Good afternoon. Good morning, everyone. Welcome to the Q1 2018 Golar LNG Earnings Call. My name is Iain Ross. I'm the CEO, and I will take you through the business update in a few moments. But firstly, I would like to introduce you to our new CFO, Graham Robjohns, who, of course, known to many of you through his time as CEO of the MLP and prior. So I’d like now to handover to Graham, who will run you through the numbers.

Thank you, Iain, and good day to everybody. And we start the presentation on Slide 3, financial highlights and our income statement. As anticipated our operating revenues were increased in Q1 as a result of further improvements in higher rates and round-trip economics which increased the company’s earnings from the Cool Pool. As referenced in our earnings release, we expect the Cool Pool earnings to dip in Q2 due to the usual second quarter seasonal softening, exacerbated by delays in the startup of the cold point LNG production facility and production interruptions in Papua New Guinea. This will of course negatively impact Q2 revenues. However, we are now seeing production increasing and new production coming on, so we expect the LNG shipping market to continue its recovery in Q3 after this pause in Q2 and Iain will talk a little more about that later. Vessel operating expenses were higher as a result of the reactivation of Golar Viking during the quarter, but administrative expenses were lower $14 million as compared to $16.8 million last quarter. We again made a gain on the derivatives that represents the fair value of the estimated discounted cash flows of payments due in respect of FLNG Hilli Episeyo as a result of the Brent crude price moving above $60 a barrel over the contract term. The total assets increased from $94.7 million to $108.3 million during the quarter as a result of the improvement in the Brent forward curve and as a result an unrealized fair value gain of $13.6 million was recorded under other operating income. Interest costs were higher this quarter due to lower deemed interests capitalized mainly in respect of Hilli. Other financial items were a loss of $1.2 million as compared to a gain of $24.1 million in Q4. This non-cash…

Thanks, Graham. Turning to Slide 6 on the FLNG update. Hilli Episeyo commissioning has progressed well, and albeit with a frustratingly large number of small commissioning-related issues that I have to say our team is on the vessel and onshore support have overcome with dedication and persistence. And consistent with my remarks on the Q4 2017 call, I can confirm that none of the commissioning issues experienced today lead us to doubt in any way the process or our ability to meet our performance criteria. We are in commercial production. We offloaded our first full cargo this month and whilst we are light on achieving full commercial acceptance, we are cash positive from our notice of readiness, which was tendered in December. We're currently offloading to Golar Maria, which will take our second full cargo, noting that we've already delivered the first part of that cargo to date. Production on the Hilli has stabilized, and we are now consistently producing at or above nominated or contractual rates, and we hope to achieve final acceptance with our customer in the coming days. Moving on to the Fortuna project, we report that finding a financing solution that's in the best interest of our shareholders remains elusive despite significant amount of effort, particularly over the last few months. And as a consequence of this lack of finance, our JV partner, Schlumberger, has advised Golar that it no longer wishes to participate in the Fortuna project. Golar and Schlumberger now plan to wind down the OneLNG joint venture and Golar and Schlumberger have agreed to work together in the future on a project-by-project basis. We still believe in the Fortuna project and, therefore, Golar will continue to work with operator Ophir and the Equatorial Guinea government to bring this development with strong economic returns…

Thank you. [Operator Instructions] And we can now take our first question from Jon Chappell from Evercore. Please go ahead.

Thank you. Good afternoon guys. Iain, the comments about keeping the first-mover advantage, I think, are important in the tolling structure as well. So just kind of a bigger-picture thing. You said you had some inquiry from others since we’ve had proof-of-concept on the Hilli. How quickly can things move forward with either FEED studies, FID, realistic first gas and is that something that needs to be done through now newbuilds? Or are there other older vessels you can acquire for the conversion process similar to that of Hilli?

Look, I think it’s a sum of all of the above. We’re working on a combination of a Mark I, which is the Hilli design, we have MARK II, where, as we’ve mentioned previously, we’re also examining newbuilds. I think it depends very much on the opportunity, the customer, the mad ocean conditions and the speed in which they want to come to market. Our Mark I and Mark II designs are faster to market, and newbuilds may take longer. So – and it just depends on the opportunity. In terms of the timing of how we can get these going, how quickly we can get this going, I would say that it’s early days for us to determine the exact sequencing. What I do know is that we’re focused on getting the BP project through the FID. We get the Hilli up and running with commercial acceptance and I think as a combination of those two events, we will get further confidence in the product, and I believe that’s going to drive many more additional enquiries coming to market as people look to monetize marginal gas assets.

