Awilco LNG

Investor Presentation • Feb 15, 2017

Q4 2016

Jon Skule Storheill Snorre Krogstad

15/02/17

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 forwardlooking 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 forwardlooking statements contained herein, whether as a result of new information, future events or otherwise.

Company Overview

Awilco LNG is a 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.

Agenda 15/02 2017

1. Highlights and financials Q4

1. Market update

2. Summary

4 th Quarter Highlights

4 th quarter 2016

• Awilco LNG reported:

−	Net freight income of	MUSD 8.8	MUSD 7.8 in Q3 2016
−	EBITDA of	MUSD 6.1	MUSD 4.6 in Q3 2016
−	Net profit/(loss) of	MUSD (2.5)	MUSD (4.2) in Q3 2016

• Vessel utilisation of 83 %, compared to 80 % in Q3 2016 (trading vessels)

Full year 2016

• Awilco LNG reported:

−	Net freight income of	MUSD 32.0	MUSD 32.5 in 2015
−	EBITDA of	MUSD 19.8	MUSD 15.8 in 2015
−	Net profit/(loss) of	MUSD(22.8)	MUSD (36.3) in 2015

Q4 2016 Income statement

USD million	Q4'16	Q3'16	2016	2015
Freight income	9.1	8.4	34.8	37.4
Voyage related expenses	(0.3)	(0.7)	(2.8)	(4.9)
Net freight income	8.8	7.8	32.0	32.5
Operating expenses	(1.8)	(2.2)	(8.7)	(12.7)
Administration expenses	(0.9)	(0.9)	(3.5)	(4.0)
EBITDA	6.1	4.6	19.8	15.8
Depreciation	(2.9)	(2.9)	(12.9)	(16.6)
Impairment	-	-	(6.6)	(11.5)
Net finance	(5.7)	(5.9)	(23.2)	(24.0)
Profit/(loss) before tax	(2.5)	(4.2)	(22.8)	(36.3)
Tax	-	-	-	-
Profit/(loss)	(2.5)	(4.2)	(22.8)	(36.3)

Q4 2016 Balance sheet

USD million	31.12.16	30.09.16	31.12.15
Vessels	371.8	374.7	422.5
Other non-current assets	0.1	0.1	0.1
Total non-current assets	371.9	374.8	422.6
Trade receivables	0.6	2.6	2.5
Other short term assets	5.8	4.0	3.1
Cash	30.0	34.5	17.3
Total current assets	36.4	41.1	22.8
Total assets	408.4	415.9	445.5
Total equity	132.8	135.3	155.6
Long-term interest bearing debt	259.0	262.6	272.8
Other non-current liabilities	0.3	0.3	0.2
Non-current liabilities	259.3	262.9	273.0
Short-term interest bearing debt	13.8	13.5	12.8
Other current liabilities	2.5	4.2	4.1
Total current liabilities	16.3	17.8	16.9
Total equity and liabilities	408.4	415.9	445.5

Q4 2016 Cash flow

USD million	Q4'16	2016	2015
Cash Flows from Operating Activities:
Profit/(loss) before taxes	(2.5)	(22.8)	(36.3)
Income taxes paid	-	-	-
Interest and borrowing costs expensed	5.7	23.2	24.1
Depreciation, amortisation and impairment	2.9	19.5	28.1
Trade receivables, inventory and other short term assets	0.3	1.3	(0.2)
Accounts payable, accrued exp. and deferred revenue	(1.7)	(1.5)	(4.0)
Net cash provided by / (used in) operating activities	4.7	19.6	11.8
Cash Flows from Investing Activities:
Investment in vessels / sale of vessels	(0.1)	32.1	17.4
Proceeds from sale of other fixed assets	-	-	0.1
Net cash provided by / (used in) investing activities	(0.3)	32.1	17.5
Cash Flows from Financing Activities:
Repayment of borrowings	(3.3)	(13.9)	(10.7)
Interest and borrowing costs paid	(5.7)	(25.1)	(22.1)
Net cash provided by / (used in) financing activities	(9.0)	(39.0)	(32.8)
Net changes in cash and cash equivalents	(4.5)	12.7	(3.5)
Cash and cash equivalents at start of period	34.5	17.3	20.8
Cash and cash equivalents at end of period	30.0	30.0	17.3

