UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of May, 2006
Golar LNG Limited
(Translation of registrant's name into English)
Par-la-Ville Place
14 Par-la-Ville Road
Hamilton, HM 08, Bermuda
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F
Form 20-F X Form 40-F
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
----------- ------------
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-____________
Item 1. INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached as Exhibit 99.1 is a copy of the press release of Golar LNG Limited
(the "Company"), dated May 30, 2006.
Exhibit 99.1
[GRAPHIC OMITTED][GRAPHIC OMITTED]
INTERIM REPORT: JANUARY - MARCH 2006
Golar LNG reports net income of $27.9 million for the three months ended March
31, 2006 as compared to net income of $10.6 million for the three months ended
December 31, 2005. This significantly improved result for the first quarter in
comparison to the fourth quarter of 2005 has primarily been driven by a $12.1
million, or 27%, increase in operating revenues to $57.3 million as a result of
the addition of the Grandis to the fleet and the improved utilisation and
charter rates of our vessels operating in the spot market. In addition there is
a $3.9 million increase in other financial item gains, predominantly due to
financial swap valuation gains and an increased contribution from Korea Line of
$3.8 million, all of which is partly offset by the additional costs this quarter
arising from the operating and finance cost of newbuilding Grandis delivered in
January 2006.
The increase in operating revenues for the first quarter of 2006 to $57.3
million, up from $45.2 million for the fourth quarter of 2005 is due to of the
addition of the Grandis to the fleet and improved utilisation and charter rates
of our vessels operating in the spot market as well as those chartered to Shell.
All vessels were employed during the quarter, including the Grandis, and there
was limited commercial waiting or idle time. Average daily time charter
equivalents (TCEs) for the total fleet were $55,116 for the first quarter of
2006 compared to $47,840 for the fourth quarter of 2005.
Vessel operating expenses were $10.4 million for the quarter as compared to $8.7
million for the fourth quarter of 2005. The increase was due to the addition of
the Grandis to the fleet from January 2006 and generally slightly higher costs
this quarter. Administration costs were $2.3 million this quarter as compared to
$4.3 million for the fourth quarter of 2005. The majority of the decrease is due
to the reduction in the level of project related expenses, which were $0.1
million this quarter as compared to $1.4 million for the fourth quarter of 2005.
Net interest expense for the first quarter of 2006 was $13.8 million, which
compares to $12.2 million for the fourth quarter of 2005. The increase was due
to the additional financing costs arising from the Grandis financing and a
slight increase in interest rates. Interest expense and interest income includes
$11.6 million and $8.4 million respectively relating to the Company's lease
finance transactions.
The results for the first quarter have again been positively impacted by the
mark-to-market revaluation of interest rate swaps, which has resulted in a net
gain (after minority interests) of $7.9 million and foreign exchange and
currency swap gains in respect of the Company's leases of $1.8 million. Both
these items, which total $9.7 million ($4.1 million for the fourth quarter of
2005), are unrealised and therefore have no cash impact. Before minority
interests the amount included in other financial items is a gain of $8.5 million
in respect of the movement in fair value of interest rate swaps. This compares
to a gain of $6.1 million for the fourth quarter of 2005. Net foreign exchange
translation and currency swap gains were $1.8 million, as noted above, and this
compares to a $0.7 million loss for the fourth quarter of 2005.
Other financial items also include a gain on the Company's equity swap of $0.2
million this quarter ($1.3 million for the fourth quarter of 2005). As at March
31, 2006 and December 31, 2005 the swap was in respect of an underlying amount
of 600,000 Golar LNG shares.
The Company's share of Korea Line Corporation's ("Korea Line") net income for
the three months to March 31, 2006, is $5.6 million as compared to the net
income in the fourth quarter of 2005 of $1.8 million in respect of Golar's 21%
shareholding. Korea Line's results were boosted this quarter as a result of
additional charter income arising as a result of the termination of the charters
of three of Korea Line's chartered in vessels.
Net income in the first quarter of 2006 at $27.9 million as compared to $17.3
million for the first quarter of 2005 has increased due to the addition of the
Grandis to the fleet and the revenue generated by her; improved earnings of
vessels operating in the spot market and additional other financial item gains;
partly offset by the additional costs of the Grandis; increased interest rates
and a reduced contribution from Korea Line.
Earnings per share for the quarter were $0.43 as compared with $0.16 for the
fourth quarter of 2005.
The number of shares outstanding as of March 31, 2006 was 65,562,000 (December
31, 2005: 65,562,000). The weighted average number of shares outstanding for
2006 was 65,562,000 and 65,567,616 for the twelve months ended December 31,
2005.
Corporate and Other Matters
The Board has been pleased with the development of the Shell charter
arrangements, in particular the high level of utilisation during the first
quarter of 2006, but also with the development of the relationship with a major
new customer for the Company.
The Board notes that the Company has made progress in the development of its
project portfolio. New opportunities have arisen during the quarter and a great
deal of work is continuing in this area.
Of particular note in April the Company announced it had signed an Equity
Subscription Agreement with Liquefied Natural Gas Limited (`LNGL`) to subscribe
for 23 million shares at A$0.50 cents. Of the 23 million shares, 13,950,000 are
unconditional and 9,050,000 subject to Liquefied Natural Gas Limited shareholder
approval. It is expected that Golar LNG will ultimately hold 19.83% of the
issued capital and will become LNGL`s largest shareholder. Liquefied Natural Gas
Limited is an Australian listed company formed to act as an energy link between
previously discovered but non-commercial gas reserves and potential new energy
markets identified by LNGL. The Board believes that the innovative strategies
being pursued by Liquefied Natural Gas Limited will facilitate the joint
development of a number of new LNG project opportunities and may also compliment
some of Golar's existing projects
Progress has been made with the Livorno FSRU project and work and discussions
are continuing with Endesa and Amga with respect to the commercial and
logistical aspects of the project.
Work and discussions also continue on the Company's other projects.
In April 2006 the Company signed an agreement for $120 million bank loan
facility in connection with the financing of Golar's next newbuilding which is
due for delivery in June 2006 and which will be chartered to Shell under the
arrangements previously announced. The outstanding instalment payable on
delivery in respect of the vessel is $104 million.
As at March 31, 2006 the Company had total outstanding debt and net capital
lease obligations of $1,003 million of which $373 million accrued interest at a
floating rate and $630 million accrued interest at a fixed rate. Effectively
therefore Golar has 63% fixed interest obligations.
As reported in March 2006, the Board is pleased to announce that Gary Smith has
joined the Company as CEO. Mr Smith has extensive industry experience most
recently from working for STASCO (Shell Trading & Shipping Co) in London in the
position of General Manager Commercial Shipping. In this position he worked
closely with all existing Shell LNG projects and LNG trading activities and
supported the development of several new LNG projects. The Board believes that
the experience Mr Smith brings to the Company is extremely valuable particularly
in view of Golar`s ambitions to expand further into the LNG logistical chain.
Market
The short-term market for LNG shipping was generally better than expected during
the first quarter. Winter demand for gas ensured high levels of LNG ship
utilisation and rates for spot charters rose to their highest levels for many
months. Rates in excess of $85,000 per day were seen, whilst the average for the
period was slightly above $50,000 per day. The number of unallocated ships has
been reduced in the quarter. The high and sustained price of gas in the Far East
coupled with continuing relative weakness in the US meant that tonnage continued
to be fixed to the Far East. In March this lead to the extreme position that no
LNG carriers delivered cargoes to the US, but were instead re-routed for
delivery in Europe and the Far East where gas prices were higher. The re-routing
of cargoes in this way, particularly from Trinidad, significantly increases the
requirement for shipping capacity.
From Golar's point of view this situation has led to substantially improved
utilisation across the fleet during the first quarter of 2006.
Turning to long-term projects; with Qatar and Nigeria just about to finalise
their latest shipping requirements and with Petronet, CPC and Woodside having
live tenders, the new building market remains active with slots for 2010
disappearing. New build prices have held firm due to strong order influx from
other shipping markets and a weakening US dollar. A standard 155,000-m3 vessel
is now priced at $215-220 million.
Global LNG trade rose to close to 140 million tonnes in 2005, a 6% rise over
2004. Far Eastern markets showed steady gains of between 2% (Japan, S. Korea)
and 4% (Taiwan). The U.S. market fell by some 2% compared to 2004 volumes and
European markets (except Belgium) exhibited a robust increase of between 10% and
22%.