Okay. And then my second question, I know you’re not going to be able to say too much on kind of the next episode Fortuna, but I think there’s a fear out there that this project is dead. So to the extent that you can just talk about your willingness to pursue other options, the timing of that may take and then also kind of the tiny to questions together was happening at the Gandria right now. I know you’ve done some work on that, is that may be jump ahead to the BP project, could that be used for another potential project that we don’t know you about yet or you’re still kind of holding that for Fortuna potentially?

We – before we’ve done the Gandria, as we brought it into the capital yard, and we said at the time, we’ll carry on – carrying on early works that will allow us to I guess to create a generic FLNG position. So there’s nothing that’s specific to any project that’s been done on Gandria. It’s early work surveys, life of vessel expansions, which will accelerate any project, I feel like, as it goes forward. And in terms of Fortuna, we – we’re continuing to support the project. We’re having discussions – we’re continuing having finance discussions. I was involved in some discussions last week – as late as last week and trying to get this thing going. So I don’t believe it’s dead that all. We like to keep the project going, and we are also in discussions with other potential partners to replace Schlumberger on the project. It’s obviously relatively fresh news to us, so we’re moving forward. But we do believe in the project. We do think we have strong economics and if we can get the financing away with the right partnership, then we’re ready to go on it.

Okay. Thank you very much, Iain.

Thank you. Next question comes from Michael Webber from Wells Fargo Securities. Please go ahead.

Hey, good morning, guys. How are you?

Hey Mike.

I want to just talk a little bit about the kind of the shuffling of the project pipeline that you just mentioned and it seems like it’s something that’s been kind of happening kind of drifting kind of gradually for the past six months to nine months and it seems like it’s been formalized today with you guys starting to kind of dissolve the JV and Fortuna sliding into the right and potentially off the board and toward to kind of moving front and center. So if we cannot dissect that a little bit, this will be the second time that Schlumberger would have walked away from this project. And I guess the sense has always been that this was an appetizer for them in terms of looking for something beyond easy, something scalable that would be kind of more meaningful for their scale. And that I guess within the context, it seems you guys have found that in Tortue, which could be anywhere from one to four more FLNG assets and Schlumberger wasn’t involve there. I’m curious, to what extent does that play a role and you guys dissolving that JV? And is Schlumberger – do you need Schlumberger as much today as you did may be two years when you guys form that JV?

I would say the Schlumberger – what we hope to create with OneLNG was that Schlumberger would bring the upstream capability and we would bring our FLNG capability. You put it together, put a wrap around it and be able to bring, obviously, finance to our project. And I think the ongoing delays together with other capital and resource priorities that are within the Schlumberger organization, has concluded their decision to and participation in Fortuna. And from my point of view, Golar’s got to be very clear with the market and potential customer who do those – where do those opportunities come into the company and having uncertainty as it relates to OneLNG is not helpful to our end market. So our view is, let’s bring them into Golar to start with. FLNG is the key to unlocking the monetization of the reserves. And if we can bring in Schlumberger or another partner at that point, then we’ll do it. So it’s more about us taking control of our own destiny than anything else.

Sure, okay. If I think about kind of that shakeup in kind of the shuffling of the pipeline, it seems like you guys had to drive and still are driving the bus on Fortuna to a large degree. If that slides to the right and this, the Tortuna – or Tortue, rather, is front and center, that’s a BP and Kosmos-led project. I certainly wouldn’t call you guys a passenger on that, but I think there’s probably less heavy lifting associated with that on your end than maybe some of the projects you guys have really, really had to drive the bus on. Can you talk a bit about how quickly you think that could scale? And when they might need a second asset? Would that be – would you need to deliver the first before you would actually see a second FLNG unit going to hook up to that FPSO that I believe FTI is working on? And maybe what sort of internal resources were tied up with Fortuna that might now be available to look at Tortue and other projects? Considering that it seems like you have to do maybe less commercial work around that than you had to do with Fortuna?

