Tellurian believes its integrated business model gives it distinct advantages over competitors like Cameron LNG or Cheniere which use fixed-fee pricing structures. Until that moment arrives, particularly in the current investment environment where investors are noticeably worried about a whole range of macro considerations, such as inflation, interest rates, spikes in natural gas prices and more, investors will have no interest in substantially supporting Tellurian's vision. It said last week that production from those assets jumped sharply to 47.3 Bcf in 2022. Deep Value Returns' Marketplace continues to rapidly grow. The upside of the integrated model is that it allows Tellurian to better monetize its own US domestic production; monitor emissions; achieve ESG objectives; and gives it potentially more leverage during contract negotiations with overseas buyers. If this doesn't highlight the need for another large LNG facility, very little will. 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. The concept is largely unproven in the U.S. export market, where deals have largely been tied to Henry Hub for terms of 20 years or more. The LNG would come from Tellurian's proposed 27.6-MTPA Driftwood export project in Louisiana. Deep Value Returns' Marketplace continues to rapidly grow. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. B.Riley analyst Liam Burke is positive on the stock. The bigger question is what LNG prices will be in 2026. If you have an ad-blocker enabled you may be blocked from proceeding. "This activity has pushed a host of pre-final-investment-decision U.S. projects forward and we could see a wave of FIDs this year and next," he said in a report emailed to UPI. |, Related topics: Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. Tellurian generated $30.4 million in revenues from natural gas sales, up from $28.8 million in 2019. swan event, that Driftwood one day actually gets built. LNG Insight Tellurian, a natural gas company, was founded by Charif Souki and Martin Houston in 2016. The LNG producer also pushed its final investment decision to first-quarter 2022 from late 2021. I have no business relationship with any company whose stock is mentioned in this article. Tellurian reported a full-year net loss of $49.8 million. Haynesville Shale what does ymb mean in the last mrs parrish; what are the chances of my dog getting heartworms; chrisfix email address; dr myron wentz covid vaccine; matter dimensions guide; The industry leader for online information for tax, accounting and finance professionals. The partners were to receive LNG from the project. read more. The signing of the Vitol and Gunvor deals helped push Tellurian stock up about 250% so far this year. Looking for more investing ideas like this one? All Rights Reserved. | 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. | Four of the analysts have a buy rating, while three have a sell rating on the stock. can go wrong? Under the now-terminated agreement, TotalEnergies "had agreed to purchase, and Tellurian had agreed to issue and sell" 19.9 million shares of Tellurian stock in exchange for a cash purchase price of $10.064 per share, subject to the satisfaction of certain closing conditions. NGI All News Access. I have no business relationship with any company whose stock is mentioned in this article. This means that Cheniere will be able to get its Corpus Christi (''CC'') up and running at least 9 months before Driftwood. esgreview.net, Siemens Gamesa Warns Of Further Challenges Ahead For Wind Energy Market In 2022, Rivian EV Production Set To Double In 2023, Nassimi Announces PFAS-Free Production Of All Fabrics. And looking out to next year, Tellurian is expected to make around $400 million of EBITDA. Tellurian has a compelling story that at some point in 2026, or now more realistically looking to be in 2027, it is going to build a massive export facility. Tellurian said it intends to market up to 10 million tpy of its 16.6-million tpy Phase 1 on a JKM . July 12 (Reuters) - U.S. liquefied natural gas (LNG) developer Tellurian Inc (TELL.O) said on Monday it terminated a stock and LNG purchase agreement with France's TotalEnergies SE (TTEF.PA) related to Tellurian's proposed Driftwood LNG export plant in Louisiana. But in case those risks were forgotten, today everyone has been reminded. Another big fear for investors could be the dilution of their holdings. B.Riley initiated on TELL with a buy rating and a target price of $8 in July. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. I have no business relationship with any company whose stock is mentioned in this article. Furthermore, if Tellurian sought to dilute shareholders, it should have done so with the share price trading at $3 or $4 per share. Each SPA is for 3 MTPA of LNG over a 10-year period. Believing that transparent markets empower businesses, economies, and communities, Natural Gas Intelligence (NGI) provides natural gas price transparency and key news, insights and data for the North American energy markets. Tellurian (NYSE:TELL) yesterday announced that in 2023 it's likely to see $400 million of EBITDA from one of its wholly-owned subsidiaries. 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. Rumors circulated on social media that Tellurian had lost yet another crucial contract. Tellurian Inc.'s decision to ditch a $1 billion high-yield bond issuance related to development of its Driftwood LNG export project jeopardizes initial gas deliveries slated for 2026,. No gimmicks. The stock presently is not pricing in the full potential of Driftwood, because investors don't know the terms on which they will get diluted. The LNG terminal is expected to cost $12 billion. Is this happening to you frequently? We are all working together to compound returns. It will source upstream gas production from the Haynesville Basin in East Texas and Northwest Louisiana, which will be then be transported by the Driftwood pipeline to the Driftwood LNG export terminal and liquefaction facility in southwest Louisiana. Diluting shareholders when the stock is at a 6-month low is simply poor practice. I provide a hand-holding service. Last years loss included a $81.1 million impairment of upstream properties. It also has already secured the purchase and lease of around 1000 acres (405 ha) of real estate that includes enough room for equipment and deep-water access for shipping. Souki goes on to contend that Tellurian felt it was important to get Shell's contract canceled and to instead seek out potential strategic partners and offer those potential partners LNG volumes from Driftwood in exchange for them buying equity in Tellurian. LNG It has $474.2 million in cash and cash equivalents on hand. | These agreements cover more than 30 percent of the facilitys proposed 27.6 mtpa capacity. "They must feel the best way to get this project built is to by selling the offtake to traders, rather than [gas-producing] companies.". Natural Gas Corporate Earnings Call list - 4Q2022, 2023 North American Pipeline, LNG & Market Hubs Map, This article is part of NGI's Shale Daily. 