The stock has jumped by nearly 190 percent YTD but is off 30 percent from the highs it reached in June. I provide a hand-holding service. Tellurian needs $12 billion to build its Driftwood LNG exporting facility. A story that's going to be a win-win for all parties. Gas producer . FIND OUT MORE Downstream capabilities View our downstream services Insights Tellurian is based in Houston, Texas, and its common stock is listed on the Nasdaq Capital Market under the symbol "TELL." I believe that anyone reading this knows the spiel well. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. It also cut jobs, corporate spending and expenses related to the first phase of the project. Follow the topics you want and receive the daily emails. Driftwood is categorically not getting built by 2026. 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." Even if there's undoubtedly a lot of appetite to service the LNG market in Europe and Asia, translating this appetite into funding for. Please disable your ad-blocker and refresh. Please. ISSN 1532-1231 | More specially, Souki notes that nothing has happened with its contract with Gunvor. 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. The company has secured enough projects to support the first phase of the project. However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. 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. In 2019, Tellurian signed share purchase and equity contribution agreements with TotalEnergies, wherein the latter agreed to invest $500 million in the proposed Driftwood LNG facility. And not only robust, but stable, and predictable! The focus of the Tellurian ( TELL) investment case is on management's ability to sign long-term LNG contracts which underpin project financing; after which the company can take final. Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. U.S. LNG exporters . 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 ongoing natural gas market recovery has made many analysts turn bullish on the companys stock. 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. Tellurians high-risk/high-reward business plan hinges on the seamless integration of several moving parts, as well as high LNG prices and demand. Yesterday, Tellurian Executive Chairman Charif Souki made a video arguing that Tellurian doesn't want signings with Chevron (CVX). The timing of this stock issuance is suspicious, to say the least. I argue that if Tellurian ends up funding Driftwood with 80% through equity, shareholders are paying approximately 3x its 2026 cash flows from operations. Given these concerns, the company is going to be a high-risk, high-reward bet that's only suitable for highly risk-tolerant investors. 3/1/2023. Another big fear for investors could be the dilution of their holdings. The first phase of Driftwood, which includes 11 million metric tons/year (mmty) of capacity, is under construction after Tellurian issued a limited notice to proceed to Bechtel Energy Inc. last year. Download now.]. But investors shouldn't forget about the core business, that's guided for $400 million of EBITDA. Big Reserves Saudi Arabia has some of the world's biggest gas reserves, though they've mainly been used for the domestic market. Our Standards: The Thomson Reuters Trust Principles. These symbols will be available throughout the site during your session. | Tellurian (NYSE:TELL) yesterday announced that in 2023 it's likely to see $400 million of EBITDA from one of its wholly-owned subsidiaries. | 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. It's a high beta stock. Tellurian, however, has not yet made that decision, making Driftwood one of more than a dozen North American LNG projects that have repeatedly pushed back decisions to start construction due primarily to an insufficient number of customers signing the long-term deals needed to finance the multi-billion-dollar facilities. LNG Insight Under its commercial framework, Driftwood Phase 1 is expected to generate around US$3.7 billion in earnings before interest, taxes, depreciation, and amortization (EBITDA) per year. No gimmicks. 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. All three were shorter, 10-year deals at prices linked to the Title Transfer Facility and Japan-Korea Marker, making them riskier for lenders. This is a simple case of arbitrage. To read this article on Zacks.com click here. Per the terms of the deal, TotalEnergies had an option to purchase 1.5 million tons per year of LNG from Tellurian. That those contracts are not what the business model is about. NGI All News Access. Tellurian also has its core business! ISSN 2577-9877 some value. "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. Bitcoin, Like the Internet Itself, Could Change Everything. This is not a hindsight remark. 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. 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. 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,. Liquefied natural gas (LNG) developer Tellurian Inc. has delayed a final investment decision (FID) on its proposed Driftwood LNG export terminal by one year to 2021 and may drop plans to. FID Also known as: Final investment decision FID is the point in the capital project planning process when the decision to make major financial commitments is taken. Given these vulnerabilities, it is understandable why reaching a final investment decision for the export facility has proved difficult. 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. | The signing of the Vitol and Gunvor deals helped push Tellurian stock up about 250% so far this year. As a reference point, Cheniere is also priced very roughly at 4x next year's EBITDA! In June, TELL signed a long-term contract with Vitol for 3 mtpa. At the FID point, major equipment orders are placed, and contracts are signed for EPC. I wrote this article myself, and it expresses my own opinions. 1.800.427.5747 Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. Tellurian said it intends to market up to 10 million tpy of its 16.6-million tpy Phase 1 on a JKM . Tellurian is actively pursuing additional upstream acreage. Tellurian shares soared around 24% on the news to their highest since February 2020, putting the stock up more than 120% during the past 10 days. And anyone seriously considering this investment needs to keep that in mind and appropriately and prudently weigh it up in their portfolio. Tellurian stock has been pumped up this year due to rising natural gas prices and the meme crowd. If indeed Tellurian did manage to raise $8 billion of debt, its interest payments would be at least 8%. Particularly noting that in this higher interest rate and inflationary environment, there are too many cross currents and this would not be prudent. View Subscription Options 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. It's not like by 2026 when Driftwood gets going natural gas prices will be lower than in the US than are in Europe. 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. Recall, this is Tellurian's vision. All Rights Reserved. Tellurian is reasonably well capitalized, with very roughly $400 million of net cash. Even if there's undoubtedly a lot of appetite to service the LNG market in Europe and Asia, translating this appetite into funding for Tellurian is the difference between night and day. I am not receiving compensation for it (other than from Seeking Alpha). The LNG would come from Tellurian's proposed 27.6-MTPA Driftwood export project in Louisiana. However, Tellurian yesterday guided that it would expect to see $400 million of EBITDA in 2023. 