Perth, Australia (ABN Newswire) - Liquefied Natural Gas Ltd (ASX:LNG) (OTCMKTS:LNGLY) is pleased to provide the company's latest Quarterly Highlights and Appendix 4C.
Liquefied Natural Gas Limited's (LNGL or the Company) focus continues to be threefold: complete marketing of Magnolia LNG's offtake capacity to progress this project through financing and into construction; finalize Bear Head LNG regulatory permitting, engineering, and the marketing of liquefaction tolling capacity; and preserving our existing liquidity through effective cash management. The LNGL executives and staff are committed to delivering these key objectives.
The Company's total cash position as at 30 September 2016 was A$61.7 million and there is no debt.
The LNG industry is currently challenged by an LNG supply / demand imbalance. However, the Company's business model of mid-scale LNG export projects, using our wholly owned patented OSMR(R) liquefaction process technology, positions the Company for long-term global success due, in part, to our industry leading low cost solutions.
LNGL believes in long-term global demand growth for natural gas and sees the market becoming short supply beginning in 2021/2022. We believe our Company is uniquely positioned to provide relief at the front part of the 2021/2022 demand window reflecting the advanced approval stage of our two North American projects, Magnolia LNG and Bear Head LNG, which combined can deliver up to 16 mtpa of liquefaction capacity into the market in this timeframe and up to 20 mtpa or greater by 2024, under existing permits.
QUARTER HIGHLIGHTS
Magnolia LNG:
- LNGL continues to focus on marketing efforts to secure tolling agreements and examine technical improvements in the OSMR technology and plant modular design to further reduce costs.
- With the receipt of the formal Federal Energy Regulatory Commission (FERC) Order Granting Authorization issued on 15 April 2016, the Magnolia LNG project has been fully authorized to site, construct, and operate facilities for the Magnolia LNG export project. The subsequent processes under the FERC Order are legal in nature, associated with addressing a request for rehearing filed by the Sierra Club within the 30-day statutory period for such actions. FERC is provided under law with 30 days to answer the request for rehearing, at which time they can: a) accept the request; b) deny the request; or c) "toll" the request, which then provides FERC with unspecified additional time to consider and respond. The issuance of a "Tolling Order" is standard practice by the FERC. It is important to recognize that the Rehearing process outlined above is a legal process and is not directly related to the actual initiation of site work. The FERC Order granted on 15 April 2016 provides Magnolia with the fundamental authoriz ation to proceed. LNGL continues to await the FERC's final decision regarding its conclusions on the merits of the rehearing request.
- FERC has issued additional data requests associated with Magnolia LNG's Implementation Plan and initial Site Preparation package. These requests are unrelated to the aforementioned Tolling Order or the rehearing process. Magnolia LNG is diligently and timely responding to these requests for additional information.
Bear Head LNG:
- The Nova Scotia Environment approved Bear Head LNG's Greenhouse Gas and Air Emission Management Plan for its liquefied natural gas facility on the Strait of Canso in Richmond County, Nova Scotia (ASX Release dated 13 July 2016).
- Bear Paw Pipeline Corporation Inc. (Bear Paw), an indirect wholly owned subsidiary of LNGL, received Nova Scotia Utility and Review Board approval to construct a 62.5 km natural gas pipeline from Goldboro, Nova Scotia to the proposed Bear Head LNG liquefied natural gas export facility in Point Tupper, Richmond County, Nova Scotia (ASX Release dated 3 August 2016).
Corporate:
- In July 2016, LNGL announced staff reductions resulting in a more streamlined organisation having a lower, more sustainable fixed cost base. These actions further the Company's commitment to our previously announced cost management strategy (ASX Release dated 21 July 2016).
- On 1 August 2016 Mr Maurice Brand stepped down as an Executive Director with LNGL. Mr Brand was the founder and former Managing Director and Chief Executive Officer of Liquefied Natural Gas Limited, which listed on the ASX in September 2004 (ASX Release dated 29 July 2016).
- LNGL announced that its current non-executive Chairman, Mr Richard J Beresford, plans to step down from the Chairmanship but remain as a non-executive Director on the Company's Board. Subject to his re-election as a director at the Annual General Meeting on 17 November 2016, Mr Paul J Cavicchi shall replace Mr Beresford as Chairman of the Board from that date (ASX Release dated 5 September 2016).
