SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

 

This Report on Form 6-K for the period ended June 30, 2017 contains certain forward-looking statements concerning future events and our operations, performance and financial condition, including, in particular, the likelihood of our success in developing and expanding our business. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” “projects,” “forecasts,” “will,” “may,” “potential,” “should,” and similar expressions are forward-looking statements. These forward-looking statements reflect management’s current views only as of the date of this Report and are not intended to give any assurance as to future results. As a result, unitholders are cautioned not to rely on any forward-looking statements.

 

Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to:

 

 

Forward looking statements in this Report on Form 6-K are based upon estimates reflecting the judgment of management and involve known and unknown risks and uncertainties, many of which are beyond our control. These forward-looking statements should be considered in light of various important factors, including those set forth in this report under the caption “Risk Factors” and in our Annual Report on Form 20-F for the year ended December 31, 2016 (our “2016 Annual Report”) under the caption “Item 3 — Key Information — Risk Factors.” All forward-looking statements included in this Report on Form 6-K are made only as of the date of this Report on Form 6-K. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement. We do not intend to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Unless the context otherwise requires, references in this report to “Golar Partners,” the “Partnership,” “we,” “our,” “us” or similar terms refer to Golar LNG Partners LP, a Marshall Islands limited partnership, or any one or more of its subsidiaries, or to all of such entities. Those statements in this section that are not historical in nature should be deemed forward-looking statements that are inherently uncertain. See “Important Information Regarding Forward-Looking Statements” on page 5 for a discussion of the factors that could cause actual results to differ materially from those projected in these statements.

 

This section should be read in conjunction with the interim financial statements presented in this report, as well as the historical consolidated financial statements and notes thereto of Golar LNG Partners LP included in our 2016 Annual Report.

 

We acquired from Golar LNG Limited (“Golar”) all of the shares of Tundra Corp., the disponent owner and operator of the Golar Tundra (“Tundra Corp”), in May 2016. Pursuant to an agreement entered into between us and Golar in connection with the acquisition of the Golar Tundra, we had the right to require Golar to repurchase the shares of Tundra Corp (the “Tundra Put Right”), and consequently Golar continued to consolidate Tundra Corp and the results of Tundra Corp are not reflected in our financial statements. In May 2017, we exercised the Tundra Put Right. Please see Recent Developments below for further details.

General

 

We were formed by Golar, a leading independent owner and operator of LNG carriers, to own and operate FSRUs and LNG carriers under long-term charters that generate long-term stable cash flows. As of June 30, 2017 , our fleet consisted of six FSRUs and four LNG carriers. We intend to make additional accretive acquisitions of FSRUs and LNG carriers with long-term charters from Golar and third parties in the future as market conditions permit. Golar is also developing a floating liquefaction business and currently has one FLNG, the Hilli. On August 15, 2017, we entered into an agreement to purchase 50% of the common units in Hilli LLC, the indirect owner of the Hilli , subject to certain closing conditions, as described more fully below under “ — Recent Developments —Hilli Acquisition”.

 

Recent Developments

Since April 1, 2017, the significant developments that have occurred are as follows:

Golar Tundra

On May 23, 2016, we acquired from Golar (the “Tundra Acquisition”) all of the shares of Tundra Corp. The Golar Tundra was expected to commence operations in order to serve the Ghana (Tema) LNG Project in the second quarter of 2016. However, due to delays in the Ghana (Tema) LNG Project, this has not yet occurred, because the required infrastructure, including a connecting pipeline, jetty and breakwater, are not yet in place. The Golar Tundra remains anchored off the coast of Ghana and the project has made limited progress. In light of this, on May 30, 2017, we elected to exercise the Tundra Put Right to require Golar to repurchase Tundra Corp at a price equal to the original purchase price (the “Tundra Put Sale”) we paid in our acquisition of Tundra Corp (the “Purchase Price”). In connection with the exercise of the Tundra Put Right, we and Golar have entered into an agreement pursuant to which we have agreed to sell Tundra Corp to Golar on the date of the closing of the Tundra Put Sale (the “Put Sale Closing Date”) in return for Golar's promise to pay an amount equal to approximately $107 million (the “Deferred Purchase Price”) plus an additional amount equal to 5% per annum of the Deferred Purchase Price (the “Additional Amount”). The Deferred Purchase Price and the Additional Amount shall be due and payable by Golar on the earlier of (a) the date of the closing of the Hilli Acquisition and (b) March 31, 2018. We agreed to accept the Deferred Purchase Price and the Additional Amount in lieu of a cash payment on the Put Sale Closing Date in return for an option (which we have exercised) to purchase an interest in the Hilli .

