Gary Smith - CEO Brian Tienzo - CFO

Fotis Giannakoulis - Morgan Stanley Ben Nolan - Stifel Jon Chappell - Evercore ISI Erik Stavseth - Arctic Securities Ken Hoexter - Bank of America Gregory Lewis - Credit Suisse Christian Wetherbee - Citigroup Andy Gupta - HITE Hedge Sunil Sibal - Seaport Global Securities

Good day and welcome to the Q3 2015 Golar LNG Ltd. Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Gary Smith. Please go ahead, sir.

Thank you very much and my welcome also to the call. The agenda for this afternoon’s call will be as per previous call where I will quickly run through the highlights for the quarter. Brian Tienzo, our CFO will then run us through our financial highlights for the quarter and then I’ll come back with a business update and our summary and outlook session before we turn to Q&A. So if I can move to slide four in the presentation pack which gives the highlights not only just for the quarter but importantly for this call, the subsequently events following the close of the quarter. During the quarter, the EBITDA for the company was a loss of $5.9 million which is an improvement of some $19.4 million over 2Q loss of $25.3 million. And pleasingly the board has maintained the dividend at $0.45 per share for the quarter, importantly during the quarter Golar, Perenco and SNH the national oil company in Cameroon signed and executed all the contracts that pertain to the employment of GoFLNG Hilli in Cameroon. As we have discussed previously that vessel is scheduled to commence operation in Cameroon during Q2, 2017 and a minimum EBITDA expected of $170 million based on the 50% capacity utilization of the vessel. During the quarter we also placed an order for an additional FSRU with Samsung and Golar Partners reported third quarter EBITDA of $94.9 million of which 30.4% was owned by Golar LNG. After the quarter and just recently Gazprom, Perenco and SNH signed the off take agreement for the LNG to be produced by Golar Hilli and I’ll come back and talk a little bit more about that and associated with that signing Golar Hilli Corporation received a $500 million guarantee from Perenco and SNH for their performance under the contract and similarly Golar has issued a $400 million guarantee to Perenco and SNH. Now during the quarter or just up the quarter, October 1, we launched “The Cool Pool” and its commenced operation now, that’s into its second full month of operation. And then finally and pleasingly during the quarter we signed a five year charter with West Africa Gas Limited through employing Golar Tundra in Ghana. So at that point I’ll hand over to Brian and I’ll come back later on.

Thanks, Gary. We [revised the] financial highlights on page five, the story of course it can really be divided into two bits. One, is an improved operational record for Golar LNG Ltd. and its fleet, but unfortunately negatively impacted by non-cash mark to market movements of certain of its derivatives. So let’s look at the operational performance of Golar LNG during the quarter. So total operating revenues in 3Q has an improvement up $27.4 million compared to 2Q of $20.1 million. Of course we still continue to incur costs in respect of the chartering of Golar Grand from Golar LNG Partners and similarly in second quarter we incurred a one-off hit in respect of the Eskimo charter that ended in the end of June. Other voyage expenses have come down from 2Q to 3Q as a result of improved utilization of the vessels. And going down the page to look at the last red block there, the utilization has improved from 33% to now 43% and just above that it signifies the importance of that improved utilization from what was a time charter equivalent of $3908 negative in 2Q to now $10,750 in the third quarter. Against that we saw a backdrop of negative mark-to-market movements following a decline in both interest rates and also the company’s share price. At the end of June, Golar share price was trading at $46.8 per share. At the end of September that had declined to $7.89. As a result of this, we had to book a $67 million loss, mark-to-market loss in the third quarter. Similarly as far as interest rates movement are concerned we saw 40 basis points decline from the end of June to the 30 of September and again as a result we booked a $22.3 million interest rate swap loss during the quarter. Finally, we looked at the repossession of Golar Salju from Indonesia and as a result of the lower than valuation in respect to the vessel the company booked a $15 million impairment as a result of writing off the part of the loan that led to the sale of Salju in Q1. Turning on to page 6, this highlights the dividend contribution by Partners into Golar LNG limited. As per our press release, Golar LNG Limited currently receives approximately $13.1 million for all the units it owns of Golar LNG Partners and of course as a result of the Tundra being able to find some employments during the quarter with which such employment commencing in the second half of 2016, we expect that the Tundra will be dropped down to Golar LNG Partners during this early part of 2016. And as a result of that we’d expect that the IDRs of which 50% level is currently reached will also trigger an improvement in dividends that Golar LNG Limited will receive from Golar LNG Partners. Turning over to page 7 to look at balance sheet movement cash and cash equivalents have decreased from the level of 30th of June from $374 million to approximately $222 million at the end of September. This is partly because of the line below that which is that the company had to post certain amount of cash collateral to secure the decrease in the mark-to-market valuation of the TRS that the company has entered into. Furthermore, the company has also spent certain amounts in respect of the Golar Hilli conversion which is highlighted in the third in the box underneath that. So we had $411 million spent as of 30th of June, 2015 to now $435 million at the end of September 2015. To date, we have spent $452 million on that vessel. At the end of June, at the end of September, the amounts owing in respect of the drop down of Golar Eskimo $100 million continue to be outstanding, however as of today that amount has now been settled which will augment Golar LNGs and cash balance from that settlement. Going onto page 8 and looking at the main cash flow movement, as a result of improved operations the net cash used and provided by operating activities has somewhat improved from quarter to quarter. We had the negative $20,649 million at the end of June to now negative $15,384 million at the end of September. The second red block there shows you the amount spend in respect of GoFLNG project. And the third block signifies the amount that has been put in security in order to secure the mark-to-market movements on the company’s TRS investment. Turning onto page 9 to look at the company’s liquidity position. Notwithstanding our current weak shipping markets and of course reflected by the continuing weak operating results the company continues to be in good liquidity position. At the end of September, the company had $223 million in cash, $330 million including restricted cash. As mentioned already the company had received $100 million in the fourth quarter from Golar Partners as a result of repayment of the amounts outstanding in respect of the Eskimo dropdown. Furthermore, taking delivery of the Golar Tundra recently has released $50 million with Golar LNG Limited. And of course the continuing annual distributions received approximately $50 million from Golar Partners continues to help the liquidity of the company. In respect of Golar Hilli, the financing structure as previously announced will look up to, will finance up to 80% of the expenditures in GoFLNG Hilli. That means the initial period will be to $700 million and that will then become $960 million of facility once the Golar Hilli reaches certain conditions off the delivery from the odds. Cameroon projects as Gary has mentioned just now has reached FID and therefore the financing is now available, which effectively moves the Hilli conversion is not fully funded and will no longer be a drain on liquidity. As a result of taking FID on the Cameroon project, the companies involved in the project had to exchange guarantees $305 million of the $400 million guaranteed at Golar LNG provided as cash back. However, a portion of that will be coming back to Golar as a banks indication progresses. Against this, we see three main points of additional sources of new liquidity. We are now in the process of refinancing to carrier Salju which we expect to release up to $62.5 million of equity. Furthermore, we are looking at refinancing LNG carriers and we have received interests that allow us to release equity of somewhere between $260 million up to $320 million. But of course Golar Tundra was -- is now has a firm employment and I will go to Ghana in 2016 and as such a drop down for the vessel is expected and such dropdown we expect will meet Golar will probably receive in excess of $100 million at the conclusion of such dropdown. Finally, looking at the various FLNG opportunities and projects we have and as far as the cashburn is concerned there is very unlikely the material expenditures in both Gimi and Gandria until the employment discussions are more firm. At such point, when those employment discussions are sufficiently firm we expect to be able to put vessels into financing such that the cashburn to Golar LNG Limited will be fairly reduced. I’ll now turn the presentation to Gary who will take you through the business updates.