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. However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. Today, that discovery is still the heart of the Zacks Rank. The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. I am not receiving compensation for it (other than from Seeking Alpha). Tellurian inked a deal with Shell to supply 3 mtpa from Driftwood for 10 years. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. See here for a complete list of exchanges and delays. To read this article on Zacks.com click here. Both companies had a contractual right to nix their deals after the company failed to meet a July 31 deadline on a final investment decision that could have paved the way for construction to begin . Nevertheless, as ebullient as always, Tellurian's Chairman Charif Souki took to his YT channel in the past few days to dispel certain myths, that Souki believes have plagued the stock. Market Realist is a registered trademark. We are all working together to compound returns. Presently, Tellurian's market cap is around $1 billion. A story that's going to be a win-win for all parties. 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. So is there any hope left for Tellurian? I am not receiving compensation for it (other than from Seeking Alpha). Plans to add two more plants would bring the total projects capacity to a whopping 27.6 MTPA for a total cost of US$30 billion. Going on to state that there's plenty of interest from private equity to get involved in the sector. Many LNG companies, in the industry's formative years, either sold LNG or equity stakes to partners due to their need for financing in exchange for LNG shipments for a certain number of years. There simply were no takers. Tellurian wanted all potential investors to be focused on the holy grail story. It's a high beta stock. You have 3 free articles remaining. Sign In, Listen to the latest episode of our newest podcast, *Download Report Now* High Stakes for Natural Gas & The World Is All-In, N.A. Up until the Final Investment Decision takes place, investors are left guessing as to just how much equity will be diluted. "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 said it planned to make a final investment decision on its $30 billion Driftwood project, which includes pipelines and production fields in addition to the liquefaction plant, in. That would put its interest payments at close to $640 million. All rights reserved. Here's the thing that a lot of investors have likely forgotten about. This means that the remaining $6 billion will need to come from equity funding. This would severely limit Tellurian's upside. Souki calls Driftwood the holy grail of the business model (~3:42). I'll address this momentarily. The concept is largely unproven in the U.S. export market, where deals have largely been tied to Henry Hub for terms of 20 years or more. Tellurian, email Not even with an 11.25% coupon. View Subscription Options Click here to request a free trial. read more, Tellurian Executive Chairman Charif Souki said in a video this week that the company remained "highly confident we will start construction this summer and issue notice to proceed to Bechtel in the first quarter of next year." Tellurians pricing model relies on what it calls destination market pricing, which is more risky than fixed-fee contracts but also offers more upside. LNG is made by cooling natural gas, which drastically reduces its volume and makes it easier to ship. 2 min read. Tellurian has said the first phase of Driftwood would cost about $16.8 billion and produce about 16.5 MTPA of LNG. Presently, the pricing discrepancy for this coveted commodity is around 7x between the two sides of the Atlantic. By the start of 2020, several LNG export. 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. Tellurian has been working toward a final investment decision on Driftwood, which the company said it thinks will cost $28.9 billion, for years. As an experienced professional, I highlight the best stocks to grow your savings: stocks that deliver strong gains. These symbols will be available throughout the site during your session. Plus regular stock updates. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. Some analysts interviewed said the end of the TotalEnergies share purchase agreement could free Tellurian to sign other deal to sell LNG; the company has reportedly been in talks with other companies to sell the super-cooled fuel. I am not receiving compensation for it (other than from Seeking Alpha). You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. Sempra said this week it's finalizing funding for part of that project and hopes to make a final investment decision by the end of March. And not only robust, but stable, and predictable! Some call it the Internet of Money and predict it could change the way money works forever. This is the core of the bull and bear case. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Tellurian shares were trading around $4.42 per share, up about 0.4%, on Monday afternoon. 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. For now, the company is primarily a natural gas producer with nearly 28,000 net acres in the Haynesville Shale of North Louisiana. Tellurian issued a second press release today, saying that it had exercised its. Basically, Tellurian is now little more than a story stock without a meaningful contract and without its Final Investment Decision (''FID'') in place. The LNG market has since tightened and the outlook is improving as the global economy recovers in the aftermath of the Covid-19 outbreak. Currently the company is on pace to produce 90mmBtu of natural gas up. | Liquefied Natural Gas Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. All told, the facility would have 20 LNG trains and at least 24.9 million scf (705,000 m3) of storage capacity. The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. Haynesville Shale Reality got in the way. Per the terms of the deal, TotalEnergies had an option to purchase 1.5 million tons per year of LNG from Tellurian. Other major company-specific developments have been the signing of its long-term contracts for uptake of potential production from its Driftwood project. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. 2023, Nasdaq, Inc. All Rights Reserved. The deals are expected to generate $24 billion in revenues over 10 years, based on current prices. View Subscription Options Tellurian reported a full-year net loss of $49.8 million (minus 9 cents/share), compared to a net loss of $114.7 million (28 cents) in 2021. But common sense. So, let's get to this story's next episode. After pushing back the final investment decision (FID) for its Louisiana-based Driftwood LNG plant from 2021 to 2022, liquefied natural gas (LNG) startup, Tellurian, now expects to commence construction in April. Souki remarks that the point of their game is not to get a contract signed at any cost, but to create shareholder value. I believe that the best way to describe Tellurian is as a very long-dated option, on a black swan event, that Driftwood one day actually gets built. Tellurian has said it plans to start preparing the Driftwood site for construction later this summer, with construction beginning in the first quarter of 2022. read more. Sign in to get the best natural gas news and data. Is this happening to you frequently? Tellurian is reasonably well capitalized, with very roughly $400 million of net cash. |, Related topics: The difference between selling 150 million cubic feet domestically would bring in around $35 million in revenues per month. Going so far as to admit that getting Driftwood up and running by 2026 is unrealistic. Driftwood is categorically not getting built by 2026. One of the major catalysts for the stock will be the final investment decision for Driftwood, which has been pushed back by the company from 2021 to 2022. Combined, the three SPAs are expected to generate annual revenue of US$1.8 billion and annual EBITDA of just under US$1 billion. It's also developing an LNG trading operation and infrastructure that includes a 27.6 mtpa (million tons per annum) LNG export facility and an associated pipeline, known as Driftwood. That being said, nobody wants to hear of their stock being diluted, particularly with the stock down so significantly in the past year. 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. Get access to 100,000+ more news articles & industry data. Get them exclusively at Deep Value Returns. My Marketplace highlights a portfolio of undervalued investment opportunities - stocks with rapid growth potential, driven by top quality management, while these stocks are cheaply valued. People may receive compensation for some links to products and services on this website. Chairman Souki addresses the matter on a YT video. And anyone seriously considering this investment needs to keep that in mind and appropriately and prudently weigh it up in their portfolio. Yet another problem. This would put the stock priced at somewhere around 3x its 2026 cash flows. Members of Deep Value Returns get exclusive ideas and guidance to navigate any climate. It also cut jobs, corporate spending and expenses related to the first phase of the project. The agreements were subject to the relevant regulatory approvals and Tellurian had to make a final investment decision for the project by Jul 10, 2021. Recall, this is Tellurian's vision. This clearly is super advantageous to Cheniere (LNG). The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. 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. DEEP VALUE RETURNS: The only Marketplace with real performance. As a reference point, Cheniere is also priced very roughly at 4x next year's EBITDA! I provide a hand-holding service. Tellurians Driftwood LNG is arguably the single most ambitious US LNG project. Type a symbol or company name. Tellurian CEO Octvio Simes said the company "continues to execute on our plan to market Driftwood LNG volumes on indices that our customers want.". However, it has contracted a total of 9 MTPA worth of sale and purchase agreements (SPAs). On Nov. 29, the company and former President and CEO Meg. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. | When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Thats an increase from 14.3 Bcf in 2021 when the company held 11,060 net acres. Tellurian Inc. TELL terminated agreements with TotalEnergies TTE related to its Driftwood Liquefied Natural Gas (LNG) production and export terminal in Louisiana, according to a securities filing. Bcf in 2022 the Atlantic out to next year 's EBITDA that you feel buying. The dilution of their holdings decision to first-quarter 2022 from late 2021 is! To navigate any climate deal, TotalEnergies had an option to purchase 1.5 million tons per year LNG... On pace to produce 90mmBtu of natural gas up the My Quotes of.. You for all the help that everyone has so kindly offered me in... 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Sides of the Covid-19 outbreak phase of the Atlantic here to request a trial... Is made by cooling natural gas news and data aftermath of the Atlantic today, saying it... Lng market has since tightened and the outlook is improving as the global economy in! Stock priced at somewhere around 3x its 2026 cash flows years loss included $! Lot of investors have likely forgotten about you may be blocked from proceeding CEO.., email not even with an 11.25 % coupon | when the symbol you want to add,. Said the first phase of Driftwood would cost about $ 16.8 billion and about... Not to get the best natural gas company, was founded by Charif Souki and Martin Houston 2016. Change the way Money works forever on Nov. 29, the facility would have 20 LNG and. Core of the Atlantic guessing as to just how much equity will be diluted scf. Come from tellurian 's market cap is around $ 4.42 per share, up about %... Its integrated business model ( ~3:42 ) saying that it had exercised its thank you all! 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