Hilli Acquisition

On August 15, 2017, Golar Partners Operating LLC, our wholly owned subsidiary, entered into a purchase and sale agreement (the “Hilli Purchase Agreement”) for the Hilli acquisition from Golar and affiliates of Keppel Shipyard Limited (“Keppel”) and Black and Veatch (“B&V”) of common units (the “Acquired Interests”) in Hilli LLC, which will, on the closing date of the Hilli Acquisition, indirectly own the Hilli . The Acquired Interests represent the equivalent of 50% of the two liquefaction trains, out of a total of four, that will be contracted to Perenco Cameroon (“Perenco”), Societe Nationale de Hydrocarbures (“SNH”) and the Republic of Cameroon (together with Perenco and SNH, the “Customer”) under an eight-year liquefaction tolling agreement (the “Liquefaction Tolling Agreement”). The purchase price for the Acquired Interests is $658 million less net lease obligations under the financing facility for the Hilli (the “Hilli Facility”), which are expected to be between $468 and $480 million. Concurrently with the execution of the Hilli Purchase Agreement, we paid a $70 million deposit to Golar, upon which we will receive interest at a rate of 5% per annum.

The closing of the Hilli Acquisition is subject to the satisfaction of certain closing conditions which include, among others, the execution and delivery of the Liquefaction Tolling Agreement by the parties thereto, receiving the consent of the lenders under the Hilli Facility, the closing of the previously announced Tundra Put Sale (described above), the delivery to and acceptance by the Customer of the Hilli , the commencement of commercial operations under the Liquefaction Tolling Agreement and the formation of Hilli LLC and the related Pre-Closing Contributions as described further below. In addition, in connection with the closing, we expect to provide a several guarantee of 50% of Golar Hilli Corp’s ("Hilli Corp") indebtedness under the Hilli Facility.

Prior to the closing of the Hilli Acquisition, Golar, Keppel and B&V will contribute their equity interests in Hilli Corp, the entity that owns the Hilli , to the newly formed Hilli LLC (the “Pre-Closing Contributions”) in return for equity interests in Hilli LLC. Membership interests in Hilli LLC will be represented by three classes of units: Common Units (“Hilli Common Units”); Series A Special Units (“Series A Units”); and Series B Special Units (“Series B Units”).

The operating agreement of Hilli LLC, which is expected to be entered into effective as of the Closing Date, will provide that within 60 days after the end of each quarter, Golar, in its capacity as the managing member of Hilli LLC shall determine the amount of Hilli LLC’s available cash and appropriate reserves (including cash reserves for future maintenance capital expenditures, working capital and other matters), and Hilli LLC shall make a distribution to the members of Hilli LLC (the “Members”) of the available cash, subject to such reserves. Hilli LLC shall make distributions to the Members when, as and if declared by Golar, provided, however, that no distributions may be made on the Hilli Common Units on any distribution date unless (i) Series A Distributions (defined below) for the most recently ended quarter and any accumulated Series A Distributions in arrears for any past quarter have been or contemporaneously are being paid or provided for and (ii) Series B Distributions (defined below) for the most recently ended quarter and any accumulated Series B Distributions in arrears for any past quarter have been or contemporaneously are being paid or provided for.

