Oscar Spieler - CEO Brian Tienzo - CFO

Michael Webber - Wells Fargo Jon Chappell - Evercore ISI Fotis Giannakoulis - Morgan Stanley Ben Nolan - Stifel John Humphreys - Bank of America Merrill Lynch Greg Lewis - Credit Suisse Prashant Rao - Citigroup Herman Hildan - Clarksons Platou

Good day and welcome to the Golar LNG Limited Q4 2016 Results Conference Call. Today’s conference is being recorded. At this time I’d like to turn the conference over to Oscar Spieler. Please go ahead, sir.

Hello everybody and welcome to the fourth quarter 2016 result presentation. Joining me is our CFO, Brian Tienzo. As you’ve seen fourth quarter has been a very busy quarter for us and it has continued into New Year and Q1. Going over to Slide number 3. The net income has improved compared to Q3 and we ended up in the loss of $13.7 million while the EBITDA and operating loss in Q4 was $15.9 million and $32.7 million respectively. We have over the years discussed many different structures with Ophir and they agreed and formed a JV between Ophir and OneLNG to come [indiscernible] Fortuna reserves. This means that we’re aligned throughout the project with our partners. We’ve made substantial progress with Golar and signed the term-sheet a Chinese bank. Golar Power has taken up on the Sergipe project and signed a 25-year FSRU agreement with the project. In addition to this, we have secured a long-term sale and purchase agreement for supply of LNG. The GMLP exchanged Golar existing IDRs for additional common units and General Partner units and reset the level at which the IDRs accrue the dividends. In Q4, we raised $170 million in equity and secured $150 million margin loan to deal with $250 million convertible bonds due in March 2017. As you all maybe aware we issued a $402.5 million 5-year unsecured convertible bond at 2.75% with a capped call giving an effective conversion price of $48.86 recently. Going on to Slide number 4, the Golar Group of companies cover all the areas of the LNG chain. We are able to develop project producing gas from the well and liquefying it on our FLNG shipping it, re-gasing it on our FSRUs and producing power from our own gas-fired power stations. By teaming up with Schlumberger, we get the best reservoir wellbore technology and production management in the industry country wide. Golar is one of the leading companies developing new solutions such as FLNG and FSRUs and shipping. Golar Power and its partner like Stonepeak and utilizing General Electric give us the best developed gas fired power projects. This set up gives us a lot of credibility in the market all from a technical, operational point of view and a financial point of view. Together with our partners and through the GMLP puts us in a prime position, when it comes to financing these large project which is one of the major obstacles in order to take FID. So giving the floor to Brian, he’ll take you through the financial for Q4.

Thank you Oscar. The highlights for the quarter is, we have reduced our loss from an EBITDA loss of $15.8 million compared to an EBITDA loss of $11.3 million in Q3. So net revenue, net of voyage expenses for 4Q, 2016 was approximately $10.5 million compared to net revenues in 3Q of $10.6 million. The main decrease is attributed to weaker performance in the overall fleet from the cool pool, however that was slightly mitigated by certain amounts received by WAGL for the Tundra during the quarter. Utilization rates for the Golar fleet increased during the quarter slightly to 39% from 37% in 3Q, but TCE rates decreased from $10,893 per day from $13,852 per day. Also direct operating cost of the ships decreased to $11.4 million from last quarter’s $12.1 million, the improvement is mainly is the result of settlement of an insurance claim for the Golar Viking relating to damage of diesel generators back in 2014. This means that in the quarter the operating cost improved for the fleet to $7,837 from $8,446 per day in 3Q this number of course includes vessels in the layout. By far the biggest movement in the quarter was administration costs which was at $14.9 million, this quarter compared to $9.8 million in the 3Q, this is largely due to increase in share options charged following awards in November and 3Q, we also saw credits against share options charge from forfeiture of certain awards. In addition to that, we saw increase in project cost as a result of higher project development also during the quarter. Turning over to Page 6 for the balance sheet. Golar’s liquidity position improved from 3Q of $138 million to 4Q of $224 million, this is the result of the successful equity offering the company did in November when we raised $170 million to par finances convertible bonds that matured six months. Since the equity offering Golar had purchased $30 million of the bond at par value. Also during 4Q, cash improved further due to reduction in the cash required to secure the Hilli letter of credit. And as Oscar already mentioned the company’s liquidity position will have further improved following successful convertible bond offering this month. We were able to raise $360 million net cash of the $402.5 million which included a greenshoe, but after the cost of entering into a capped call option. The effect of the capped call is to mitigate the dilutive effect of the bonds when they eventually mature, but also reflects the board’s positive outlook on Golar. Having concluded into convertible bond the company is now able to meet its initial equity obligations for both Sergipe and the Fortuna project as well as meet its liquidity needs with shipping operations. The other highlighted numbers there in the table simply shows the progress is being made on the conversion of Hilli and again just highlighting the relevant notes in relating to the numbers on long-term debt and short-term debt as they include numbers of the listed [ph] companies rather than numbers that Golar actually owns. That concludes the discussion on the numbers. I’ll now turn the presentation back to Oscar for business update.

