) |
| | | |
| Net income attributable to non-controlling Interests | (9,412) | (2,817) |
| | | |
| Net loss attributable to Golar LNG Ltd | (99,501) | (80,088) |

In 2Q the Company generated a net loss of $99.5 million. Notable contributors to
this are summarised as follows:

* 2Q interest expense at $13.3 million has increased from the prior quarters
$6.0 million. The increase is largely due to a substantial reduction this
quarter in capitalised interest (a credit to interest expense) in respect of
assets under development. The credit in the first quarter included a catch-
up element for prior quarters. This capitalised interest credit should now
be at normalised levels.
* Other Financial Items at $27.5 million for 2Q were in line overall with the
prior quarter cost of $28.9 million.  A 2Q mark to market loss representing
the decrease in Golar''s share price from $17.97 on March 31 to $15.50 on
June 30 of $7.8 million was recorded against the Company''s Total Return
Equity Swap. Mark-to-market losses on the valuation of interest rate swaps
amounted to $5.9 million in 2Q following further decreases in long-term swap
rates. Amortisation of debt related expenses increased from $4.4 million in
1Q to $11.1 million in 2Q following a change in amortisation method.
* Despite a 67% increase in Golar Partners reported net income after non-
controlling interests, Golar Partners overall contribution to equity in net
losses of affiliates increased by $11.7 million compared to 1Q.  This
follows a one-off non-cash charge of $19.2 million recorded at the end of
the subordination period when the Company''s 15.9 million subordinated units
in Golar Partners converted into common units. Cash flows however remain
unchanged.  In line with 1Q, the Company has received $13.2 million in cash
distributions in respect of its investment in Golar Partners.

Commercial Review

Existing Assets and Contracts

LNG Shipping

The modest increase in utilisation in 2Q from historically low levels in 1Q is
underpinned by a much greater increase in activity.  During 2Q 22 spot voyages
were concluded by the Cool Pool relative to only 8 commencing in 1Q. Much of
this additional activity was initially supported by an ENARSA tender for 35
cargoes into Argentina early in the quarter followed by tenders for additional
cargoes into Egypt.  It was activity in the Atlantic basin where structural
availability is less than the Pacific or Middle East that drove this improvement
in utilisation.  Despite the increase in activity, hire rates throughout 2Q
remained low at $30kp/day for TFDE tonnage and sub $20kp/day for modern steam
vessels.  Compensation for backhaul legs was only available in isolated cases.

Subsequent to the quarter end, chartering activity and LNG charter rates have
climbed steeply.  This improvement cannot be explained by seasonal fluctuations
alone.  A combination of ramped up production from new facilities that started
producing in late 2015/early 2016, the withdrawal of spot traded ships in
anticipation of the imminent start-up of their dedicated project volumes and
more trading activity to service recently installed FSRU capacity have
collectively started to absorb some of the excess spot tonnage. The delayed
Gorgon and Angola export projects that weighed heavily on the 1H shipping market
are also now starting up and will be accompanied by Sabine Pass'' Train 2

The Company believes that sentiment is shifting and owners are cautiously
confident in the market over the next 12-24 months. The volume of voyage
charters concluded since 2Q, their headline rates and the re-emergence of full
round trip economics indicates that the anticipated 2H recovery in the shipping
market is finally materialising as expected.  Round-trip voyages are currently
being concluded at rates exceeding $40k/day out of the Atlantic.  Rates in the
Pacific have strengthened but not to the same extent with voyages typically
being fixed in the mid-$30k/day range.  There are however certain additional
reserves in the fleet should maximum steaming speeds be reintroduced.

Enquiries from traders and energy majors for 3-6-12 month charters accompanied
by extension options have increased notably. Discipline among ship owners is
also a welcome sight. Only 4 LNG carriers have been ordered this year to date
with conventional carriers on order currently representing 31% of the current
fleet. Approximately 130 million tonnes of new production equivalent to 49% of
current LNG production is expected to deliver between now and 2020. Golar
expects further opportunities to emerge over the coming quarters as cargo
owners, mindful of the tightening market seek to secure their shipping at
sensible rates.


Golar''s existing fleet of six operating FSRUs, all of which reside within Golar
Partners but are managed by the Company, have maintained operational excellence
achieving 100% availability during scheduled 2Q operations.

