Awilco LNG

Quarterly Report • May 10, 2019

FIRST QUARTER 2019 RESULTS

Highlights first quarter

• The Awilco LNG Group (Awilco LNG or the Group) reported net freight income of MUSD 8.4 (MUSD 10.4 in Q4 2018) and EBITDA of MUSD 5.0 (MUSD 7.1 in Q4 2018)
• Vessel utilisation of 90 % compared to 84 % in Q4 2018 (excluding off-hire from scheduled drydocking)
• Consolidation initiative with other ship owners high on the agenda

Subsequent events

• WilForce commenced repairs and upgrades at yard end-April, anticipated offhire about 40 days in Q2 which is to be added to TC period

Key financial figures

USD million	Q1'19	Q4'18	2018
Freight income	9.4	11.1	40.0
Voyage related expenses	1.0	0.7	5.1
EBITDA	5.0	7.1	22.4
Net profit/(loss)	(3.4)	(1.2)	(11.4)
Total assets	386.0	393.6	393.6
Total equity	112.2	115.6	115.6
Interest bearing debt	266.2	267.0	267.0
Cash and cash equivalents	18.7	22.5	22.5
Book equity ratio	29 %	29 %	29 %

FINANCIAL REVIEW

Income statement first quarter 2019

Freight income for the quarter was MUSD 9.4, down from MUSD 11.1 in Q4 2018 due to muted demand in the Far East combined with seasonal effects. Fleet utilisation for the quarter ended at 90 %, compared to 84 % in the previous quarter (excluding scheduled off-hire). Voyage related expenses amounted to MUSD 1.0, compared to MUSD 0.7 in Q4 2018.

Operating expenses were MUSD 2.2 in the quarter compared to MUSD 1.9 in Q4. Provisions for repair of damage to machinery on the WilForce was increased by MUSD 1.1 in Q1 2019, and a MUSD 0.9 increase in the corresponding insurance claim was recognised as other income in the quarter. Repairs at yard commenced end-April. Please see note 4 for further information.

Administration expenses were MUSD 1.0 in Q1 compared to MUSD 1.4 in Q4 2018. EBITDA for the quarter was MUSD 5.0 (MUSD 7.1 Q4 2018) and depreciation for the quarter was MUSD 3.3 compared to MUSD 3.2 in Q4 2018.

Net financial items were MUSD (5.1) same as in Q4 2018. Interest expenses on the WilForce and WilPride financial leases amounted to MUSD 5.2, down from 5.4 in the previous quarter.

Loss for the period was MUSD 3.4, compared to MUSD 1.2 in Q4 2018.

Statement of financial position

Book value of vessels was MUSD 358.9 as at 31 March 2019 (MUSD 362.1 Q4 2018).

Total current assets were MUSD 27.1 as at 31 March 2019 (MUSD 31.4 Q4 2018), including an insurance claim of MUSD 4.9 relating to repairs on the WilForce and cash and cash equivalents MUSD 18.7 (MUSD 22.5 Q4 2018).

Total equity as at 31 March 2019 was MUSD 112.2 (MUSD 115.6 Q4 2018).

Total current liabilities were MUSD 273.4 as at 31 March 2019 (MUSD 277.6 Q4 2018), of which MUSD 265.9 relates to the WilForce and WilPride financial lease liabilities (MUSD 266.7 Q4 2018), MUSD 1.3 was deferred revenue relating to Q2 2019 invoiced in Q1 (MUSD 2.7 Q4 2018) and MUSD 5.1 provisions for repair of WilForce (MUSD 4.5 Q4 2018). Total deferred bareboat hire towards the financial leases was MUSD 22.7 as at 31 March 2019 (MUSD 19.9 Q4 2018), which is included in the total financial lease liabilities.

The repurchase obligations for WilForce and WilPride mature 31.12.2019 plus 60 days extension option in the Group's favour. Awilco LNG has rolling repurchase options and is actively pursuing refinancing alternatives, see note 5 for further information. Awilco LNG is considering multiple sources of capital available to refinance the vessels in due course.

