FLEX/SHI Update

[Tree]

Oh what could have been.  Somare's illness and ensuing PNG political struggle has a silver lining for IOC and crap brown one for FLEX.  Kinda hard to battle SHI I'd imagine.

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COMPANY UPDATE 19 DEC 2012
December 19, 2012

FLEX LNG (Oslo Axess: FLNG) would like to provide shareholders with an update regarding the status of ongoing discussions for reallocation of its capital invested with Samsung Heavy Industries (“SHI&rdquo.

Road Town, Tortola, 19 December 2012. FLEX LNG (Oslo Axess: FLNG) would

like to provide shareholders with an update regarding the status of ongoing

discussions for reallocation of its capital invested with Samsung Heavy Industries

(“SHI&rdquo.

FLEX LNG disclosed in the Q3 2012 Financial Report that it is prepared to initiate

alternative options to secure the net paid-in capital in the event an agreement

with SHI for the alternative deployment of capital is not reached within 4Q 2012.

As of 18 December 2012 no agreement has been reached with SHI regarding the

alternative deployment of capital and as a consequence FLEX LNG has initiated

actions deemed appropriate to secure the net paid-in capital. The company has

for some time, in close collaboration with its Board of Directors and external legal

advisors, prepared for this scenario. A commercial resolution to the deadlock is

preferred, but in absence of such, the company will take all steps necessary to

secure shareholder value.

During the 2nd half of 2012 FLEX LNG has significantly reduced the company’s

cash expenditure. This includes closure of the company’s offices in Singapore and

Oslo and a further downsizing of the organisation.

FLEX LNG will provide additional information to its shareholders during January

2013.

[Justin94360]

Must really piss them off when the company that threw the spanner in the works for them is actually massively in favour of the technology: Shell and Technip Samsung strengthen FLNG ties Monday, 17 December 2012 SHELL and the Technip Samsung Consortium has signed a heads of agreement to enhance collaboration on the design, engineering, procurement, construction and installation of future floating LNG facilities. An artist's impression of Shell's Prelude FLNP. The agreement builds on a relationship that started in 2009 to ensure the parties could capitalise on insights gleaned from the design and construction of Shell’s Prelude FLNG. It is designed to drive a culture of joint delivery, continuous improvement and ensure greater value from the collaboration for all parties. Technip chairman and chief executive officer Thierry Pilenko said Shell’s FLNG vision and ambition was gaining momentum and Technip, with its partner Samsung Heavy Industries, wanted to support the additional projects that could be realised under this agreement. His views were echoed by Samsung Heavy Industries president and CEO Dae Young Park. “As CEO of Samsung Heavy Industries, I am very confident that Samsung is ready to construct multiple FLNGs at its Geoje shipyard and is fully committed to achieving the highest quality and on-time delivery of Shell’s FLNG facilities in accordance with the spirit of the partnership,” Park said. Shell expects global natural gas demand to increase by 60% from 2010 to 2013, reaching 25% of the global primary energy mix and, within that, strong growth in LNG. Floating LNG allows the development of gas resources ranging from clusters of smaller more remote fields to potentially larger fields via multiple facilities where an onshore development is not viable. This can mean faster, cheaper and more flexible development and deployment approaches for resources that were previously uneconomic or constrained by technical or other risks, helping bring more natural gas to market. Shell projects and technology director Dr Matthias Bichsel said Shell and TSC were forging a strong alliance to help ensure they were well positioned to deliver FLNG solutions across a wide range of scenarios. “Central to this portfolio expansion are technology designs that cater for a wider range of gas fields,” he said. “In locations where liquid production is low, for example, Shell’s FLNG Lean technology would be able to process additional gas and produce more LNG, opening up new business opportunities for countries looking to develop their gas resources.”

[Tree]

"Must really piss them off when the company that threw the spanner in the works for them is actually massively in favour of the technology."

No doubt Justin, that is justifiable PO-edness.  Now if Shell, as PNG preferred LNG operator, is forced to be high bidder in Gulf LNG, that is a bit of bittersweetness for FLEX/EWC/Mitsui/IOC.

And, per a text from philstar.com,  we never know, perhaps T-2 or 2nd or 3rd Gulf LNG module could have EWC/FLEX afterall.  A portfolio of LNG projects are in IOC's future.

[Justin94360]

"we never know, perhaps T-2 or 2nd or 3rd Gulf LNG module could have EWC/FLEX afterall"

Was thinking along those lines Tree especially as IOC is a large shareholder in FLEX.
Latest share price 2.5 NOK, think it was around 8 NOK when the IOC/EWC/FLEX deal was announced. Could be one to watch if talk of it being in the mix for T-2 etc

[Palm]

Saw this this AM and I would guess they will try some sort of offering or at least float the idea (no pun intended). They have a very strong llarge investor base and I'm sure they have already received a lot of advice. IMO this is another instance of some porr handling by PNG where they once supported the idea of FLNGs and now have backed away. Petromin had the NEC approve the technology in Dec 2010 and IOC haddiscussions with Petromin about using the Flex/SHI ship, but Petromin wanted too much control and discussions fell apart; as well with the idea of using Petromin's Daewoo FLNG. So possible bad investment to purchase a share of Flex. We'll have to see how this all turns out.