Golar LNG's $500M Debt Offering and Strategic Positioning in the LNG Sector

Golar LNG Limited's recent $500 million convertible senior notes offeringGolar LNG Limited Announces Proposed Offering of $500^[1] represents a pivotal moment in its capital structure strategy, balancing shareholder returns with ambitious growth in the floating liquefied natural gas (FLNG) sector. The offering, priced at a 2.75% coupon with a 2030 maturity, provides the company with critical liquidity while embedding flexibility to manage dilution risksGolar LNG (NASDAQ:GLNG) Stock Rating Upgraded by Wall Street Zen^[2]. This analysis evaluates how the capital raise impacts Golar's financial flexibility and long-term positioning in a sector poised for structural growth.

Financial Implications: Leverage and Flexibility

The debt offering adds $500 million to Golar's balance sheet, with proceeds allocated to repurchasing up to 2.5 million shares and funding FLNG expansionGolar LNG Limited Announces Proposed Offering of $500^[1]. As of September 2025, Golar's long-term debt stood at €1,245.4 million, up from €834.7 million in MarchGolar LNG (STU:G20) Long-Term Debt^[3]. While the debt-to-equity ratio is reported at 0.63Golar LNG (GLNG) Current Portion of Long Term Debt^[4], the company's enterprise value of $5.648 billion and market capitalization of $4.22 billion suggest a moderate leverage profileGolar LNG Ltd (GLNG) Intrinsic Value Analysis^[5]. The convertible notes, with their 40% conversion premium over the June 25, 2025, share price, offer a buffer against immediate dilutionGolar LNG Limited Announces Proposed Offering of $500^[1].

The USD/EUR exchange rate, currently hovering near 0.84 EUR per USD1 USD to EUR Exchange Rates (18 Sep 2025)^[6], further cushions Golar's debt servicing costs. Converting the $500 million offering to EUR at this rate adds approximately €421 million to its debt, a manageable increment given its operational cash flows from long-term FLNG chartersGolar LNG Limited: Valuation Ratios, Analysts' Forecasts^[7]. The company's ability to settle the notes in cash, shares, or a combination thereof provides strategic flexibility, particularly if its stock price outperforms the $41.24 level (its September 2025 price)Golar LNG Ltd (GLNG) Intrinsic Value Analysis^[5].

Strategic Use of Proceeds: Share Buybacks and FLNG Expansion

The allocation of proceeds underscores Golar's dual focus on shareholder value and growth. Share repurchases, capped at 2.5 million shares, align with intrinsic value estimates of $47 per share—a 14% upside from current levelsGolar LNG Ltd (GLNG) Intrinsic Value Analysis^[5]. This suggests the buybacks could enhance earnings per share (EPS) while signaling management's confidence in undervaluation.

Simultaneously, the funds will accelerate FLNG projects, including a potential fourth unit and conversion/redployment costsGolar LNG Limited Announces Proposed Offering of $500^[1]. Golar's recent 20-year, 5.95 mtpa FLNG agreement in ArgentinaPress releases 2025 – Golar LNG^[8] exemplifies its strategic pivot toward large-scale, long-term contracts. These projects, combined with the commercialization of the FLNG Gimi, position Golar to capitalize on the global shift toward FLNG for remote gas resources—a trend driven by environmental and economic advantages over traditional LNG infrastructurePress releases 2025 – Golar LNG^[8].

Market Positioning and Sector Dynamics

Golar's debt offering reflects broader industry dynamics. The LNG sector is witnessing a surge in FLNG adoption, with companies leveraging floating technology to access unconventional reserves. Golar's 20-year Argentina contract, one of the largest FLNG projects globally, ensures stable cash flows critical for servicing new debtPress releases 2025 – Golar LNG^[8]. Meanwhile, institutional ownership at 92.21%Golar LNG (GLNG) Current Portion of Long Term Debt^[4] and a recent stock rating upgrade to “hold”Golar LNG (NASDAQ:GLNG) Stock Rating Upgraded by Wall Street Zen^[2] highlight investor confidence in its strategic direction.

However, risks persist. The company's debt-to-equity ratio could rise if the $75 million over-allotment option is exercisedGolar LNG Limited Announces Proposed Offering of $500^[1], and currency fluctuations could impact EUR-denominated liabilities. Additionally, while the 2.75% coupon is favorable, rising interest rates in 2025 may pressure future debt costs.

Conclusion: Balancing Growth and Prudence

Golar LNG's $500 million convertible notes offering is a calculated move to strengthen its balance sheet while funding high-conviction growth initiatives. The proceeds' allocation to share repurchases at a discount to intrinsic value and FLNG projects with long-term cash flow visibility positions the company to navigate sector volatility. With a moderate leverage profile and a strategic focus on FLNG—a technology central to the LNG industry's evolution—Golar appears well-positioned to deliver value to shareholders over the medium to long term.