MARKET UPDATE

A relatively warm winter in the Far East and high storage levels in China and South Korea resulted in muted gas buying interest in the quarter and the downward gas price pressure seen in Q4 2018 continued throughout Q1 2019. FE gas prices started the quarter at USD 9.0/MMBTU and ended at USD 5.1/MMBTU, whereas UK NBP started Q1 at USD 8.4/MMBTU and closed at USD 5.1/MMBTU. Henry Hub opened at USD 3.9/MMBTU and closed at USD 2.8/MMBTU. Due to weak demand and ample cargo availability Asian LNG futures prices for Q2 2019 delivery continued falling until early April, at which point buyers started positioning for the seasonally stronger summer months.

Global LNG trade including reloads is estimated by Fearnleys LNG to have increased by about 8-9 % in Q1 y-o-y, but due to lack of arbitrage between the basins, weak demand in the Far East and redirection of volumes into Europe average sailing distances fell by the same number. Shipping demand was essentially flat compared to Q1 2018 and coupled with a 10 % growth in the fleet since Q1 2018 rates suffered. According to Fearnleys LNG headline TFDE day rates started the quarter at USD 110,000 in both basins. End of March rates were assessed at USD 36,000 and USD 37,000 per day West and East of Suez respectively.

LNG imports to China increased by about 21 % in Q1 2019 y-o-y. Imports to South Korea, India and Japan decreased by 19 %, 12 % and 9 % respectively, due to temporary weather effects and restarting of nuclear plants in Japan and South Korea.

A total of 44 MTPA of new LNG nameplate production capacity started up in 2018, of which 27 MTPA added in Q4 2018 is not expected to produce at capacity until Q2 2019. A further 20 MTPA of new LNG production capacity is expected to commence production in 2019, followed by 63 MTPA under construction with startup 2020 to 2024. According to industry analysts new LNG production plants with total potential production capacity of over 380 MTPA are in various stages of pre-FID planning, and market analysts assess more than 60 MTPA as likely to reach FID in 2019 including Golden Pass (15.6 MTPA) which was sanctioned in February.

In Q1 2019 12 vessels were delivered and 11 vessels were ordered. According to shipbrokers the orderbook at the end of Q1 2019 for LNG vessels above 150,000 cbm (excl. FSRU and FLNG) was 106 vessels, of which about 40 are assumed available for contract. A further 27 vessels are scheduled for delivery in 2019, 35 in 2020, 43 in 2021 and 4 in 2022.

ORGANISATION

The principal activity of Awilco LNG ASA and its subsidiaries is to invest in and operate LNG transportation vessels. Technical and commercial management of the fleet is performed from the Group's office in Oslo, Norway. The Group has 8 employees. and Awilco LNG purchases certain administrative and sub-management technical services from two companies in the Awilhelmsen Group; Awilhelmsen Management AS and Awilco Technical Services AS, see note 6 for further details.

VESSEL CONTRACT STATUS

WilPride is being marketed in the spot/short term market.

WilForce was delivered 15 September 2018 on a 9-12 month time charter contract to an oil and gas major and is expected to be redelivered mid-July 2019

OUTLOOK

The mild winter, well stocked inventories and ample supply has translated into a weak shipping market so far in 2019. Current spot rates are about USD 35,000 - 50,000 per day, but multi-month charters with delivery in Q3 2019 are being concluded at considerably higher rates to provide for winter coverage. At current gas prices the LNG energy equivalent to oil costs less than USD 30/bbl, and with Brent at around USD 70/bbl demand for LNG is expected to increase going forward.

A total of 83 MTPA of new LNG production capacity is expected to start up in 2019 to 2024 of which 68 MTPA in North America. New US volumes are expected to increase average sailing distances, and tonnage demand and supply looks balanced the next few years. However, periods of volatility and seasonality should be expected.

Several new LNG production plants are expected to be sanctioned in the next 6-12 months to meet the growing demand for gas, estimated at double the growth rate of the total global energy demand according to Shell Energy Outlook.

Awilco LNG has one vessel on contract until mid-July 2019 and one vessel trading in the spot market and is well positioned in this firming market.

