Awilco LNG

Investor Presentation • Aug 29, 2019

Q2 2019

CEO Jon Skule Storheill CFO Øyvind Ryssdal

29 August 2019

www.awilcolng.no

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. Financials Q2
• 1. Market update
• 1. Summary

2 nd quarter 2019 highlights

Net freight income	MUSD 2.7	MUSD 8.4 in Q1 2019
EBITDA	MUSD (0.2)	MUSD 5.0 in Q1 2019
Net profit/(loss)	MUSD (8.6)	MUSD (3.4) in Q1 2019

• 2 nd quarter negatively impacted by weak rates and off-hire on WilForce
• Utilisation 56 % compared to 90 % previous quarter
• TCE* USD 31,100 pd (USD 46,200 pd in Q1 2019), current CBE** of USD ~58,000 pd
• Consolidation initiative with other ship owners ongoing, timing and outcome unclear due to current capital market conditions

Subsequent events

• WilPride delivered on an 8 month time charter contract, expected annualised EBITDA MUSD 23
• Term sheet signed for the full refinancing of WilForce and WilPride, subject to final credit approval, documentation and customary closing conditions
• 90 % of 3rd quarter 2019 booked at an expected TCE* of USD 68,000 pd

*TCE: net freight income including loss of hire insurance divided by the number of calendar days less off-hire days not covered by loss of hire insurance **CBE: All-in cash break even in USD per day including operating expenses, administration expenses, dry-docking and financing costs (estimated)

1. Highlights

2. Financials Q2

3. Market update

4. Summary

Q2 2019 income statement

USD million	Q2'19	Q1'19	2018
Freight income	3.9	9.4	40.0
Voyage related expenses	(1.1)	(1.0)	(5.1)
Net freight income	2.7	8.4	34.8
Other income	6.1	0.9	4.0
Operating expenses	(8.3)	(3.3)	(12.5)
Administration expenses	(0.7)	(1.0)	(3.9)
EBITDA	(0.2)	5.0	22.4
Depreciation	(3.3)	(3.3)	(13.0)
Net finance	(5.1)	(5.1)	(20.9)
Profit/(loss) before tax	(8.6)	(3.4)	(11.4)
Tax	-	-	-
Profit/(loss)	(8.6)	(3.4)	(11.4)

Q2 2019 financial position

USD million	30.06.19	31.03.19	31.12.18
Vessels	356.5	358.9	362.1
Total non-current assets	356.5	358.9	362.1
Trade receivables	0.8	1.6	2.7
Other short term assets	12.8	6.8	6.1
Cash	16.4	18.7	22.5
Total current assets	30.1	27.1	31.4
Total assets	386.6	386.0	393.6
Total equity	103.7	112.2	115.6
Long-term interest bearing debt	-	-	-
Other non-current liabilities	0.4	0.3	0.3
Non-current liabilities	0.4	0.3	0.3
Short-term interest bearing debt	264.1	265.9	266.7
Other current liabilities	18.4	7.5	10.9
Total current liabilities	282.5	273.4	277.6
Total equity and liabilities	386.6	386.0	393.6

Q2 2019 cash flow

USD million	Q2'19	Q1'19	2018
Cash Flows from Operating Activities:
Profit/(loss) before taxes	(8.6)	(3.4)	(11.4)
Income taxes paid	-	-	-
Interest and borrowing costs expensed	5.2	5.2	21.5
Depreciation, amortisation and impairment	3.3	3.3	13.0
Trade receivables, inventory and other short term assets	(2.8)	0.5	(2.2)
Accounts payable, accrued exp. and deferred revenue	8.5	(3.4)	5.7
Net cash provided by / (used in) operating activities	5.6	2.2	26.5
Cash Flows from Investing Activities: Investment in vessels / sale of vessels	(0.9)	-	(11.2)
Net cash provided by / (used in) investing activities	(0.9)	-	(11.2)
Cash Flows from Financing Activities:
Repayment of borrowings	(2.1)	(1.1)	(2.7)
Interest and borrowing costs paid	(4.9)	(5.0)	(19.1)
Net cash provided by / (used in) financing activities	(7.0)	(6.0)	(21.8)
Net changes in cash and cash equivalents	(2.2)	(3.9)	(6.4)
Cash and cash equivalents at start of period	18.7	22.5	29.0
Cash and cash equivalents at end of period	16.4	18.7	22.5