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. DEEP VALUE RETURNS: The only Marketplace with real performance. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. 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. 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; 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. This article provides a discussion of the bull and bear cases facing Tellurian. Not even with an 11.25% coupon. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. As an experienced professional, I highlight the best stocks to grow your savings: stocks that deliver strong gains. 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. Liquefied Natural Gas I wrote this article myself, and it expresses my own opinions. Tellurian clearly has assets with some value. 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. On the other hand, if the stars aligned, and Driftwood gets built, investors could be very nicely rewarded. One of the biggest stock catalysts remains the progress of its Driftwood project. ConocoPhillips (COP): Free Stock Analysis Report, Hess Corporation (HES): Free Stock Analysis Report, Magellan Petroleum Corporation (TELL): Free Stock Analysis Report, TotalEnergies SE Sponsored ADR (TTE): Free Stock Analysis Report. DEEP VALUE RETURNS: The only Marketplace with real performance. I am not receiving compensation for it (other than from Seeking Alpha). Gunvor Group Ltd. has the option to terminate its deal to buy supplies from the proposed Driftwood LNG terminal after a deadline passed Tuesday for Tellurian Inc. to meet certain conditions. Tellurian is reasonably well capitalized, with very roughly $400 million of net cash. Copy and paste multiple symbols separated by spaces. Sign in to get the best natural gas news and data. It then announced it would seek equity partners. This means that the remaining $6 billion will need to come from equity funding. 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. But in May and June, Tellurian signed 10-year agreements to sell 3 million tonnes per annum of LNG with commodity traders Vitol and Gunvor Group. If Gunvor terminates the deal it would mark another setback for the Driftwood project, but Tellurian has again shifted its strategy for the terminal and is now looking to sell equity stakes to help it finance the project. By using this Site or clicking on "OK", you consent to the use of cookies. 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. swan event, that Driftwood one day actually gets built. I follow countless companies and select for you the most attractive investments. Reality got in the way. Combined, the three SPAs are expected to generate annual revenue of US$1.8 billion and annual EBITDA of just under US$1 billion. So the core. Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. Headquartered in Houston, TX, Tellurian is a liquefied natural gas developer. Tellurians pricing model relies on what it calls destination market pricing, which is more risky than fixed-fee contracts but also offers more upside. 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. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. 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. $6 billion from equity. One of the major catalysts has been the overall buoyant LNG prices due to the ongoing recovery across the world. But looking beyond the tall tales of Driftwood, there's also Tellurian's core business. So, let's get to this story's next episode. Is this happening to you frequently? 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. The partners were to receive LNG from the project. LNG Driftwood isn't expected to produce its first feed gas at least until 20252026 and assume a decision by the first quarter of 2022. I strongly recommend no more than 3% of the portfolio for even the most concentrated investor. In the past, Tellurian wanted partners like TotalEnergies to invest in its Driftwood project, which will include a liquefaction plant, pipelines and natural gas production. Tellurian then secured a third SPA with Shell in July 2021. Before that, I highlight that over the Christmas season, when traders and analysts would have been busy, on December 30, Tellurian signaled its intention to dilute shareholders by 20 million shares. Unlike other U.S. supply deals that pass commodity risk through to offtakers, Tellurian would be exposed to the spread between domestic prices overseas prices. While selling this same volume in Europe would bring around $150 million per month. 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. 1.800.427.5747 In May, Tellurian agreed to supply 3 mtpa of LNG over a 10-year period to Gunvor Singapore. 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. Market Realist is a registered trademark. "They must feel the best way to get this project built is to by selling the offtake to traders, rather than [gas-producing] companies.". [2023 Natural Gas Price Outlook: How will the energy industry continue to evolve in 2023? Written by The essence of the video states that Tellurian wants profits. 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. The problem here is that, aside from. But common sense. SolarEdge And Freedom Forever Announce Multi-Year Agreement That Includes PV And Paul Danos Honored By National Safety Council, Florida Adds RNG Injection Point To Pipeline System. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. Currently the company is on pace to produce 90mmBtu of natural gas up. 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. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. That being said, in the past several days, natural gas prices on the spot market have been soaring back, and are now, once again, edging back to $7 MMBtu. 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 . I argue that this meaningfully improves the bull case. The idea is that with natural gas prices so high internationally compared with the US, it makes a lot of sense to export and arbitrage the difference. Since I wrote Pipe Dream, Tellurian's share price has taken a tumble. To build Driftwood, a large, fully integrated LNG facility. Tellurian has no signed Final Investment Decision. Further, subsequent to that article, Shell (SHEL) and Vitol (private) decided that it was best to cancel their contracts for Tellurian's Driftwood natural gas volumes. 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 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: This is of course if Driftwood ends up getting built at all. Gunvor Please. I do all the work of picking the most attractive stocks. 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. We are all working together to compound returns. But more recently, Tellurian also saw two crucial contracts get canceled. Plus regular stock updates. I argue that this meaningfully improves the bull. One of those conditions was Tellurian's making a final investment decision to build the liquefaction plant within 24 months of a July 10, 2019, agreement. Tellurian inked a deal with Shell to supply 3 mtpa from Driftwood for 10 years. This clearly is super advantageous to Cheniere (LNG). "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. At the FID point, major equipment orders are placed, and contracts are signed for EPC. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. Here's the thing that a lot of investors have likely forgotten about. There simply were no takers. Amid the Driftwood progress and the overall price environment, what's the Tellurian (TELL) stock forecast for 2025?