Oslo, 9 May 2019

Sigurd E. Thorvildsen Chairman of the Board

Jon-Aksel Torgersen Board member

Henrik Fougner Board member

Annette Malm Justad Board member

Synne Syrrist Board member

Jon Skule Storheill CEO

Interim Condensed Consolidated Income Statement

In USD thousands, except per share figures		Q1	Q4	Q1
		2019	2018	2018	2018
	Note	(unaudited)	(unaudited)	(unaudited)	(audited)
Freight income	2	9 351	11 107	13 808	39 952
Voyage related expenses	6	995	723	1 351	5 133
Net freight income		8 355	10 384	12 456	34 819
Other income	4	870	-	-	4 000
Operating expenses		2 150	1 857	1 933	7 987
Provision for repair of vessel damage	4	1 121	-	-	4 500
Administration expenses	6	950	1 397	1 007	3 900
Earnings before interest, taxes, depr. and amort. (EBITDA)		5 004	7 130	9 516	22 432
Depreciation and amortisation		3 254	3 188	3 242	12 989
Earnings before interest and taxes (EBIT)		1 750	3 942	6 274	9 442
Finance income		117	300	223	887
Finance expenses		5 228	5 409	5 497	21 765
Net finance income/(expense)		(5 111)	(5 109)	(5 274)	(20 878)
Profit/(loss) before taxes		(3 361)	(1 167)	1 000	(11 435)
Income tax expense		-	-	-	-
Profit/(loss) for the period		(3 361)	(1 167)	1 000	(11 435)
Earnings per share in USD attributable to ordinary equity holders of Awilco LNG ASA:
Basic, profit/(loss) for the period Diluted, profit/(loss) for the period		(0.03) (0.03)	(0.01) (0.01)	0.01 0.01	(0.09) (0.09)
Interim Consolidated Statement of Comprehensive Income
Profit/(loss) for the period		(3 361)	(1 167)	1 000	(11 435)
Other comprehensive income:

Total comprehensive income/(loss) for the period	(3 361)	(1 167)	1 000	(11 435)

Interim Condensed Consolidated Statement of Financial Position

In USD thousands		31.3.2019	31.12.2018	31.3.2018
	Note	(unaudited)	(audited)	(unaudited)
ASSETS
Non-current assets
Vessels (right-of-use assets)		358 893	362 110	361 812
Other fixed assets		12	12	12
Total non-current assets		358 906	362 122	361 825
Current assets
Trade receivables		1 603	2 749	424
Inventory		1 204	1 377	2 007
Other short term assets	4	5 625	4 772	3 983
Cash and cash equivalents		18 653	22 540	30 050
Total current assets		27 085	31 438	36 465
TOTAL ASSETS		385 991	393 560	398 289
EQUITY AND LIABILITIES
Equity
Share capital	3	49 407	49 407	49 407
Share premium	3	133 384	133 384	133 384
Other paid-in capital		18 157	18 157	18 157
Retained earnings		(88 717)	(85 356)	(72 921)
Total equity		112 232	115 592	128 028
Non-current liabilities
Pension liabilities		345	322	298
Long-term interest bearing debt		-	-	262 828
Other non-current liabilities		-	-	2 000
Total non-current liabilities		345	322	265 126
Current liabilities
Short-term interest bearing debt	5	265 868	266 683	3 893
Trade payables		236	1 323	234
Income tax payable		-	-	-
Provisions and accruals	7	7 310	9 640	1 008
Total current liabilities		273 414	277 646	5 135
TOTAL EQUITY AND LIABILITIES		385 991	393 560	398 289

Interim Consolidated Statement of Changes in Equity

For the period ended 31 March 2019

In USD thousands	Share	Share	Other	Retained	Total
	capital	premium	paid-in capital	earnings	equity
Equity at 1 January 2019	49 407	133 384	18 157	(85 356)	115 592
Profit/(loss) for the period	-	-	-	-	-
Other comprehensive income for the period	-	-	-	(3 361)	(3 361)
Total comprehensive income	-	-	-	(3 361)	(3 361)
Balance as at 31 March 2019 (unaudited)	49 407	133 384	18 157	(88 717)	112 232