Thanks, Brian. And I’ll continue on page 10 which is the familiar Golar portfolio slide. Three changes to this slide during the quarter. The first pleasingly is the change of color against the Hilli where now her employment is dark blue or contracted and we’ll talk more of that in a moment. Similarly, we’ve built a Tundra, that vessel is now also fixed and as Brian has just mentioned we’ll probably move up until the partners segment of the portfolio when next we speak well shortly thereafter. And then finally as I mentioned in the highlights, there’s the FSRU new build home on the 2189 still to be given its first name which will deliver from Samsung November 2017. I’ll move on now to page 11, where we talk a little bit about the LNG carrier segment of that business. And now withstanding a pretty depressing story across the market generally, it is a little bit pleasing I guess to afford an improvement albeit from that lower base. So we saw utilization pick up during the quarter from a 33% utilization in Q2 to a 43% utilization in Q3. Rates have remained essentially unchanged in the sort of range of $35,000 a day or low, I can report that we are now starting to see a full grant of economics for these charters as opposed for the paid [ph] in one way. The spot business generally is active, and what we do see however is rather than not incurred by some trade, we are now moving to a world which is predominantly intra-basin trade. So we are not seeing too many of the long haul trades particularly the sort of reloads from Europe to the Far East but rather trades within by similar or indeed trades into the Middle East on the back of the FSRU activity that’s being starting up in the Middle East. So we do see improvement, it’s registered in the third quarter. We would expect to see more of that in the fourth quarter as new projects now start to come on stream. So we now have the first of the three North East Australian projects, the BG QCLNG project fully handed over and running at two trains less than has just started up with I think the first two cargoes now loaded but more anticipated the IP LNG project is still scheduled to come on stream between now and year end and so then pass in the U.S. Gulf to start up early in the New Year. So there’s a wave of the LNG coming at us and hopefully we will see that reflected in rates going forward. Now The Cool Pool as previously discussed began operation on the 1st of October, very pleasing to see the Pool as being well accepted, almost universally the market has adopted what the proposition is here. It is proven already and you can see in the results reduction in positioning costs and the ability importantly to actually fix forward which you cannot do without the sort of liquidity that we have within the fleet at the moment. Now a lot of interest and exploratory discussions currently taking place around COAs and other flexible as far as the contracts not previously seen within LNG. And then finally, and when the pool is successful in signing up I think nearly two thirds of the available charters that were on the market during the month of October. Moving on then to page 12, which talks about FSRUs. Really we’re seeing a pretty significant change in the sort of market landscape for FSRUs. So as of today we have six operating vessels all operating very successfully. We’ve just taken in the last week or so delivery of 7th FSRU Golar Tundra and she has now been employed in Ghana, the contract party there is West African Gas Limited which is a joint venture between NNPC or the National Oil Company of Nigeria and Sahara and she is scheduled to begin operation during Q2 of 2016. The vessel will sail to Singapore undergo some relatively minor modifications to enable her to operate within that location. As in the press release the EBITDA from that contract is some $44 million per annum, it’s a five year contract with an extension option for another five years on the same terms as for the initial five years. And as I’ve said just a moment ago, she will hopefully find a home within the Golar Partner Portfolio vessels. On the back of the success, wouldn’t be just proud of the success we contracted FSRU and she is scheduled to be delivered during Q4, 2017 and there really is a lot of interest in that vessel as the remaining uncommitted FSRUs available are slowly being snapped up and we’re very confident of being able to find a home for that vessel well in advance of her delivery from the yard. And then finally during the quarter results presentation of last quarter we did indicate our involvement in a Brazilian Gas LNG Fired Power station in the north of Brazil in the place called Sergipe working in partnership with our joint venture Genpower. The project has conditionally secured a 25-year PPA for a 1.5 gigawatt power station and Golar has the exclusive right to provide the FSRU and at the moment is investigating participating at a level of 25% in the project. Good progress has been made on this project with all the various land based EPC contractors and the discussions are quite advanced in respect of securing LNG supply for the power stations as well and we remain on track to take a power investment decision on this project within the first half of next year. As we flagged in the last quarter’s results and we are restating it is Golar’s intention to hold this investment in a standalone non-recourse subsidiary of Golar rather than manage it within Golar LNG itself. If I move then onto page 13, and just update on the Hilli conversion progress, we were in Singapore just a few weeks ago and have the opportunity to visit the island and witness the progress. But it’s pleasing to report that the conversion project remains on schedule and remains on budget the contingency budget which we have for this project is relatively untapped and that’s what we would expect it to be at this stage of project of this scale and complexity. Right at the moment what’s happening is the sponsons which have been pre fabricated and you might have seen previously pictures of the sponsons sitting on the key side are currently being attached to the whole of Hilli and for those of you who can view the PowerPoint presentation that we’re talking to you can see on the bottom picture a stern view of Hilli with both the port and starboard aft sponsons now attached to the vessel. This action of the sponsors will continue for the rest of the year, most in parallel the top-side modules are being prefabricated and the pipe racks are also being prefabricated such as they can be installed in our other complicated jig saw puzzle which will be goal of Hilli when she finally delivers. Also pleasing to report that all the major equipment items which go into making the vessel have been received at Singapore and are available within the yard following the time. If I then move onto slide 14, with just updates progress against the two announced projects. And starting with the Hilli project in Cameroon which as we’ve previously reported is a project of ideas of life to produce 1.2 tons of LNG per