Awilco LNG

Investor Presentation • Aug 27, 2014

Q2 2014

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 27/08 2014

1. Company Overview and Highlights Q2

• 1. Financials Q2
• 1. Market update
• 1. 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 three 125,000 cbm steam Moss type LNG vessels; WilGas, WilPower and WilEnergy. Awilco LNG is listed on Oslo Axess under the ticker code ALNG.

2 nd Quarter Highlights

2 nd quarter 2014

• Awilco LNG reported:

−	Net freight income of	MUSD 17.2	MUSD 17.6 in Q1 2014
−	EBITDA of	MUSD 10.9	MUSD 10.7 in Q1 2014
−	Net profit of	MUSD 0.2	MUSD 0.0 in Q1 2014

• Vessel utilisation of 94 % excluding dry-dock, compared to 95 % in Q1 2014 (84 % including dry-dock compared to 95 % in Q1 2014)
• WilEnergy charter extended for up to two months until end September
• WilGas commenced scheduled dry-dock in early June, and sailed from the yard in mid-July

Contract Overview

	2014	2015
WilEnergy	On charter	DD Available
WilPride	On charter	Available
WilGas	On charter DD On charter	Available
WilForce	On charter	On charter
WilPower	Lay-up - Marketed for project work	Lay-up - Marketed for project work

• WilEnergy: Employed until end September 2014
• WilGas: Employed until October/November 2014
• WilPride: Employed until mid-November 2014
• WilForce: Employed until January 2017
• WilPower: Lay-up

Agenda 27/08 2014

1. Company Overview and Highlights Q2

2. Financials Q2

3. Market update

4. Summary

Q2 2014 Income statement

USD million	Q2'14	Q1'14	2013
Freight income	19.9	20.2	54.7
Voyage related expenses	(2.7)	(2.5)	(12.8)
Net freight income	17.2	17.6	41.9
Operating expenses	(4.8)	(5.6)	(18.5)
Administration expenses	(1.5)	(1.3)	(6.8)
EBITDA	10.9	10.7	16.6
Depreciation	(4.4)	(4.4)	(10.0)
Net finance	(6.3)	(6.3)	(5.5)
Profit/(loss) before tax	0.2	0.0	1.1
Tax	-	-	0.1
Profit/(loss)	0.2	0.0	1.2

Net freight income MUSD 17.2

• Off-hire of WilGas due to scheduled dry-docking, partly offset by increased earnings on TFDEs
• 94 % utilisation trading vessels (95 % in Q1 2014)
• Increased voyage expenses due to WilGas positioning for scheduled dry-dock

Operating expenses MUSD (4.8)

• Reduction mainly due to due to natural fluctuations in timing of expenses

Q2 2014 Balance sheet

USD million	30.06.14	31.03.14	31.12.13
Vessels	470.9	474.2	478.7
Other non-current assets	0.3	0.3	0.4
Total non-current assets	471.2	474.5	479.1
Trade receivables	3.9	5.8	3.7
Other short term assets	7.1	7.9	12.6
Cash	23.8	22.5	18.2
Total current assets	34.7	36.3	34.5
Total assets	505.9	510.8	513.6
Total equity	194.7	194.5	194.5
Long-term interest bearing debt	291.6	294.5	297.3
Other non-current liabilities	0.2	0.1	0.1
Non-current liabilities	291.7	294.6	297.4
Short-term interest bearing debt	11.2	11.0	10.8
Other current liabilities	8.3	10.7	11.0
Total current liabilities	19.5	21.7	21.7
Total equity and liabilities	505.9	510.8	513.6

Current assets MUSD 34.7 • Other short term assets includes MUSD 3.0 prepaid hire • Cash MUSD 23.8 vs. MUSD 22.5 Q1
Non-current liabilities MUSD 291.7 • MUSD 291.6 long term portion of WilForce and WilPride financial lease liabilities
Current liabilities MUSD 19.5 • MUSD 11.2 short term portion of WilPride and WilForce financial lease liabilities
• MUSD 3.5 deferred revenue