I think it’s a fair comment that just focusing on Fortuna relieves certainly some of the technical and commercial resources than trying to do two projects in parallel. I do believe that we could have done two projects in parallel. However, we are absolutely focused on getting the BP project to the point where they feel confident toward FID. And in terms of what comes next, they probably said that they got 10 million tons a year to get going. I don’t know if it’s appropriate for me to talk publicly about their project schedule. It would probably better to ask them. I would imagine that they would not be waiting until their first FLNG vessel’s up before they’ve at least decided how they’re going to move forward with the next one or two.

Sure. It seems like the FEED work they’re doing on the FPSO would be able to handle two FLNG assets. So the idea behind an FID, it just – it seems that the – if you’re going to FID the FPSO with the availability to handle two FLNG assets, is it fair to say that first gas on that project would likely include two FLNG units?

I would imagine the first gas will include one, and then there will be another one a bit after it and then more after that. But you’re right about the capacity of the FPSO to deliver the gas.

Okay. That’s helpful. I will – I’ll stop there and hop back in the queue. Thanks guys.

Thank you. Next question comes from Fotis Giannakoulis from Morgan Stanley. Please go ahead.

Yes. Hi, gentlemen and thank you. I’m trying to understand if the FLNG projects need, going forward, a large E&P partner, an oil major similar to what Perenco did to guarantee the economics of the project. And you talked about new potential partners for the Fortuna project. What type of partners can they be? How many partners they are available? If you can give us, a little bit, a profile of the potential partners.

they could be – I guess if you think about it in one extreme, they could be technical subsurface partners that are big, and have a balance sheet and prepared to bring equity to the project. Or on the other extreme, they could be more of an operating type of partner or a sort of an oil company, a gas company-type of partner and anything in between. I think there’s a lot of interest – or there’s reasonable interest in the Fortuna project. It’s a case of between ourselves and Ophir and the Equatorial Guinean government, finding a combination of partnerships, plus ourselves, that can come up with a financing solution that works for all of us. And I just got to reemphasize that it’s the finance that’s become a problem on this project rather than anything else.

And regarding this issue there, the financing difficulty that this project has faced, and I assume that, that could be a similar problem for other projects. Is it a country risk? Is it the balance sheet behind it’s projects, the projects can get financing when you have BP, but it’s more difficult when you have smaller companies? What is exactly the difficulty? And why the Perenco project did not fail this kind of difficulty in getting financing? And it got financing at such high levels.

Fotis, it’s Graham. I think it’s a combination of all of those that you mentioned in your first question, reference the ease of financing and whether a large credit-worthy counterparty is required. But country political risk is certainly a factor in these projects. Complexity of the structure is certainly a factor, and that can be a plus and a minus if you’re including the upstream assets and the midstream unit all-in-one financing. Obviously, there’s additional security there, but there’s additional complexity. And then of course, the counterparties involved are also important. So if it’s a tolling agreement, then obviously having BP as a counterparty is pretty helpful in terms of financing.

Okay. Thank you, guys.

Next question comes from Chris Wetherbee from Citi. Please go ahead.

Hi. This is William on for Chris. Thank you for taking my question. So as we looked at some of your cost, they kind of, like, stepped up this quarter. I’m just kind of wondering if you can give us a sense of, like, how things are going to change after the Hilli’s accepted and now that you have Golar Viking included. If you can just kind of give a sense on, like, your vessel operating expenses and, like, potential run rates going forward.

Sorry, just to go back – that question clear, you’re asking what happens to the – our operating expenses post-Hilli startup?

Yes. And also, like, the Golar Viking with that as well.

Well, I guess Viking, Golar Viking’s been operational for most of the quarter. But – on LNG carriers, ship operating expenses are in the sort of, pristine vessel, around $13,000, $13,500 a day. And the FLNG unit OpEx is in the ballpark of plus or minus $4.40 million a year, something like that. Maybe a little higher to the low 4s.

Thank you. All right. And also on your agreement with BP, apart from, like, the July 1 date that you have in your release, I was just wondering if there any other major dates that we could kind of be looking for as part of that, and the potential FID by back half 2018.

There are no other specific dates that we can discuss. What we can say is that the FID of that project is solely the hands of BP.

All right. Thank you for taking the questions.

