Awilco LNG

Investor Presentation • Nov 15, 2018

Q3 2018

Jon Skule Storheill

Øyvind Ryssdal

15/11/18

Disclaimer

This presentation may include certain forward-looking statements, forecasts, estimates, predictions, influences and projections regarding the intent, opinion, belief, various assumptions or current expectations of Awilco LNG (the "Company") and it's management with respect to, among other things, (i) goals and strategies, (ii) evaluation of the Company's markets, competition and competitive position, and (iii) anticipated future performance and trends which may be expressed or implied by financial or other information or statements contained herein.

All statements, other than statements of historical facts, that address activities and events that will, should, could or may occur in the future are forward-looking statements. Words such as "may," "could," "should," "would," "expect," "plan," "anticipate," "intend," "forecast," "believe," "estimate," "predict," "propose," "potential," "continue" or the negative of these terms and similar expressions are intended to identify such forward-looking statements.

These forward-looking statements, forecasts, estimates, predictions, influences and projections are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors because they relate to events and depend on circumstances that will occur in the future, some of which are beyond our control and difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements, and no representation is made as to the accuracy of these. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements, forecasts, estimates, predictions, influences and projections are: changes in LNG transportation market trends; changes in the supply and demand for LNG; changes in trading patterns; changes in applicable maintenance and regulatory standards; changes in applicable regulations and laws; technological developments affecting gas and LNG demand; political events affecting production and consumption of LNG; changes in the financial stability of clients of the Company; the Company's ability to secure employment for available vessels and newbuildings on order; increases in the Company's cost base; failure by yards to comply with delivery schedules; changes to vessels' useful lives and residual values; the Company's ability to obtain financing of the newbuildings and lastly unpredictable or unknown factors with material adverse effects on forward-looking statements.

Neither the receipt of this presentation by any person, nor any information contained herein, constitutes, or shall be relied upon as constituting, any advice relating to the future performance of the Company. Each person should make their own independent assessment of the merits of the Company and its business and should consult their own professional advisors. The information and opinions contained in this presentation relate only as of the date of this presentation, and are subject to change without notice. Neither the Board of Directors of the Company or the Company and it's management make any representation or warranty, express or implied, as to the accuracy or completeness of this presentation or of the information contained herein and none of such parties shall have any liability for the information contained in, or any omissions from, this presentation, nor for any of the written, electronic or oral communications transmitted to the recipient in the course of the recipient's own investigation and evaluation of the Company or its business. Unless legally required, the Company assumes no responsibility or obligation to update publicly or review any of the forward-looking statements contained herein, whether as a result of new information, future events or otherwise.

Company overview

Awilco LNG is a fully integrated pure play LNG transportation provider, owning and operating LNG vessels. The Company owns two 2013 built 156,000 cbm TFDE membrane LNG vessels, WilForce and WilPride. Awilco LNG is listed on Oslo Axess under the ticker code ALNG.

1. Highlights

• 1. Market update
• 1. Summary

3 rd quarter 2018 highlights

Awilco LNG reported:

−	Net freight income	MUSD 7.4	MUSD 4.6 in Q2 2018
−	EBITDA	MUSD 3.8	MUSD 1.9 in Q2 2018
−	Net profit/(loss)	MUSD (4.8)	MUSD (6.5) in Q2 2018

• Vessel utilisation of 70 % compared to 71 % previous quarter (excluding DD off-hire)
• TCE* of USD 45,000 pd (USD 27,900 pd in Q2 2018), current CBE** of USD ~53,000 pd
• WilForce completed dry-docking on time and budget, total cost of MUSD 3.3 and 21 off-hire days
• WilForce delivered on a 9-12 month TC to an oil and gas major, annualised EBITDA MUSD 26

Subsequent events

• WilPride en route to yard for dry-docking, budgeted at MUSD 3.3 and 20 off-hire days

*TCE: net freight income divided by the number of calendar days minus off-hire days

**CBE: Cash break even in USD per day including operating expenses, administration expenses, dry-docking and financing costs (estimated)

1. Highlights 2. Financials Q3

2. Market update

3. Summary

Q3 2018 income statement

USD million	Q3'18	Q2'18	2017
Freight income	8.6	6.4	20.4
Voyage related expenses	(1.3)	(1.8)	(6.9)
Net freight income	7.4	4.6	13.6
Other income	4.0	-	-
Operating expenses	(6.7)	(2.0)	(7.9)
Administration expenses	(0.8)	(0.7)	(3.9)
EBITDA	3.8	1.9	1.7
Depreciation	(3.3)	(3.3)	(12.3)
Net finance	(5.3)	(5.2)	(21.2)
Profit/(loss) before tax	(4.8)	(6.5)	(31.8)
Tax	-	-	-
Profit/(loss)	(4.8)	(6.5)	(31.8)

Q3 2018 financial position

USD million	30.09.18	30.06.18	31.12.17
Vessels	360.9	360.6	363.9
Total non-current assets	360.9	360.6	363.9
Trade receivables	4.8	-	1.6
Other short term assets	8.4	5.1	5.1
Cash	24.3	26.5	29.0
Total current assets	37.4	31.6	35.7
Total assets	398.3	392.2	399.6
Total equity	116.8	121.5	127.0
Long-term interest bearing debt	258.6	260.7	263.9
Other non-current liabilities	2.3	2.3	2.3
Non-current liabilities	260.9	263.0	266.2
Short-term interest bearing debt	6.4	5.1	2.7
Other current liabilities	14.3	2.5	3.7
Total current liabilities	20.7	7.6	6.4
Total equity and liabilities	398.3	392.2	399.6

Q3 2018 cash flow

USD million	Q3'18	Q2'18	2017
Cash Flows from Operating Activities:
Profit/(loss) before taxes	(4.8)	(6.5)	(31.8)
Income taxes paid	-	-	-
Interest and borrowing costs expensed	5.4	5.4	22.2
Depreciation, amortisation and impairment	3.3	3.3	12.3
Trade receivables, inventory and other short term assets	(4.1)	1.3	(1.6)
Accounts payable, accrued exp. and deferred revenue	5.6	1.2	1.1
Net cash provided by / (used in) operating activities	5.4	4.7	2.1
Cash Flows from Investing Activities:
Investment in vessels	(3.6)	(2.1)	(2.3)
Net cash provided by / (used in) investing activities	(3.6)	(2.1)	(2.3)
Cash Flows from Financing Activities:
Gross proceeds from equity issue	-	-	26.8
Transaction costs of equity issue	-	-	(0.7)
Repayment of borrowings	(0.6)	(1.1)	(5.6)
Interest and borrowing costs paid	(3.5)	(5.1)	(21.4)
Net cash provided by / (used in) financing activities	(4.1)	(6.2)	(0.9)
Net changes in cash and cash equivalents	(2.2)	(3.6)	(1.1)
Cash and cash equivalents at start of period	26.5	30.1	30.0
Cash and cash equivalents at end of period	24.3	26.5	29.0

1. Highlights

2. Financials Q3

3. Market update

4. Summary

Elevator pitch

In spite of

• ➢ Newbuild deliveries at all-time high in 2018 42 delivered, 9 to come
• ➢ Atlantic-Far East arbitrage closed Winter season approaching

New liquefaction capacity may lift rates further

• ➢ 30 MTPA liquefaction starting Q4 2018
• ➢ A further 22 MTPA in 2019 all in the US Fleet growth 36 vessels

What about 2020+?

Rates at all-time high USD 185,000 per day spot

➢ FIDs are coming LNG Canada 14 MTPA in October 2018

➢ Gas is cheap, abundantly available and environmentally friendly

LNG demand growth in Asia

AIR QUALITY INDEX 2017 ENERGY DEMAND GROWTH VS COAL SHARE

Change in energy demand (2017-2035), KTOE

• China's "Blue Sky" plan is working no 1 gas importer, ~50 % increase in LNG imports two years running
• South Korea is a mature LNG importer and following same path gas and renewables combating pollution
• India plans to double the share of natural gas in energy mix to 15 % by 2022, increasing LNG imports from 20 MTPA to 70 MTPA

Source: Shell LNG Outlook 2018, Reuters, ICIS

LNGC rates

USD/DAY

• USD 195,000 pd East and USD 175,000 pd West rates at all-time high
• 100 % ballast bonus and positioning payments may lift TCE beyond headline

LNG trade change

• Five liquefaction plants commenced operations this year in USA, Russia, Australia and Cameroon with total capacity of 26 MTPA

• Ramp up of capacity added in 2017 contributed to export growth, partly offset by minor outages and maintenance

• Continued fuel switching in China and South Korea resulting in import growth of 45 and 17 % respectively

• India up 12 % in 2018

Source: Clarksons Platou, Energy Aspects

LNG fleet and orderbook

• 42 vessels delivered year to date, 9 further vessels scheduled for delivery
• Total fleet 472 vessels > 100' cbm
• Orderbook is 93 LNGC or 19 %, 42 orders YTD 2018
• ~20 % of the fleet is «Commercially challenged» (smaller/less efficient), of these 19 laid up, 3 recycled in 2018

Source: Fearnley LNG

LNG production and ton-mile

0 50 100 150 200 250 300 350 400 450 MT LNG 9 % CAGR 3 % CAGR 2 % CAGR

• 47 MTPA new liquefaction capacity expected to start up in 2018, and a further 44 MTPA in 2019 – 2021
• 53 MTPA in the US
• 380 MTPA new LNG production pre-FID phase with target startup 2021 - 2024

LNG PRODUCTION 2011 - 2021 TON-MILE 2011 - 2021

• Asia's appetite for LNG met by new US supply, increasing sailing distances by 80 – 90 % compared to historical average
• Ton-mile increased by 12.9 % y-o-y October 2018

Source: Reuters, GIIGNL, DNB, Arctic Securities, Fearnley LNG

1. Highlights

2. Financials Q3

3. Market update

4. Summary

Summary

• ➢ Owner's expectations for the coming years are high
• ─ Rates at all-time high despite all-time high newbuilding deliveries in 2018
• ─ 10 % growth in LNG production in 2018, 14 % exp in 2019 (or 40 % higher growth..)
• ─ 12.9 % growth in ton-miles in 2018 year to date, 18.4 % exp in 2019 (or 42 % higher growth..)
• ─ 30 % fewer newbuilding deliveries in 2019
• ➢ Mid- and long-term demand for LNG transportation remains strong
• ─ Gas is cheap, abundantly available and environmentally friendly
• ─ LNG as a marine fuel is IMO 2020 and future compliant SOx in 2020 PM and NOx next?
• ─ Growing gas demand will trigger further FIDs for next liquefaction wave
• ─ ~20 % of the sailing fleet is smaller and inefficient
• ➢ Awilco LNG
• ─ Pure play integrated LNG transportation company with excellent commercial and operational track record in a segment with high barriers to entry
• ─ Strong earnings from WilForce for 9-12 months supporting spot exposure strategy on WilPride in firm (and firming!) winter market
• ─ Actively pursuing refinancing at improved terms
• ➢ Awilco LNG is well positioned for the improving market

A Fully Integrated Pure Play LNG Transportation Provider

Jon Skule Storheill

CEO Mobile: +47 -9134 4356 E -mail: jss@awilcolng.no

Øyvind Ryssdal CFO Mobile: +47 -920 14 029 E -mail: or@awilcolng.no