Q4 2011 - Awilco LNG

www.awilcolng.no - 1 -

Q4

2011Jon Skule Storheill

Snorre Krogstad


Agenda 28/021. Highlights Q4

2. Company overview

3. Q4 Financials

4. Market update

5. Summary


4th Quarter Highlights

• Awilco LNG ASA reported freight income of MUSD 16.8 (MUSD 12.3 in Q3) and an EBITDA of MUSD 10.9 (MUSD -0.5 in Q3)

• WilEnergy fixed on 200 day contract with option to extend up to max 400 days, commencing in mid-February 2012

• The charters declared the option to extend the period up to 365 days in January 2012, and WilEnergy is thus on contract until February 2013

• WilPower was fixed for a 200 day contract, with commencement end of December 2011

• 2nd installment on both newbuildings paid

• Q4 vessel utilization of 88% vs. 47% in Q3

• Continued strong market in the 4th quarter

Subsequent events

• WilEnergy completed dry dock on 15th of February, on time and below budgeted cost, the vessel commenced a one year charter after bunkering

• Term sheet received for increase of credit facility from MUSD 15 to MUSD 20 with tenor until February 2013

• Newbuilding on track – steel cutting started 20 February on 1st vessel

• 3rd installment paid on 1st vessel



2. Company overview

3.Q4 Financials

4.Market update

5. Summary


Company overview

Awilco LNG is a pure play LNG transportation provider, owning and

operating LNG vessels in international trade. The company owns three

125,000 cbm LNG vessels: WilGas, WilPower and WilEnergy. In addition,

the company has entered into a newbuilding contract with Daewoo

Shipbuilding & Marine Engineering Co Ltd in Korea for two155,900 cbm

LNG vessels to be delivered during the 3rd and 4th quarter of 2013. The

company is listed on Oslo Axess under the ticker code ALNG.


Our fleet of 2nd generation vessels

WilGas WilPower WilEnergy

Built: 1984

Yard: Nagasaki

Capacity: 125,631

Manager: V.Ships LNG

Flag: NIS

Main Engine: Steam Turbine

Cap: 2/1

Built: 1983

Yard: Kawasaki

Capacity: 125,660


Flag: MI


Cap: Due next DD

Built: 1983

Yard: Nagasaki

Capacity: 125,556


Flag: MI


Cap: 1


Order of two newbuildings

Yard: Daewoo Shipbuilding

Cost approximately MUSD 200, depending on final specification

Soft payment terms

Delivery August and November 2013

ICE classed

In total 19 new buildings delivering in 2012 and 2013, only 7 vessels are available for charter

Awilco LNG has on paper the first available new building to be delivered


Contract overview

WilPower: open August 2012

WilGas: open October 2012

WilEnergy: open February 2013

2012 2013

WilPowerDD

WilGas

WilEnegy DD

Newbuilding

no1Construction

Newbuilding

no 2Construction

Available

Available

Available

Available



2. Company overview

3. Q4 Financials

4. Market update

5. Summary


Q4 2011 Income statement

Total freight revenue MUSD 16.8

• Mobilization fee MUSD 2.0 (MUSD 3.5 Q3)

Voyage related costs MUSD – 0.7

• Less idle time and repositioning during the quarter

Operating expenses MUSD 3.3

• No “take-over costs” during the quarter (MUSD 0.2 Q3)

