Talk leads pen to paper. The joint venture will utilize Golar's FSRU newbuild, scheduled for delivery in late-2017, for its first project while also potentially converting two 160,000 cbm LNG carriers into FSRU assets as well. The JV will also hold the right to an 25% interest in the Sergipe Power project which has progressed well with the agreement in place for the supply of natural gas in 2Q and FID expected by 2H16. Golar Power has a one year option to acquire two further LNG carriers which will likely be converted into FSRU with the first beginning immediately following closing of the deal. We believe that the formation of Golar Power provides a significant growth catalyst for Golar as FSRU demand continues to grow globally while also derisking the company's business model as it previously had several irons in the fire. Following completion of Golar Power, the parent can focus exclusively on FLNG projects without the worry of potential issues arising from Golar Power.
Golar increases liquidity. After selling 50% interest to Stonepeak, Golar will receive $117 million in cash while Stonepeak will acquire $100 million of preferred shares and commit to $75 million in additional equity. Golar will provide a $75 million debt commitment to Golar Power and will also transfer $431 million of debt and capex commitments to the JV. Along with providing strong upside potential, Golar Power also reduces some of its capex commitments between FLNG projects, Golar Power, and FSRUs. Also the company has $250 million convertible bond due in 2017 which will need to be addressed. With Golar's liquidity position significantly improving following the transfer of debt and capex payments, we believe refinancing its current debt will be less of a concern. Although selling equity interest does limit the upside in Golar Power the combined efforts and capital could result in the potential for multiple projects in quick order without much financial support at the parent level.
Amazing to see a "dislike" reply on the post, which merely gives a factual statement about new business developments.
If one has an objection to that business development, if would be more helpful to post a reason for why this might not be good for shareholders of GMLP, rather than just swiping a "thumbs-down".
While our initial commitment is $290 million we hope to invest up to $500 million in the coming years".
Golar comments: "By establishing this downstream entity with a strong financial partner that has extensive experience in the energy business Golar is able to accelerate the realization of its downstream ambitions and exploit the unprecedented number of opportunities in the current market".
Golar Power's initial asset base will comprise the FSRU currently being constructed at Samsung shipyard, two modern 160,000 cbm trifuel LNG carriers suited for conversion to FSRUs, and the right to invest in up to 25% of the Sergipe Power project. The Sergipe Power project is progressing well and is expected to take FID in the second half of 2016. Golar will also grant Golar Power a one year option to acquire from the Company a further two LNG carriers for conversion to FSRUs. Upon closing, Golar Power will immediately commence conversion of the first LNG carrier to a FSRU.
Subsequent to the formation of Golar Power and the contribution of the abovementioned assets, the Company has sold a 50% interest in Golar Power to Stonepeak. Stonepeak will acquire its 50% of Golar Power for $117 million in cash, subscribe to $100 million in preference shares on closing of the deal and commit to $75 million in additional equity. This, together with an additional $75 million funding commitment from Golar, in the period before Q1 2018, is expected to be sufficient including debt financing to fully finance the conversion of the two carriers to FSRUs, take delivery of the 2017 new-build FSRU and complete the financing of its share of the Sergipe Power project. Approximately $214 million in ship mortgage debt and $217 million of remaining newbuilding capex on the FSRU is projected to be transferred to Golar Power. The transaction will improve Golar's liquidity position.
LNG prices are at a significant discount to oil prices and Golar Power sees a range of potential LNG importers who would ben
Noticed that Zacks has revenue for 2017, and 2018 with a $3/sh earning estimate for 2018.
Yet, has anyone seen they're likely product pricing?
And, what are the implications for litigation on full rights to L 1021?
Yes, shares are down. But the lows were closer to $4 just over +1 yr ago or so.
There is downside here, don't be too complacent.
spot product rates down 30-50% on most routes.
Vessel NB values declined.
All near term negative, but longer term is much more positive.
Stonepeak Senior Managing Director, Luke Taylor, commented: "We are excited to partner with the leading player in the LNG downstream market and see compelling opportunities in this market to build and operate long term LNG and power infrastructure with high quality counterparties. While our initial commitment is $290 million we hope to invest up to $500 million in the coming years".
Golar comments: "By establishing this downstream entity with a strong financial partner that has extensive experience in the energy business Golar is able to accelerate the realization of its downstream ambitions and exploit the unprecedented number of opportunities in the current market"
This is an important point. If the litigation casts a cloud over L1021 as a valuable asset at this time, then as others have argued, a partner to launch may not be forthcoming promptly.
Then, assuming LPCN is determined to launch alone, the costs would indeed be very high.
They of course have other promising drugs in early to mid-stage trials, and that investment will need to be kept
going. Those drugs may eventually be viewed more valuable.
Perhaps there is a rationalization that FDA approval in this case is not the boon (for shareholders...) that it might otherwise be, were there not the litigated issue overhang.
I get the reality of share price volatility ahead of a critical FDA ruling, but this volatility in LPCN is almost all to the down side, and now yielding a new 52-wk low.
Hardly consistent with a notion of greater than a 50% chance of approval, as has been stated by some analysts, etc.
Its hard from an investor's perspective to place a value (cost) on this litigation issue. We don't really know enough.
What I find galling is that analyst reports, like Zacks ($24 target), and like Roth Capital ($36 target) don't even mention this matter, or appear to give it any weight in their targets.
Maybe it is a red-herring, and should be a concern.
I doubt it, and I suspect the large disparity in current share price vs their predictions owes in no small part to this matter of the litigation.
This issue seems to place a major cloud over the PDUFA, should FDA accept L1021.
Even if approved, the litigation aspects will be unresolved for some time, and I don't believe LPCN could move ahead to market their product, until resolution.
What is your view?
Perhaps Im misinformed, but is there not some other contention about the rights to L1011, should it become approved?
Yes, I agree. A point to add....the market is jut beginning to distinguish the LNG from the oil trade.
The market is also just beginning to distinguish the LNG shipping from the FSRU vessel sector.
As that unfolds in the coming 12-18 months, LNG related equities in general, and FSRU focused players especially, will be given stronger valuations than today, imo.
On the negative near term side is that GLNG, the parent, may need to sell shares in its GMLP stake to address a bond due in mid-2017.
Also, the runup in GMLP shares in the last few weeks may lead management to explore a secondary, as the dilution effect is now much less (but still not likely accretive...). To your point, that point help insure against another market hiccup....and share price weakening.
According to tradewinds...
sale for 6 modern MR (about 2-2.5 yrs old) at a en bloc total of $170M.
That is an amazing price (for Ardmore) since these vessels will hit the water in 3-5 months, contract free, at a cost of only $28M/vessel.
It appears that FRO is pivoting from the smaller tanker trade to the larger, and this sale will allow them to fund their VLCC purchases of late.
It increased its fleet my 25%...that is also huge.
They indicate the additional vessels will be accretive to earnings.
They paid about $28-$29M per vessel, whose age is about 2.4 years.
That is a remarkable price, given that these vessels can earn $7M/yr for rates at $20,000/day---a reasonable rate given the order book record low, and the demand side for shipped refined distillates.
There is little doubt that LPCN's product, awaiting FDA approval next month, could become a blockbuster drug.
All the more remarkable is that LPCN would be holding the keys to such a drug (of course, not yet approved...), given its current market cap is less than $200M.
If (and that should be IF...given FDA unpredictability) approval occurs next month, and ( IF) LPCN can stay independent, produce and market their drug globally, the shares would be valued 10X the current price before 2020, imo.
what are you saying? Do you know how many were purchased? Their age? Their construction? Their augmented attributes, include ballast water?
please clarify what was not to be "believed"