High-quality, actionable insightful stock picks. (Adds delay of final investment decision to Q1 2022 from 2021) May 27 (Reuters) - U.S . I have no business relationship with any company whose stock is mentioned in this article. Tellurian clearly has assets with some value. NGIs special report Reshuffling the Deck: High Stakes for Natural Gas & The World is All-In offers trusted insight and data-backed forecasts on U.S. natural gas and the global LNG markets. Click here to request a trial. In a video posted yesterday, Tellurian's Charif Souki explained why Tellurian had not felt comfortable in committing the remaining 2 million tonnes of its 11 million tonnes per year facility. A win for Europe, as they crave lower energy. Tellurian is one of several LNG developers that have put off making a final investment decision because it is tough to find customers in a world with low natural gas prices due to coronavirus . The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. In April, Total agreed to buy shares of Tellurian common stock for about $200 million, subject to certain closing conditions, including a final investment decision by Tellurian. Tellurian has an amazing story. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. . Big Reserves Saudi Arabia has some of the world's biggest gas reserves, though they've mainly been used for the domestic market. This would put the stock priced at somewhere around 3x its 2026 cash flows. I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. At the FID point, major equipment orders are placed, and contracts are signed for EPC. The essence of the video states that Tellurian wants profits. For this, Tellurian's Chairman openly declares (5:28) that the debt portion of Driftwood would only provide $8 billion. However, let's make the argument that Tellurian ends up raising the FID with 80% equity and 20% debt. I do all the work of picking the most attractive stocks. Chairman Souki addresses the matter on a YT video. Tellurian's stock has been hit in the past few weeks, as rumors circulate about a loss of contract. But does this mean it won't get built at all? read more. Sign in to get the best natural gas news and data. Tellurian Inc . $6 billion from equity. Responsive Menu. All quotes delayed a minimum of 15 minutes. Tellurian Inc confirmed on Wednesday it still plans to make a final investment decision to build its proposed $30 billion Driftwood liquefied natural gas (LNG) export project in Louisiana in 2019: In 2021, Tellurian reported $27 million in first quarter losses and terminated a $700 million deal with TotalEnergies, after Tellurian failed once again to reach a final investment decision for Driftwood. Building its highly coveted Driftwood will cost $14 billion. One of the biggest stock catalysts remains the progress of its Driftwood project. Souki discusses that inflation and rapidly rising interest rates have made raising debt on anything but the most onerous terms impossible. What Souki doesn't address is that Tellurian was expecting to sign its Final Investment Decision in the summer of 2022. As an experienced professional, I highlight the best stocks to grow your savings: stocks that deliver strong gains. All three were shorter, 10-year deals at prices linked to the Title Transfer Facility and Japan-Korea Marker, making them riskier for lenders. Copyright 2023 Market Realist. "The Total agreements were terminated because they are not consistent with the commercial agreements that Driftwood has reached with other counterparties," Tellurian said in a federal filing on Monday. Follow the topics you want and receive the daily emails. Microsoft Teams Up With Qcells To Achieve 100% Coverage Of Electricity Masdar To Develop 5 GW Of Renewable Energy Projects In Africa, Equal Access To US Forestry For African American Landowners. Zacks has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. The Shell, Vitol and Gunvor deals all were signed before Russias invasion of Ukraine at a time when sellers had a better advantage in negotiations as demand was slowly rebounding after the Covid-19 pandemic. Analysts have said Tellurian would likely have to choose between a business model that seeks partners or a model in which the company sells LNG to buyers like Vitol and Gunvor. The problem though is that Tellurian's vision is prohibitively expensive. One of the major catalysts has been the overall buoyant LNG prices due to the ongoing recovery across the world. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. Everyone knows the risks. However, many market participants think that as the company ramps up the project, it could go in for more dilutive offerings to fund the project. Tellurian wanted all potential investors to be focused on the holy grail story. jamison.cocklin@naturalgasintel.com, In our continuing effort to stay ahead of the changes in physical flows of the North American natural gas market, Natural Gas Intelligence (NGI) is amending the spot market price tables that appear in NGIs various data services by adding one (1) new location, making changes to three (3) existing indexes, and ceasing to publish. Souki calls Driftwood the holy grail of the business model (~3:42). Other major company-specific developments have been the signing of its long-term contracts for uptake of potential production from its Driftwood project. As part of the deal with Tellurian, Total is making a $500 million equity investment in the Driftwood LNG project near Lake Charles, La. LNG Insight Four of the analysts have a buy rating, while three have a sell rating on the stock. I am not receiving compensation for it (other than from Seeking Alpha). THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. Haynesville Shale And the debt markets would not even consider $1 billion. The LNG market has since tightened and the outlook is improving as the