Golar LNG Partners LP (NASDAQ: GMLP) (the "Partnership") announced today that it has entered into an agreement to acquire the ownership interests in the companies that lease and operate the liquefied natural gas ("LNG") carrier the Golar Grand from Golar LNG Limited ("Golar LNG") for a purchase price of $265 million. The acquisition is subject to the satisfaction of certain closing conditions.
The Golar Grand is currently operating under a three year time charter to Methane Services Limited, a wholly owned subsidiary of BG Group. The charter has an initial term that expires in March 2015. Methane Services Limited has the option to extend the charter term for an additional three years. In the event that this option is not exercised, Golar LNG and the Partnership have entered into an Option Agreement pursuant to which the Partnership has the right to cause Golar LNG to charter the vessel from March 2015 until October 2017.
The Partnership estimates that the Golar Grand acquisition will give rise to annual revenues between $42 million and $44 million and annual net cash from operations (before the deduction of interest costs) between $36 million and $38 million during the term of its charter with Methane Services Limited. Golar Wilhelmsen will manage the operation of the Golar Grand pursuant to an existing ship management agreement. The Board of Directors of the Partnership and the Conflicts Committee of the Board have approved the purchase price. The Conflicts Committee retained a financial advisor, DNB Markets, to assist with its evaluation of the acquisition.
The Board is pleased that the Partnership has entered into this purchase agreement with respect to its third acquisition since the Partnership's initial public offering in April 2011. The acquisition is expected to be an accretive transaction and is consistent with the Partnership's growth strategy. As a result of this acquisition, the Partnership's management intends to recommend to the Board an increase in the Partnership's quarterly cash distribution of between $0.0225 and $0.0275 (or an annualized increase of between $0.09 and $0.11), which would become effective for the distribution with respect to the quarter ending December 31, 2012. Any such increase would be conditioned upon, among other things, the closing of the Golar Grand acquisition, the approval of such increase by the Board and the absence of any material adverse developments or potentially attractive opportunities that would make such an increase in advisable.
FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking statements concerning future events and the Partnership's operations, performance and financial condition. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words "believe", "anticipate", "expect", "estimate", "project", "will be", "will continue", "will likely result", "plan", "intend" or words or phrases of similar meanings. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the Partnership's control. Actual results may differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially include, but are not limited to:
- statements regarding the revenues and annual net cash from operations that may be generated by Golar Grand;
- statements about the Partnership's ability to increase distributions to unitholders and the amount of any such increase;
- the Partnership's anticipated growth strategies;
- the Partnership's future revenues, expenses, financial condition and results of operations;
- the repayment or refinancing of debt;
- the Partnership's ability to make additional borrowings and to access debt and equity markets;
- charter termination dates and extensions of charters;
- the Partnership's business strategy and other plans and objectives for future operations; and
- other factors listed from time to time in the reports and other documents the Partnership files with the United States Securities and Exchange Commission.
New factors emerge from time to time, and it is not possible for the Partnership to predict all of these factors. Further, the Partnership cannot assess the impact of each such factor on its business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement. The Partnership does not intend to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership's expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.
Hamilton, Bermuda
November 1, 2012
Investor relations enquiries:
Golar Management Limited - +44 207 063 7900
Brian Tienzo