ISSN 2577-9877 Tellurian's stock has been hit in the past few weeks, as rumors circulate about a loss of contract. No gimmicks. Tellurian then secured a third SPA with Shell in July 2021. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Deep Value Returns' Marketplace continues to rapidly grow. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. Each deal is worth about $12 billion in revenue over the contract period. Tellurian has said the first phase of Driftwood would cost about $16.8 billion and produce about 16.5 MTPA of LNG. Please disable your ad-blocker and refresh. 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. I do all the work of picking the most attractive stocks. In sum, there are three items overhanging Tellurian. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. Souki discusses that inflation and rapidly rising interest rates have made raising debt on anything but the most onerous terms impossible. However, Tellurian yesterday guided that it would expect to see $400 million of EBITDA in 2023. No gimmicks. Follow the topics you want and receive the daily emails. I argue that if Tellurian ends up funding Driftwood with 80% through equity, shareholders are paying approximately 3x its 2026 cash flows from operations. 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. I follow countless companies and select for you the most attractive investments. FIND OUT MORE Downstream capabilities View our downstream services Insights 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. Tellurian dangles a carrot to investors, $400 million of EBITDA in 2023. That would mean that for Tellurian to get hold of its much-needed $6 billion via equity, its shareholders would need to be diluted by approximately 7x. This means that Cheniere will be able to get its Corpus Christi (''CC'') up and running at least 9 months before Driftwood. Washington DC | New York | Houston | Pittsburgh | Mexico City Calgary | Chile. B.Riley analyst Liam Burke is positive on the stock. 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. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. 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. I am not receiving compensation for it (other than from Seeking Alpha). The ongoing natural gas market recovery has made many analysts turn bullish on the companys stock. | Tellurian has no signed Final Investment Decision. All rights reserved. The first phase would have a nameplate production capacity of 11 million mt/y per year of LNG. Particularly noting that in this higher interest rate and inflationary environment, there are too many cross currents and this would not be prudent. People may receive compensation for some links to products and services on this website. Presently, Tellurian's market cap is around $1 billion. When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. Big Reserves Saudi Arabia has some of the world's biggest gas reserves, though they've mainly been used for the domestic market. However, TotalEnergies had the right to terminate if Tellurian did not reach a final investment decision by Saturday (July 10). Tellurian, a natural gas company, was founded by Charif Souki and Martin Houston in 2016. By using this Site or clicking on "OK", you consent to the use of cookies. 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. Given these concerns, the company is going to be a high-risk, high-reward bet that's only suitable for highly risk-tolerant investors. 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. However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. (Reuters) Sempra Energy reported fourth-quarter profit that beat analysts' estimates on Tuesday, helped by higher earnings from its California utilities. To build Driftwood, a large, fully integrated LNG facility. 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 stock caught the eye of the meme crowd this year as natural gas prices rallied. This clearly is super advantageous to Cheniere (LNG). Part of this decline is due to the companys share offering in August. 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. For good reason too. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. 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 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. Finally, even if Driftwood was to be built at some point in the future, investors' prospects will be capped, as Tellurian's equity would need to be diluted approximately 7x. I follow countless companies and select for you the most attractive investments. I am not receiving compensation for it (other than from Seeking Alpha). [2023 Natural Gas Price Outlook: How will the energy industry continue to evolve in 2023? Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. Tellurian has a contract with Bechtel to build the liquefaction plant. The average target price for the stock is $6.34, which implies an upside of nearly 72 percent. Last years loss included a $81.1 million impairment of upstream properties. However, the company missed the. . Offers may be subject to change without notice. I strongly recommend no more than 3% of the portfolio for even the most concentrated investor. I wrote this article myself, and it expresses my own opinions. LNG The definitive agreements are consistent with the terms contemplated by the Heads of Agreement announced on April 3, 2019, and are subject to certain closing conditions, including the final investment decision (FID) to construct Driftwood. 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. NGI All News Access. 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." 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. And yet, we are now in 2023, and this crucial milestone isn't even discussed. Tellurian had 96 million outstanding shares at the end of 2016 compared to 470 million currently. High-quality, actionable insightful stock picks. Plus regular stock updates. Consequently, I declare that the demand for Tellurian's LNG facility couldn't possibly be higher and in more demand. 2023 Natural Gas Intelligence. Shares of the company have outperformed the industry in the past six months. Tellurian, email |, Related topics: 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. View Subscription Options The downside is that it is extremely capital-intensive and places a lot more industry, macroeconomic, and geopolitical risks on Tellurian rather than a diversified network of partners. As you can see above, Tellurian's Driftwood is expected to cost approximately $14 billion. | 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. 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. 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. While this does not fully change the investment case here, it does support the case that Tellurian has cash-flow generating assets. So, let's get to this story's next episode. All quotes delayed a minimum of 15 minutes. Hess earnings for 2021 are expected to rise 116.2% year over year. Driftwood isn't expected to produce its first feed gas at least until 20252026 and assume a decision by the first quarter of 2022. That being said, nobody wants to hear of their stock being diluted, particularly with the stock down so significantly in the past year. Plus regular stock updates. See here for a complete list of exchanges and delays. 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; Type a symbol or company name. Consequently, Tellurian would absolutely need to be making around $3 billion in cash flows to make this investment compelling. Natural Gas Corporate Earnings Call list - 4Q2022, 2023 North American Pipeline, LNG & Market Hubs Map, This article is part of NGI's Shale Daily. I have no business relationship with any company whose stock is mentioned in this article. 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. 1.800.427.5747 One of the major catalysts has been the overall buoyant LNG prices due to the ongoing recovery across the world. LNG 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. It said last week that production from those assets jumped sharply to 47.3 Bcf in 2022. Indeed, what can go wrong? "They must feel the best way to get this project built is to by selling the offtake to traders, rather than [gas-producing] companies.". Two-thirds debt to one-third equity. I wrote this article myself, and it expresses my own opinions. 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