annum which is roughly half the capacity of the vessel. During the quarter, the Tolling agreement and the Midstream Gas Convention were executed. As you might recall, the midstream gas convention was the tri pipeline agreement between Golar, Perenco and the government which covered all the regulatory and fiscal requirements for operating in Cameroon. As previously reported, the EBITDA based on the two train operation will range between $170 million per annum which corresponds to a Brent oil price of $60 per barrel, so that’s the floor and the point below which the toll will not hold to a cap of some $300 million per annum which corresponds to a Brent oil price of $102 a barrel. Also contemplating within the Tolling agreements is the option to increase capacity to a three train operation which then lifts the EBITDA for the same oil price range in the span of $240 million to $430 million. Within the last week, Gazprom and Perenco have publicly announced the signing of the LNG SCA for the full capacity of the project and so very pleasing now to report that all the documentation, all the contracts both involving Golar and all the other parties that participate in this project and they have signed and really it’s now simply a task of execution and delivery. The long and somewhat arduous process of negotiation is predominantly behind us. We remain on track to take -- sorry FDI has now taken and will remain on track for our Q2 start up 2017. And there you can see the newspaper article which means that must be true. In Equatorial Guinea also very pleasing to report good progress, the characteristics of this project are a little bit different so now we’re talking of a 20-year project life at the full capacity of the vessel which in this case is 2.2 million tons per annum. The upstream developments buy up here has made good progress. The fundamentals of the project so the biogenic gas is almost purely methane, its’ relatively shale. The upstream project development is relatively simple and the economics of this project were quite outstanding. And most importantly and I think what we are learning is a very important attribute of any of these projects is we have strong political support from within the country to for this project to proceed. Ophir had a capital market stay within the last month. We have a publicly announced that they now signed a number of heads of agreements for the LNG off take in effect the project is over sold by several times and Ophir will now and through the process of finalizing the LNG SPA which will support that project with a target of have an SPA concluded probably around the end of the first quarter of next year. Ophir have also progressed with their financing options and I will direct you towards their presentation on which sets they have in a little bit more detail. As we have previously advised that Equatorial Guinea will employ the Gandria project and indeed pleasing to report that she is still on track to start-up first half of 2019 following what we expect to be a very similar FID types of announcements during the first half of next year. Now moving if I may to slide 15, on the back of the progress made both in Cameroon and Equatorial Guinea the whole GoFLNG business development part of that business is really continuing to grow in volume but also in terms of substance of the counter parties that we are talking with. We are as previously announced looking aggressively to mature project with the potential to commence operation in 2018. We are not yet there, and so clearly we are starting to run out of time the window for securing a 2018 start up is narrowing on us, we are very conscious of that and we are pushing hard, it’s too early to declare even success or failure at this time, and we remain optimistic. Various active discussions are continuing. There is as I have mentioned previously a short list of projects capable of meeting that start up, we are not simply dependent upon one project progressing. And importantly, and I think upon which is worth making strongly is the commitment in Cameroon for the Hilli project which was made in prevailing oil and gas prices of today has really caused people to take note of the economics possible from of loading LNG approach and a flexible commercial structure really is starting to get some traction within the industry. Now the fact that we are ideal to take an FID on these projects in this environment creates a lot of upside and really we tend to be the only option available the conventional approach to LNG in discount market simply doesn’t stack up. So as a result of that we are continuing to see growing interest all the way from the sort of junior explorers until recently whenever engaged in discussions with some of the oil majors as well. It’s yet to be seen where the next project will come from but certainly of wide ranging discussions also with a number of different counter parties. And then just before further questions wrap up on slide 16 which is just to summarize what we have been through. The current spot LNG carrier market is showing signs of improvement; you can see that within the results we are reporting today. We continue to see it and the new liquefaction capacity now starting to come on stream can only help in that regard. The Cool Pool is now launched. It has been well received by the market and is doing well. We are seeing the launch of the opportunities that are out there are being secured by the pool. Very pleasing to have Golar Tundra fixed. Very proud to be the first FSRU to go into service in sub Sahara and Africa. We were the first into South America, we were the first into Asia, we were the first into the Middle East and we are preserving our record now first into sub Sahara and Africa. The Brazilian project, power project continues to make good progress. But some multi-fascinate project, both the power station, the FSRU component and the LNG supply are all coming together with the target to make a decision in the first half of next year. GoFLNG, very pleased to report after a long and focus journey. We've now taken FID in the Cameron project. And in many ways that decision has validated not even in technical approach but we are taking that also the commercial approach. In a sense it is validated the story which we've been propagating now for someone two years. Good progress in Equatorial Guinea, with Ophir and the Gandria project remaining on schedule to take FID in 2016 and that's particular interesting to see the strength of interest from the LNG buyers who have doubled up –more than doubled up to buy the LNG from that project. We are looking aggressively to employ the Gimi, you have third FLNG vessel, but we recognize the tight schedule that we're working against. And then finally, but certainly not least in our ports and Brian has covered the strong focus within the company to carefully manage our cash and to manage our liquidity position as we get forward. So, at that point I'll stop the formal part of the presentation and we'd be very happy to take questions. Thank you.

