GOLAR LNG ENERGY LIMITED - INTERIM RESULTS FOR THE PERIOD ENDED JUNE 30, 2010

8/27/2010, 8:56 AM (Source: GlobeNewswire)
Highlights

·     Golar LNG Energy reports a net loss of $7.3 million and operating income
before depreciation and amortisation of $2.6 million
·     Weak spot LNG shipping market during Q2 but recent tightening
·     Golar Commodities progressing well  toward becoming fully operational and
in August executed their first trade
·     Golar LNG Energy short listed for West Java FSRU bid
·     Golar Freeze FSRU transferred back to Golar LNG Limited


Financial Review

Golar LNG Energy Limited ("Golar Energy" or the "Company") reports a net loss of
$7.3 million and operating income before depreciation, amortisation and gain
arising on asset transfer of $2.6 million for the three months ended 30 June,
2010 (the "second quarter").

Revenues in the second quarter at $14.5 million were in line with $14.5 million
for the first quarter of 2010 (the "first quarter"). Revenue has benefited from
a contribution from the Golar Freeze charter for part of the quarter prior to
its transfer back to Golar LNG Limited ("Golar LNG"). This is offset by a weaker
performance from vessels operating in the spot market. As a result overall
utilisation for the second quarter was down at 42% compared to 50% for the first
quarter and second quarter average daily time charter equivalents ("TCEs") were
down at $12,615 (excluding the contribution from Golar Freeze) compared to a
first quarter TCE of $16,795.

Voyage expenses and operating expenses were lower than the first quarter by a
combined $2.4 million whilst admin expenses were higher by $1.7 million.

Net interest expense for the second quarter at $3.9 million was up from $3.7
million in the first quarter due to a small increase in LIBOR.

The net gain on sale of investee of $0.7 million represents the sale of 2.8
million LNG Limited shares for a total consideration of $1.4 million.
The net gain on asset transfer of $3.5m relates to a gain arising on the part
extinguishment of the sellers credit in respect of the transfer of Golar Freeze
back to Golar LNG, which results from depreciation charged in Golar Energy's
income statement from the date of acquisition in August 2009 until the transfer
back to Golar LNG in June 2010.
Whilst the economic ownership of the Golar Freeze has transferred to Golar LNG
via agreements between the companies there remains a lease from the lessor bank
to Golar Energy and a corresponding agreement between Golar Energy and Golar
LNG. Therefore Golar Energy retains a lease obligation, capital lease asset and
cash deposit in respect of the Golar Freeze together with the remaining part of
the original sellers credit.
The Company reports revenues of $29.0 million and a net loss of $18.2 million
for the six months ended June 30, 2010.
Financing, corporate and other matters

During the quarter Golar Energy announced that it was establishing a new
subsidiary, Golar Commodities, which would position Golar Energy in the market
for managing and trading LNG cargoes. Activities will include structured
services to outside customers (such as risk management services), arbitrage
activities as well as proprietary trading. Since the announcement, the team has
made good progress setting up operations for the new subsidiary. The team
currently numbers nine, based in Tulsa Oklahoma, London and Bermuda, and offices
and systems are well under way to being fully operational. Golar Commodities is
in detailed discussions with financial institutions with regards to the
provision of credit lines. Golar Commodities has also just recently entered into
their first cargo transaction and expect to increase activity from September
onwards

The joint venture company Golar Wilhelmsen Management A.S. ("GWM"), established
with Wilhelmsen Ship Management (Norway) A.S. was incorporated in May 2010. It
is the intention that all Golar LNG and Golar Energy carriers and FSRU's will be
managed by GWM and the process of transfer of management has progressed to the
stage where actual handover of management for the first vessel took place in mid
August. The management handover for the whole fleet is scheduled to be completed
in September. Also during the quarter the ownership of Golar Management Ltd, the
Company's in house manager and GWM joint venture partner, transferred to Golar
Energy. By bringing the fleet together under one manager, Golar Energy will have
better control over and more day-to-day involvement with the technical operation
of, in particular, the Company's FSRU's.

The Company announced during the quarter its intention to buy back up to a
maximum of 5,000,000 of its own shares. To date the Company has acquired a total
483,627 of its own shares.

Operational Review

Shipping

The LNG shipping market during the second quarter by and large followed the
format of the first quarter with too many idle vessels chasing too few cargoes
for short voyages at depressed rates.  However, by the quarter end, vessel
availability in all markets was tightening amid new supplies and emerging
smaller buyers that in aggregate, helped to absorb excess production.