The Series A Units shall be entitled to receive the “Series A Distributions,” which means, with respect to any quarter, 100% of any Incremental Perenco Revenues received by Hilli Corp during such quarter. “Incremental Perenco Revenues” generally means:

Series B Units shall be entitled to receive the “Series B Distributions,” which means, with respect to any quarter, an amount equal to 95% of Revenues Less Expenses received by Hilli Corp during such quarter. “Revenues Less Expenses” generally means:

Upon the closing of the Hilli Acquisition, which is expected to occur on or before April 30, 2018, Golar, Keppel and B&V will sell 50% of the Hilli Common Units to us in return for the payment by us of the net purchase price of between approximately $178 and $190 million. We will apply the $107 million Deferred Purchase Price receivable from Golar in connection with the Tundra Put Sale and the $70 million deposit referred to above against the net purchase price and will pay the balance with cash on hand.

We do not expect to initially consolidate Hilli LLC or Hilli Corp and so will reflect our share of net income on our income statement as "equity in net earnings of affiliates."

Our board of directors (our “Board”) and the conflicts committee of the Board (the “Conflicts Committee”) have approved the Hilli Acquisition and the purchase price. The Conflicts Committee retained a financial advisor to assist with its evaluation of the Hilli Acquisition.

The description of the Hilli Purchase Agreement contained in this report is a summary and is qualified in its entirety by reference to the terms of the Hilli Purchase Agreement, which is filed as an exhibit to this report.

Liquefaction Tolling Agreement

In October 2015, Hilli Corp entered into a binding term sheet for FLNG tolling services with the Customer for the development of the Hilli Project. The binding term sheet has been converted into a Liquefaction Tolling Agreement and we expect that the Liquefaction Tolling Agreement will be executed by September 30, 2017. The Hilli is scheduled to provide liquefaction services under the Liquefaction Tolling Agreement for a term of the earlier of (i) eight years from the date the delivered Hilli is accepted by the Customer (the “Acceptance Date”), or (ii) at the time of receipt and processing by the Hilli of 500 billion cubic feet of feed gas. The commissioning process of testing the Hilli and preparing it for service is expected to commence in November 2017, and under the Liquefaction Tolling Agreement, the commercial start date to begin providing liquefaction services is the earlier of 180 days after the scheduled commissioning start date or the Acceptance Date, as may be extended by the parties. Under the terms of the Liquefaction Tolling Agreement, the Hilli will be required to make available 1.2 million tonnes of liquefaction capacity per annum, which capacity will be spread evenly over the course of the contract year. The Customer will pay Hilli a monthly tolling fee, which will fluctuate to a certain extent in relation to the price of Brent crude. We expect that under the Liquefaction Tolling Agreement, the Customer will have an option to increase liquefaction capacity. We expect that the Liquefaction Tolling Agreement will provide certain termination rights to the Customer and Hilli Corp. The Liquefaction Tolling Agreement will provide for the payment by Hilli Corp of penalties of up to $400 million in the event of Hilli Corp’s underperformance or non-performance. If the Customer elects to terminate the Liquefaction Tolling Agreement prior to the second anniversary of the Acceptance Date, the Customer will be obligated to pay Hilli Corp $400 million, with termination payments decreasing if the Liquefaction Tolling Agreement is terminated after the second anniversary.

Charter Amendments

In July 2017, we agreed with the charterer of the Golar Freeze FSRU, Dubai Supply Authority ("DUSUP") certain amendments to the existing time charter that was due to end in May 2020. We and DUSUP have agreed to shorten the charter by one year (so that it will now expire in 2019) and to remove DUSUP's termination for convenience rights and extension option rights (which ran to 2024). We have the right to terminate our obligations under the charter while continuing to receive the capital element of the charter hire until the end of the new charter period in April 2019.