Thank you. [Operator Instructions] We will start with our first question from Fotis Giannakoulis, Morgan Stanley. Please go ahead. Your line is open.

Yes. Hello, gentlemen and congratulations for the progress with Hilli FLNG. I want to ask about the additional projects, I think in the last call you talked about you are working on four opportunities that they can be prompt for 2018? I didn't hear you talking about any specific number in this call. You still see that they're working on projects for 2018? Can you give us a little bit more color on that?

Thanks, Fotis. In the last call we did mentioned four potential candidates to employ Gimi for a 2018 startup, three of those four projects are still alive and a potential candidate for 2018. The four projects were still potentially alive is sort to slip back in time and so no longer realistically an opportunity for Gimi. So all three of those projects are potentially there, but none of them are with side the point where we would confidentially predict that we're going to close. In addition to that there are some other opportunities that have come into our field, which could be a 20918 startup, but I think realistically I would say, we're sort of – we've lost one of those four candidates that we talked about in the last call.

Thank you, Gary. I want to ask about the Cameroon potential, you have made a reference on the EBITDA that could be earn for third train. Were these discussions standing at and how feasible is a third train within a short period of time and what will depend upon?

Okay. So, the ink is only just drying right now on the LNG SBA and what we have said repeatedly is our focus was on getting the FID done before we then move on to look at how we more enhance the economics of the projects. The first thing to say is there is actually enough gas within the country of Cameron probably to the employee to vessels, albeit it in slightly different parts of the country. There are various ways in which we can employee three vessels -- three trains on the vessels. We can do that by either running harder for shorter and then we look at in the vessel. We'll assign more gas from that geography to the vessel and then look to exploit other parts of the country separately. All of that is subject to discussion and obviously not solely at Golar's discretion. It involves our partners Perenco and SNH. What is clear is that the interest by others to produce LNG within Cameroon is diminishing. I'm glad [ph] that the Gaz de France office in Cameroon is now closed. And so it's just a matter of how we best progress with our partners, but do need to bring them or they need to bring us along with them. And so, at this moment in time, we're happy to have got the first two trains put away and as I say, once the ink is dry we will revisit how we take this forward.

Thank you, Gary. Does this also involve the possibility fourth train at some point or this unit it has a maximum capacity of three trains?

The vessel is built and fully capable of running it four trains. So, the step up from two to three trains requires zero incremental capital from Golar and indeed the step from three to four trains would require no or little or any capital input from Golar. There would be some capital involved on behalf of their partners Perenco and SNH in securing that fourth train, but the third train could essentially be achieve by just running harder when the reserves that are within the field. So, all of these need to be put together in some economic analysis and decision making framework and that's where I hope this discussion goes.

But I understand that there can be potential. There are reserves sufficient that Perenco and SNH can get access for a fourth train as well at some time in the future?

Sure. These reserves and as I tried to include in my previous answer, there are reserves in the other part of the country as well, which would simply require a relocation of the vessel. So there are several ways to approach this. But to-date we've not engaged in those discussions.

I want to go on some recent newspapers articles and some statements by officials from Iran, I'm not trying to find out if you can confirm or not, obviously this is not possible, but I want to understand what is the potential over the Iranian gas? These articles they were talking about one FLNG, how many FLNGs can Iran give contracts for? And how – what kind of a process and what kind of steps they need to be taken in terms of sanctions lifting and securities that any potential FLNG provider will need to have?

Okay. I'm going to be little bit careful here, Fotis. So, Iran sits on the largest single gas accumulation in the world. So, in time they have – the capacity to employee as many as FLNG vessels as the data occurring. My understanding is in terms of produced gas of a certain suitable quality for what we do, this potentially capacity for maybe one to two or two of our vessel pump, obviously in time that number could grow. In terms of sanctions, I'm not the right person to give advice and I think there are lawyers much better qualified to advice on the sanction process.

Thank you, Gary. I want to turn a little bit on your liquidity and also if you can clarify us about what this performance guarantee are for and the $300 million. And I think that I understand that Brian said that out of this $305 million a part will be lifted at some point and can be retaken back. Can you explain how does this work and what is the amount that you can take back?

So, sure Fortis. So, this $400 million is a guarantee that's Golar LNG Limited, Golar Hilli Corporation I should say had given respect of entering into the Cameroon contracts. Similar Perenco and SNH in aggregate have given us a guarantee of $500 million also. I think in essence this whole thing is more of show of commitments to each parties. We have done this but in order to be able to cement such relationship we had to show certain amount of commitment and we have done that. In order for us to have given that $400 million guarantee, the bank requested us to cash back a portion of that, in this case $305 million. Having said that, and as mentioned in a presentation, a proposition of that 305, will come back to Golar as the bank who is standing in the front of the guarantee, progress with this syndication. They are now in the midst of syndicating the amount. We understand the breakdown of those syndications, but as far as timing is concern whilst we expect some of the amount to come through shortly, a portion of this syndication may take a little longer. So, while we have posted $305 million as a cash collateral in respect this guarantee, we soon should be receiving some of that back into our bank account.

And Brian, can you clarify the consolation fee that you have for the second and third FLNG, how – when it expires, can you continue having it until you get the commercial contract for this unit?

Yes, sure. So, we have committed $50 million in both Hilli – sorry, on both Gimi and Gandria. And there isn't really any material expenditures we have in front of us to enable us to still follow the time line of delivering Gimi in 2018 and Gandria in 2019. Those expenditures that we had now don't allow us to maintain those timetables for those vessels. Our strategy is that as Gary mentioned earlier there are certain commercial discussions in respect of the Gimi and certainly as far as is the fair opportunity is concern that's starting to mature. Our aim is to be able to put financing in place from both of those vessels prior to putting a lot of material expenditures on to Golar such that we continue to protect Golar's liquidity position. As far as the expiry is concern, I think for the Gandria we have to declare the end of 2016 and similarly Gimi, the discussion there now is that will allow us to at least keep the expenditures in check but maintain the timetable whilst maintaining the ability to declare that project until the end of June 2016.

Thank you, Brian. One last question and it has to do with the Tundra and the MLP in general. Obviously, the MLP valuations have been quite disappointed across the entire MLP sector. How do you envision this dropdown and how necessary these dropdown for your liquidity? And if there are any thoughts of potential using this excess liquidity that you currently have to or to buy back some share from the MLP or even making an exchange offer for the MLP given the steep discount, the valuation of the MLP?

I mean, certainly, it’s good to put a Tundra away immediately soon after its still – in fact just before it was delivered. As far as the dropdown is concern, I mean, that's a process we still have to go through and as you can imagine, Fotis, the conflicts committee that governs these kind of transactions has to go through a process and finding what the middle ground is in respect with the pricing. Bu you can potential point towards sort of Eskimo valuation, not necessarily saying that's what it will be, but certainly whilst we see the MLP space is being very challenging at the moment. I think in the previous presentation and I think this Golar LNG Partners press release today suggest that the company has capacity to be able to buy the vessel, buy the Tundra on potential and on debt basis, that's of course now assuming that the equity market and other potential financing available to it doesn't improved over time. So, of course, its and important factor that we'd able to dropdown vessel not only for Golar LNG Partners in order to demonstrate its ability to be able to grow, but for Golar LNG Limited as well, because one thing that we do once we maintained is our growth trajectory. So, it allows us to continue building up our FSRU franchise as well as continuing the progression on Gimi and Gandria commercial discussions.

Thank you very much, Brian and thank you, Gary.

Thanks, Fortis.

Thank you. We'll now take our next question from Ben Nolan from Stifel. Please go ahead. Your line is open.

Thanks. I'll try to keep this brief, just couple of question. First on the Ophir potential contract there, I know that in the release and in the presentation there wasn't any mention of the tolling, the preliminary tolling right that you guys had talked about previously. Is that something that you guys would consider or considering maybe restructuring similar to the Perenco deal where you have a floating toll rather than a fixed rate?