For the period ended 31 December 2018

In USD thousands	Share	Share	Other	Retained	Total
	capital	premium	paid-in capital	earnings	equity
Equity at 1 January 2018	49 407	133 384	18 157	(73 921)	127 028
Profit/(loss) for the period	-	-	-	(11 435)	(11 435)
Other comprehensive income for the period	-	-	-	-	-
Total comprehensive income	-	-	-	(11 435)	(11 435)
Balance as at 31 December 2018 (audited)	49 407	133 384	18 157	(85 356)	115 592

Interim Condensed Consolidated Cash Flow Statement

In USD thousands	Q1	Q4
	2019	2018	2018
	(unaudited)	(unaudited)	(audited)
Cash Flows from Operating Activities:
Profit/(loss) before taxes	(3 361)	(1 167)	(11 435)
Income taxes paid	-	-	-
Interest and borrowing costs expensed	5 215	5 382	21 543
Items included in profit/(loss) not affecting cash flows:
Depreciation and amortisation	3 254	3 188	12 989
Changes in operating assets and liabilities:
Trade receivables, inventory and other short term assets	466	4 273	(2 221)
Trade payables, provisions and accruals	(5 104)	(2 861)	5 656
i) Net cash provided by / (used in) operating activities	471	8 816	26 532
Cash Flows from Investing Activities:
Investment in vessels / sale of vessels	(38)	(4 406)	(11 182)
Proceeds from sale of other fixed assets	-	-	-
ii) Net cash provided by / (used in) investing activities	(38)	(4 406)	(11 182)
Cash Flows from Financing Activities:
Repayment of borrowings	(1 079)	(1 022)	(2 735)
Interest and borrowing costs paid	(4 951)	(5 142)	(19 053)
iii) Net cash provided by / (used in) financing activities	(6 030)	(6 164)	(21 788)
Net change in cash and cash equivalents (i+ii+iii)	(5 597)	(1 754)	(6 438)
Cash and cash equivalents at start of period	24 250	24 250	28 979
Cash and cash equivalents at end of period	18 653	22 540	22 540

Notes to the Interim Condensed Consolidated Financial Statements

Note 1 - Corporate information, basis for preparation and accounting policies

Corporate information

Awilco LNG ASA (the Parent Company) is a public limited liability company incorporated and domiciled in Norway. The Parent Company's registered office is Beddingen 8, 0250 Oslo, Norway.

The interim consolidated financial statements (the Statements) of the Parent Company comprise the Parent Company and its subsidiaries, together referred to as the Group. The principal activity of the Group is the investment in and operation of LNG transportation vessels. The Group owns and operates two modern TFDE LNG carriers.

Basis for preparation

The Statements for the three months ended 31 March 2019 are prepared in accordance with IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board (IASB) and as adopted by the European Union (EU). The Statements have not been subject to audit or review. The Statements do not include all of the information and disclosures required by International Financial Reporting Standards (IFRS) for a complete set of financial statements, and the Statements should be read in conjunction with the Group's annual consolidated financial statements for the period ended 31 December 2018, which includes a detailed description of the applied accounting policies.

Significant accounting policies

The accounting policies adopted in the preparation of the Statements are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2018, with the exception of IFRS 16 Leases implemented with effect from 1 January 2019.

IFRS 16 replaces IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for most leases under a single on-balance sheet model. Lessor accounting under IFRS 16 is substantially unchanged from IAS 17. Lessors will continue to classify leases as either operating or finance leases using similar principles as in IAS 17. Thus IFRS 16 did not have an impact for leases where the Group is the lessor.

The Group elected to use the transition practical expedient allowing the standard to be applied only to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 at the date of initial application. The Group also elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option ('short-term leases'), and lease contracts for which the underlying asset is of low value ('low-value assets').