Administration exp. MUSD -1.9

• MUSD 0.8 provisions for bonuses, syntethic stock

option and BOD fee

Net Finance

• No interest costs, expenses related to fees

Tax MUSD -1.3

• Non payable in Q4, full year MUSD 0.1 payable

USD million Q4'11 Q3'11YTD

2011

Freight income 16,8 12,3 30,7

Voyage related costs -0,7 -7,5 -10,0

Net freight income 16,1 4,8 20,7

Operating expenses -3,3 -3,7 -12,0

Administration expenses -1,9 -1,7 -4,6

EBITDA 10,9 -0,6 4,1

Depreciation -1,7 -1,7 -3,9

Net Finance -0,2 -1,1 -0,8

Profit/Loss before tax 9,0 -3,4 -0,6

Tax -1,3 -1,3 -2,6

Profit/loss 7,7 -4,6 -3,3


USD million 31.12.11 30.09.11

Vessels 69,9 69,7

Vessels under construcction 79,2 39,7

Total non-current assets 149,2 109,4

Trade receivables 3,8 7,7

Other short term assest 0,8 4,0

Cash 28,4 52,6

Total current assets 33,0 64,3

Total assets 182,2 173,7

Total equity 171,6 163,3

Long term liabilities 1,9 1,2

Trade payables 2,2 4,9

Other current liabilities 6,5 4,4

Total current liabilities 8,7 9,3

Total equity and liabilities 182,2 173,7

Q4 2011 Balance sheet

Vessels MUSD 149

• Book value of existing vessels MUSD 69.9

• Paid in installment on newbuildings of MUSD 39.5 during the quarter

Current assets MUSD 64.3

• Trade receivables MUSD 3.8 vs. MUSD 7.7 Q3

• Cash MUSD 28.4 vs. MUSD 52.6 Q3

Long term liabilities

• Long term liability deferred tax

• MUSD 15 credit facility not utilized

• No interest-bearing debt

Short term liabilities MUSD 9

• Marginally lower than last quarter


Q4 2011 Cash flow

Increase in cash from

operations due to:

• Increased profits before taxes

• Reduced trade receivables

• 2nd installment for both newbuildings

paid during 4th quarter

USD million Q4'11 Q3'11 2011

Cash flow from operating

activities:

Profit/(loss) before taxes 9,0 (3,4) (0,6)

Depreciation and amortization 1,7 1,7 3,9

Trade receivables, inventory and other short term assets 5,1 (2,4) (4,6)

Accounts payable, accrued expenses and deferred revenue 1,5 (1,8) 8,6

Net cash provided by operating activities 17,3 (5,9) 7,3

Cash flow from investing activities:

Investment in vessels (1,8) (0,2) (73,8)

Investment in vessels under construction (39,5) (0,4) (79,2)

Investment in other fixed assets (0,1) (0,0) (0,1)

Net cash used in investing

activities (41,4) (0,6) (153,1)

Cash flow from financing activities

Issuance of shares, net of transaction costs - 131,6

Issuance of loan - 39,0

Net cash provided by/ (used in) financing activities - - 170,6

Net changes in cash and cash equivalents (24,2) (6,4) 24,8

Cash and cash equivalents at start of period 52,6 59,0 3,7

Cash and cash equivalents at the end of the period 28,4 52,6 28,4


Rate development

• Spot rates somewhat down from peak in Q4 due to seasonal influx of vessel availability

• Mid-term charter rates unchanged at reg. USD 140 – 150’



2. Company overview

3. Q4 Financials

4. Market update

5. Summary


Market update

LNG shipping fundamentals are appealing

Gas is clean Gas is abundantly available Gas is cheap


LNG demand to grow strongly

Source: IEA, BP, Fearnley

• Gas is expected to be the strongest growing source of energy going forward

• According to BP, gas supplied from LNG is expected to grow more than twice as fast as global gas production in percentage

terms, and faster than inter-regional pipeline trade

• LNG is expected to contribute with 25% of global gas supply growth 2010-30, compared to 19% for 1990-2010


• January imports up 28% Y-O-Y to 8.15 million tonnes, new all time high

• 3 out of 54 Japanese nuclear reactors are running, and will likely be closed during 1st half 2012

• To restart, final approval is needed from the government and local communities based on input from the Nuclear Safety commission, the

International Atomic Agency and Japanese nuclear experts

Japanese import at all time high

Source: Fearnley


China LNG imports increases

• January imports up 60% y-o-y, to 1.3m tonnes

• The Chinese government aims to increase the share of gas in total energy demand from

4% in 2010 to 8% in 2015 and 10% in 2020

Source: Fearnley


Country Project name Main Partners FID Startup MPTA Max Vessels Req.