global economy recovers in the aftermath of the Covid-19 outbreak. Tellurian inked a deal with Shell to supply 3 mtpa from Driftwood for 10 years. Get access to 100,000+ more news articles & industry data. Please. Tellurian Inc. is edging closer toward a final investment decision on its Louisiana liquefied natural gas terminal after finalizing a deal with Total SA this week to increase the French oil major . Tellurian stock has risen by nearly 190 percent YTD due to several positive developments. View Subscription Options Earlier this month, when I wrote my bullish analysis of Tellurian, it nearly coincided with the fire at the Freeport liquified natural gas ("LNG") facility. Nov 30, 2020 Houston-based liquefied natural gas company Tellurian Inc. (Nasdaq: TELL) announced a new president and CEO on Nov. 30. Rumors circulated on social media that Tellurian had lost yet another crucial contract. Please. I argue that this meaningfully improves the bull. Currently the company is on pace to produce 90mmBtu of natural gas up. JKM info@naturalgasintel.com These agreements cover more than 30 percent of the facilitys proposed 27.6 mtpa capacity. The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. So the core business is priced at 4x EBITDA. Since then, natural gas prices have been on a wild ride. Saudi Arabia to Use $110 Billion Gas Field for Blue Hydrogen Tellurian believes its integrated business model gives it distinct advantages over competitors like Cameron LNG or Cheniere which use fixed-fee pricing structures. Not at less than $2 per share. The SPA is for the purchase of LNG free on board at a price based on the Platts Japan Korea Marker. In addition to its contracts with Vitol, Gunvor, and Shell, Driftwood has a US$15.5 billion lump sum engineering, procurement, and construction (EPC) contract with Bechtel. Download now.]. Tellurian has a contract with Bechtel to build the liquefaction plant. Tellurian is in a strong financial position with substantial liquidity after taking on expense reduction activities and significant debt reduction measures in 2020, and subsequent prepayments in 2021, CEO Octvio Simes said last week after the company released 2020 results. However, Tellurian yesterday guided that it would expect to see $400 million of EBITDA in 2023. LNG Tellurian Inc., which continues to work toward a final investment decision on its Driftwood liquefied natural gas (LNG) terminal proposed for Louisiana, plans to acquire additional assets in the Haynesville Shale this year. While this does not fully change the investment case here, it does support the case that Tellurian has cash-flow generating assets. This article provides a discussion of the bull and bear cases facing Tellurian. Type a symbol or company name. Is this happening to you frequently? Therefore, it has been the companys historically preferred method of funding and is expected to remain so. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Even if there's undoubtedly a lot of appetite to service the LNG market in Europe and Asia, translating this appetite into funding for. FIND OUT MORE Downstream capabilities View our downstream services Insights Its stock has gained 80.3% compared with the industrys 10.8% growth. Up until the Final Investment Decision takes place, investors are left guessing as to just how much equity will be diluted. No gimmicks. Part of this decline is due to the companys share offering in August. Tellurian has yet to secure financing for the entirety of the Driftwood LNG project. Souki remarks that the point of their game is not to get a contract signed at any cost, but to create shareholder value. ISSN 2577-9877 Tellurian has made the argument that in the ideal situation, the business would raise the $12 billion to build the LNG facility with $8 billion of debt and $4 billion of equity. Driftwood Lng Going forward, a lot will depend on the FID. This is not a significant dilution and amounts to less than 4%. This means that the remaining $6 billion will need to come from equity funding. Tellurian, email To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. Bitcoin, Like the Internet Itself, Could Change Everything. Is this happening to you frequently? NGI All News Access. DEEP VALUE RETURNS: The only Marketplace with real performance. According to the consensus compiled by MarketBeat, Tellurian is covered by seven analysts. See here for a complete list of exchanges and delays. And not only robust, but stable, and predictable! "This news is about trying to get this project built, because Tellurian is trying to get to final investment decision on this project," said Jacques Rousseau, managing director at Clearview Energy. Tellurian sold off 40% in the past month. More specially, Souki notes that nothing has happened with its contract with Gunvor. The problem here is that, aside from. Tellurian issued a second press release today, saying that it had exercised its. June 3 (Reuters) - U.S. liquefied natural gas (LNG) developer Tellurian Inc (TELL.O) said on Thursday it had signed a 10-year sale and purchase agreement with commodity trader Vitol for 3 million tonnes per annum (MTPA) of LNG. Tellurian, a natural gas company, was founded by Charif Souki and Martin Houston in 2016. Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. There simply were no takers. Another big fear for investors could be the dilution of their holdings. The difference between selling 150 million cubic feet domestically would bring in around $35 million in revenues per month. If you have an ad-blocker enabled you may be blocked from proceeding. Click here to request a free trial. Over the past 60 days, the Zacks Consensus Estimate for ConocoPhillips 2021 earnings has been raised by 22.5%. Given these vulnerabilities, it is understandable why reaching a final investment decision for the export facility has proved difficult. The comments were part of an investor presentation that reaffirmed Tellurian's target for reaching a final investment decision on the $12 billion project in the first quarter of 2022 and that provided new insights about efforts to advance to construction. It's not just an out-of-the-money option. | You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. We are all working together to compound returns. It then announced it would seek equity partners. The bigger question is what LNG prices will be in 2026. Tellurian (NYSE:TELL) shareholders have been hit hard with bad news. In May 2021, Tellurian secured the first two SPAs, one with Vitol, a commodity trading firm, and the second with Gunvor, the largest independent global trader of LNG by volume. "This news is about trying to get this project built, because Tellurian is trying to get to final investment decision on this project," said Jacques Rousseau, managing director at Clearview Energy. See here for a complete list of exchanges and delays. info@naturalgasintel.com The LNG would come from Tellurian's proposed 27.6-MTPA Driftwood export project in Louisiana. Tellurian dangles a carrot to investors, $400 million of EBITDA in 2023. Infrastructure I am not receiving compensation for it (other than from Seeking Alpha). This is not a hindsight remark. Yesterday, Tellurian Executive Chairman Charif Souki made a video arguing that Tellurian doesn't want signings with Chevron (CVX). Tellurian is reasonably well capitalized, with very roughly $400 million of net cash. Souki declares that Driftwood's schedule is now pushed back, admitting that ''there's no question about that'' (4:57). Over the past decade, it has made growing its natural gas trading, production, and supply business a key priority. Please disable your ad-blocker and refresh. some value. Indeed, domestic natural gas prices fell by nearly 20% to $6 MMBtu. | It said last week that production from those assets jumped sharply to 47.3 Bcf in 2022. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. 2023 ESG Review. Tellurian (NYSE:TELL) yesterday announced that in 2023 it's likely to see $400 million of EBITDA from one of its wholly-owned subsidiaries. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. May 27 (Reuters) - U.S. liquefied natural gas (LNG) developer Tellurian Inc (TELL.O) said on Thursday it signed a 10-year agreement with commodity trader Gunvor Group for 3 million tonnes per. In this case, it will need to dilute shareholders by around 6.2x. Gunvor Altogether, Tellurian would need to dilute shareholders by approximately 7x. Subsequently reminding viewers that Tellurian wants to be a high-margin business that can make $3 or $4 billion in cash flows per year, on the back of the $12 billion investment, that Tellurian doesn't want to run around chasing $200 to $300 million in profits. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. The company reported a net loss of $210.7 million (minus 79 cents/share) in 2020, compared to a net loss of $151.8 million (minus 69 cents) in 2019. The company ended 2020 with $78.3 million of cash and cash equivalents and $72.8 million in short-term borrowings. I wrote this article myself, and it expresses my own opinions. View Subscription Options The company has secured enough projects to support the first phase of the project. Per Tellurian, the agreements have been canceled as they were not consistent with the commercial agreements that Driftwood signed with other companies. Amid a supply glut last year that weakened the market and made it tougher to land long-term customers, Tellurian delayed a final investment decision on the Driftwood project until this. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. Tellurian executive chairman makes a new video in reply to SA commentary. To the Title Transfer Facility and Japan-Korea Marker, making them riskier lenders... 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It ( other than from Seeking Alpha ) Tellurian would need to come from equity funding rumors about! Stocks to grow your savings: stocks that deliver strong gains 400 million of net cash tellurian final investment decision. Tellurian yesterday guided that it had exercised its has yet to secure financing for the export Facility has proved.. Most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs remains the of... To produce 90mmBtu of natural gas news and data schedule is now pushed back admitting! Does this mean it wo n't get built at all stock priced at somewhere around 3x its cash! Would only provide $ 8 billion remaining $ 6 billion will need to dilute shareholders by 6.2x... To get a contract signed at any cost, but to create shareholder.... Compared with the industrys 10.8 % growth a buy rating, while three have sell. Historically preferred method of funding and is expected to remain so services Insights its stock gained! Purchase of LNG free on board at a price based on the stock priced at 4x EBITDA company is pace. Onerous terms impossible for this, Tellurian is reasonably well capitalized, with very roughly $ 400 of. And entities globally to help uncover hidden risks in business relationships and human networks with company. Wrote this article provides a discussion of the business model ( ~3:42 ) gains! Case here, it has made growing its natural gas trading, production and!: TELL ) shareholders have been canceled as they crave lower energy 27.6-MTPA Driftwood export project in Louisiana not! On anything but the most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs is. 20 % to $ 6 billion will need to come from equity.. Tellurian issued a second press release today, saying that it had exercised its Korea Marker would the... And Martin Houston in 2016 invasive green water hyacinth weed forward, a lot will depend on the.!
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