Upon adoption of IFRS 16, the Group applied a single recognition and measurement approach for all leases that it is the lessee, except for short-term leases and leases of low-value assets. The Group has previously under IAS 17 where the Group is the lessee accounted for lease agreements on-balance and recognised lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. Thus IFRS 16 did not have an impact for leases where the Group is the lessee.

Set out below are the new accounting policies of the Group upon adoption of IFRS 16:

Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Leased assets with repurchase obligations at the end of the lease term are separated into components which are depreciated over the useful life of the component. Right-of-use assets are subject to impairment.

Note 1 - Corporate information, basis for preparation and accounting policies - cont.

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include repurchase obligations or alternatively the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest based on the effective interest method and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the insubstance fixed lease payments or a change in the assessment to purchase the underlying asset.

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of equipment and office lease (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered of low value (i.e., below €5,000). Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

Significant judgement in determining the lease term of contracts with renewal options

The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Group applies judgement in evaluating whether it is reasonably certain to exercise the option to renew. That is, it considers all relevant factors that create an economic incentive for it to exercise the renewal. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise (or not to exercise) the option to renew.

Sale-leaseback arrangements

No gain or loss is recognised in the income statement related to sale-leaseback arrangements where the vessel is sold and subsequently leased back on a financial lease with repurchase obligations to the Group.

Note 2 - Segment information

Operating segments

The Group owns and operates two LNG vessels. For internal reporting and management purposes the Group's business is organised into one reporting segment, LNG transportation. Performance is not evaluated by geographical region as the vessels trade globally and revenue is not dependent on any specific country. Revenue from the Group's country of domicile, Norway, was NIL in Q1 2019, same as in 2018.

Information about major customers

The Group had two customers contributing with more than 10 per cent of the Group's freight income in Q1 2019, at 15 and 85 % of total revenue, and two in Q4 2018 at 27 and 73 % of total revenue.

Note 3 - Share capital

The number of issued shares was 132,548,611 as at 31 March 2019. There were no changes in shares issued in Q1 2019. The share capital is denominated in NOK, and the nominal value per share is NOK 2.5. All issued shares are of equal rights.

Note 4 - Significant events in the quarter

In Q3 2018 damage was incurred to certain non-critical machinery equipment on the WilForce. Repairs commenced at yard end-April 2019, and as at 31 March 2019 total repair costs were estimated at MUSD 5.6 of which MUSD 4.5 was recognised in 2018 and MUSD 1.1 was recognised in Q1 2019. A corresponding insurance claim of MUSD 4.9 is recognised in other short term assets, of which MUSD 4.0 was reflected in 2018 and MUSD 0.9 in Q1 2019. The estimated net cost of MUSD 0.8 reflects a deductible and certain other non-claimable costs.

Note 5 - Financing

Both vessels are financed by sale/leaseback agreements with Teekay LNG Partners L.P., which mature 31 December 2019 + 60 days in Awilco LNG's option and are therefore presented as current liabilities. Awilco LNG has rolling repurchase options throughout the lease period and repurchase obligations at maturity.

The contractual bareboat hire per day is USD 49,100 per vessel. From July 2017 to March 2018, the bareboat hire payable was USD 28,500 per day, from April 2018 to March 2019 USD 33,500 per day, and from April 2019 to December 2019 USD 38,500 per day. The deferred amounts will become payable at maturity of the leases, or by way of a cash sweep mechanism measured on a quarterly basis. Net earnings in excess of cash break even levels, currently at approx USD 58,000 per day, is to be sweeped towards the outstanding deferred charter hire, subject to the Group retaining a minimum cash position after sweeping of approx. MUSD 23.5. Deferred charter hire as of 31 March 2019 was MUSD 22.7 in total for both vessels (MUSD 19.9 as at 31 December 2018).

The purchase obligations at maturity of the lease agreements in December 2019 are MUSD 113.3 and MUSD 114.5 for WilForce and WilPride, respectively, in addition to the deferred hire.

According to the amended lease agreements a fee of MUSD 2 is payable to the lessor. The fee is payable either following voluntary prepayment of all, or parts, of the deferred amounts or by repurchase of the vessels. The fee has been capitalised as cost price of the vessels and depreciated over the term of the lease.