Golar Spirit Early Termination

In July 2017, we received an early termination fee from Petrobas for the early termination of the Golar Spirit charter. The charter, which had an original end date of August 2018, was terminated on June 23, 2017. The amount received from Petrobras was net of withholding tax paid to the Brazilian tax authorities. The Golar Spirit is currently in lay-up. If we are unable to employ the Golar Spirit under a suitable replacement charter by the 90th day following the Early Termination Date, we will be required to provide additional security to the lenders under our $800 million credit facility in the form of $40 million in cash collateral.

Financing

On May 8, 2017, we drew down $125.0 million of the $150.0 million available revolving credit facility.

Cash Distributions

On May 12, 2017, we paid a quarterly cash distribution with respect to the quarter ended March 31, 2017 of $0.5775 per unit, amounting to $40.8 million in the aggregate. On August 14, 2017, we paid a quarterly cash distribution with respect to the quarter ended June 30, 2017 of $0.5775 per unit, amounting to $40.8 million in the aggregate.

^{(1)      TCE is a non-GAAP financial measure. See “Non-GAAP Measure” for a computation of TCE.}  

 

Operating revenues: Total operating revenues increased by $24.2 million to $136.0 million for the three months ended June 30, 2017 compared with $111.8 million for the same period in 2016 . This is primarily due to:

The average daily time charter equivalent rate (“TCE”), for the three months ended June 30, 2017 increased by $25,800 to $147,700 compared to $121,900 for the same period in 2016, primarily as a result of recognition of the charter termination fee for Golar Spirit and an increased hire rates from the NR Satu and the Golar Winter .

 

Vessel operating expenses: The increase of $1.7 million in vessel operating expenses to $18.6 million for the three months ended June 30, 2017 , as compared to $16.9 million for the three months ended June 30, 2016 was primarily due to:

This was partially offset by:

 

Administrative expenses:  Administrative expenses increased by $0.5 million to  $2.2 million  for the three months ended  June 30, 2017 , compared to  $1.7 million for the six months ended June 30, 2016 .

We are party to a management and services agreement with Golar Management, a wholly owned subsidiary of Golar, under which Golar Management provides certain management and administrative services to us and is reimbursed for costs and expenses incurred in connection with these services at a cost plus 5% basis (the “Management and Administrative Services Agreement”). Under this arrangement, for the three months ended June 30, 2017 , we incurred charges of $1.1 million. For the three months ended June 30, 2016, management fees charged by Golar Management to us in relation to management and administrative services and technical services were recorded under both administrative expenses and vessel operating expenses respectively. From the second half of 2016, as a result of Golar's in-housing of technical operations (as a result of Golar Management Norway becoming a 100% owned subsidiary of Golar), we have subsequently accounted for more of the management fees charged by Golar Management under administrative expenses.

Depreciation and amortization : Depreciation and amortization increased by $1.3 million to $26.1 million for the three months ended June 30, 2017 , compared to $24.9 million for the same period in 2016 . This was primarily due to $1.1 million of incremental drydock amortization on the Golar Winter following the decision to accelerate her planned drydocking from 2018 to the second half of 2017.

Interest expense: Interest expense decreased by $1.1 million to $18.9 million for the three months ended June 30, 2017 , compared to $19.9 million for the three months ended June 30, 2016 . This was principally due to:

This was partially offset by:

Other financial items: Other financial items reflect losses of $7.7 million and $10.2 million for the three months ended June 30, 2017 and 2016 , respectively, as set forth in the table below:

 

 

As of June 30, 2017 , we had an interest rate swaps portfolio with a notional value of $1,358.5 million (excluding the cross-currency interest rate swap related to our Norwegian Kroner (“NOK”) denominated bonds). The decrease in mark-to-market losses by $3.1 million was due to the increase in long-term swap rates during the three months ended June 30, 2017 . We designated 6% of these swaps as hedging instruments.

