LONDON - Golar LNG (NASDAQ:GLNG) Ltd., a prominent player in maritime LNG infrastructure, has finalized a 20-year agreement with Pan American (TSX:PAAS) Energy (PAE) to deploy a Floating Liquefied Natural Gas (OTC:LNGLF) (FLNG (OL:FLNG)) vessel in Argentina. The project, which aims to export liquefied natural gas by 2027, will tap into the vast Vaca Muerta shale formation in the Neuquina Basin, positioning Argentina as a new player in the global LNG market.
Under the terms of the agreement, Golar will provide the FLNG Hilli with a capacity of 2.45 million tons per annum, ensuring a base tariff linked to LNG sales prices. The agreement includes a 10% stake for Golar in Southern Energy S.A., a joint venture with PAE dedicated to managing the operation and sales of LNG from Argentina.
The project represents the first phase of what could potentially expand to include multiple vessels as other large natural gas producers in the region are expected to join. Golar’s CEO, Karl Fredrik Staubo, expressed enthusiasm for the partnership with PAE, highlighting the opportunity to create value for Argentina and its gas stakeholders while expanding Golar's global presence.
This development is subject to customary conditions, and it builds on Golar's history of pioneering maritime LNG projects, including the world's first FLNG terminal. The company holds a significant market position with the largest fleet of FLNG units by annual liquefaction capacity.
PAE, a leading integrated energy company in Latin America, produces 250,000 barrels of oil equivalent per day and is actively involved in the energy transition, investing in renewable power, LNG, lithium, and biofuels.
In other recent news, Golar LNG Ltd . has been making significant strides in its operations. The company received a positive update from BTIG, which raised its share price target to $45.00, maintaining a Buy rating. This update comes amid progress in the re-contracting of Golar LNG's Hilli floating liquefied natural gas (FLNG) unit and the final investment decision on its first Mark II FLNG. Furthermore, Stifel also raised its price target for Golar LNG to $55.00, reflecting optimism about the company securing multiple new contracts for projects such as Hilli and Mk II.
Golar LNG has also been in the headlines for its strong Q1 2024 financial results, reporting operating revenues of $65 million, net income of $66 million, and an adjusted EBITDA of $64 million. In addition, the company reinstated dividends and a share buyback program, demonstrating its commitment to shareholder returns.
The company is also advancing its FLNG operations, with plans to expand its fleet and advanced negotiations for the Mark II FLNG project. Other developments include the planned separation of Macaw Energies into a standalone entity in 2024.
Golar LNG's strong liquidity position, with $700 million in cash and $550 million in net debt, supports these strategic initiatives. The company anticipates an additional $150 million EBITDA from the Gimi charter with BP (NYSE:BP).
InvestingPro Insights
In light of Golar LNG Ltd.'s recent 20-year FLNG vessel deployment agreement in Argentina, key financial metrics and insights from InvestingPro offer a deeper understanding of the company's current market position. Golar's management has been focused on share buybacks, demonstrating confidence in the company's value. Furthermore, with the expectation of net income growth this year, the company appears to be on a positive trajectory.
An analysis of Golar’s financial data reveals a market capitalization of approximately $3.27 billion USD, with a Price/Earnings (P/E) ratio standing at 28.79 for the last twelve months as of Q1 2024. The company has also shown a solid gross profit margin of 57.26% during the same period. Notably, Golar's stock has been trading near its 52-week high, with a price that is 98.99% of this peak, underscoring the market's bullish sentiment on the stock.
Investors looking for additional insights on Golar LNG can explore more InvestingPro Tips, which include analyses on the company's valuation multiples and debt levels. For instance, Golar is trading at high EBIT, EBITDA, and revenue valuation multiples, which could be of interest to those examining the company's market pricing. Additionally, with a moderate level of debt, Golar operates within a manageable risk framework. In total, there are 15 InvestingPro Tips available for Golar LNG, which can be found at: https://www.investing.com/pro/GLNG. To access these insights and more, readers can use the coupon code PRONEWS24 for up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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