The Golar Tundra arrived off the coast of Ghana at the end of May and issued its
notice of readiness the following month.  Amounts due under the contract started
to accrue from mid-July. Charterers of the FSRU, West Africa Gas Limited
("WAGL") have however experienced significant delays with respect to the part of
the project for which they are responsible.  Golar Partners who own the FSRU
Tundra are however entitled to payment of hire and invoices have been issued for

Although Golar continues to receive assurances that the project remains intact,
the Company has sought and received a positive opinion which strongly supports
its legal position in exercising its rights under the contract should WAGL
contest their obligations under the charter.  Golar maintains a constructive
dialogue with WAGL with regards to finding a mutually agreeable way forward for
the project which is both needed and supported by the government of Ghana.  The
market generally for FSRUs remains positive as noted further below.


The FLNG Hilli conversion project remains on schedule and within budget.  Up to
3,000 contractors are working on the vessel during the day with a night shift of
300 also now on-board.  FLNG Hilli is currently on track to deliver within its
stipulated delivery window. In light of the suspension of Engie''s proposed land
based LNG project and discussions with our partners in Cameroon, local
authorities and key stakeholders, Golar is cautiously optimistic that increased
utilisation of the FLNG Hilli can be achieved after production start-up.
Assuming this occurs and depending on the incremental uplift in volumes, this
will significantly improve the EBITDA.  Based on the configuration of the vessel
this additional EBITDA could be achieved for little or no additional investment
by Golar.

Ophir and Golar continue to explore ways to develop the Fortuna reserves.
Projected economics even at current gas forward prices are strong and the
combined upstream and midstream investment required to complete the development
should be manageable and financeable.

The biggest challenge for the project is to secure alignment between the
upstream and midstream partners.  Proper alignment should help secure attractive
financing for the entire project. Good progress has been made on both fronts in
the last quarter.

Business Development Review

FSRU activities

Over recent quarters Golar has seen a number of companies express a desire to
enter the FSRU space.  Although they have been attracted by the strong
underlying prospects, superior returns and increasing opportunities relative to
conventional shipping, many of them lack the technical capability required to
replicate Golar''s own successful conversion model or do not have the risk
appetite to speculatively order a new-build.  A select few will however succeed
and this has the potential to put pressure on margins where competitive tenders
arise.  As previously communicated the company has also noted over time that a
large proportion of FSRU projects are being used to directly support power
projects.  In many cases these power projects enjoy returns well in excess of
those achieved by the established FSRU infrastructure providers.

On June 20 Golar entered into a 50/50 joint venture with Stonepeak.  This
venture, Golar Power, combines the Independent Power Project experience of
Stonepeak with the terminal and FSRU experience of Golar and will offer
integrated LNG based downstream solutions through the ownership and operation of
FSRUs and associated terminal and power generation infrastructure.  At closing
on July 6 Golar Power assumed from Golar two new-build carrier conversion
candidates, the 2017 delivering FSRU new-build and Golar''s right to participate
in Brazil''s Sergipe power project. Golar Power is now pursuing both standalone
FSRU opportunities and integrated LNG/FSRU supported power projects and is
working on several opportunities which have the potential to be awarded over the
next year.  The Sergipe project is now entering the final stages of its pre
Final Investment Decision ("FID") process.  This is a large project with equally
large returns but also risks that must be managed.  The recent strengthening of
the Brazilian Reais against the US Dollar further improves forecasted project
economics and solid progress is being made toward FID in the coming months.

FLNG - Business Development Progress

Subsequent to the quarter end, Golar and Schlumberger formalised plans to co-
operate on the global development of greenfield, brownfield and stranded gas
reserves.  On July 25 the two parties established OneLNG, a joint venture 51%
owned by Golar that will develop low cost gas reserves to LNG.  The combination
of Schlumberger''s reservoir knowledge, wellbore technologies and production
management capabilities with our own low cost FLNG solution will offer gas
resource owners a faster and lower cost development solution.  By presenting a
united one-stop upstream and midstream solution, OneLNG reduces the number of
competing interests in what can be a complicated set of negotiations and also
increases the number of financing options available.  Golar believes that this
will materially improve the likelihood of a project succeeding.

OneLNG was established with $20 million of working capital ($10.2 million funded
by Golar) and a commitment to contribute a further $250 million each upon
approval of the first project.

A separate OneLNG organisation including a recruited CEO and CFO will be
established in due course.  The initial working capital will fund employment
costs for those initially seconded and recruited into the JV as well as the cost
of commissioning extensive research into potential fields and bringing the first
project to a final investment decision.  To this end, OneLNG is now reviewing in
detail a comprehensive list of projects that suit its offering.  Whilst there
remains a West African bias to the current shortlist it also includes projects
in Asia that Golar had not previously contemplated.