Agenda 15/02 2017

1. Highlights and financials Q4

2. Market update

3. Summary

LNG rates

• Activity and rates bottomed during summer of 2016, and improved throughout Q4
• Reduced activity and marginally softer rates so far in Q1 2017, but still significantly higher than same period last year

www.awilcolng.no - 10 -

Monthly global LNG trade

• Global trade was up by 7 % in 2016

• New LNG production capacity added in 2016 was 41 MT global trade expected to increase more in 2017 and 2018
• Seasonality is still valid in LNG trading, but new production capacity coming on line is lifting volumes

Source: Clarksons Platou

Gas price

• Due to cold weather and low inventory, gas price in Far East increased sharply Q4 and hit highest level since 2014
• Far East price coming off at the end of the quarter while Europe sees cold weather and increasing prices into Q1 reducing the W-E arbitrage
• US LNG prices wide open for arbitrage 15 cargoes exported from Sabine Pass in January

Source: Clarksons Platou

www.awilcolng.no - 12 -

LNG trade

LNG exports yoy 2016 LNG imports yoy 2016

• LNG exports increased by 7.2% YoY
• Total new LNG production capacity increased by 41 MT vs. 17.5 MT increased trade
• New Australian LNG is materialising with 14 MT

• US has just started, Sabine Pass T3 ahead of schedule Source: Clarksons Platou

• China, India and Egypt showing continued strong demand

• Europe is price sensitive and has massive capacity
• Japan is again down YOY but the trend has slowed

LNG spot market

• 274 fixtures recorded in 2016
• 67 % increase in number of fixtures YOY
• With substantial increase in production LNG will become a fully commercially traded commodity

Source: Pareto Securities

LNG production

MTPA LNG PRODUCTION CAPACITY UNDER CONSTRUCTION

• About 41 MTPA of new production capacity added in 2016
• Ramp-up takes about 6 months full effect of 2016 capacity increase will come in 2017 another busy year for new LNG plants
• Sabine Pass T3 ahead of schedule, several others recently confirmed on time

Source: Clarksons Platou, Poten & Partners

LNG fleet and orderbook

LNG Fleet and orderbook Total fleet No. vsls Open order (LHS) Comitted Order (LHS) Delivered (LHS) Total fleet (RHS)

• Total orderbook 109 vessels of which only 7 are available
• 41 vessels were scheduled for delivery in 2016 27 actually delivered
• 43 vessels scheduled for delivery in 2017 slippage expected in 2017 as well
• Only 5 newbuilding orders placed in 2016, very low activity continues

Source: Fearnley LNG

www.awilcolng.no - 16 -

Agenda 15/02 2017

1. Highlights and financials Q4

2. Market update

3. Summary

Summary

• Market has turned but still volatile
• ─ Q4 experienced highest rates in two years
• ─ Softer market so far in Q1 but rates still significantly higher than last year
• ─ Continued seasonal variations
• ─ Fluctuating ton-mile due to price variations
• Mid- and long-term demand for LNG transportation remains strong
• ─ We are at the start of the biggest increase of LNG volumes in history
• ─ Full effect of 2016 new capacity will be seen in 2017
• ─ Limited newbuilding orders, charterers and finance available
• ─ 17 % of existing fleet is built prior to 2000 and is smaller and inefficient

Awilco LNG – summary

Awilco LNG offers full LNG spot market exposure

• Expect improving and firmer markets going forward but still volatility
• With two modern TFDE vessels available from 2017 ALNG is perfectly positioned for improving market

A Pure Play LNG Transportation Provider

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

Snorre Krogstad CFO Mobile: +47 -9085 8393 E -mail: ssk@awilcolng.no