Yes, Ben. So, that discussion is in play right now. So, what Ophir have in front of him is a number of offers from perspective buyers of the LNG. We have heads of terms with Ophir on the basis of the fixed toll, but it does contemplate shifting to a variable toll along the lines that we've done in Cameroon. So, there's a sort of tri-part our discussion where we're trying to get these two contracts aligned and that's what will be taking place over the next months. I can't predict which way it will go. But there is a potential for us to move off a fixed toll something towards what we've done in Cameroon so long its make sense to Golar.

Okay. That's helpful. And then my second question relates to just to sort of the market dynamic for the vessels, you talked about how the supply and demand equation is tightening a little bit. Just curious how -- maybe it’s possible to quantify or at least generally speak to how close you are or how close you think the market might be to an equilibrium where you may actually be able to get some pricing power, would you envision that to be something like we could see maybe in the first half of the next year we still little bit too far away to put some time frame on it?

Challenging to predict forward, I mean, we think right now in the Atlantic prices already starting to affirm, so there's a lot of vessels sitting in and around Singapore in anticipation of the Australian projects coming on stream and a consequence to that is a tightening in the Atlantic and we're seeing some price signals in the Atlantic already. Once that happen -- when will that happen globally? I guess I'm optimist. I would like to think it would happen within the first half of next year for sure.

Okay.

And by some of the volumes coming on stream, it should happen in the first half of next year.

Okay. Very good. I'll turn it over. Let somebody else have a chance.

Thanks, Ben.

Thanks, Ben.

Thank you. Our next question is from Jon Chappell from Evercore ISI. Please go ahead. Your line is open.

Thank you. Good afternoon. Just a couple of clarifications from some stuff in the press release first on the dividend policy, I'm just trying to read into this one sentence about may consider reducing in the coming six quarters. Does that mean we should expect reduced dividends starting in the next quarter until Hilli create first gas or does it mean that at some point within the next six quarters the actual payout policy may be reconsidered?

I think it’s more than latter, I mean, certainly one thing that we have always maintain is look guys, we're going to try and pay dividends, but to some extend its going to dependent on one the commercial opportunities that we have in front of us and also how strong the cash flow from operations can continue to maintain such dividends. We were able to do that throughout 2015, but what we don't want to be doing is misleading investors to say, that we're going to continue paying dividend at the same levels between now and when the Hilli comes online. We are seeing as Gary mentioned earlier, now we are seeing sufficient and abundant opportunities as far as FSRUs, and certainly FLNGs are concern. I think what the board want to be able to do is keep the flexibility to be able to reduce dividends when it sees fit in order to those opportunities don't run away from us.

Okay. Understood. Just one of the clarifications on that. Another area of clarification that is you mentioned in release that you decided and agreed to delay the effective dates for the Gandria and the Gimi, however it states here that you would be on schedule for 18 and 19 gas. How do those two comments kind of match up. What are you doing differently to effectively delay moving for with this, but yet still have the potential to meet the original targets?

So, what we have Chappell is a termed up contract for the conversion of both the Gimi and the Gandria, and the commitment to order the long lead items that protect the delivery dates that we've referred to. What we had originally contemplated was once the Hilli was fully executed and we had access through the financing on Hilli that we would then straightaway launch into the next conversion ahead of the contract in much the same way as we do with Hilli. What we've decided is to slow up a little. We still have the ability to hit the 2018 and 2019 startup dates of the two vessels, but we don't yet actually have to start the physical work in the shipyard at the moment and we think in this environment is probably prudent of us to get further progress on both the financing for the second and third project and also the employment from the second and third project before we instruct the yard to actually take delivery of the Gimi and then start preparing her for conversation.

Okay. That may sense. And then the third one also you mentioned with the LNG fleet looking at doing things like unencumbered assets or re-leveraging create facilities, but also open strategic transactions, is that to be interpreted as that you may look to monetize some of those assets and maybe reuse that capital in the FSRU business which sound far more optimistic about for the FLNG business both of which generate much stronger return?

There is definitely a possibility of that. I think we're looking at all options. We have seen indicative terms on all options and certainly the company hasn't made up its mind, yet and how best to do it. I think one thing that the company wants to be able to do is continue to have certain ownership on LNG carriers, but at the same time the question remains okay, well how many do we need. I think we can be very flexible there and certainly what we are trying to manage is that we want to communicate to investors that there are certain opportunities in front of us that allows us to release certain equity from these vessels, but yet that's not yet decided, but we're giving heads up of where those equity – the ways that financing transactions would release such equity.

Okay, understood. And then one last clarification and I'll turn it over. Brian, on that $305 million how is that going to flow to the financial statements I guess for the fourth quarter, I guess this was post September 30th, is there a cash outflow of $305 million that at some point you're going to get back? Or is this just pledging us some type of balance sheet collateral?

No. It will be deposits amount. So, it’s a cash outflow to the extent that we put into a bank account, but that bank account is ours. So it securing $400 million of guarantee that we've put out. We will start seeing that 305 being reduced, in other words, it’s a reclassification in Golar LNG's bank account – Golar LNG's balance sheet from sort of restricted cash to cash and cash equivalent. So it remains within Golar.

Got it. Right. Understood. Thank you, Brian. Thanks, Gary.

Thank you. [Operator Instructions]. We'll now take our next question from Erik Stavseth from Arctic Securities. Please go ahead.

Hi, guys. Couple of quick ones from me. First of all, have you drawn down on the $700 million facility on Hilli now?

Not yet, but one of the last puzzle of that was the FID of the project and so we just gearing up to draw down now.

Right. And also could you tell me to turn on Jon's question, the unencumbered assets, do you have any assets which are unencumbered today? And also secondly if you were to leverage up instead of strategic transactions or selling the energy carriers, how much do you think you could leverage up on the LNG fees?

Okay. So, on the first point, in respect of the unencumbered assets we mentioned that we are taking repossession -- we are repossessing the Golar Viking which is now called the Salju. So that comes back to Golar and a result of that we will finance that vessel and release up to $62.5 million. In respect of the other assets, so the interest as far as re-leveraging concern will allow us to re-leverage of anywhere between 70% to 85% of the value of the vessel, hence the range of equity release that we'd mentioned in the presentation.

Right. And then, little bit on to the market. I mean, we are seeing that there is still Australian gas coming on to the market and the vast majority is fixed for Asian clients, however the Asian clients may not need that gas at the moment and there has been talks about giving that gas to Europe. Is there any destination flexibility on the Australian gas or does it have to go Australia, Asia and then potential Asia/Europe?