Although the cost of feed gas to North American export projects is significantly
higher than West African gas today, there are also a number of opportunities in
this region that have the potential to be interesting medium term prospects.
These prospects would also represent an opportunity to diversify the FLNG
portfolio of opportunities from both a gas source (onshore/offshore) and a
geographic perspective.

Financing Review

FSRU Tundra dropdown

On May 23 the sale of Golar Tundra to Golar Partners was completed.  Proceeds
from an additional drawdown against the vessels existing debt facility together
with a balancing payment from Golar Partners collectively added an incremental
$102.8 million liquidity to Golar''s 2Q balance sheet.  The Company will however
continue to consolidate the company that owns the Golar Tundra until operations
under the contract with West Africa Gas Limited commence. Included in the
contract is a one year put to Golar in the event that operations do not commence
in accordance with contractual arrangements or no satisfactory mitigating
arrangement is agreed.

FLNG financing

As at June 30, 2016, $588 million has been spent on the FLNG Hilli conversion
($619 million including the vessel). To date, Golar has drawn down $150 million
against the $960 million CSSCL FLNG Hilli facility. As the project remains well
within its $1.2 billion budget, all remaining conversion and site specific costs
for the FLNG Hilli are expected to be satisfied by this facility. Given that
Golar have already invested $400 million in the conversion of FLNG Hilli, and
once the $960 million debt facility is fully drawn, an equity release of up to
$160 million is expected.

Golar Power

As well as having strategic merit, the formation and subsequent sale to
Stonepeak of a 50% interest in Golar Power represents an important first step in
the strengthening of Golar''s financial position.   Together with the addition of
$103.0 million in new liquidity to the 3Q balance sheet this transaction removed
Golar''s obligations to meet the remaining $216.5 million of instalment payments
due to Samsung in respect of the 2017 delivering FSRU new-build and
substantially reduced the equity call on Golar should the Sergipe project
proceed as planned. Golar has also been relieved of the daily operating and debt
service costs in respect of the two carriers, equivalent to approximately
$50k/day each. Finally, in addition to paying Golar $103.0 million (net of a $10
million working capital contribution to Golar Power), Stonepeak have also
subscribed to a further $100 million of preference shares in Golar Power.  This,
together with an additional $75 million funding commitment from Golar in the
period before 2H 2018 provides Golar Power with the capital it needs to sustain
its asset base, pursue FSRU and other independent power projects, and, when
combined with reasonable debt assumptions, convert both of its carriers into


Golar''s total cash position as at June 30 was $464.4 million. Of this $280.0
million and $85.9 million respectively is restricted cash relating to the FLNG
Hilli Letter of Credit ("LC") and the Company''s total return swap. A further
$37.9 million invested in the FLNG Hilli during 2Q will be drawable against the
CSSCL debt facility in 3Q.

Since the end of June, the Company''s cash position has been improved by the
closing of the Golar Power joint venture with Stonepeak.  This transaction
produced a $103.0 million net cash addition to Golar. After another bank
syndication exercise and a reduction in mark-to-market swaps a further $13.9
million of the $280 million cash backed LC to Perenco has also been released to
Golar.  Restricted cash tied up in this LC now stands at $266.1 million.
Efforts continue to be directed to the release of a further $31 million of this
restricted cash over the next few months.

The next step to a strengthened balance sheet requires that Golar address its
March 2017 maturing $250 million convertible bond.  This bond is secured by
shares in Golar Partners currently worth approximately $240 million. Over and
above the units used to secure the bond, Golar also has ordinary units in the
Partnership worth approximately $90 million and 100% of the General Partner, all
of which are unencumbered.

Golar has also initiated discussions with commercial banks.  The objective of
these discussions is to refinance a material share of the outstanding
convertible bond with a medium term commercial bank line secured by Golar''s
stake in the Partnership.  This could be supplemented by the monetisation of
dividends associated with the incentive distribution rights which currently
generate $8.6 million in annual distributions.  Such an arrangement could also
enhance the Partnerships ability to make accretive investments in the future.
Several proposals have been received and the Board is confident that a suitable
commercial solution can be agreed.

Corporate and other matters

As at June 30, 2016, there were 93.1 million Golar shares outstanding including
3.0 million Total Return Swap shares that have an average price of $41.10 per
share. There were also 2.4 million outstanding stock options in issue with an
average strike price of approximately $51.92 per share.

