Golar Lng Ltd Q4 FY2021 Earnings Call

Thank you for joining us for Golar LNG Limited's Quarterly 2021 Results Call. I will now turn the conference over to your speaker today, Karl Staubo. Please proceed, Karl.

Thank you, and welcome to Golar LNG's Q4 earnings results presentation. Thank you for taking the time to dial in. My name is Karl Fredrik Staubo, CEO of Golar LNG. Before we get into the presentation, please note the forward-looking statements on Slide 2. I am accompanied today by Eduardo Maranhao, our CFO. Given that this is a Q4 presentation, we would like to start today's presentation with a review of the key events that occurred in 2021 as laid out on Slide 4. The year started with the announced sale of Golar's two subsidiaries, GMOP and Hygo Energy Transition to New Fortress Energy in January of last year. The transaction closed in April, realizing $130 million in cash proceeds to Golar, as well as 18.6 million shares in New Fortress Energy equivalent to an ownership in NFE of 8.9%. Following the sale of the two subsidiaries, in May and June, we undertook a corporate reorganization, parting ways with changes to corporate management. I moved from being the CFO of Golar to the CEO of Golar, whilst Eduardo transitioned from being the CFO of Hygo to the CFO of Golar. Furthermore, we rightsized our shore-based organization to the renewed company structure, reducing run rate G&A by approximately $5 million, of which the effects will be effective into 2022 due to redundancy packages for the majority of 2021. In July, we announced increased capacity utilization of the FLNG Hilli of 1.2 million tonnes of incremental production effective from January 1st this year. The increased production has a tariff linked to TTF gas prices. At current TTF prices, this announcement represents increased earnings for Hilli for 2022 of approximately $80 million at no incremental CapEx to Golar. In Q3, we announced a refinancing of $682 million of new and refinancing debt facilities at improved terms from retiring facilities and extending our debt maturities. Lastly, in December, we announced the formation of Cool Company, the business separation of our 8th LNG carriers. We then raised $275 million in external equity for that outlet and $570 million of new bank debt for the shipping fleet. In total, these activities involve the sale of assets and subsidiaries for a total enterprise value of approximately $6.2 billion and a refinancing of around $1 billion of debt. Together, these activities have simplified Golar, crystallized the underlying value of our asset portfolio, and significantly strengthened our balance sheet. Turning to Slide 5. Golar's new corporate structure consists of our two FLNGs, Hilli, which is in production, and Gimi, which is 80% technically complete and scheduled to start its 20-year contract for BP in the second half of 2023. We remain with two LNG midstream assets, the Golar Arctic, which is a steam carrier, and Golar Tundra, one of the most modern available FSRUs in the market today, currently operating as an LNG carrier. We have furthermore developed three different FLNG designs using the same liquefaction technology and design concept, but with differences in liquefaction and storage capacity to cater for different sized potential new FLNG projects. As a result of the transactions undertaken during 2021, we have three sizable holdings in publicly listed LNG infrastructure companies. As explained, we own about 9% of New Fortress Energy, around 31% of Cool Company, and around 24% of Avenir LNG. Combined, these three investments have a total value of around $600 million. On Slide 6, we have highlighted some of the key balance sheet effects of the actions undertaken in 2021. We now have cash and marketable securities of more than $1.1 billion. We have contractual net debt of approximately SEK 0.5 billion. If you include the total remaining CapEx on the FLNG Gimi, the net debt plus remaining CapEx is just under SEK 1 billion. We expect EBITDA development from our existing FLNGs to quadruple over the next three years. On the right-hand side, you can see that we have rearranged all our debt facilities, and we have no material debt maturities until 2025, well after Gimi's expected start-up in 2023. Turning to Slide 7. We believe we are now uniquely positioned for FLNG growth. We have a proven FLNG design and a market-leading operational track record with 100% commercial uptime since Hilli started its contract in 2018. We have now delivered 5 million tonnes of LNG, more than any other FLNG globally. To the bottom left, we have a market-leading carbon footprint and a market-leading CapEx per tonne of liquefaction. Lastly, the gas price environment is supportive of upstream investments. We are encouraged by the progress made for new FLNG projects with existing and prospective new clients, and we expect to be awarded a new FLNG contract within 2022. Our FLNG technology is competitive down to a tolling fee in the region of $2 to $3 per MMBtu, enabling monetization of stranded and associated gas fields. As previously announced, we are exploring alternatives to obtain commodity upside exposure while maintaining a base tariff similar to the structure that we have in place for the FLNG Hilli. In the current commodity price environment, Hilli is making a tariff in the region of $6 to $7 per MMBtu liquefied. I'll now hand over to Eduardo to present our Q4 results.