I'm not privy to that other than that we had seen certainly early cargos already head from Australia to Egypt and we've seen reloads at China hitting west. So, that would suggest that even directly or indirectly it's perfectly possible for those cargos to west, of course we would prefer the latter option where the cargos get shipped twice, but nonetheless we're starting to see signs of that happening.

Right. And then the last question, I mean, now there are few capital markets there, they indicate their tolling fee for two FLNG project which based that we haven't show this to you before, but they were talking about $2.8 to $2.9 per mbtu, do you have any background for how they arrived to that number?

So far the negotiation I would say, so they have a tolling number in the binding heads of terms which we executed with Ophir earlier in the year and they're making some assumptions as to where might move to. But at this point in time there is no agreement. It's subject to a discussion.

All right. Thanks.

Thanks, Erik.

Thanks, Erik.

Thank you. Our next question is from Ken Hoexter from Bank of America. Please go ahead. Your line is open.

Great. Good morning. Thanks and congrats on the Gazprom announcement yesterday. When do you have to write-off for the 2008 delivery that Gimi? Or can you develop the two vessels at the same time if it pushes into 2019?

Ken, I just make sure, understand. Are you saying when do we have to quit pursuing that opportunity.

Yes. Because you had sounded like you said before that time was running out in order to still meet those deadline, so I just wanted to understand is there a cutoff point where if you don't have those agreements or financings or heads of agreement in place, that you then have to kind of either have two going at the same time or you have to skip 2018 and go after the Gandria?

I think we are sensitive to is not actually being in the position of commissioning two vessels at the same time. So, we believe we have sufficient bandwidth within the company to be simultaneously managing conversions, but what we wouldn't want to be in is in the position where we're trying to oversee to start up two vessels at the same time. And that's sort of purpose of the discussion, sort of six months window where we wouldn't want to be overlapping vessels. And then the other variable in this equation is exactly when is it that the fee will start up, so at the moment we have for the six-month nominated delivery window and we kind of hopeful on the basis of the progress we'll be making recently that we might come in towards the front end of that window, so if you like early 2019. So, we need an opportunity that allows us to startup in the second half of 2018 failing which we would elect to move that opportunity to the second half of 2019. And I think we need to be a lot more confident than we are right now of that opportunity by the end of Q1 next year. So, I think if it comes in the Q1 next year, we're not willing to the sort of finalization of discussions and assuming that Ophir is holding for schedule or even improving as they seem to be doing than we're more likely to push the Gimi to deliver after Gandria rather than hang on to the opportunity of delivering it part of Gandria.

Okay. Thanks for that Gary. And then going back to Brian, you were talking about the levering up of the vessels, I just want to understand, is that for the cash that you're doing on this kind of in hold for the guarantee out and back. Is that what you're levering up for or is there another reason you're talking about the increase availability of levering up the vessels?

No. It’s not for that, ken, it’s really – it’s basically what we – as Gary mentioned what we see in front of us is quite buoyant opportunity as far as FSRUs are concerned. And so we're taking these opportunities to try and lever up some of the vessels, six of the vessels really in order the free up the equity. These vessels are sort of under low leverage now, because the initial that were put in these vessels has a very steep amortizations. And so as a result you can, we can now start levering them upward or at least refinancing them to enable us to release some of the equity. It's not for the security that we talked about, it’s for future opportunities we see in front of us.

Perfect. Thanks for that. And then, similarly on your cash discussion, the Brazil project is there additional cash out of hand for that project at investment?

Not immediately Ken, I think it’s something – I mean essentially the group, not just ourselves, but entire project has to look at the cash situation. There is cash, if you want the liquidity plan for that project already in terms of financing it. There will be at some points a sort of an injection of investments, but only to the extent that we take the 25% opportunity there. If it just FSRU than all we're doing is really just financing the construction progress of the vessel in Korea. But that's not in the immediate future.

Okay. And then I just wanted to understand the Gazprom agreement just a little bit here. Do sanction against Russia or anything else through this kind of as we move into the larger global war, is there potential impact this project in terms of the sale, the Gazprom commitment here or as that gets committed now that's – it’s a financial agreement. And then I guess what I'm asking is does that matter or they fixed with their $500 million cont or whatever was $400 or $500 million contribution. Do they put the cash upfront similarly to what you're putting in reserve? Do they have to put up the cash up in reserves?

So, let me deal with the first of the question first. So, there are no conditions attached to the sale of LNG from the project. So to all intents and purposes the LNG is sold unconditionally. And my understanding is there's no impact of sanctions on that contract, although as I said to Fotis earlier, I'm not the right guy to advice on sanctions more generally. But our understanding is and the commitment toward the project certainly is, that that LNG is sold unconditionally and there's no hint of any issue around sanctions involving Russia. So that's in relation to the first part of your question. In terms of the security that Perenco and SNH had to put up toward Golar, how they collateralize their contribution is really a matter to them. So we are not privy to that, other than we have the same reciprocal guarantee by Perenco and SNH towards Golar Hilli as Golar Hilli has towards them. The two arrangements are reciprocal and in all respects, identical. I don't know if, Brian, you want to add anything to that.

That's right. I mean, how Perenco, I mean, we each have to give each other a form of a bank guarantee and the way we've done it is partly cash collateral that amount. We're not privy to how Perenco and SNH have done their portion, because ultimately what we are interested in is that bank guarantee that is given to us and we're the beneficiary of it.

Yes. And then lastly, Gary, when you mentioned earlier that the 40 to 45 vessel overcapacity, I'm talking now about the current LNG trading market, were you talking about after the new yards that are coming online in Australia and US that you discussed? Or is that current right now, and given what is coming online you'd expect part of that at least to be absorbed this next quarter, just trying to understand your comments on the state of the market currently.

Sure. So I mean, for the last quarter or probably two quarters we had, plus or minus, about 40 LNG carriers more than the market really needed. I think going forward there are two things going on. One is all the Australian and then US Gulf Coast capacity starting up. But you have also got the effects of projects like Angola, where we understand Chevron are getting ready to restart that project and there's some, I forget now, six or seven vessels that they have in the spot market which really shouldn't be there. And then, finally, we're just continuing to see all the vessels scrapping or pointing home waiting for redeployment. So if you add all those effects together, then that 40 starts to diminish reasonably quickly.

You're right. So I got it. So you're talking about Angola there and then older vessels scrapped, but when you were mentioning the 40, plus or minus, that is before all these are starting up?

