FLEX LNG today announced its results for the first quarter of 2011.
During the first quarter the FLEX LNG group of companies (the Group) has continued to develop what it expects could be amongst the world’s first LNG Producers. In the quarter costs of $1.0m ($6.7m) were capitalised on the four units.
The cash balances at 31 March were $6.5m ($20.3m) with $3.4m net outflow ($5.4m) in the quarter. In the three months in 2011 the operating cash outflow was $3.0m (principally the operating loss and working capital movements); investing activities outflow $1.0m (capitalised asset costs); and financing activities inflow $0.6m (proceeds from deferred payments to Samsung).
The loss before tax was $3.7m ($2.7m) in the quarter, with a year to date retained net loss of $3.8m ($2.7m). Q1 2011 has been impacted by the weakening USD and the resultant FX loss on the NOK liabilities.
Outlook
The Group continues to focus on securing employment for the LNG Producers and is discussing alternative commercial arrangements for the employment, such as integrated projects consisting of gas supply contracts with oil and gas companies, product handling agreements for the services of the LNG Producers, and LNG sales and purchase contracts with LNG off-takers as well as more traditional charter arrangements. The Group is currently pursuing a number of opportunities.
In April 2011 the Group announced that it had signed preliminary agreements with InterOil Corporation (IOC), Pacific LNG Operations (PACLNG) and Samsung for a floating liquefaction (FLNG) Project in PNG with targeted start of operations in 2014. The FLNG project will liquefy gas from the Elk and Antelope gas fields in the Gulf Province in PNG. Project specific Front-End Engineering and Design (FEED) started in May 2011 and the parties will work towards reaching a FID before the end of 2011.
In April 2011 Samsung agreed to restructure the commercial relationship between the two parties whereby, upon achieving FID, the intention is to transfer a substantial share of all previous instalments paid to Samsung under the existing four shipbuilding contracts to the single FLNG unit that is destined for the PNG project. FLEX LNG would remain able to order additional FLNG units at Samsung.
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Source: FLEX LNG, May 27, 2011;