Thanks, Karl, and good morning, everybody. I'm very pleased to provide an update on our group results for the fourth quarter of 2021. So turning to Slide 9. This quarter has been very busy for us. We reported total operating revenues of $115 million with an adjusted EBITDA of $94 million, up 21% year-on-year. On the FLNG side, Hilli continues to operate with 100% commercial uptime. Based on encouraging market conditions, we have also managed to hedge 100% of our TTF-linked production for this year's Q2 and Q3 at around $25 per million BTU. Gimi construction is 80% technically complete, and we'll provide further details on that in the next slide. We are also making considerable progress on the commercial front. As alluded to by Karl, a new FLNG contract award is expected in 2022. Moving on to shipping. The announced formation of Cool Company followed by a successful private placement was completed in January, and the closing of the sale of the 8 TFDE is in process with expected financial closing within the first quarter of 2022. Cool Company has also secured a debt facility of $570 million, which will be used to refinance six out of the eight vessels. On the corporate front, to provide extra financial flexibility and support further FLNG growth, we have entered into a new $250 million bilateral facility with a seven-year duration. We have also repaid our existing convertible bonds and have no major debt maturities until 2025. The formation of Cool Company also reduces our contractual debt by $833 million, and we will improve our liquidity by a further $342 million. I will talk more about these in detail in this presentation. So moving on to Slide 10. I wanted to discuss our financial results further. The group had a very solid performance in the fourth quarter. Total operating revenues increased from $107 million in Q3 to $115 million in Q4. This represented a 7% increase from the previous quarter. Operational performance was strong, and adjusted EBITDA came in at $94 million this quarter, up 27% from the previous quarter and also up 20% from the same quarter in 2020. Adjusted EBITDA from shipping was $43 million this quarter, an increase of 43% compared to the previous quarter. FLNG contributed with $56 million this quarter, reflecting an important increase of 14% compared to the previous quarter. The increase in total operating revenues can be attributed to increased revenues from our operating FLNG, Hilli, and robust performance from our shipping assets. TCE earnings across our shipping fleet increased to $57,300 per day in Q4. Total operating revenues from our FLNG Hilli, including base tolling fees, were $57 million in Q4, an increase of 4% from the previous quarter. This number was further enhanced when including the realized gains from Brent-linked revenues. The oil-linked component of the Hilli generates additional operating cash flows of approximately $3.1 million for every dollar increase in brand crude prices above $60 per barrel. As a result of rising prices, a realized gain of $12.9 million was observed in the fourth quarter, up from the $8.9 million realized in Q3. This quarter, we recorded a net income of $7 million, but a decline in the NFE share price between October 1st and December 31st resulted in a noncash mark-to-market loss of $51.6 million on our shareholding of 18.6 million NFE shares. However, this impact was more than offset by realized and unrealized gains on our oil and gas and interest rate derivatives of approximately $55 million. Due to the new financings put in place during the fourth quarter, which included the issuance of a $300 million Norwegian bond, the refinancing of our FSRU Golar Tundra, and the repayment of the existing $101 million revolving credit facility in November, we ended the year with a total cash position of $360 million. This shows how our financial position continues to strengthen, and I will discuss this more on the next slide with some key balance sheet developments. Moving on to Slide 11. The formation of Cool Company brings great benefits to us. Firstly, it immediately reduces our contractual net debt by $833 million. Secondly, it brings cash proceeds of $217 million to be received during Q1 2022, while also adding $125 million of marketable securities through our shareholding of Cool Company. We have also entered into a new corporate bilateral facility, which allows us to draw up to $250 million until the end of Q2. Once drawn, it will have a seven-year duration with a bullet repayment maturing in 2029. Subject to certain ratios, it will carry a cost ranging from LIBOR plus 450 to 500 basis points. Considering our existing cash position, net proceeds received from Cool Company, the new $250 million bilateral facility, and the existing $200 million revolving credit facility, we now have the right level of financial flexibility to support future growth. Our total cash and market securities position now stands at $1.1 billion, as you can see on the left side of the slide. Our contractual net debt has also substantially improved. When accounting for the new financials put in place and adjusting for the debt associated with the Cool Company vessels, our contractual net debt stands at $523 million. If we consider our pro-rata share of Gimi's remaining CapEx, the contractual net debt attributable to Golar would be around $936 million. I will now turn the call back over to Karl.

