Magnolia LNG quarterly highlights:
- On 5 May 2017, Magnolia LNG received its Notice to Proceed (NTP) from the Federal Energy Regulatory Commission (FERC) to commence initial site preparation activities.
- On 13 June 2017, Magnolia LNG announced a further extension of the validity period of the current binding EPC contract with KSJV through 31 December 2017.
- LNGL continued to examine technical improvements in the OSMR® technology and plant modular design to further reduce costs.
- On 16 June 2017, John Baguley was appointed Chief Operating Officer.
- As disclosed 12 July 2017, 2 532 823 Performance Rights lapsed at or around 30 June 2017. Performance Rights totalling 2 274 137 lapsed as performance conditions were not met during the measurement period and 258 686 Performance Rights lapsed as a participant ceased employment with the Company and was no longer eligible to participate.
- Effective 10 July 2017, 5 205 000 Incentive Rights were issued, consisting of a) 3 123 000 Performance Rights and b) 2 082 000 Retention Rights. These Incentive Rights were issued to employees pursuant to the Incentive Rights Plan summarised in 2016 Notice of Annual General Meeting and released to ASX on 18 October 2016. No Exercise price or other amount is payable on vesting of Incentive Rights.
During the three-months ended 30 June 2017, net operating cash outflow was A$4.5 million, which compared with the net operating cash outflow of A$7.1 million for the three-months ended 31 March 2017. Management believes the liquidity management plan remains on course to deliver its goal of liquidity into 2019 but acknowledges there remain risks to realising the goal.
LNGL’s total cash balance as at 30 June 2017 was A$44.5 million, which compares to A$49.3 million as at 31 March 2017, reflecting a net reduction in reported cash of A$4.8 million. The change in reported cash between periods reflected net cash outflows of A$4.5 million and a noncash reduction of A$0.3 million from currency translation effect relating to movements in exchange rates associated with cash held in denominations other than the Australian dollar (primarily US dollars).
LNGL maintains a material portion of its existing cash and cash equivalents denominated in US dollars. The preponderance of forecasted cash outflows is 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 unrealised gain (loss) from translation as a period end-toperiod end reconciling item in reported cash balances. The Company has no debt.
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