Escalating LNG Project construction costs are slowing the rate of development of
the industry. Raw material price increases ranging from 25% to 100% have been
experienced in several liquefaction projects and many US and Canadian import
projects are also suffering higher EPC costs than previously anticipated.
A further 11.5 MTPA (million tonnes per annum) is scheduled for commissioning in
2007, however there is an estimated decline in output from Arun amounting to
approximately 2.2 MTPA.
Currently there are 197 existing LNG carriers above 70,000 m(3) with around 137
more on order.
Outlook
Sustained levels of LNG production has moved the market to a well balanced
shipping position, however short term volatility can be expected to continue as
a result of changes in regional world wide gas prices as well as general
seasonality. Any delays in projects or unavailability of vessels for technical
or other reasons will increase this volatility.
The Board is of the opinion that several of the Company's regasification
terminal related projects currently under development have interesting
prospects. The Board wants to use the next period of development to conclude on
several of these projects and to seek to develop new project ideas with the
focus on liquefaction projects and trading where the profitability is expected
to be higher.
The Board expects that earnings in the second quarter from the Company's spot
vessels and those under charter to Shell will be in line with the first quarter
of 2006. The general improvement in rates and utilization in the first quarter
of 2006 is expected to continue for the time being but will be highly sensitive
to the development in global gas prices and the price differences between the
various markets for LNG as these impact on the requirement for shipping.
One of our vessels on long term contract will be dry-docked during the latter
part of June which will therefore result in reduced earnings.
The Board is hopeful that the overcapacity in LNG shipping is reduced and that
the spot market in the coming years will show improved earnings compared to the
last two years.
Forward Looking Statements
This press release contains forward looking statements. These statements are
based upon various assumptions, many of which are based, in turn, upon further
assumptions, including examination of historical operating trends made by the
management of Golar LNG. Although Golar LNG believes that these assumptions were
reasonable when made, because assumptions are inherently subject to significant
uncertainties and contingencies, which are difficult or impossible to predict
and are beyond its control, Golar LNG cannot give assurance that it will achieve
or accomplish these expectations, beliefs or intentions.
Included among the factors that, in the Company's view, could cause actual
results to differ materially from the forward looking statements contained in
this press release are the following: inability of the Company to obtain
financing for the new building vessels at all or on favourable terms; changes in
demand; a material decline or prolonged weakness in rates for LNG carriers;
political events affecting production in areas in which natural gas is produced
and demand for natural gas in areas to which our vessels deliver; changes in
demand for natural gas generally or in particular regions; changes in the
financial stability of our major customers; adoption of new rules and
regulations applicable to LNG carriers; actions taken by regulatory authorities
that may prohibit the access of LNG carriers to various ports; our inability to
achieve successful utilisation of our expanded fleet and inability to expand
beyond the carriage of LNG; increases in costs including: crew wages, insurance,
provisions, repairs and maintenance; changes in general domestic and
international political conditions; changes in applicable maintenance or
regulatory standards that could affect our anticipated dry-docking or
maintenance and repair costs; failure of shipyards to comply with delivery
schedules on a timely bases and other factors listed from time to time in
registration statements and reports that we have filed with or furnished to the
Securities and Exchange Commission, including our Registration Statement on Form
20-F and subsequent announcements and reports.