The Board has left the dividend unchanged at $0.05 per share for the quarter.


Golar has delivered on two significant commitments since last reporting and
changed the structure of the company as a result.  Golar Power is now an
independent downstream entity that is working to build the skills required to
embed its FSRUs directly into power projects thus sidestepping the risk of
slowly becoming an undifferentiated supplier to what will eventually become a
more commoditised business.  At the other end of the value chain is OneLNG, a
combination with Schlumberger that now has the skills and financing clout
required to deliver some of the lowest cost integrated upstream gas to LNG
solutions in the market today.  In between the two is Golar LNG with its
shipping portfolio and technical project development capabilities that will
ultimately be the link between these ventures.  The shipping business shows
signs of an anticipated recovery.  Improving utilisation, rates and the re-
emergence of full round trip economics should all help to reduce the cash burn
associated with this business from 3Q forward. Golar LNG will retain the FLNG
Hilli which remains well within budget and on track to deliver off the coast of
Cameroon within its contracted delivery window.  Discussions regarding
utilisation of the vessels spare capacity also represent grounds for cautious

There are near-term concerns with the status of the FSRU Tundra contract in
Ghana that need to be addressed.  The commercial rational remains sound and the
rhetoric from government and charterers is supportive however the pace of
progress on the ground is not yet reflective of this.

At a macro level the last 18 months have been overshadowed by the conventional
wisdom that China was no longer in a position to be the LNG demand engine that
was the foundation for the wave of new supply that is now starting to deliver.
Adding to the pessimism has been the reduced demand from mainstay markets Japan
and South Korea. As with the shipping business we are now starting to see signs
of new demand.  Although traditional demand centres Japan and South Korea have
indeed reported recent reductions in LNG imports, China and India have seen
imports increase dramatically over recent months.  The delinking of LNG prices
from oil prices and the reduction of China''s LNG gate price is being met by a
demand response.  In the case of China there is scope for the gate price to
reduce further and this should stimulate additional demand.  India is also a
price sensitive market that is now responding accordingly both with demand for
LNG and also for FSRUs. This together with new demand in the Middle East should
be welcome news for LNG players and it is for Golar.  The Company does however
firmly retain the view that conventional approaches to executing LNG projects
still look unlikely to cost effectively deliver new supply in the future.  This
fact underpins Golar''s belief in the viability of its flexible and low cost
OneLNG FLNG offering.

The Board is of the opinion that good progress has been made strategically and
financially over the last year to better position the company for the future.

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.  Unless legally required, Golar undertakes no obligation to update
publicly any forward-looking statements whether as a result of new information,
future events or otherwise.

Among the important factors that could cause actual results to differ materially
from those in the forward-looking statements are:  changes in LNG carriers, FSRU
and  floating LNG vessel market trends, including charter rates, ship values and
technological advancements; changes in the supply and demand for LNG; changes in
trading patterns that affect the opportunities for the profitable operation of
LNG carriers, FSRUs; and floating LNG vessels; changes in Golar''s ability to
retrofit vessels as FSRUs and floating LNG vessels, Golar''s ability to obtain
financing for such retrofitting on acceptable terms or at all and the timing of
the delivery and acceptance of such retrofitted vessels; increases in costs;
changes in the availability of vessels to purchase, the time it takes to
construct new vessels, or the vessels'' useful lives; changes in the ability of
Golar to obtain additional financing; changes in Golar''s relationships with
major chartering parties; changes in Golar''s ability to sell vessels to Golar
LNG Partners LP; Golar''s ability to integrate and realize the benefits of
acquisitions; changes in rules and regulations applicable to LNG carriers, FSRUs
and floating LNG vessels; changes in domestic and international political
conditions, particularly where Golar operates; as well as other factors
discussed in Golar''s most recent Form 20-F filed with the Securities and
Exchange Commission.  Unpredictable or unknown factors also could have material
adverse effects on forward-looking statements.

August 31, 2016

The Board of Directors

Golar LNG Limited

Hamilton, Bermuda

Questions should be directed to:

Golar Management Limited - +44 207 063 7900

Oscar Spieler - Chief Executive Officer

Brian Tienzo - Chief Financial Officer

Stuart Buchanan - Head of Investor Relations

Interim Results for the Period Ended 30 June 2016:

This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Golar LNG via GlobeNewswire

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Date: 08/31/2016 - 09:22
Language: English
News-ID 1455426
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