Thank you. Let’s talk on shipping on Slide number 7. The order book is around 104 vessels when it comes to LNG carriers and with an increased projection going forward the utilization of the LNG should increase as you can see on the upper left graph on the slide. However, the much ever report portion of the new volumes comes at the end of 2017. The activity level so far in Q1 has been approximately the same as last year. We see an increased active [indiscernible] charter to secure time charters indicating that both old companies and the traders have view as that the market will tighten. We, Golar are in advance discussions with several charters for our vessels in this respect. The time charter equivalent for Q4 as Brian mentioned was $11,000 per day with utilization of 39%. So far in Q1, we’ve 50% our carriers and the total. And the rates for Q1 will be higher than Q4 and Q3. We’re moving to Slide number 8. Looking at the FSRU market, as you all know the FSRU concept is well accepted and the preferred solution for mainly projects. Due to its flexibility, time for construction and costs. 70% to 80% of the new import terminals have chosen FSRU solutions since 2007. We decreased the availability of LNG and lower LNG prices relative to other energy sources, the demand for FSRU is increasing. We believe that this market will be strong going forward and that we will see a more diversified amount for FSRU when it comes to sites, standard requirements and the way the FSRU provide to participate on the import projects. The market of our FSRUs undertaken by Golar Power and they are now working on a number of project in South America, Africa and Far East. We will not be able to comment on specific project they are working on at present time. Golar Power is making very good progress on the Sergipe project. And the Sergipe project has found FSRU [ph] contract to build and operate the Sergipe power plant with General Electric. Their plan are flexible and agreement with Exxon and the Sergipe project have also signed a 25-year FSRU deal on the [indiscernible] permitting and financing are going according to plan. In addition Golar Power has ordered long-lead items for its first FSRU conversions and the FSRU will be available mid-2018. I’m afraid I do not have any news on Tundra and the Tundra contract with WAGL is a major concern for us. We are in a positive dialog with WAGL on trying to find solution and we’re exploring different options. In parallel, we’re also continuing to protect our contractual and legal rights. Moving over the Slide number 9, coming to our major project. Hilli will be renamed Hilli Episeyo and we will have a renaming ceremony with the Government of Cameroon around middle of the year. We’re making good progress on Hilli and we’re on schedule to start our pre-commissioning interval in end of September 2017. Have still close to 4,000 people working on the project daily with night shift of around 400. It is a huge project and we’re now in the phase where we are getting the vessel to a mechanical complete. It is extremely important to get the individual different system to mechanical complete because only then we will be able to start pre-commissioning and testing of the systems. We have started of the pre-commissioning of certain systems that we have lost some time in this respect lately. However we are still comfortable with tendering notices of revenues [ph] at end of September. When it comes to cost, we’re well below budget and are confident that we will continue to be below at project end and that’s anything unforeseen happens. When it comes to the specific work on the Cameroon project in Cameroon, we’re on track with permitting at the marine. Operational [indiscernible] on schedule and we do not see any major concerns here. Perenco is on track with their scope and will be ready well before we arrive with our vessel. Both SNH and Perenco has reported of filling the remaining trains after we’ve completed acceptance. Moving