Angola Angola LNG Chevron,BP, Eni, Total, Sonangol Taken 2012 5,2 9

Australia Pluto LNG Woodside, Tokyo Gas, Kanseai Electric Taken 2012 4,8 4

Algeria Gassi Touil Sonatrach Taken 2013 4,7 5

Papua New Guinea PNG LNG ExxonMobil, OilSearch, Santos, NPCP Taken 2014 6,6 5

Australia Gladstone LNG Santos, Petronas, Total, KOGAS Taken 2015 7,8 7

Australia Gorgon LNG Chevron, Shell, Exxon, Mobile Taken 2015 5+5+5 12

Australia Queensland Curtis LNG BG, Queensland Gas Taken 2015 4,25+4,25 10

Australia Australia Pacific LNG Origin, ConocaoPhilips, SinoPec Taken 2016 433+4,3 8

Australia Ichtys Field NW Australia INPEX,Total Taken 2016 4,2+4,2 6

Australia Prelude LNG Shell Taken 2016 3,5 4

Indonesia Donggi-Sulawesi Pertimina, Medco, Mitsubishi 2012 2015 2 2

Papua New Guinea Liquid Niguini Interoil, Pacific LNG, Liquid Niguini, Flex 2012 2015 2 3

USA Sabine Pass Chenniere, JP Morgan 2012 2015 4,3+4,3+4,3+4,3 30

Australia Brownse LNG

Woodside, BP, BHP Billition, Chevron,

Shell 2012 2016 4+4 8

Australia Weatstone LNG Chevron, Shell 2012 2016 4,4+4,4 7

Canada Kitimat Apache, EOG, Encana 2012 2016 5+5 10

Indonesia Tangguh (expansion) BP Migas 2012 2016 3,8+3,8 6

USA Freeport Freeport LNG, Macquaire 2012 2016 4,4+4,4+4,4 18

Equatorial Guinea Tain 2 Sonagas Boble, Ophir 2012 2017 5 8

Russia Sthokman Gazprom, Statoil, Total 2012 2017 5+5+5 18

Russia Yamal LNG Novatek, Total, QP ? 2012 2017 5+5+5 18

Nigeria NLNG (7 train expansion) ExxonMobil, NNPC, Shell, Total, ENI 2013 2017 4,7 7

Total 150-200mtpa 205

• If all projects realized – 205 vessels required in order to meet incremental volume.

• If only 70% on stream – 143 vessels required

Source: Fearnley

LNG Projects growth 2011-2017


Shale gas

U.S production

• U.S producers have started to reduce production du to low gas price

• Cheniere has signed off-take contracts totaling 16 Mtpa

• Construction is scheduled to start in 2012, pending FERC approval

Europe

• BP do not expect major unconventional production in Europe before 2020

• The decline in conventional supply implies a growing import requirement for Europe, up by more than

60%, from 26 Bcf/d in 2010 to 42 Bcf/d in 2030 ( equaling 122,6 Mtpa of LNG)

China

• Gas consumption expected to increase from 109 Bcm in 2010 to 400 bcm in 2020

• Gas production is expected to grow from 93 Bcm in 2010 to 251 Bcm in 2020 (of which shale gas

production is estimated to contribute 100 Bcm)

• LNG import estimated to increase from 9.3 Mtpa in 2010 (11% of total demand) to 59.2 Mtpa in 2020

(20% of total demand)

Source: BP, Fearnley


World LNG Fleet by Year of Built

• Total orderbook LNG vessels ex FSRU – 69 vessels (including last Golar vessels), of which 30 are assumed committed and 39 open.

• Limited yard capacity until end 2014, options will most likely be utilized

• Orderbook expected to grow at the tail end of the period (2014-2015) annual capacity about 45 vessels/year

Source: Fearnley



2. Company overview

3. Q4 Financials

4. Market update

5. Summary


Summary

Market • LNG demand: Expected to grow steadily

• Liquefaction capacity: Capacity is set to grow

- 60 – 70 Mtpa under construction

- 90 – 140 Mtpa additional FID in period 2012 to 2013

• Shipping: - Shortage of vessels expected next two years

- Limited orderbook until end 2014

- Trading distances is expected to continue to increase

- Firm market expected in 2012 and 2013

Awilco LNG • All vessels on contracts with proven track record

• Strong balance sheet with no debt on existing vessels, no need for financing of NB prior to delivery

• Awilco LNG well positioned to take advantage of strong market with 2 vessels available during 2nd half 2012


A Pure Play LNG Transportation Provider

Experienced

management team

2nd gen. fleet of

3 LNG carriers

2 newbuildings

world class yard

Strong balance sheet

Solid ownersTier 1 customers

Opportunistic strategy


Jon Skule Storheill

CEO

Mobile: +47-9134 4356

E-mail: [email protected]

Snorre Schie Krogstad

Chief Financial Officer

Mobile: +47-9085 8393

E-mail: [email protected]

Q4 2011 - Awilco LNG

Documents