[Operator Instructions] Next question comes from Randy Giveans from Jefferies. Please go ahead.

Thanks operator. So looking at the Hilli, obviously, trains 1 and 2 are now basically complete, so congrats on that. Two questions there. So with the Golar Maria currently taking a cargo, is there a possibility that, that vessel, or maybe even the Mazo, signs a multiyear time charter to ship Hilli cargoes?

I wouldn’t have thought so. Anyway, that’s – no, I don’t think we’ve got any comment on that at all.

All right. And then second, what is the time line around train 3 and/or train 4? How long would it take those running once those FID is approved? And what is keeping train 3 from happening?

Well, train 3 is already running, if you like, in terms of production capability. Once we get our formal acceptance from our customer, then we’ll start the dialogue on train 3. The only comment we’d make is it looks like it’s a sensible thing for everyone to get involved around the economics of that additional train. So we're very hopeful that, that will happen in due course.

Okay. And then any updates on the Tundra operating as an FSRU? Or is that still an LNG carrier currently?

Tundra is still operating as a carrier at the moment in Cool Pool. And we're continuing to look for opportunities to position her as an FSRU. Obviously, she's already converted, so it makes it easier to place her if we can get the right rate. But as we've commented before, some of the rates in the FSRU market are quite low. So yes, she's trading. And yes, we still are looking for FSRU opportunities for her.

Okay. And then on the LNG shipping side, what is kind of current fleet utilization for both your spot vessels during 1Q 2018 and then kind of currently now in the second quarter?

We don't tend to comment on what utilization has been. Obviously, in the first quarter, it's been fairly good. Probably drop off a little bit in the second quarter as we've mentioned, as headline rates will do as well. Obviously, as I'm sure you're well aware, the TCE rate or sort of net earnings in a vessel is a combination of the headline spot rate that you get and the utilization.

What we're saying is that we think the second quarter TCE will be about half of the first quarter TCE. And that the large component of that is actually joint utilization.

Including utilization. Okay, great. All right last question for me, just to clarify a lot of the earlier questions. So what would you ballpark the chances of Fortuna actually happening? And could it happen without Ophir?

I don't think I'm going to answer either of those questions, sorry.

All right. I just wanted to give you the opportunity.

Last question comes from Michael Webber from Wells Fargo Securities. Please go ahead.

Just want to follow up with one more. In the release, I think kind of beyond the shuffling of the projects, you guys kind of detailed $50 million of additional cash flow that stems from the S curves on the Hilli contract. So something that's difficult to put into our models, into our numbers, but it's good to know that, obviously, that those contracts are in the money and is generating that much cash. Can – I believe you've renegotiated a toll on train 3 and it's obviously subject to increasing the export license and proof-of-concept, et cetera. Can you maybe walk us through the time line associated or the sequence of events, I guess, associated with train 3? Is that something that you would need government approval for first? I'm assuming Perenco will push that to the government. And then is there – I'm assuming some sort of a RoFR associated to get – with Gazprom around that tolling structure for train 3. Or would it be just off to the open market?

Mike, it's Graham. Just let me first answer the first bit of it about – on the Brent forward curve and then allow Iain to comment on your second part of this – the question. But the additional EBITDA from the Brent forward curve is kind of – well, easy to model in a simplistic way in terms of you kind of simply take the Brent forward curve and multiply every dollar above $60 oil by $3 to a cap of $100 oil. So – which is how we came up with the sort of $75 oil equals $45 million a year in EBITDA. That's not sort of perfect because it doesn't quite exactly [indiscernible] calculation for this. It's very -- it's a good approximation of what the EBITDA will do.

And in terms of Train 3, like I said earlier, we are focused on getting acceptance of trains 1 and 2, commercially out of the way, and then we'll dive into conversation with Perenco. And I don't think we would disclose any details of that particular contract. And we'll be pleased to tell you when we're producing from 3 trains rather than 2, but other than that, I think you just leave it at that just now.

Fair enough. Is it fair to assume there will be an S curve on a Train 3 total billing agreement as well?

Yes, I think that would be a fair assumption.

Okay, all right. That’s helpful. Thank you, guys. I appreciate it.

Thanks.

Next question comes from Greg Lewis from BTIG. Please go ahead.