Thank you, Eduardo. Turning to FLNG on Slide 13. We are starting to see the effects of higher commodity prices on Hilli's earnings. Hilli's adjusted EBITDA increased to $57 million for Q4 on the back of an increase in Brent-linked revenues and the billing of $1.9 million of overproduction. We expect Hilli earnings to continue to increase due to higher Brent-linked earnings estimated at $17 million for Q1 '22 and the start-up of the previously discussed TTF-linked production from Q1 this year onwards. The unit continues its strong 100% operational utilization, and as I alluded to, we have offloaded 68 cargoes since its start-up in 2018. Slide 14 elaborates on the embedded upside in the commodity exposure of Hilli's tariff. For the last 12 months, Golar's pro-rata share of Hilli's EBITDA was $99 million, which is expected to grow by around 2.6x for 2022. This growth will be on the back of these higher Brent-linked earnings, where Golar generated $2.7 million of EBITDA for every dollar Brent is above $60. This will lead to an estimated increase of $80 million in year-over-year earnings. Furthermore, the start-up of our TTF-linked production unlocks an additional $80 million of Golar's pro-rata Hilli earnings. As Eduardo explained, during the quarter, we hedged Q2 and Q3 TTF gas prices since the summer months are typically the seasonally soft quarters, and we remain open for Q4 2022 TTF gas exposure. Perenco, the charter of Hilli, has a one-time three-year option to declare up to 0.4 million tonnes of increased production from 2023 until the end of the contract in July 2026. The tariff on this volume is based on the same TTF link as the 0.2 million tonnes of the additional capacity utilization in 2022. The option is declarable until the end of July this year, and Perenco is currently undergoing a drilling campaign to prove up more gas reserves with a target to increase the gas flow to Hilli. Even if forward curves suggest a reduction in the TTF price from today's level, Hilli earnings are sustainable due to the offsetting effect of the higher utilization should Perenco declare their option. Turning to Slide 15 for an update on Gimi construction. The unit is now 80% technically complete with 16 million man-hours worked to date on the conversion. The remainder of the build is mainly around construction, installation, and testing of equipment ahead of the 2023 sail-away and contract start-up. The contract will unlock an annual EBITDA to Golar of $151 million per year for its 20-year contract. On Slide 16, natural gas market fundamentals continue to improve for new upstream and liquefaction projects. COVID-related effects have stalled new gas upstream infrastructure projects, leading to an anticipated shortage of LNG supply to meet the continued strong demand for LNG. These developments, together with weather effects and the ongoing escalation of the geopolitical landscape involving large natural gas exporters, have caused spot and forward gas prices to increase, improving the economics for LNG upstream projects and also increasing the desire to diversify gas supply sources. We will now turn our attention to shipping and focus on Cool Company, which comprises the majority of our shipping portfolio. On Slide 18, we provide further details of the charter profile of our shipping fleets. The light blue color represents our spot market exposure, where we're fully covered for Q1 this year, but we anticipate increasing exposure to the strengthening LNG freight rates from Q2 onwards. In slightly darker blue, we have our floating rate charters, which fluctuate with quoted spot market rates within a band subject to floor and ceiling rates. The bottom two columns represent our fixed charters and options fixtures that generate an average time charter equivalent of just over $60,000 a day. Despite short-term headwinds for LNG spot rates, term rates continue at healthy levels, significantly above our 2021 achieved rates. Hence, we expect Cool Company earnings to increase significantly as the fleet recontracts into higher charter parties. On Slide 19, we discuss the potential dividend from Cool Company. Cool Company has a clear strategy to distribute quarterly dividends once listed in New York, expected later this year. The dividend potential, at average spot rates for 2021 of $91,000 a day, would equate to a dividend yield of 15% for 2022 or 24% in 2023 as more of the fleet is exposed to higher recontracting rates as we move further out in time. Looking at the LNG freight market on Slide 20, it has grown by around 7% cumulative aggregate growth over the last 20 years. This trend is expected to continue due to new liquefaction projects coming online and increasing transportation distances, as most new capacity is coming from the U.S., while the fastest-growing demand is in the Far East. U.S. to Far East consumes about double the vessel demand compared to a U.S.-Europe round trip. On Slide 21, as discussed in our previous earnings calls, new environmental regulations coming into effect from January 1, 2023, will likely make a large part of the fleet currently in operation uneconomical for international long-haul trade. In particular, steam-propelled vessels built before 2007 are at heightened risk of exiting international trade, corresponding to about 30% of the fleet on the water. The order book now stands at over 160 vessels, primarily built against charters to service new liquefaction projects, and only 21 of these ships on order are currently uncommitted. Hence, the market backdrop where we have a demand side growing by about 7% a year, the supply side at risk of seeing 30% of the fleet on the water made obsolete by new environmental regulations, and no ability to increase supply well into 2025 due to yard capacity restrictions bodes well for a tightening of LNG shipping freight rates. We believe Cool Company is well positioned to benefit from this development with increasing exposure to the spot market. Golar was awarded Best ESG Strategy for North America in 2021. We have a history of being an LNG market entrepreneur at the forefront of key technology advances in the LNG industry, including being the first mover into FSRUs and later FLNGs. Repurposing assets and focusing on energy efficiency makes financial sense for Golar and its customers while reducing the environmental footprint of LNG. We're grateful to be recognized for our long-standing efforts in strengthening LNG's relative competitiveness in the global energy market. Turning to Slide 24, this slide is familiar to most of you, as we have shown it in most of our previous quarterly results, but it is now updated for the effects of the Cool Company transaction on both our earnings and balance sheet. Starting with Hilli, this unit has an embedded upside, which should see a 2.6x increase in the earnings year-over-year based on the commodity exposure and increased production. Golar's share of net debt on Hilli stands at $317 million at the end of Q4. Gimi is currently under construction and, as such, does not yet generate earnings. She is expected to start her contract in late 2023 and will add $151 million of Golar's pro-rata share of EBITDA. Q4 debt stands at $287 million, and Golar's share of remaining CapEx stands at approximately $410 million, with about half being covered by existing debt facilities and half by equity. Our two remaining shipping and FSRU assets generated $24 million of EBITDA during 2021, and we expect an increasing attraction of the FSRU Tundra for potential charters that can increase EBITDA generation and earnings visibility from this unit. Net debt on our two assets combined stands at $187 million at quarter end. Lastly, G&A for 2021 came in at negative $18 million in cash and marketable securities of more than $1.1 billion. In sum, we expect earnings to quadruple within 2024 from 2021 levels. Total net debt, including remaining CapEx, stands at less than $1 billion or about 2x fully invested run rate EBITDA. With our current cash position and contract profile, we can fund new FLNG projects while starting a dividend following Gimi's contract start-up. To round off on Slide 25, through 2021, the group simplification is now executed. We expect a quadrupling of our FLNG earnings from our existing assets from 2024 versus 2021 levels. We have a strong balance sheet position with cash and marketable securities of $1.1 billion and fully delivered net interest-bearing debt of less than 2x. We believe we're uniquely positioned for FLNG growth and are confident that we will see a contract award within 2022. That concludes our Q4 2021 earnings presentation. Thank you all again for dialing into the call. I would like to turn over to the operator for any questions.