Retaining some LNG onboard after discharge (heel), at relatively low cost in
comparison with fuel oil prices, became important as vessels repositioned
speculatively to active supply locations in order to remain cold (i.e. ready to
accept LNG) and seek charter opportunities and to mitigate against high
positioning costs.

Looking forward, indications for the third and fourth quarters of 2010 are that
the current LNG over supply will continue with more cargoes entering the market
faster than can be absorbed in the short to medium term.  This is likely to
result in a larger spot market with newer entrants becoming more active. With
more market liquidity there is an increased possibility of traders taking new
logistical positions such as short and medium term charters as well as
regasification capacity.

Market sentiment for ship utilisation is firming with recent cargoes unable to
find tonnage to market and charterers becoming more likely to exercise options
to extend the capacity they currently hold.  Consequently rates are likely to
move up although lower than expected gas prices in some markets may place a cap
on what could otherwise be large rate hikes relative to recent levels.  Spot
requirements continue to surface both East and West of Suez and this looks
likely to continue to the year end.

Currently all Golar spot market vessels are employed with the earliest
redeliveries likely to be towards the end of the third quarter.

The current global fleet stands at 358, (including regas and lay-up vessels) and
there are 28 vessels on order.

Regasification

A steady stream of new enquiry for floating storage and regasification projects
continues.  Every quarter sees Golar's development team contacted about new
projects.  Numerous projects are also starting to appear more concrete with
project developers achieving new milestones. Some of the more notable recent
developments include:

   ·     Indonesia (West Java):  Golar is one of three parties remaining in the
tender process. The final evaluation of commercial bids is underway with an
expectation of a final award decision in the near future.
   ·     Indonesia (Sumatra): The project reportedly reached a positive project
milestone with the appointment of Foster Wheeler as the Project Manager
("PMC").  The project appears on track for a Q4 2010 tender.
* Uruguay:  Foster Wheeler Iberia has progressed significantly on their study
to define the tender scope.  There are indications this tender may be
launched in Q4 2010.


In addition to projects more widely reported in the market, numerous other
opportunities are being worked by the Golar Energy team.  In this regard, Golar
Energy remains very optimistic that the market for FSRUs will only grow and that
the Company is well positioned to take advantage of that growth.

Market

Earlier in the second quarter supply side underperformance was still the biggest
factor in limiting LNG to European markets. Production shortfalls in a number of
locations and start-up problems in others, removed approximately 15.5 mt/yr from
the supply chain. Nigerian and Norwegian supplies have subsequently recovered,
although a shortage of feedstock gas continues to limit output from Damietta in
Egypt.

Sharply rising supply volumes of LNG worldwide and the surge in North American
gas production combined with a global recession significantly reducing worldwide
gas demand, has created a global oversupply of gas.  By early May U.S. markets
were "swimming" in gas even with U.S. industrial demand showing signs of
recovery. Non U.S. markets showed a high capacity to absorb additional volumes
as summer peaking markets became a growing force for market balance and a
counter to the lack of cargoes entering the U.S. due to price disadvantage
against other markets.  Mexico's Costa Azul, Kuwait, Brazil, Chile and Argentina
all received cargoes.

European market pricing has been volatile, driven by a cool spring as well as
field and infrastructure maintenance.  Even in summer, when demand is
approximately 50% of winter peak, European markets have traded through wide
ranges and have been the preferred location after Asian demand is met. The UK
saw unusually high gas demand over summer with much of this increase being met
through LNG imports.

Asian Markets were also 'heating-up' towards the end of the quarter and buyers
continue to seek cargoes for October and November deliveries although signs are
that Japanese buyers may be holding off in expectation that a falling NBP may
reduce Asian prices.  Other major buyers were CPC and CNOOC.  Kogas and CPC are
both reportedly looking for a number of winter cargoes.  Imports across Asia in
the first 6 months of the year were running 16% up on the 1(st) six months of
2009.

Outlook

The over-supply of LNG has been maintained during the quarter and may increase
further with additional LNG trains coming on stream later this year and early
next. However, as the world recovers from recession gas demand will increase.
Additionally there are potential major cost savings available for power
companies by switching fuels from oil to gas and with the added environmental
benefits and significant gas reserves worldwide increasing gas demand is likely
to continue. This leads to increased transportation demand and the need for cost
effective solutions for importing natural gas.

