Awilco LNG

Investor Presentation • Nov 17, 2015

Q3 2015

Jon Skule Storheill Snorre Krogstad

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.

Agenda 17/11 2015

1. Company Overview and Highlights Q3

2. Financials Q3

3. Market update

4. Summary

Company Overview

Awilco LNG is a pure play LNG transportation provider, owning and operating LNG vessels. The Company currently owns two 2013 built 156,000 cbm TFDE membrane LNG vessels; WilForce and WilPride, and two 125,000 cbm steam Moss type LNG vessels; WilGas and WilEnergy. Awilco LNG is listed on Oslo Axess under the ticker code ALNG.

rd 3		Quarter Highlights
rd 3 quarter 2015
• Awilco LNG reported:
− Net freight income of	MUSD 7.2	MUSD 6.0 in Q2 2015
− EBITDA of	MUSD 2.8	MUSD 1.7 in Q2 2015
− Net profit/(loss) of	MUSD (7.3)	MUSD (11.7) in Q2 2015

• Vessel utilisation of 68 %, compared to 34 % in Q2 2015 (trading vessels).
• The 1983 built LNG carrier WilPower was sold and delivered to new owner on 30 July.

Contract Overview

	2015	2016
WilPride		Available
WilForce	On charter	On charter
WilGas	Available	Lay-up - Marketed for project work
WilEnergy	Lay-up - Marketed for project work	Lay-up - Marketed for project work

WilPride:	Open Atlantic early-December
WilForce:	Employed until January 2017
WilGas:	Lay-up
WilEnergy:	Lay-up

Agenda 17/11 2015

1. Company Overview and Highlights Q3

2. Financials Q3

3. Market update

4. Summary

Q3 2015 Income statement

USD million	Q3'15	Q2'15	2014
Freight income	8.3	7.3	78.5
Voyage related expenses	(1.1)	(1.3)	(11.2)
Net freight income	7.2	6.0	67.2
Operating expenses	(3.4)	(3.4)	(21.1)
Administration expenses	(0.9)	(1.0)	(5.1)
EBITDA	2.8	1.7	41.0
Depreciation	(4.0)	(4.2)	(18.4)
Impairment	-	(3.2)	-
Net finance	(6.1)	(6.0)	(25.2)
Profit/(loss) before tax	(7.3)	(11.7)	(2.6)
Tax	-	-	(0.1)
Profit/(loss)	(7.3)	(11.7)	(2.7)

Net freight income MUSD 7.2

• Improved utilisation of WilPride Up from 3% in Q2 to 56% in Q3

Operating expenses MUSD (3.4)

• The reduced cost from lay-up of WilGas from end of August was offset by increased cost related to placing the vessel in cold lay-up mode

Q3 2015 Balance sheet

USD million	30.09.15	30.06.15	31.12.14
Vessels	434.6	438.6	467.1
Other non-current assets	0.1	0.1	0.3
Total non-current assets	434.7	438.8	467.4
Trade receivables	2.6	2.5	2.5
Other short term assets	2.7	5.8	6.8
Cash	21.4	7.6	20.8
Total current assets	26.7	15.8	30.1
Vessel held for sale	-	17.8	-
Total assets	461.4	472.4	497.5
Total equity	168.2	175.4	191.8
Long-term interest bearing debt	276.1	279.3	285.6
Other non-current liabilities	0.2	0.2	0.2
Non-current liabilities	276.3	279.5	285.7
Short-term interest bearing debt	12.5	12.2	11.7
Other current liabilities	4.4	5.2	8.2
Total current liabilities	16.9	17.4	19.9
Total equity and liabilities	461.4	472.4	497.5

Current assets MUSD 26.7 • WilPower delivered end July - net sales proceeds MUSD 17.8 • MUSD 3.0 reduction in other short term assets relates to late invoice of October BB hire • Cash MUSD 21.4 vs. MUSD 7.6 Q2 (MUSD 3.0 higher due to late invoice of BB hire) Non-current liabilities MUSD 276.3 • MUSD 276.1 long term portion of WilForce and WilPride financial lease liabilities Current liabilities MUSD 16.9 • MUSD 12.5 short term portion of WilPride and WilForce financial lease liabilities • MUSD 2.4 deferred revenue