- Mr Andrew Gould was appointed to the position of Joint Company Secretary following the departure of Mr David Gardner. Mr Gould's new role is in addition to his existing role as Group Development Manager (ASX Release dated 5 September 2016).
Security movements:
- On 4 July 2016, 100,000 shares were issued on exercise of options at $0.28 per share. On 4 August 2016, 259,000 shares were issued on exercise of options at an average $0.27 per share. On 5 August 2016, 400,000 shares were issued on exercise of options at $0.28 per share.
- At the date of this report, there are 1,000,000 options outstanding, having an option expiration date of 20 December 2016 with a strike price of A$0.465.
- On 6 July 2016, 6,224,720 Ordinary Shares were issued from conversion of 6,245,402 Performance Rights and 2,752,329 Performance Rights lapsed.
- On 7 September 2016, 5,060,500 Incentive Rights (involving: 3,169,580 Performance Rights and 1,890,920 Retention Rights) were issued.
Financial Position:
During the three-months ended 30 September 2016, net operating cash outflow was A$8.1 million, which is approximately one-half the cash outflow in the June quarter 2016 of A$16.0 million. Management expects net cash outflows to continue to trend lower reflecting execution of the Company's liquidity management plan. Management believes the liquidity management plan remains on course to deliver this goal of liquidity into 2019 but acknowledges there remain risks to realising the goal.
LNGL's total cash balance as at 30 September 2016 was A$61.7 million, which compares to A$71.4 million as at 30 June 2016, reflecting a net reduction in reported cash of A$9.7 million. As disclosed in the Appendix 4C, the total net reduction in cash was A$8.3 million consisting of outflows of $8.1 million relating to operations, an outflow of A$409,000 relating to investing activities, and a net inflow of A$197,000 relating to financing activities. The remainder of the reported reduction in cash relates to an unrealized foreign exchange translation effect of A$1.4 million.
Included in the A$8.3 million of net cash outflow in the three-month period were one-time payments of A$2.5 million relating to the staff reduction occurring in the quarter. LNGL maintains a material portion of its existing cash and cash equivalents denominated in US dollars. The preponderance of forecasted cash outflows will be denominated in US dollars, supporting maintenance of a majority of cash and cash equivalents denominated in US dollars as a foreign exchange risk mitigation strategy. Because LNGL's reporting currency is Australian dollars, the US dollar denominated cash balances are translated to Australian dollars at each balance sheet date, with the net effect reflected as unrealized gain (loss) from translation as a period end-to-period end reconciling item in reported cash balances.
The Company has no debt.
To view the report, please visit:
http://abnnewswire.net/lnk/KZF3Q4UQ
About Liquefied Natural Gas Ltd:
Liquefied Natural Gas Limited (ASX:LNG) (OTCMKTS:LNGLY) (LNGL) is an ASX listed company whose portfolio consists of 100% ownership of the following companies:
- Magnolia LNG, LLC (Magnolia LNG), a US-based subsidiary, which is developing an 8 mtpa or greater LNG export terminal, in the Port of Lake Charles, Louisiana, USA;
- Bear Head LNG Corporation Inc. (Bear Head LNG), a Canadian based subsidiary, which is developing an 8 mtpa or greater LNG export terminal in Richmond County, Nova Scotia, Canada with potential for further expansion;
- Bear Paw Pipeline Corporation Inc. (Bear Paw), proposing to construct and operate a 62.5 km gas pipeline lateral to connect gas supply to Bear Head LNG;
- Gladstone LNG Pty Ltd, a subsidiary which plans to develop the 3.5 mtpa Fisherman's Landing LNG (FLLNG) project at the Port of Gladstone in Queensland, Australia; and
- LNG Technology Pty Ltd, a subsidiary which owns and develops the Company's OSMR(R) LNG liquefaction process, a mid-scale LNG business model that plans to deliver lower capital and operating costs, faster construction, and improved efficiency, relative to larger traditional LNG projects.
Source:
Liquefied Natural Gas Ltd
Contact:
Mr. Greg Vesey
Managing Director & CEO
LNG Limited
T: +1-713-815-6900
T: +61-8-9366-3700
E: LNG@LNGLimited.com.au
www.lnglimited.com.au