over to Slide number 10. The Hilli will generate a substantial free cash in the year after these acceptance. The first two trains will generate $170 million in annual EBITDA. We will release $160 million in net debt release and release $90 million from the letter of credit with Perenco. If you then deduct the deduct service the Hilli will have net cash release of $310 million. On the last slide, that’s $390 million so you’re just so you’re aware of it, it should read $310 million. Hilli has an addition, the potential to generate cash from the increased oil price above $60 of $130 million then addition around $70 million to $130 million per additional claim. Golar is also in discussion with GMLP regarding the drop down of parts of Hilli. Moving into Slide number 11. Fortuna project has made good progress and I believe we will be able to take FID around middle of the year. In our experience to put this agreement together it takes a lot of time and effort especially to get everybody aligned and comfortable and takes much longer than we and you would wish for. OneLNG and Ophir has signed a shareholder agreement where OneLNG will own 66.2% resulting in that we are all aligned throughout the project. The total CapEx for the project is around $2 billion and the project is expected to generate around $560 million based on the FOB price of $6 per million BTU. In addition, we’ve signed a financing term-sheet with the banks and we’ve made good progress on agreed fiscal and regular framework with the government. The national oil company of Equatorial Guinea have expressed interest to invest in the Midstream. Before the project handshake FID, we need to get to the Umbrella Agreement signed and get, the Presidential decree to get agreement ratified. We need to execute the financing agreements including the new deal from the banks and finally get Ophir shareholder approval. In addition we had strategic discussions with our partners with regard to how to do the off-take. We will shortly move Ganza [ph] to [indiscernible] start off some lean methods preparational [ph] work for the vessel. Moving onto the Slide number 12. OneLNG has focusing on African Gas is in our belief that West African Gas is highly competitive. We believe that a typical cost for an FLNG project including the upstream and midstream is in the region of $2 billion producing around 2.4 million ton per year. The FOB price of around $5.5, this gives around free cash flow of around $500 million per year resulting in a payback period of four years. This type of economics are sufficient to take FID without off-take agreements in place and only make sure you have sink-in Europe where there forward prices are around $6.5 delivered to Europe. OneLNG are working on a number of project invest in East Africa, Far East. Golar is in addition also working on project outside of the FSRU. Moving over to Slide 13. Last six months our finance people have been extremely busy and we have strengthened our financial position and should have sufficient cash to deliver Hilli, meet our share of Golar Power’s equity contribution to Sergipe project, to fund the initial equity contribution on Fortuna project in addition to support our LNG carrier. The GMLP are in discussion on a deal structure to drop down parts of Hilli. The most important thing going forward for Golar is to complete Hilli, get it accepted and start of the production on schedule and budget. The Sergipe project is progressing well. Fortuna project are making progress and we think we will make FID middle of the year. And with the increase LNG production, the LNG carrier markets will improve overtime. Golar Power has a laser focus on the FSRU business and power business and OneLNG under the new FLNG projects. We have the best partners we can wish for and we all believe that, we are very well positioned to take major role in developing future FMG [ph] and FSRU projects going forward. Thank you very much operator, we can go into the Q&A session.