May 30, 2006
The Board of Directors
Golar LNG Limited
Hamilton, Bermuda
Questions should be directed to:
Tor Olav Troim - +44 7734 976 575
Golar Management (UK) Ltd - +44 207 517 8600:
Gary Smith: Chief Executive Officer
Charlie Peile: Executive Vice President, Head of Commercial
Graham Robjohns: Chief Financial Officer
GOLAR LNG LIMITED FIRST QUARTER 2006 REPORT (UNAUDITED)
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INCOME STATEMENT 2006 2005 2005
(in thousands of $) Jan - Mar Jan - Mar Jan - Dec
unaudited unaudited unaudited
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Operating revenues 57,340 44,196 171,042
Vessel operating expenses 10,391 9,572 37,215
Voyage expenses 2,774 1,044 4,594
Administrative expenses 2,314 3,185 13,563
Depreciation and amortisation 13,321 12,135 50,991
Total operating expenses 28,800 25,936 106,363
Operating income 28,540 18,260 64,679
Interest income 9,113 8,710 35,653
Interest expense (22,945) (19,433) (82,479)
Other financial items 9,918 2,597 7,507
Income before taxes and minority interest 24,626 10,134 25,360
Minority interest (2,050) (2,279) (8,505)
Taxes (191) (125) (818)
Equity in net earnings of investee 5,560 9,591 18,492
Net income 27,945 17,321 34,529
Basic earnings per share ($) $0.43 $0.26 $0.53
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BALANCE SHEET 2006 2005 2005
(in thousands of $) Mar 31 Mar 31 Dec 31
unaudited unaudited unaudited
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ASSETS
Short term
Cash and cash equivalents 86,858 116,372 62,227
Restricted cash and short-term investments 45,183 46,946 49,448
Other current assets 31,799 17,438 23,784
Amounts due from related parties 64 316 17
Long term
Restricted cash 702,963 698,590 696,308
Equity in net assets of non-consolidated 71,935 59,523 65,950
associate
Newbuildings 65,282 76,989 111,565
Vessels and equipment, net 1,346,183 1,249,429 1,209,044
Other long term assets 14,653 10,523 12,352
Total assets 2,364,920 2,276,126 2,230,695
LIABILITIES AND STOCKHOLDERS' EQUITY
Short term
Current portion of long-term debt 67,627 54,457 67,564
Current portion of capital lease obligations 4,740 2,557 2,466
Other current liabilities 55,001 47,566 53,077
Amounts due to related parties 695 550 886
Long term
Long term debt 746,092 813,719 758,183
Long term capital lease obligations 914,408 823,044 801,500
Other long term liabilities 84,200 85,185 84,878
Minority interest 29,637 28,561 27,587
Stockholders' equity 462,520 420,487 434,554
Total liabilities and stockholders'equity 2,364,920 2,276,126 2,230,695
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STATEMENT OF CASH FLOWS 2006 2005 2005
(in thousands of $) Jan - Mar Jan - Mar Jan - Dec
unaudited unaudited unaudited
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OPERATING ACTIVITIES
Net income 27,945 17,321 34,529
Adjustments to reconcile net income
to net cash
provided by operating activities:
Depreciation and amortisation 13,321 12,135 50,991
Amortisation of deferred charges 358 2,026 3,035
Income attributable to minority interests 2,050 2,279 8,505
Undistributed net earnings of (5,560) (9,591) (16,945)
non-consolidated investee
Drydocking expenditure (301) (8,875) (9,373)
Stock-based compensation 320 - -
Change in market value of equity, (12,267) (1,204) 4,605
interest rate and currency derivatives
Interest element included in capital 1,964 2,204 7,351
lease obligations
Unrealised foreign exchange loss/(gain) 1,758 (3,697) (15,709)
Change in operating assets and liabilities 5,624 8,033 4,037
Net cash provided by operating activities 35,212 20,631 71,026
INVESTING ACTIVITIES
Additions to newbuildings (104,522) (105,452) (140,028)
Additions to vessels and equipment (331) (1,588) (5,700)
Long-term restricted cash 22 (1,253) (56,953)
Purchase of unlisted investments (500) (3,000) (3,000)
Short-term restricted cash and investments 4,265 (4,993) (7,495)
Net cash used in investing activities (101,066) (116,286) (213,176)
FINANCING ACTIVITIES
Proceeds from long-term debt - 420,000 420,000
Proceeds from long-term capital lease 102,983 - 44,800
obligation
Repayments of long-term capital lease (458) (1,417) (3,004)
obligation
Repayments of long-term debt (12,028) (254,777) (297,206)
Financing costs paid (12) (2,710) (3,944)
Dividends paid to minority - - (7,200)
shareholders
Payments to repurchase equity - (667) (667)
Net cash provided by financing activities 90,485 160,429 152,779
Net increase in cash and cash equivalents 24,631 64,774 10,629
Cash and cash equivalents at beginning 62,227 51,598 51,598
of period Cash and cash equivalents at 86,858 116,372 62,227
end of period
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Notes
1. The financial information included in this interim report has been derived
from information prepared by the Company in accordance with accounting
principles generally accepted in the United States of America.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorised.
Golar LNG Limited
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(Registrant)
Date May 30, 2006 By /s/ Graham Robjohns
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Graham Robjohns
Chief Financial Officer