The first question is from Randy Givens from Jefferies. Please go ahead. Your line is open.

Congrats on the Cool Company spin. That was a long time coming, so nicely done there. I guess starting with FLNG, you keep mentioning a possible project in 2022. What gives you that confidence? Can you provide a little more detail around that, maybe timing and hurdles? And then staying on FLNG, any updates on the Hilli expansion? I know it's kind of the same language you used a few months ago, but how likely is that additional option? What's Perenco doing? Any other color you can provide there would be great.

Yes, Randy, when it comes to FLNG projects, most FLNG projects are large infrastructure projects that obviously require a gas resource and an FLNG, but they also require governmental approvals, environmental approvals, and several fairly lengthy processes that are often outside our control. So even if both we and the prospective charter are ready to engage, there are still hurdles that we need to cross with timelines that we can’t always control. However, I would say that we are extremely confident in the progress made through 2021, and also in particular, this quarter, with both existing and new prospective clients. For some of the clients, we have a target timeline that should support new contract awards very well within this year, and that is what gives us the confidence to say that we will get the award within 2022. Regarding your second part of the question on Hilli, at this gas price, it seems like a no-brainer to increase production. The unit is available to produce more, and the economics of upstream are quite strong at current gas prices. The only hold-up, if any, is the results of the drilling campaign. The option is declarable up until July, and we expect a decision to be made close to the end of that option window.