[Operator Instructions] we can now take our first question from Michael Webber from Wells Fargo. Please go ahead.

Oscar I wanted to start first on your comments [indiscernible] run additional projects or looking for certainly larger projects. You ran through the geographies there. Now just help me, you could can maybe prioritize this for us, in terms of where you think the next most likely project comes from be it West Africa, East Africa or Southeast Asia and maybe kind of prioritize those and then maybe a bit of color around the types of fields you’re looking at and how FLNG technology would be used either as an early stage production or as a wholesale [ph] solution?

As I said we’re working on these projects and I think there are, the probability that this project will happen is quite equally spread around the world, we’re working on a project around in the Far East which is potentially a good project and we have several project in Africa, West Africa and East Africa. Personally I’m in the favor of the African projects because of the price and so forth and it suits very well to Golar execution model. On the other side, we sometimes have some more challenges when it comes to political situation in different countries. So my favourite or what I think is more likely that we will take FID is most probably in West Africa. I will not going into details about different projects. When it comes to US, you have taken out the political risk, but of course you have some other risks which [indiscernible] more destiny of your own, control your own destiny more in US than in West Africa in many ways.

Right and there’s a cost for that too. I guess maybe looking at the kind of projects you’re looking at with on your own and then with the OneLNG JV with Schlumberger, can you maybe parse out that kind of work you would look at with them versus what you look at on your own, if there was a large deals with a major involved and you’re looking at early stage production, is that something you would still likely do with the JV or is that the scenario where it’s more likely you would do it on your own?

No, I think most projects if there is an upstream handle to it, we’ll definitely do that in the OneLNG and we will also potentially also do, even if it’s not an upstream angle on it, with OneLNG but have not decided yet. Of course if there are a few FLNG and there are nothing in there for our partner it might not be a natural place to be, but that’s a discussion we will need to have and so when it comes to big project if there, maybe we’ve seen - I think we will definitely like have Schlumberger in there.

Okay, just two more and I’ll turn it over Brian on the Hilli and the potential investment from the Equatorial Guinean Government. Do you have a sense on how larger stake they would want to take and what the timing of that would be, would that impact the capital call associated with the JV assuming that does hit FID or would that be later?

That’s for the Gandria, not the Hilli. In respect to the government, I mean so those discussions are ongoing at the moment wise, so we can’t really comment on values and to the extent of shareholding and so on, but their interest is already communicated to us.

Got you. Okay and then finally with the Tundra I know it’s a bit of a sensitive scenario you requested to trade that earlier as I guess on the spot market as a carrier. Just any update as to whether you’ve actually gained any employment for the Tundra and then maybe how you think about either a drop dead date for negotiations there and or how you handle the worst case scenario for that asset given that it’s already at the MLP level.

We’re on constant [indiscernible] with WAGL when it comes to Tundra and we have tried to get them release the vessels, but we have not been able to do that without compromising our competitive rights and legal rights, so we have decided not to do it, but we are still continuing we have positive discussions with them and we believe that this project will happen over time. So we are continuing the discussions and of course we can’t continue with this forever but we will give it considering when we should stop that discussions or not, but we still believe that there is a good hope that project will go forward, it will be delayed, so we need to find alternative structures to the time charter agreements which we have today.

Okay, thanks guys. Will turn it over. Appreciated.

Moderator, can you please limit the questions to two.

[Operator Instructions] we can now take our next question from Jon Chappell from Evercore ISI. Thank you.

First question regarding the Hilli. There’s obviously some hopes or potential I guess for third and fourth train just wondering what needs to be done in that regard, both what we’re kind of waiting on for the government approval, is this just kind of proof of concept that first two trains are running efficiently and then also for that $70 million to $130 million potential further EBITDA contribution. What is the new investment that would be required to tap into a third train for that?

Okay, it’s Oscar. On our side we don’t need any extra investment and so. When it comes to the discussions we had with SNH and especially for Perenco, they are saying that they don’t want to invest any additional on it, before we see got acceptance on the Hilli and they see, the real production on Hilli. When it comes to moving from two trains to three trains it’s a relatively marginal investment for Perenco. There we’ll have to utilize the plant they have to their 100% without any contingency, but they will be able to do that with a marginal investment. Overtime they’ll need invest in some additional drilling potentially some small pipelines, but this is relatively small amounts compared to the EBITDA both for Perenco, SNH and us. When it comes to train number four, if they don’t want to go for train number four, they need to invest more infrastructure onshore, but still that and we believe is relatively marginal investments. Hopefully all in for train three and four below $100 million based on my own assumptions.

