Golar LNG has appointed Goldman Sachs International to explore strategic alternatives, including a potential sale of the company. This formal review process, initiated by the board, aims to accelerate the growth of its floating liquefied natural gas (FLNG) business and maximize shareholder value.

Strategic Review Details

The review will involve a comprehensive evaluation of Golar's FLNG technology, its long-term contract backlog, and its growth pipeline. The alternatives under consideration include a sale of the entire company, a merger or other business combination, asset sales, or further optimization of the corporate structure. There is no set timetable for the conclusion of this process.

Background and Rationale

The move follows repeated statements from the company's leadership that the market undervalues Golar. The chairman has lamented that while the value of existing contracts is recognized, the market largely ignores the value of contract extension options and, more importantly, the value of the "Golar franchise." This franchise refers to the company's eight-year track record of successful FLNG operations in Cameroon and Mauritania-Senegal, which has established it as a market leader. The chairman emphasized that one of the world's largest oil companies has approached Golar to act as its service arm for future FLNG activities, underscoring this franchise value.

Market Context and Valuation

The chairman has stated that a more accurate market valuation may only materialize when cash begins to flow from its contracts in Argentina in 2028. He also revealed that several years ago, the company received unsolicited offers significantly higher than the share price at the time, but the board chose not to sell. The current strategic review is presented as a proactive step to address the perceived persistent undervaluation and improve value for shareholders.