Correct. Before starting up, before Angola comes back.

Yes. Back on line. Okay. Perfect. Thank you so much for the time insights. Appreciate it.

You're welcome.

Thank you. Our next question is from Gregory Lewis from Credit Suisse. Please go ahead. Your line is open.

Yes. Thank you and good afternoon. Gary, I just wanted to touch a little bit more on the comments that you made about motivated owners of LNG looking to accelerate FSRU projects. I mean, historically, it looks like you were kind of willing to have one speculative FSRU at a time. Just given potentially what you are seeing in the markets here, could we see Golar potentially go a little bit farther out on the risk curve and potentially look to take more un-contracted FSRUs into the portfolio, newbuilds?

So for sure, there's been sort of a change in the market for FSRUs. Whereas previously there were always potential opponent opportunities for FSRUs but it was always a struggle to marry up those opportunities with LNG supply. The world we find ourselves in now is where there's plentiful supply and people are now trying to work with us and others to open up new markets. So the dynamic has completely reversed. We've had a strategy for some time now of trying to ensure that we always have one uncommitted FSRU available within our portfolio, and that's the position we find ourselves in right now with Tundra now put away. I am reasonably optimistic that we will find a home for the next newbuild within a relatively short period the time. So we may well be in the position where we have to commit to another vessel. But I'm not sure at this moment in time and given the discussion we've had about cash and liquidity, that we want to put ourselves in a position where we would have two FSRUs without reasonably strong indication we could put them away. So we, for sure, have some appetite for risk, but we need to be a little bit prudent and we need to be careful that we don't in any way compromise our ability to deliver on the FLNG story as well.

Okay. Great. And then just following up with that in terms of maintaining flexibility and execution and delivery of the Ophir contract. I think there were reports in the last couple weeks that Ophir might be potentially - is potentially entering the world of M&A and could potentially be acquired. I mean, clearly one would imagine, if someone was going to acquire Ophir, doing it probably to get their hands on this LNG project. But in just thinking about that, it sounds like we have some deadlines here. Their flexibility to extend and if the conversion doesn't have to happen right away, I mean, is there - are the banks, the yard, I imagine is, is their ability to extend these delivery windows, if need be, giving for something like a change of control on the asset, and the asset I mean the gas?

I think the real issue in relation to that opportunity is in fact, the position of the government in Equatorial Guinea. So they are quite keen that this project maintain schedule and won't be inclined at all to entertain any delay in schedule. And I think Ophir or any other participant would run the risk of not returning onto that license if they tried to delay any - by any reasonable amount without good explanation. So the relationship with the government at the moment are very solid and very strong, clearly it’s in the government interest that this project precede and I think that's the quarter from where the pressure will come if there's any suggestion on delay, not the banks.

Okay, great, guys. So hey, thank you very much for the time. Let's keep getting some dark blue on that portfolio chart.

Thanks, Gregory.

Thank you. [Operator Instructions] We'll now take our next question from Christian Wetherbee from Citigroup. Please go ahead. Your line is open.

Hey, thanks. Good afternoon. I wanted to ask specifically what type of agreement you need with Ophir to get the Gandria going. I guess I just want to make sure I understand sort of what is the benchmark we should be watching for in terms of sort of committing to that, whether it be what the banks need to commit financing. What's that benchmark, what's that next news point that we need to be focused on for that deal specifically?

So there are a number of parallel work streams happening on the Ophir project and just to quickly run through them, both Ophir and Golar are doing engineering studies or feed studies in respect of their own contribution towards the project and both those feed studies are on schedule to conclude within Q1. The sale of the LNG from the project, and we've already talked a little bit about that where we now have HLAs in place and it is the process of negotiation which will lead to an eventual selection of the LNG buyer or buyers from the project, which will be wrapped up in a challenging SBA, which, again, is scheduling conclusion within Q1 of next year. There's a thing which in Cameroon which we call the gas convention; in Equatorial Guinea, the umbrella agreement it's called in Equatorial Guinea. It's effectively the same document. That’s currently being negotiated between Golar, Ophir, and the government and making good progress. And then, finally, Brian is now progressing on the financing of our contribution towards the project and similarly, Ophir are putting their own financing package in place. All of those activities are scheduled to coincide roundabout be into Q1 at which point we should be in a position to move towards FID and as we’ve learnt with Cameroon that’s not an overnight process but it in itself is a process that takes a little bit of time. My belief is we should be on a -- in a fairly good position to call this project end of Q1, early Q2 next year assuming we don’t have any unforeseen delays on the trajectory where we are currently travelling. So in Q1, early Q2 we should be -- I mean we are already talking quite confidently about this project that we should be much more followed by then and be able to signals that perhaps you are looking for.

Okay. So is it for both perspective at LNGs you guess sort of that timing and then an answer to the previous question about the Gimi, sort of apple for that 1Q '16 you’ll have a better sense of sort of how the next step and those both processes I guess play out.

Yes by -- end of 1Q '16 we will have very good indications of what the capital costs are for both Golar and Ophir. We would have locked them both the LNGs are in purchase agreement and our corresponding totaling agreement. We will have cleared all the regulatory and fisal regimes and we will both have our financing packages in place. So we will have at that time all the information we need to make a clear decision and then as just a process of executing that decision.

Okay, that’s helpful. Two other quick follow up questions. As utilization rates on the LNG carriers in the fourth quarter and now if you kind of give as an indication there I think 43% was the third quarter numbers that moved higher from here?

Yes and we would project so. I mean we have [Indiscernible] was 33% to 43% step-up between Q2 and Q3 and I guess we are continuing on that sort of trajectory.

Okay. I’m sorry so higher in the fourth quarter is what you said or around the third quarter levels?

It will be higher. I think it’s continuing to…

All right, that’s helpful. And then just finally, just on the distribution on the dividend specifically you know obviously maintaining some stream of liquidity back to the company by potentially reducing that as is I understand that would you go to a zero at any point over the course of the next several quarters, does that seem like it makes sense or would it just be a reduction but a maintenance of the dividend just at a lower level just trying to get an understanding about how you guys think about that?

I think if you read our press release I think the tone from the board of directors is that we continue to see dividends as a fairly important return to Golar shareholders which is why the way it suggests that more of a reduction larger than a complete arbitration, so there is a plan as I mentioned earlier, it’s not set in stone as to when that will happen but we’d like to manage investors expectations that it could happen between now and when Hilli becomes operational in order that to be able to maintain our liquidity to explore these opportunity and but that -- any movement is not to remove dividends but if anything it is just to reduce it.