Q2 2014 Cash flow

USD million	Q2'14	Q1'14	2013
Cash Flows from Operating Activities:
Profit/(loss) before taxes	0.2	-	1.1
Taxes paid	-	-	(0.1)
Interest and borrowing costs expensed	6.3	6.3	5.6
Depreciation and amortisation	4.4	4.4	10.0
Trade receivables, inventory and other short term assets	3.0	2.5	(8.5)
Accounts payable, accrued exp. and deferred revenue	(2.6)	0.4	2.6
Net cash provided by / (used in) operating activities	11.3	13.6	10.7
Cash Flows from Investing Activities:
Investment in vessels	(1.0)	-	(1.1)
Investment in vessels under construction	-	(0.5)	(291.6)
Investment in other fixed assets	-	-	(0.2)
Net cash provided by / (used in) investing activities	(1.0)	(0.5)	(292.8)
Cash Flows from Financing Activities:
Proceeds from borrowings	-	-	312.1
Repayment of borrowings	(2.7)	(2.6)	(6.6)
Interest and borrowing costs paid	(6.3)	(6.2)	(7.7)
Net cash provided by / (used in) financing activities	(9.0)	(8.8)	297.8
Net changes in cash and cash equivalents	1.2	4.3	15.7
Cash and cash equivalents at start of period	22.5	18.2	2.6
Cash and cash equivalents at end of period	23.8	22.5	18.2

Operating activities MUSD 11.3

• Reduction in accounts payable of MUSD 3 from previous quarter

Investing activities MUSD (1.0)

• Prepayment WilGas dry-dock

Financing activities MUSD (9.0)

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

Cash at the end of the quarter MUSD 23.8

Agenda 27/08 2014

1. Company Overview and Highlights Q2

2. Financials Q2

3. Market update

4. Summary

Rate development

Spot charter rate for 160k TFDE

• Seasonal slow Q2 with reduced spot LNG demand in the Far East gas prices tumbled and arbitrage reduced
• Rates declined to the lowest level since 2010
• Activity and rates increased in Q3 have we seen the turning point?

Source: RS Platou

Production and ton-mile

• Ton-mile and LNG production declined during the quarter to the lowest level in 4 years
• 16 vessels were delivered during 1st half 2014
• Despite this market increased in July, and has remained flat since

Source: Arctic Securities

LNG imports

• 1 st half 2014 in mill mt /YoY

-	Europe	17.1	-12.8%
-	N.America	4.0	10.6%
-	S.America	6.3	-5.5%
-	Japan	44.3	2.0%
-	Korea	20.3	-5.3%
-	Taiwan	6.2	-2.2%
-	China	9.9	19.1%
-	India	7.5	11.5%
-	Total	119.9	0.5%

• In July, Japan imported a record amount of LNG – primary data shows that the total imports for the month were 7.8 million tonnes – 5.7% higher than same month last year
• According to CNPC, China's gas demand in 2014 is forecasted to be 206 bcm. Domestic production is estimated at 132 bcm, imports 60 bcm – implying a shortfall of 13.6 bcm – the equivalent of some 135 LNG cargoes….

LNG production

• 27% increase in production capacity scheduled to start up 2014 2016
• A total of ca 130 MTPA of new LNG capacity is under construction with startup by end 2018
• In addition 150 200 MTPA capacity is in various stages of planning with planned startup from 2017 2020

Source: RS Platou

World LNG fleet by year built

• 16 vessels were delivered 1st half 2014 and 16 scheduled for delivery in 2nd half
• As of end June 2014 total orderbook of 119 LNGC of which 22 available for contract
• Increased ordering activity in 2nd quarter 8 vessels ordered

Source: Fearnleys LNG

Agenda 27/08 2014

1. Company Overview and Highlights Q2

2. Financials Q2

3. Market update

4. Summary

Summary

• Rates have weakened consistently since summer of 2012 but the market has been able to absorb 35 newbuildings despite reduced LNG production
• Spot activity and rates turned in July, when gas prices tumbled and several modern vessels have been taken out for storage plays
• Still a number of newbuildings to come in 2014 but increased production should start to show its effect going forward
• Real improvement in rates can be expected from mid/late 2015 and sentiment is improving
• The long term LNG picture is very strong with 130 MTPA of new production under construction with historic and expected growth at close to 7 %
• Demand for LNG is strong and expected to remain so in the foreseeable future
• Start up and production levels from new liquefaction determine the LNG market in the short mid term

Summary Awilco LNG

• WilPride utilisation of 85 % in spot market since delivery
• Short-midterm contract WilPride waiting for the "right" deal
• 2 nd Generation vessels coming of charter during the 2 nd half of 2014
• Evaluating infrastructure projects and potential contracts for the 2nd Generation vessels
• Several fresh short and long term tenders in the market for existing tonnage and newbuildings

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