In 2012, in connection with issuance of our 2012 High Yield Bonds, to hedge our exposure, we entered into a cross currency interest rate swap with a notional value of $227.2 million (NOK 1.3 billion). This was initially designated as a cash flow hedge and accordingly the related retranslation gains and losses were previously accounted for within other comprehensive income.  During 2017, we commenced the repurchase of 2012 High Yield Bonds in advance of their maturity. The majority were acquired in the first quarter of 2017 with smaller piecemeal acquisitions thereafter. Accordingly, effective January 1, 2017, this swap was de-designated as a cash flow hedge. As a consequence of cessation of hedge accounting on the swap in 2017, we have recognized an unrealized foreign exchange loss of $1.1 million for the three months ended June 30, 2017, which relates to the remaining 2012 High Yield Bonds.

As part of the transaction with Golar and our general partner in October 2016 pursuant to which we exchanged our old incentive distribution rights (“IDRs”) for new IDRs and the issuance of new general partner units and common units, we agreed to issue an aggregate of up to 748,592 additional common units and up to 15,278 additional general partner units in the future (collectively, the "Earn-Out Units") subject to certain conditions. These Earn Out units have been accounted for as a derivative. Accordingly, we have recognized a mark-to-market gain of $0.5 million related to these Earn-Out Units for the three months ended June 30, 2017.

Income taxes: The tax charge for the three months ended June 30, 2017 included (i) corporate income taxes in respect of our operations in the United Kingdom, Brazil and Kuwait; (ii) withholding taxes and interest and penalties primarily on withholding taxes in respect of our operations in Indonesia; and (iii) utilization of losses against our taxable profits in Indonesia and Jordan. We do not currently incur any corporate income tax in respect of our operations in Indonesia and Jordan given the availability of brought forward tax losses which can be utilized against taxable profits.

Taxes during the three months ended June 30, 2017 decreased by $1.3 million to $4.7 million compared to $6.0 million in the same period in 2016 . The decrease was mainly attributable to withholding taxes and interest and penalties primarily on withholding taxes in respect of our Indonesian operations in 2016. In 2016, the tax audits for our Indonesian operations for the years 2012 and 2013 were re-opened and concluded by the local tax authorities. The conclusion of the tax audits resulted in recognition of a provision of $2.3 million to cover penalties and interest on certain taxes for the periods 2012 to June 30, 2016. See note 7 to our unaudited condensed consolidated financial statements.

Non-controlling interest: Non-controlling interest refers to our 40% interest in the  Golar Mazo . In addition, since our entry into a sale and leaseback arrangement with a wholly-owned subsidiary (“Eskimo SPV”) of China Merchants Bank Leasing (“CMBL”) in November 2015 relating to the  Golar Eskimo , we have consolidated the Eskimo SPV into our results. Thus, the equity attributable to CMBL is included in our non-controlling interest.

 

Six Month Period Ended June 30, 2017 Compared with the Six Month Period Ended June 30, 2016

 

The following table presents details of our consolidated revenues and expense information for the six months ended June 30, 2017 compared to the six months ended June 30, 2016 :

 

^{(1)   TCE is a non-GAAP financial measure. See “Non-GAAP Measure” for a computation of TCE.}  

 

Operating revenues: Total operating revenues increased by $24.5 million to $237.4 million for the six months ended June 30, 2017 , compared to $212.8 million for the same period in 2016 . This is due to:

This was partially offset by:

The increase of $18,500 in the average daily TCE for the six months ended June 30, 2017 to $135,300 compared to $116,800 for the same period in 2016 , is primarily a result of recognition of the charter termination fee for Golar Spirit and an increased hire rates for the NR Satu , Golar Winter and Golar Spirit . In addition, the Golar Maria operated for a full six months in 2017 compared to approximately five months in the same period in 2016 as result of her scheduled drydocking.