Q3 2015 Cash flow

USD million	Q3'15	Q2'15	2014
Cash Flows from Operating Activities:
Profit/(loss) before taxes	(7.3)	(11.7)	(2.6)
Income taxes paid	-	-	-
Interest and borrowing costs expensed	6.1	6.1	25.1
Depreciation, amortisation and impairment	4.0	7.4	18.4
Trade receivables, inventory and other short term assets	(0.1)	-	7.0
Accounts payable, accrued exp. and deferred revenue	(0.8)	0.4	(2.2)
Net cash provided by / (used in) operating activities	2.0	2.1	45.7
Cash Flows from Investing Activities:
Investment in vessels / sale of vessels	17.8	-	(6.7)
Investment in vessels under construction	-	-	(0.5)
Proceeds from sale of other fixed assets	-	-	-
Net cash provided by / (used in) investing activities	17.8	-	(7.2)
Cash Flows from Financing Activities:
Repayment of borrowings	(2.0)	(3.9)	(10.8)
Interest and borrowing costs paid	(4.0)	(8.1)	(25.0)
Net cash provided by / (used in) financing activities	(6.0)	(12.0)	(35.9)
Net changes in cash and cash equivalents	13.8	(9.8)	2.6
Cash and cash equivalents at start of period	7.6	17.4	18.2
Cash and cash equivalents at end of period	21.4	7.6	20.8

Operating activities MUSD 2.0

Investing activities MUSD 17.8

• WilPower delivered end July, net sales proceeds MUSD 17.8

Financing activities MUSD (6.0)

• Interest payment and repayment on WilPride and WilForce financial lease liabilities

• Decrease compared to Q2 due to late invoicing of April and October bareboat hire, thus double cash flow effect in Q2

Cash at the end of the quarter MUSD 21.4

Agenda 17/11 2015

1. Company Overview and Highlights Q3

2. Financials Q3

3. Market update

4. Summary

www.awilcolng.no - 11 -

LNG Rates

• Disappointing market development in Q3 with little activity, low rates and utilisation during most of the quarter
• Pockets of high fixing periods but too few and far apart to change sentiment
• Atlantic basin looks short tonnage rest of 2015

Source: Fearnley LNG

Inter-Basin Trade

• Average sailing distance lowest level in 5 years

• F.East demand has dropped in anticipation of wave of Australian LNG
• Leading to inter-basin trade down 22% YoY in first half 2015 to levels not seen since Q2 2011

LNG Price

• Asian buyers have been absent from spot market in anticipation of wave of Australian LNG assuming prices could go back to 2009 levels
• Has eliminated arbitrage opportunities but spot prices now going up!
• Arbitrage now open and we may see increased inter basin trade short term.

LNG Production and Import

• Production increased 5.3% YoY first 9 months (6.7% 1H)
• Production problems Yemen
• Australia + Qatar increasing

• Less import and reloads from Spain

• Pakistan started importing LNG in March via 5.2 MTPA capacity FSRU (37 cargoes!). Has secured and are tendering for abt 3.5 MTPA so far.

• Ongoing preparations for another FSRU with startup 2017.

LNG Production

• 135 MTPA of new LNG capacity (ex. Angola) with planned startup Q4 2015 Q4 2019
• A total of 35 MTPA expected next 6 months and almost same following 6 months giving total of in excess of 60 MTPA by end 2016
• Latest production start-ups have been "on" or ahead of scheduled commencement date

LNG Fleet orderbook

NEWBUILDING DELIVERIES BY QUARTER

• 19 vessels delivered in 2015 of which seven in Q3

• Annual "slippage" was about 8 vessels 2014 + 2015 reason to expect delays for 2016/17 as well
• Only 20 new orders reported during first nine months 2015 with very limited activity
• Several ongoing long term tenders are now changing to shorter duration for existing vessels
• Orderbook as of end Q3 was 145 LNG

Source: Fearnley LNG

Agenda 17/11 2015

1. Company Overview and Highlights Q3

2. Financials Q3

3. Market update

4. Summary

Summary

• Disappointing market development in Q3 with low rates and utilisation due to:
• Production problems
• Low LNG demand in Far East leading to:
• Very limited arbitrage and ton-miles at 5 year low
• We believe we are through market bottom but there are many vessels available and on order
• In order for an substantial improvement we need to see available vessels be absorbed by:
• Increased LNG production incoming!
• Increased ton-mile reverse arbitrage?
• Exit smaller and uncompetitive vessels ongoing!
• Recent LNG startups have been on schedule
• More than 10 % increase in LNG production capacity over the next 6 months
• Long term shipping demand for LNG remain strong
• LNG production capacity expected to increase by 50 % next 4 years vs orderbook of 37%

Awilco LNG – summary

• Disappointing earnings despite improved utilization
• Market recovery has been slower than expected
• Have been and are looking at several projects
• Increased tender activity for longer term TC
• Small scale / bunkering vessel
• Various infrastructure projects including conversion of our 2nd gen vessels
• The LNG market is also cyclical but requires patience!

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