Okay. That’s very helpful. Thank you very much for the time. I appreciate it.

Thank you. Now our next question is from Andy Gupta from HITE Hedge. Please go ahead, your line is open.

Hi, just a few questions of trying to fill in some of the questions that have been asked before. On slide 9 just to understand here you lay out your liquidity, how has this got impacted by the $305 million of cash collateral, is that part of this restricted cash or is the $305 going to be new restricted cash following the slide?

So the $305 or whatever level it may be, but as soon as we get to the end of December we’ll be a new restricted cash. The $305 in day position, there is an expectation that a proportion of that will already have come back to Golar but it’s only at the end of before the end of December.

Understood. And when does this current restricted cash become unrestricted as about $100 million here, $110 million.

That’s right. I think -- so the vast majority of the restricted cash we currently have in our balance sheet point towards the companies’ investment in the total return swap. So if you look back to the end of June, when share price was around $49, $46.80 the restricted cash was actually very small. And then of course as a result of the share price falling down at the end of September it was $27.89 then the restricted has increased. And the reason for that is any negative mark-to-market movement in respective to the TRS, some of that mark-to-market movement has got to be cash collateralized, not all of it but some of that has got to be cash collateralized. So if we fast-forward to the end of December and there is an improvement of share price from the $27.89 level which was at the end of September then the restricted cash will have reduced already. And fortunately it’s not something that -- its market, it’s market related basically it’s one of the thing Andy.

I understand, understand. And of the $400 million guarantee I understand $3 or $5 of that could come down. What about the balance? What form is the balance taking, is that against a revolver, is that a letter of credit against the revolving dollar….

That’s basically that’s the risk the bank is taking on Golar.

Okay, that’s pretty good. One of the things is on the dividend policy; I understand there has been commentary about it here. Your liquidity looks fairly good and Hilli does not require anymore equity, so why you even consider potential reducing the dividend?

Well I guess one of the questions that was asked earlier is what we at Golar take awkward positions on one more FSRU for example. If those kind of eventualities that we try to offset really certainly at the same time we expect to be able to put into place financings in respect of Gimi and Gandria when they take full decisions on those. Those will not be 100% financed. So there will be certain amount of cash requirements as Golar initiates those projects. But obviously what we want to be able to be do is want to be able to limit that cash requirement, so that’s why we are looking to finance those vessels now in order that when we take FID in Q1, 2016 that we have commitment for financing those projects already, but it’s not going to be 100% and it’s that gap that we want to be able to nullify.

And do you have a sense obviously it too preliminary right now to try and get a sense for quantifying that gap right?

So if you look at the financing we’ve done on the Hilli, so we were able to finance 80% of the all in conversion cost of the Hilli. I mean certainly that’s something that we would aim for. I guess the only difference with the Hilli is that all of the equity that was injected into that project came of the very front, whereas what we are trying to achieve here for Gimi and Gandria is that -- that equity injection happens in a pro rata basis. So it’s not going to be as high requirement as the Hilli but there is always going to be a certain amount of requirement.

Yes, and are you guys giving any guidance on potential cost, because my guess would be that the cost for these two vessels will probably be lower than Hilli now?

Yes, that’s correct. So what we are seeing and I think if you look at the [indiscernible] data themselves we are seeing reductions in the capital costs for vessels two and three, up now huge but is certainly trending in that direction and that’s I guess the sign of as we do each vessel we learn. It also reflects the state of the offshore market at the moment and the ability to get good pricing.

Understood. And a couple of quick ones. In terms of refinancing the LNG carriers, I understand you said because you see opportunities for the FSRU space, but is there any risk that there could be -- you could potentially miss debt service as long as these ships remain merchant?

No, I mean the refinancing then will actually help us, because as mentioned earlier one of the things we want to try and avoid is to have a debt profile if you want that is fairly steep. These vessels are currently in what we believe to be fairly steep debt profile. So were we to refinance these not only would we look to increase the loan to value and therefore release some equity but also stretch the profile such that we are paying over the loans, the loan over a longer period of time than they currently are.

Yes, one last question from me. In the drop down I understand it can be done all that financed at the MLP, would there be any willingness to take equity back, probably not right?

I guess to some extent it’s really a decision that that still needs to be made; all we are looking at the moment is what’s the capability of Golar LNG Partners being able to take the Tundra. And we pointed towards that simply because we father that the MLP currently has sufficient capacity to be able to do it and whether or not it uses that as its main source of funding for the drop down remains to be seen.

Great, well I appreciate you taking my questions.

Sure.

Thank you. [Operator Instructions] We’ll take our next question from Sunil Sibal from Seaport Global Securities. Please go ahead.

Hi, good afternoon guys and thanks for taking my question. Most of my questions have actually already been addressed. But I was just curious, if you could talk about the terms on the contract for by Gazprom on the Perenco project, vis-à-vis how your contracts tenure is for example I guess you have eight years of contracts or half the capacity of 1.2 mtpa how does that compare with the off-take agreements that and Gazprom has signed so far.

So I think the first thing to say is we are not party to the LNG SPA, so the LNG SPA or the sale of the LNG if you like is between Perenco SNH and Gazprom. We see that LNG SPA mirrored in our Tolling agreement and through the Tolling agreement we get some insight as to what the terms of the LNG SPA might be, but because we are not party to it, I think it’s inappropriate for me to speculate on what it might look like.

Okay, now fair enough. And then on your Cool Pool vessels, I was just kind of curious it seems like you have been realizing some OpEx savings there, based on what you did in the third quarter is there still a lot of run room for or do you guys still reduce OpEx or you realized most of the OpEx savings as of now?

So the Cool Pool really didn’t kick off until 1 October. So in fact those savings that you see in the results that we presented today really don’t include any real contribution from the pool other than as some anticipation of what the pool might do. So I think the true impact of the pool and the results won’t be visible until we report that in a quarter’s time.

Okay, got it. So basically then we are looking at for the fourth quarter improving utilization as well as you know some reduction in OpEx also, is that fair?

Yes, we’d like to see continuing improvement in positioning costs as The Pool text effect.

Okay, that’s helpful and that’s all I had. Thanks guys and congrats on a good quarter.

Thanks.

Thank you. There are currently no further questions in the queue.

In which case we thank everyone for dialing in and we very much look forward d to sharing with you the story one quarter from now. Thank you very much and have a good day.

Thank you. That will conclude today’s conference call. Thank you for your participation ladies and gentlemen. You may now disconnect.