1. Highlights

2. Financials Q2

3. Market update

4. Summary

Spot rates

USD/DAY

• Mild weather in the Far East impacting demand and rates in Q2
  • Average headline assessed rate USD 52,200 pd in H1 2019 vs USD 58,100 in H1 2018
• Charterers positioning for contango and winter demand
  • Multiple contracts for Q3/Q4 2019 delivery concluded in the USD 80s 90s pd

Source: Fearnley LNG

LNG trade

• Export growth of 23 MTPA so far in 2019, mainly from new production capacity started in Q4 2018

• Mild weather in H1 and nuclear restarts reducing demand from Japan and South Korea
• India flat in H1 2019, up 9.1 % in July y-o-y
• Still solid growth in China at 20 % y-o-y; H1 2019 imports of 29 MT, more than FY 2016 at 26 MT
• Europe has massive import and storage capacity. Imports more than doubled in H1 y-o-y, storage levels above 90 %

Source: Clarksons Platou, Energy Aspects

Gas prices

USD/MMBTU

• Global gas prices currently lowest in 10 years, LNG delivered in Far East priced at ~USD 25/bbl oil equivalent
• Forward gas prices supports floating storage
  • At current spot shipping rates cost of 1 month floating storage about USD 0.6/MMBTU
  • Oct 19 Jan 20 spread JKM USD 2.2/MMBTU, NBP USD 2.4/MMBTU

Source: Clarksons Platou, CME

Floating storage

FLOATING STORAGE VESSELS 2017 2018 2019 AVAILABLE VESSELS All basins Pacific Ocean Indian Ocean Atlantic Ocean

• Global hunt for storage ongoing due to contango
  • European storage levels above 90 % in August, the "sink" is filling up….
• In November 2018 35 vessels were employed as floating storage, pushing spot rates to all-time highs (~USD 200,000 pd)
• Lining up for a very interesting winter market in Q4

Source: Fearnley LNG, CME, GIE AGSI

LNG fleet and orderbook

• 28 vessels delivered year to date, 11 further vessels scheduled
• Total fleet 505 vessels > 125' cbm
  • Orderbook is 106 LNGC or 21 %, 28 orders year to date (vs 37 same period in 2018)
  • ~20 % of the fleet is «Commercially challenged» (smaller/less efficient), of these 16 laid up, 2 recycled in 2019 (3 in 2018)
• ~60 steam vessels coming off long-term contracts 2019 2022, modern vessels have economic advantage

Source: Fearnley LNG

LNG production

• 111 MTPA capacity starting up 2019 2024 of which 69 MTPA in the US (~60 %)
  • ~35 % of total trade in 2018 at 325 MT (vs orderbook of 21 %)
  • 44 MTPA FIDs year to date, industry experts expect up to 100 MTPA FID in 2019
• With historical vessel multiplier 1.3x shipping need is about 145 vessels higher ton-mile for US volumes
• More than 800 MTPA are in various stages of planning

Source: Clarksons Platou, Arctic Securities, Fearnley LNG, IGU, Rystad Energy, Company presentations

1. Highlights

2. Financials Q2

3. Market update

4. Summary

Summary

➢ Despite weak start to 2019 due to weather and trade war, fundamentals are expected to improve

• ─ Charterers preparing for winter
• ─ Contango and full tanks in Europe supporting floating storage and long haul shipping
• ─ 8 % annual growth in LNG production
• ─ 7 % annual fleet growth (excluding phase out)
• ➢ Mid- and long-term demand for LNG transportation remains strong
  • ─ Gas is cheap, abundantly available, environmentally friendly and flexible
  • ─ Growing gas demand will trigger further FIDs in 2019 and beyond
  • ─ US supply and Asian demand expected to improve ton-miles
  • ─ LNG as a marine fuel reduces GHG emissions and local pollutants far beyond IMO 2020
• ➢ Awilco LNG
  • ─ Term sheet signed for full refinancing of WilForce and WilPride
  • ─ Q2 2019 weak due to extraordinary events, Q3 already profitable, winter looks promising
  • ─ Consolidation effort still on the agenda
• ➢ 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

www.awilcolng.no

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