And then I guess the second question, just looking at some of your other assets. You have the Golar Arctic. What's the status there? And then the Golar Tundra; it seems like there's some opportunity for an FSRU at the Barcarena project. Can you shed some light on those two assets?

I think Arctic is our last shipping asset. She’s a steamer, which we believe will be highly disadvantaged from January 1st, 2023 due to the new regulations. We are exploring basically three alternatives for her: an outright sale, a charter, or a potential conversion to an FSRU. We believe we will conclude one of those three well within this year, and we are in different processes regarding all of those alternatives. As for Tundra, she is one of the most modern FSRUs available in the market today. Given the latest geopolitical events, it could be advantageous to have a diversified source of natural gas, and we believe her relative attractiveness has increased, both for named projects like the one you referred to in Brazil, as well as for other projects elsewhere.

The next question is from Ken Hoexter from Bank of America. Please go ahead.

Karl, you mentioned three different potential FLNG styles. Just going back to your Mark III, is there any new development in perhaps creating a mid-size versus the large and small styles you've been talking about? Maybe just discuss progress on sales and the optionality there for differentiation?

I think Mark I is basically what we have for Hilli and Gimi. It’s around 2.5 million tonnes of liquefaction capacity, based on the conversion of an existing ship. Mark II is a slightly more flexible solution ranging between 2 million to 3 million tonnes. It’s also based on a conversion, but it has shorter construction times and can be built at shipyards that provide attractive financing. Lastly, the Mark III is a new build design typically in a Korean shipyard and that can go up to 5 million tonnes—specifically geared for larger projects. It also boasts significantly larger storage capacity.

Does the sale of CoolCo, which still essentially holds the base of potential vessels for some of the conversion opportunities, impact the opportunities for conversion, or is this more focused on developing Mark III projects moving forward?

For conversion, we will focus on Moss carriers. All ships that went into Cool Company are membrane type and not suited for FLNG conversion, so there is no impact in terms of conversion candidates from Cool Company on the FLNG side of the business.

Switching to current events, could you talk about the impact of Ukraine developments on Europe's increasing need for gas and what that could mean for potential opportunities or negotiations as you look forward into '22 and '23?

The most immediate effect is the potential increased production on Hilli linked to TTF. It makes sense for Perenco, for us, and a higher gas price makes it even more attractive. Hence, that's the most immediate impact. I think somewhat longer term, the need for diversifying LNG sources is quite relevant for pretty much everyone in the market and should bode well for the supportive actions towards new FLNG projects.

Lastly, could you discuss your outlook for direct interest expense? You referenced refinancings. Can you talk about what your interest expense looks like going into '23, given those refinancings?

Yes, sure. Coming into 2023, as we mentioned before, we have managed to issue a $300 million bond in October, mainly used to repay convertible bonds in February of this year. Looking ahead to 2023, our interest expense would align closely with previous figures. The main effect of the different refinancings and the formation of Cool Company will be the deconsolidation of $833 million of debt upon closing the sale to Cool Company's acquisition of the eight vessels.

Great. We'll have a follow-up with Stuart on some other minor details. But I appreciate the time and congrats on the CoolCo payment and good luck on the next FLNG project.

The next question is from Chris Chung from Webber Research. Please go ahead.

Just to follow up on the potential options for the Golar Arctic. I know you mentioned sale, charter, or conversion to an FSRU. If it were a conversion, could it be similar to what you've done with the Golar Viking where you converted it for a customer and then sold it and subsequently managed it?

That's an extremely simple yes—the answer is yes.

Is that on the table? Is that what you're examining now?

That is a potential avenue, and yes, there are projects that could suit that.

I note that Nicolay is being paid about $2 million a year for managing this. With the carrier spend down to CoolCo and along with the commercial and technical teams, does that $2 million still sit with Golar, or is that split with CoolCo, or does it all go down to CoolCo?

The vast majority of that stays with Golar.

On the Hilli extension, there's an option for Franco in July 2022, and there are no discussions about possible expansions until Hilli is fully contracted, correct? So is the goal to ensure the full 2.4 million tonnes, or just slightly above where it's at now?