Until Teekay LNG and the Group agrees to not defer any bareboat hire, the Parent Company is restricted from paying dividends to its shareholders.

Awilco LNG is actively pursuing refinancing alternatives, and are considering multiple sources of capital available to refinance the vessels in due course.

Note 6 - Related party transactions

Agreements

Related party	Description of service	Note
Awilco Technical Services AS (ATS)	Technical Sub-management Services	1
Awilhelmsen Management AS (AWM)	Administrative Services	2
Fearnleys AS	Ship Brokering Services	3

(1) The Group's in-house technical manager, ALNG TM, has entered into a sub-management agreement with ATS, whereby ATS assists ALNG TM in management of the Group's fleet. The sub-management services also include management for hire of the managing director in ALNG TM. ALNG TM pays ATS a management fee based on ATS' costs plus a margin of 7 %, cost being time accrued for the sub-manager's employees involved. The fee is subject to quarterly evaluation, and is regulated according to the consumer price index in Norway. The agreement can be terminated by both parties with three months notice. ATS is 100 % owned by Awilco AS.

(2) AWM provides the Group with administrative and general services including accounting and payroll, legal, secretary function and IT. The Group pays AWM MNOK 2.1 in yearly management fee (approx. MUSD 0.2) based on AWM's costs plus a margin of 5 %. The fee is subject to semi-annual evaluation, and is regulated according to the consumer price index in Norway. The agreement can be terminated by both parties with three months notice. AWM is 100 % owned by Awilhelmsen AS, which owns 100 % of Awilco AS.

(3) One of the Parent Company's Board Members is employed by Astrup Fearnley AS. Fearnleys AS, a subsidiary of Astrup Fearnley AS, delivers ship brokering services on a competitive basis to the Group.

Note 6 - Related party transactions - continued

Purchases from related parties
In USD thousands	Q1	Q4
Related party	2019	2018	2018
Awilco Technical Services AS	146	144	597
Awilhelmsen Management AS	58	59	244
Fearnleys AS	13	37	104

Purchases from related parties are included as part of Administration expenses in the income statement, except from commissions paid to Fearnleys AS, which are included in Voyage related expenses.

Note 7 - Provisions and accruals

Provisions and accruals as at 31 March 2019 were MUSD 7.3 (MUSD 9.6 as at 31 December 2018), of which deferred revenue was MUSD 1.3 (MUSD 2.7 as at 31 December 2018), and provisions for repair of WilForce MUSD 5.1 (MUSD 4.5 31 December 2018), see note 4.

Note 8 - Events after the balance sheet date

WilForce commenced repairs and upgrades at yard end-April, expected offhire about 40 days in Q2 which is to be added to TC period.

Appendix 1

ALTERNATIVE PERFORMANCE MEASURES

Alternative performance measures (APMs), ie financial performance measures not within the applicable financial reporting framework, are used by Awilco LNG to provide supplemental information. Financial APMs are intended to enhance comparability of the results and cash flows from period to period, and it is Awilco LNG's experience that these are frequently used by analysts and investors.

These measures are adjusted IFRS measures defined, calculated and used consistently. Operational measures such as, but not limited to, volumes, utilisation and prices per MMBTU are not defined as financial APMs. Financial APMs should not be considered as a substitute for measures of performance in accordance with IFRS. Disclosures of APMs are subject to established internal control procedures.

Awilco LNG's financial APMs:

• Net freight income*: freight income voyage related expenses
• EBIT: Net freight income operating expenses administration expenses depreciation and amortisation impairments
• EBITDA: EBIT + depreciation and amortisation + impairments
• Interest bearing debt: long-term interest bearing debt + short-term interest bearing debt + pension liabilities + other non-current liabilities
• Book equity ratio: Total equity divided by total assets

*When vessels operate in the spot market, freight income includes bunkers compensation and the fuel element of ballast bonuses, whereas voyage related expenses include the corresponding bunkers costs and other repositioning costs. The APM net freight income adjusts for this grossing up, and provides for improved comparability of the Group's performance between periods.