Hey, hi, thanks, and good afternoon. Iain, in the presentation, you talked a bit about, you kind of mentioned it on a high level about the power update with – there’s some high interest. Could you talk a little bit about the types of opportunities in terms of size and scale, and when we could actually realize that these are multi-year projects? At what point could we expect to maybe here from Golar about maybe being a little bit more active with future projects now that’s Sergipe is kind of put the bed in terms of ready to start moving forward with.

So, it’s a good question. Because we’ve always seen that be in that great, and trying to update the market on the sites that we are progressing some of these power projects. There’s a couple of variants of this business projects that we’re focusing on perhaps around the Indian subcontinent, which are, I guess less formal in their construct, so that’s involved a lot of work and trying to get them up with a local partner with how we’re going to get the power off-take sorted. If you go back to Brazil, where the Sergipe project is, it’s a very regulated and organized process that requires an auction, and they have auctions several times a year. And we are positioning for a number, so more than one of these auctions over the coming months. And in order to qualify to bid on an auction, you have to do a certain amount of work to obtain the right license to be able to bid on the auction. And that process, as I said, is quite formal and regulated, so we’ve been spending quite a lot of money picking and choosing the opportunities that we want to pursue, and we will be, I hope, betting on some of those this year. So the time line for – of size, they are kind of the same sort of scale as those you pay maybe a little bit smaller. So have to – the size of Sergipe, and they would take a similar amount of time to get going and of a comparable level of complexity.

Okay, perfect. Thank you for that answer.

Next question comes from Eric Almeraz from Apis Capital. Please go ahead.

Hey guys. Thanks for taking the question. I noticed, first of all, congratulations on getting the Hilli up and running, I mean you guys have been talking about that for years and that entire type of ship has been, something has been in discussion for many, many years that I’ve been following the company. So congratulations on that. I wanted to ask you about just some of the hiccups that you had in terms of ramping it up, it sounded like there were a lot of small things to deal with and I know that many of your potential customers are watching that as well as your investors. I’m wondering if you could talk a bit more about that and what you’ve learned in the process and maybe – how was – you continue to role these out in the future, you’ll be able to get it up and going a bit faster.

So, I mean it’s been an interesting journey. And as I said before, there has not been one major thing that’s stopped the commissioning process. And I guess before I go and comment on that a little bit more detail, every commissioning process of any process facility has got commissioning related upsets and anyone that’s been involved in commissioning knows that you can predict everything that will go wrong. We’ve seen things that have been inside our control and that we can do a better job of next time and things that have been less inside our control and then we just have to deal with them. Some of the things inside are controlled relate to some of the vendors’ selections. We’ve had a lot of support, good support from equipment vendors on the facility, where we’ve had breakdowns and change-outs of certain components that have failed. And of course, as you are bobbing around in the ocean offshore West Africa. It’s a bit harder to fix some of these bits of equipment when you are in the yard in Singapore. So perhaps do even more at the onshore facility is probably one of our goals to next time. But you can be assured that we gathered a really comprehensive list of lessons learned as we’ve developed the project and in fact the basic design on Gandria and Guinea’s already got some of these incorporated. So, it’s been the first of a kind, it’s been a prototype. I think the team that’s worked on this has done an outstanding job of getting us there and really a record time and record cost. and as we move forward, we want to continuously improve that, so that we move from prototype into production line.

Great. Thanks for the color there. I appreciate it.

Next question comes from Fotis Giannakoulis from Morgan Stanley. Please go ahead.

Yeah. Hello, and thank you again. I just want to clarify, is there a deadline on the licenses for the Fortuna project that can be extended beyond the end of 2018?

I think that’s a matter between the equatorial government – Guinean government and Ophir.

So, it does exist and is there something is there a discussion to be extended if necessary? Is there something that is possible?

I’m sure it’s possible. Anything is possible around that. all I’m trying to advise you is that between – we’re not the party to that production sharing contract, that’s between Ophir and the EG government.

Okay. And thank you and one last question, can you give us an idea if Tortue projects, if we shall expect a NOE link upside for the Tortue product similar to what you have for the Perenco project?

No. We’re not going to comment on that at this stage.

Okay. Thank you very much.

There are no further questions in the queue. I would now like to turn the call back to the host for any additional or closing remarks.