You’re absolutely right. We have been very adamant in the past that we won't discuss any extensions until they declare the 0.4. For any extensions, we need to see that we are compensated for the full unit capacity. We think it's unlikely that the unit will produce up to 2.4 million tonnes at its current location due to gas flow. Last year, we produced 1.2 million tonnes. This year, we produced 1.4 million tonnes due to the TTF link. Next year could potentially be up to 1.6 million tonnes if declared, and the unit is generating revenue until July 2026. Beyond that, we will look for a contract to compensate for the full capacity of 2.4 million tonnes, and we will need to see the 1.6 million tonnes declared to even consider that discussion with Perenco. Additionally, there is some construction time for new FIDs. Hilli is the fastest available FLNG in the world, with no construction risk and the best operational track record in the market. We believe its relative attractiveness increases as we approach the end of the contract.

The next question from Chris Wetherbee from Citi. Please go ahead.

I wanted to touch on what you had said about a potential FLNG project on the horizon and a customer order around it. When considering if it’s a Mark III project, what are the economics around cost, especially given the inflationary environment and potential delivery? Are there other aspects we should be considering relative to Hilli and the other projects you have online right now?

CapEx-wise, you're looking at approximately $500 million per tonne of liquefaction capacity. For a 5 million unit, it’s roughly $2.5 billion. There is some inflationary pressure, but there are also economies of scale going from 2.5 million tonnes of production on one unit to 5 million tonnes for longer hauls. So the rule of thumb is still valid for that.

What is the potential delivery time? If you put the order in now, considering the specification tightness in the order book across shipping, what's the potential delivery date if the order is placed mid-year this year?

For a 5 million-tonne unit, delivery would take plus or minus four years. If you do a Mark II, the time can be significantly shortened to 2.5 to three years. Regarding the sizable equity investments, the rationale for holding them is important. We regard all of them as very attractive businesses with favorable risk-reward characteristics from current share prices. Our focus has been on simplifying Golar to become a pure-play FLNG owner and operator, crystallizing underlying value, and strengthening our balance sheet for new FLNG projects. For now, we are holders of these investments until the stocks reflect their embedded value or until we can recycle capital for FLNG growth. With the new financing facilities explained by Eduardo, we don't need to take action if we're pursuing an FLNG project.

On the $250 million delayed draw, are there specific uses earmarked for that? Any plans from a debt financing perspective that you want to address?

The $250 million facility is a fairly attractively priced corporate facility with a seven-year duration and a bullet repayment. It enables us to pursue FLNG growth without needing to tap our publicly listed stocks. Securing this facility offers an attractive risk-reward scenario before FID versus after. We have no other significant debt maturities until 2025 and have low near-term ambitions around further debt optimization. We believe there is potential to significantly improve the Gimi debt facility around delivery, but there's no immediate need for that.

The next question is from Omar Nokta from Clarkson Securities. Please go ahead.

Karl, Eduardo, congratulations on the official completion of the Golar simplification process. I wanted to ask about the expected FLNG contract award for this year. Could you elaborate on what kind of contract it might look like? Will it be similar to the 20-year BP contract for Gimi, or do you envision a model that gives you a bit more skin in the game, like the one for Hilli?

On balance, it's likely to be a long-term tolling fee-based contract, more similar to that of Gimi. However, as previously mentioned, we are seeking to obtain some commodity exposure and are working to achieve that for the expected contract award in 2022.

Regarding Gimi, you mentioned instituting a dividend when it starts up. Have you considered what that dividend might look like? Will it be a regular quarterly payout, or do you anticipate a special dividend or recapitalization?

Talk of shareholder returns and capital allocation includes around $25 million of buybacks we can enable. Due to the bond concluded last year, we cannot pay dividends until Gimi delivers. However, the plan is to establish a regular quarterly dividend following the delivery of Gimi. With the infrastructure we have, we should be able to create a stable yield play. Our liquidity will allow us to pay that dividend while funding FLNG growth from our cash reserves.

Could you also provide an update on the Brent-linked component of Hilli? The dollar of incremental EBITDA for every dollar above $60 increases. What’s the ceiling for that?

We disclosed back in 2015 that the ceiling is just over $100.

Thank you. There are no further questions at the moment.

Then we would like to thank you all for dialing in to the call today, and we look forward to speaking to you again on our next quarterly results. Please feel free to reach out if you have any additional questions. Have a good day.

And that concludes the conference for today. Thank you for participating. You may all disconnect.