 

Vessel operating expenses: The increase of $2.6 million in vessel operating expenses to $35.7 million for the six months ended June 30, 2017 as compared to $33.1 million for the six months ended June 30, 2016 , was due mainly to:

This was partially offset by a $1.9 million decrease in vessel operating costs in the six months ended June 30, 2017 from the  Golar Freeze , the Golar Spirit and the Golar Winter  due to lower repairs and maintenance.

Administrative expenses:  Administrative expenses increased by $1.2 million to  $4.8 million  for the six months ended  June 30, 2017 , compared to  $3.6 million for the six months ended June 30, 2016 .

Under the Management and Administrative Services Agreement, we incurred charges of $2.6 million for the six months ended June 30, 2017 . For the six months ended June 30, 2016, management fees charged by Golar Management to us in relation to management and administrative services and technical services were recorded under both administrative expenses and vessel operating expenses respectively. From the second half of 2016, as a result of Golar's in-housing of technical operations, we have subsequently accounted for more of the management fees charged by Golar Management under administrative expenses.

Depreciation and amortization : Depreciation and amortization increased by $1.0 million to $50.9 million for the six months ended June 30, 2017 compared to $49.9 million for the same period in 2016 primarily due to $1.0 million of incremental drydock amortization on the Golar Winter following the decision to accelerate her planned drydocking from 2018 to the second half of 2017.

 

Interest expense: Interest expense increased by $3.5 million to $37.1 million for the six months ended June 30, 2017 , compared to $33.6 million for the six months ended June 30, 2016 . This was principally due to:

This was partially offset by:

Other financial items: Other financial items reflect losses of $14.6 million and $30.9 million for the six months ended June 30, 2017 and 2016 , respectively, as set forth in the table below:

 

As of June 30, 2017 , we had an interest rate swaps portfolio with a notional value of $1,358.5 million (excluding the cross-currency interest rate swap related to our NOK denominated bonds). The decrease in mark-to-market losses by $23.0 million was due to the increase in long-term swap rates during the six months ended June 30, 2017 . We designated 6% of these swaps as hedging instruments.

For the six months ended June 30, 2017, we have recognized an expense of $3.8 million on repurchase of the 2012 High Yield Bonds and the related swap, which includes the recycling to the income statement of $5.0 million accumulated market-to-market losses previously recorded within accumulated other comprehensive income.  In addition, we have also recognized a further $2.8 million expense representing the premium paid on repurchase of these bonds. As a consequence of cessation of hedge accounting on the swap, we have recognized an unrealized foreign exchange loss of $1.2 million for the six months ended June 30, 2017 relating to the remaining 2012 High Yield Bonds.

For the six months ended June 30, 2017, we have recognized a mark-to-market gain of $0.5 million related to the Earn-Out Units.

Income taxes: The tax charge for the six months ended June 30, 2017 included: (i) corporate income taxes in respect of our operations in the United Kingdom, Brazil and Kuwait; (ii) withholding taxes and interest and penalties primarily on withholding taxes in respect of our operations in Indonesia; and (iii) utilization of losses against our taxable profits in Indonesia and Jordan. We do not currently incur any corporate income tax in respect of our operations in Indonesia and Jordan given the availability of brought forward tax losses which can be utilized against taxable profits.

 

Taxes during the six months ended June 30, 2017 decreased by $1.4 million to $8.1 million compared to $ 9.5 million in the same period in 2016 . The decrease was mainly attributable to withholding taxes and interest and penalties primarily on withholding taxes in respect of our Indonesian operations in 2016. See note 7 to our unaudited condensed consolidated financial statements.

Non-controlling interest: Non-controlling interest refers to our 40% interest in the  Golar Mazo , and the equity attributable to CMBL relating to the Eskimo SPV is included in our non-controlling interest.

Liquidity and Capital Resources

 

Liquidity and Cash Needs

 

We operate in a capital-intensive industry and we expect to finance the purchase of additional vessels and other capital expenditures through a combination of borrowings from, and leasing arrangements with, commercial banks, cash generated from operations and debt and equity financings. In addition to paying distributions, our other short-term liquidity requirements relate to servicing interest on our debt, scheduled repayments of long-term debt, funding working capital requirements, including drydocking, and maintaining cash reserves against fluctuations in operating cash flows.