Got it. Thanks Oscar and then for my second question just trying to think about the competitive landscape for you guys in the solution that you provide. So obviously there’s a big other West African project that’s been talked about a lot recently in Senegal and Mauritania and although Golar hasn’t been mentioned specifically as we think about who you would be going up against to get a project that could be an FID next year or that or any project that could take FID next year and have first gas by 2020 or 2021. Are there any other realistic solutions or independent oil companies or majors to pursue or as your conversion process kind of the only game in town as it stands right now.

I will say in order for some of the start-up feed study it will take them one half year to do the feed study, then they will need to negotiate with the shipyards that will take another half year, so two years at least before they actually can take FID on the project, if you ask me. Then there will be a building period between 36 and 48 months, so that’s what we’re up against. What we’ve seen in the past when it comes to shipyards, you see a cost which is more or less double cost of ours when it comes cost per produced ton. So I think there are nobody at present which are close to our cost basis. So in that respect, I don’t think we had too many competitors, but of course we only have a lead for certain time and most probably people are working on concepts now, which could compete with us, looking at different structures but we haven’t seen it so far and we are also working on a new concept which will reduce our cost as well. So I think we are pretty lonely here, but of course that our wanting is to be able to offer the FLNG, but in other way it’s to actually finance it, which is one of the major obstacles. So I still think we have some time alone in this market, but not for long, but for too long but maybe two, three years.

Two to three years, okay. Great. Thanks very much Oscar. Appreciated.

Thank you. [Operator Instructions] we can now take our next question from Fotis Giannakoulis from Morgan Stanley. Thank you.

Oscar, it seems that this have been very busy period for you and a very critical period in terms of delivering FLNG. There are a lot of people - they are concerned and a lot of people, we’re expecting to see the successful delivery of the FLNG and the ability of the company to do multiple of this project, can you please give us what are the main milestones that between now and September that will make investors feel more comfortable that the conversion really works and production can start by end of September after you’re envisioning?

I think first of all, if you’re thinking about the pre-proposal, if you’re in doubt. I think we have a real life example of the commissioning of the barge down in China that has been fully commissioned, fully accepted by the customer and produced over capacity. So that is when it comes to the prequel [ph]. Then you have the performance of [indiscernible] on our sales and like a leach on Hilli. We are down there every week, the margin stones now is to get vessel mechanical completion that will happen over the next month or so and then, we will continue to do pre-commissioning over as long as possible, we will stay in Singapore as long as possible in order to be able to do as much pre-commissioning as possible and that’s the real milestones. All the equipment is onboard, all engineering is done, we’re finalizing the acceptance from DMV and so forth, I don’t see any obstacles it’s just to get the work actually done and that’s a challenge, so that’s for sure but we still have some leeway and we believe that, unless we have busy, big unforeseen issues going forward that we’ll be able to sail the vessel in the middle of the summer, we will be able to get it around Cape, we will be tendering notice of readiness, if we take that amount to prepare the vessel off we’re tendering notice of readiness of two, three weeks and then we fire off the gas plants and we’ll start production. Our initial schedule and it comes to commissioning, it’s lower than what we have in the contract. In the contract we have 201 days, we believe we can do it in a shorter time.

Thank you Oscar. Can you also describe us what are the main risk between now and September you led the first conversion of FSRU ever, how much more complicated this project is and what is the risk that the investor should be aware of, is there a chance that you go in Cameroon and the vessel does not work, does not produce or you think that there’s no way that something like that is going to happen.

We will definitely meet some challenges, but we’re 100% certain that the vessel will work not issue. Going forward, we need to test our own 11,000 loop test going forward, we need to test pipes, we need to dry out all the systems. We need to transport the vessel for around Cape and we need to rip it off at the marine station and then we need start our commissioning, all these things are critical. I think we have good control over it. Of course it’s a much, much more complex project on FSRU. We’re spending 17 million hours on this vessel to convert it. We have had a focus on this issues which I just mention from the very, very beginning that we should be do mechanic completion, that we must be able to do the testing, drying out, cleanliness, etc., etc. So the risks but there are much less risk today than it was a month ago, two months, four months, around six months ago. So we have better come, we have now much closer to the goal today.

Thank you Oscar.

Thank you. We can now take our next question Ben Nolan from Stifel. Please go ahead.

So two quick questions, the first is sort of I know you don’t want to talk about specific projects and that’s fine. But with respect to both the Golar Power and the OneLNG, what is your target in terms of new project announces, what would make you happy? One or two of each per year is that sort of the goal, any context that maybe you could place around what you’re aiming at.

I think when it comes to FLNG so I think, hopefully discussed with the board is to have one at the final stage, one in the middle stage and on in the beginning stage. We have three parallel FLNG going forward. When it comes to the FSRUs historically it has been done around four FSRUs every year. If we manage to get between 25% and 50% of those, I think we’d be pretty happy. We would like to be a part of the new development of the receiving terminals, by being more actively in the power business and develop these terminals ourselves. We’re also relieved that as I earlier on the call, that FSRU market is changing a bit people are requiring small FSRUs. You need to de-bottle the LNG train, so there are opportunities in this respect going forward, as well which I think we should be a part of.

Okay and then, sorry go ahead.

No go on.

So my next question it relates to the FLNG business in the press release you talked about, I think it was three or four incremental or maybe it was four or five incremental projects that you were currently working on, some of which would require multiple units. We’re just curious how you would break that down. I mean do many of them require multiple units and by multiple does that mean four or two in terms of just trying to conceptualize the size of [indiscernible].

You’re right, you answered the question four and two.

Okay.

I mean on the US project we’re talking about more than two, in other projects we’re talking about two projects on Fortuna we’ve been speaking about two vessels, as you know we’re working on project up in Mauritania potentially with oil merger, the challenge when it comes some of the oil merger is that our execution model is quite different from the oil merger and there we need to try to meet to merge those two execution models in a good way, so everybody feel comfortable and we have positive discussions with the oil merger in this respect.

Okay, I guess it does it for my two questions. Thanks a lot.

Thank you. We can now take our next question from John Humphreys from Bank of America Merrill Lynch. Please go ahead.

Brian if you could just walk through to what Oscar done, what risk way ahead from a financing perspective. Obviously over the last year you guys have done incredible amount of work adjusting the liquidity around the future project, but with the debt now being fully funded if you can sort of walk through, if the Tundra the financing of the $170 million that could be due to the partnership should the Tundra discussion not workout at planned, if you could just sort of go through how you plan to address potential issues that lay ahead?

Sure. I think we mentioned in our press release that we currently have around $550 million worth of cash and cash equivalents. I mean taken the worst case scenario and Tundra’s put back to Golar that’s potentially a leakage of $107 million. We still have out of that bank cash balance we still have to pay $70 million to settle the remaining convertible bond, but at the same time as we’re talking about Tundra there’s of course the possibility where we would try and mitigate that through a potential drop down of at least one train of the Hilli. So potentially, there’s a potential exchange of assets in respect of FLNG and FSRU that would retain, that would make Golar LNG Limited the hole in terms of cash leakage, but what we have done as a result of the convertible offering that we did recently. We will be able to ride through all of the stuff that I’ve mentioned, but we also have prepared ourselves for the FID events on the Fortuna project and of course we’re aware of obligation in respect of the Sergipe Project in which we have 25%. So the convertible and the finances that we’ve done recently takes care of that and then you get to 2018 and of course, Oscar has already mentioned the potential cash release coming out of the Hilli, within a year of the Hilli becoming operational, so to some extent in our minds the financing requirements in order to take FID progress the projects that we’ve been talking about is already done and that gets us to position where we can now concentrate on delivering the Hilli this year.

Great thank you Brian that’s very helpful and then lastly on the Fortuna side. The government - if you can just sort of give us some color on the hurdles, how high and low that bar is, how many agencies involved or concerned individuals. I don’t have a great sense of.

You can say that all, other set of major obstacles when it comes to government has been solved. We have neutralized Umbrella agreement which is going to be signed over next few weeks and then it needs to get a Presidential Decree. Then we also need to agree with [indiscernible] on the shareholder agreement with them when it comes to their participation in the midstream, that’s more or less outstanding on the governmental part of Fortuna, then we have the financing which we spoke about and no fear, shareholder acceptance [ph].

Got it and you mentioned earlier, mid your targets of mid-year FID that those [indiscernible].

I mean we are first rated as you guys, when it comes to take the time to develop these agreements, but there are so many parties involved. There are not only commercial people, but there are also political people. So things just take time and that we believe that are so few items left, so we are very optimistic that we’ll be able to do this around mid-year.

Okay, great. Thank you very much.

Thank you, we can now take our next question from Greg Lewis from Credit Suisse. Please go ahead.

I mean you clearly mentioned that there’s a handful of projects out there that you’re looking forward or looking to lot of these have been very public and what stage in the process does OneLNG typically get involved, if I have a project in West Africa and I’m already talking and thinking about and FLNG as a solution, is OneLNG in there doing a pre-feed study or is it, the customer, the sites, but that’s the solution and at that point then Golar or OneLNG starts working with the customer. Can you give any sort of color on timing?

Generally if you look at the Golar Group now, we have two marketing and that is Golar Power and OneLNG, they’re doing OneLNG are doing all the marketing going forward on FLNG, while Golar Power is doing all the marketing on FSRU for Golar Power. So OneLNG they’re doing all the FLNG’s apart from the US Gulf projects which is using pipe gas from US. And they will develop it, they will then have - so Golar will act as built, we will support them during business development and we will deal the asset and we will operate the asset while OneLNG will own it.

Okay and then just as we think knowing negotiations around the Tundra are ongoing, as we look out over the next 12 to 18 months, how many marketed FSRU opportunities are out there at the moment as we think about start up in the next 12 to 18 months.

It’s very difficult to say, that they’re still in the parts, that there are been certain urgent requirements and what we see today that there might be one or two of them going forward for the next 12 to 18 months, but those opportunities are quite uncertain I would say, but there are one to three potential opportunities for that.

Okay guys, thank you very much for your time.

Thank you. We can now take our next question from Chris Witherby from Citi. Please go ahead.

This is Prashant Rao on for Chris. Thanks for squeezing us in. The first question I wanted to ask was, I know this has been touched on earlier the call, but talking about the Hilli and looking forward a little bit towards the drop down to GMLP I know your discussions I understand, but there’s a lot of variability there, but given that the MLP market is improving, we’re going to see more supply come on in the LNG commodity landscape in the back half of this year, we should start to see a tightening overall carrier market as well, what are some of the potential scenarios in terms of drop down and timing in terms of maybe taking down a couple of chunks of come any funds would go down and how do you think about that or I guess maybe more broadly, how is that changed since the last time that you talked about given the underlying market and how it’s inflecting?

I guess from the MLP perspective, there’s been an awareness that there are certain contracts expiring at the end of this year and so to some extent, we want to be able to show some mitigency [ph] gain stats, obviously the Hilli is certain, it is coming, it’s contracted with Perenco. Everything is in place as far as contracts are concerned. What we’re waiting for now is the delivery of the vessel and also the vessel becoming, putting into commissioning so the discussions there for potential drop down has progressed quite well actually. So our expectation is that, a train at a time will be drop down. I think a two train drop down is a bit too chunky in the current position, but of course there is also, as you say there is also a possibility of ships putting into charter, but those onto yet certain. I mean whilst we’re working on various potential charter opportunities until such time as we put those vessels into charter that we can’t really contemplate those potential drop downs, but the Hilli we can and so that’s what we’re working and discussing with MLP.

Okay that’s very helpful. I’m sort of picking up where we left over and about the chartering environment. I mean with the core carrier’s fleet that you have at Golar, at LNG. How do you think about placing those on long-term charters as rates start to get better? Maybe next year, back half of this year versus keeping them in terms of optionality to service some of your floating projects or related to other power projects that you have going up, what’s the balance or the calculus there is there a clear priority or is it really sort of determined by all kind of cash flows, we would look at.

I think going forward shipping will not be crucial part of Golar going forward, but it’s very important that we keep the shipping alive in Golar due to fact that we’re recruiting a lot of people bought for the FSRUs and the FLNG. When it comes to time charters, when the market picks up I think if you see $70,000, $80,000 per day we will start to consider to do time charters. We are quite bullish on the market going forward into 2017 to 2018 and to 2019. So and I think it will be most probably from a strategic point of view maybe to reduce some of the risk and try to get some of the fleet out on time charters and keep the rest as spot, maybe 50% if you just on top of my head and we leave the remaining vessels as conversion candidates and to serve potential projects, FLNG projects and FSRU projects in the fleet.

Okay, thank you Oscar. That’s very helpful. I’ll turn it over.

Thank you. We can now take our next question from Herman Hildan from Clarksons. Please go ahead.

First question is a follow-up in the potential to drop down on the Hilli, did I understand you’re correctly, that you’ll have to take the delivery of the Hilli before it can do the drop down on the first train?

No, not necessarily Herman. I think what we - actually said what we’re trying to do is, I mean the Hilli if you listen to what we talked about the Hilli contract. It’s quite a complicated contract because they’re potentially three revenue streams. One is the existing EBITDA as we see it today, they’re train three and four EBITDA and of course as the EBITDA coming out of as a function of oil price. So we don’t necessarily wait until the vessel gets delivered, we need to structure it now because we want to be able to put their structure in place, it’s not like buying a ship for example when you got one source of income.

So how do you think about the current drop down in taking those different revenues streams into accounts?

Well that’s what we’re working towards in - as I said it’s a slightly more complicated structure and I’m sure we’ll share that with you and everyone else, when we found the right balance for it.

Okay, thank you. Last question you talked generally about ambitions for the future because you give some hard goals for 2017, be on just delivering and non-taking delivery of the Hilli and FID and Fortuna and what’s the ambition for new projects with OneLNG and Golar Power?

I think on Golar when it comes to FLNG business deliver Hilli, sign up Fortuna start up or maybe complete the mark two that means the next version of our FLNG and coming have one term sheet signed on other FLNG, for that term sheet, but call it.

HoA

Heads of Agreement something like that. And as I said earlier, our target is that one vessel in the final stage, one in the middle and one in the beginning. When it comes to FSRUs I think if you manage to do one FSRU contract over this year, I think we will be happy.

And on Golar Power.

That was Golar Power, FSRU.

Yes so no ambitions, we’ll further call it power plant.

We have a business for sure, but it’s, I’m trying to be a bit realistic, so I think it will take a bit longer time to develop a power plant when based on where we are today, we’ve been working one opportunity for a long time and that can materialize, if we’re very optimistic but it just takes time and as you may know the power business is quite competitive.

Sure. So I guess that was my two questions. Thank you.

Thank you very much. [Operator Instructions] we can now take our next question from Matt [indiscernible].

In terms of the FLNG business development effort, when would you expect to announce another project beyond Fortuna, what’s the timeframe and then also related to that, if you could, you’ve given sort of five gross projects that you’re interested in, if you could give maybe a probability weighted number of projects or number of FLNG’s that would also be helpful. Thank you.

As I said we don’t do into details on a different project, but as I just said you know I mean, if we manage to sign agreement with one other FLNG project this year, I think we’re pretty satisfied than we have one vessel in the beginning, one vessel in the middle and one vessel finalizing. So this means that we will try to sign off maybe one FLNG per year or one project, one project will be multiple units. One of the projects which we’re working out is multiple vessels, we believe that project will take longer time to take FID, we’re talking about 2018, 2019 when it comes to project in US, we need to do the permitting and develop this multiple, so that this [indiscernible] late to 2018 project. So and then we have some other West African projects which can materialize, but as we know as I said several times during this call these projects takes long time to develop.

Thank you.

[Operator Instructions] there’s no further questions in the queue at this time. I would like to turn the call back over to you for any additional comment.

Thank you very much for attending the call. Look forward to Q1 call and hopefully we’ll have, be able to give news from Hilli and also from the rest of the business. Thank you very much.

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