The winter market is approaching and we have over the last month seen that the
market has strengthened. Given steadily increasing LNG supply and demand and the
fact that by the end of the year the LNG carrier order book will stand at only
approximately 3% of the total fleet, the Board believes that we will see an
improved shipping market over next 12-18 months as compared to the previous 12
months.

In order to cope with the increase in consumption and proliferation of LNG there
will need to be further development of the logistics to deliver it to markets
and Golar Energy is therefore highly focused on continuing to develop new LNG
midstream solutions for its customers. The Company's Moss type tankers are
particularly well suited for these projects both from a quality and cost point
of view.

New floating regasification opportunities are coming to the surface every month
and although it takes time to develop such projects, some of them will in time
come to fruition. Based on feedback from some of the projects Golar Energy is
involved in the Company believes it is extremely competitive in the market and
the Board believes that Golar Energy is well positioned to secure new contracts.

The Golar Commodities trading team is in place and as noted above has transacted
their first cargo trade. The Company believes that the timing for setting up the
entity is optimal in terms the development of LNG trading. There are also clear
synergies between the trading division and the shipping and project development
side of the business which Golar expects to take advantage of.
LNG shipping rates have recovered from very low levels in the second quarter to
in the region of $30,000 to $40,000 per day currently and this will positively
impact earnings in the third quarter. With cash of $98.5 million as at June
30, 2010, current market rates approaching break even levels and strong support
from the major shareholder the Board feels the Company has good flexibility to
grow and complete existing projects without relying on raising additional
equity.

The Board is disappointed with the development in the Company's share price
since the IPO last August. However, the recent rate improvements in the
short-term market, the good progress in the FSRU business and the commencement
of Golar Commodities operations should have a positive effect on earnings. The
Board is hopeful that this increase in earnings will increase interest in the
Company's shares.

Operating results for the third quarter are expected to show clear improvement
from the second quarter.


Forward Looking Statements

This press release contains forward looking statements. These statements are
based upon various assumptions, many of which are based, in turn, upon further
assumptions, including examination of historical operating trends made by the
management of Golar LNG Energy. Although Golar LNG Energy believes that these
assumptions were reasonable when made, because assumptions are inherently
subject to significant uncertainties and contingencies, which are difficult or
impossible to predict and are beyond its control, Golar LNG Energy cannot give
assurance that it will achieve or accomplish these expectations, beliefs or
intentions.
Included among the factors that, in the Company's view, could cause actual
results to differ materially from the forward looking statements contained in
this press release are the following: inability of the Company to obtain
financing for the new building vessels at all or on favourable terms; changes in
demand; a material decline or prolonged weakness in rates for LNG carriers;
political events affecting production in areas in which natural gas is produced
and demand for natural gas in areas to which our vessels deliver; changes in
demand for natural gas generally or in particular regions; changes in the
financial stability of our major customers; adoption of new rules and
regulations applicable to LNG carriers and FSRU's; actions taken by regulatory
authorities that may prohibit the access of LNG carriers or FSRU's to various
ports; our inability to achieve successful utilisation of our expanded fleet and
inability to expand beyond the carriage of LNG; increases in costs including:
crew wages, insurance, provisions, repairs and maintenance; changes in general
domestic and international political conditions; the current turmoil in the
global financial markets and deterioration thereof; changes in applicable
maintenance or regulatory standards that could affect our anticipated
dry-docking or maintenance and repair costs; our ability to timely complete our
FSRU conversions; failure of shipyards to comply with delivery schedules on a
timely basis and other factors listed from time to time in subsequent
announcements and reports. Nothing contained in this press release shall
constitute an offer of any securities for sale.

August 26, 2010
The Board of Directors
Golar LNG Energy Limited
Hamilton, Bermuda
Questions should be directed to:

Golar Energy Management Ltd
Oscar Spieler: CEO - +65 6296 5518
Golar Management Ltd - +44 207 063 7900:
Graham Robjohns: CFO
This information is subject of the disclosure requirements acc. to §5-12 vphl
(Norwegian Securities Trading Act)


[HUG#1440922]





GOLAR LNG ENERGY Q2 2010 INTERIM RESULTS:
http://hugin.info/142200/R/1440922/385271.pdf




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