FLEX LNG 1Q2011 F/S and June 2011 Corporate Presentation + IOC/Pacific LNG share | IOC Message Board Posts


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Msg  8065 of 13357  at  6/23/2011 1:56:12 PM  by

ValueSleuth


FLEX LNG 1Q2011 F/S and June 2011 Corporate Presentation + IOC/Pacific LNG share

 The latest FLEX LNG 1Q2011 Financial Statements (link: http://www.flexlng.com/publish_files/Q1_11_press_release_-_May.pdf ) and  June 2011 Corporate Presentation (link: http://www.flexlng.com/publish_files/Investor_Update_June_2011.pdf  ) provide a wealth of information on the IOC LNG project and relationship between the parties, as well as a substantial amount of information about the dealings between FLEX LNG and Samsung.
 
It is interesting to note that FLEX's revised deal -- to apply all funds advanced for several delayed hulls to the IOC project -- is contingent on reaching FID by December 15, 2011 -- not that it couldn't be revised if necessary.  However, it could well be a target date marker in the sand for all parties to shoot at.
 
With respect to the FLEX LNG Financial Statements, note that they are in US Dollars.
 
On the other hand, the option that IOC and Pacific LNG got for shares in FLEX were priced in NOK.  Currently 1 NOK is equivalent to about $.18.  Therefore, for the 11,315,080 shares currently owned by IOC and Pacific LNG (50-50?) which is about 9.1% of FLEX LNG, they paid about $9.5 million based on a NOK 4.60 price of FLEX's shares some time ago.  The current price of FLEX's shares is NOK 6.50, so IOC and Pacific LNG have already picked up 41% appreciation on their investment.
 
Per Henry Aldorf, there is a lot more appreciation available.  For instance, the book value shown on FLEX LNG's balance sheet shows Equity of some US $427 million, over 100% represented by the Samsung deposits, the value of which is likely to be reached sooner or later by the value of the LNG vessel.  The 9.1% holding should therefore be worth at some point 4 times more than was paid for it. 
 
In addition, there are more shareholdings to be granted to IOC and Pacific LNG upon reaching FID and upon other post-FID milestones, if the financial guarantees are used by FLEX LNG.
 
Connect the dots.
 
ValueSleuth


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