Our funding and treasury activities are intended to maximize investment returns while maintaining appropriate liquidity. Cash and cash equivalents are held primarily in U.S. Dollars with some balances held in other currencies. We have not used derivative instruments other than for interest rate and currency risk management purposes.

Short-Term Liquidity and Cash Requirements

Sources of short-term liquidity include cash balances, restricted cash balances, short-term investments, available amounts under revolving credit facilities and receipts from our charters. Revenues from the majority of our time charters are received monthly in advance. In addition we benefit from low inventory requirements (consisting primarily of fuel, lubricating oil and spare parts) due to fuel costs, which represent the majority of these costs being paid for by the charterer under time charters.

 

As of June 30, 2017 , our cash and cash equivalents, including restricted cash was $439.5 million, and we had access to undrawn borrowing facilities of $25.0 million. The majority of our restricted cash balances (excluding $7.7 million in performance bonds relating to certain of our charters) contribute to our short and medium term liquidity as they are used to fund payment of certain debts, swaps and capital leases which would otherwise be paid out of our unrestricted cash balances. Since June 30, 2017 , significant transactions impacting our cash flows include:

Following the termination of its charter, the Golar Spirit was placed under temporary lay-up and if we are unable to enter into a suitable replacement charter by the 90th day following the early charter termination date of June 23, 2017, we will be required to provide additional security to the lenders under our $800 million credit facility in the form of $40 million in cash collateral.

As of June 30, 2017 , our current assets exceeded current liabilities by $161.4 million.

We expect that the cash to be generated from our operations (assuming the current rates earned from existing charters continue until charter termination or expiration, where applicable) will be sufficient to cover our operational cash outflows and our ongoing obligations under our financing commitments to pay loan interest, make scheduled loan repayments and make cash distributions.

We believe our current resources, including our undrawn revolving credit facility totaling $25.0 million as of August 31, 2017, are sufficient to meet our working capital requirements for our current business for at least the next twelve months.

 

In addition to our cash and cash equivalents noted above, as of June 30, 2017, we had restricted cash of $138.1 million. This consisted principally of (i) $126.0 million representing balances retained on restricted accounts in accordance with certain lease and loan requirements (these balances act as security for our obligations and, in the case of restricted cash relating to our lease obligation, is used to repay the obligation); (ii) $4.4 million in relation to cash collateral in respect of our cross-currency interest rate swap entered into in connection with the NOK denominated High-Yield Bonds, the collateral requirements of which are dependent upon the mark to market valuation of the swap; and (iii) the balance which relates mainly to collateral deposits relating to performance guarantees issued to charterers.

Net Cash Provided by Operating Activities

 

Net cash provided by operations increased by $40.8 million to $ 163.0 million for the six months ended June 30, 2017 compared to $122.2 million for the same period in 2016 . The increase was primarily due to an improvement in the general timing of working capital in the six months ended June 30, 2017, compared to the same period in 2016. This includes an increase in cash inflows from trade receivables and related parties, partly offset by an increase in cash payments for drydocking expenditures.

Net Cash Used in Investing Activities

Net cash used in investing activities of $ 107.2 million for the six months ended June 30, 2016 was due to the payment of $107.2 million of cash consideration in connection with the acquisition of the Golar Tundra in May 2016.

Net Cash Provided by Financing Activities

 

Net cash provided by financing activities is principally generated from funds from equity offerings, new debt and lease financings and contributions from owners, offset by debt and lease repayments.

Net cash provided by financing activities during the six months ended June 30, 2017 of $ 72.8 million was primarily due to the following:

This was partially offset by:

Net cash provided by financing activities during the six months ended June 30, 2016 of $5.6 million was primarily due to the following:

This was partially offset by: