Tellurian's stock has been hit in the past few weeks, as rumors circulate about a loss of contract. 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. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. Some call it the Internet of Money and predict it could change the way money works forever. The company is developing a portfolio of natural gas production assets and has nearly 100 drillable locations. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. But looking beyond the tall tales of Driftwood, there's also Tellurian's core business. Reality got in the way. Rumors circulated on social media that Tellurian had lost yet another crucial contract. Deep Value Returns' Marketplace continues to rapidly grow. Tellurian generated $30.4 million in revenues from natural gas sales, up from $28.8 million in 2019. Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. Tellurian dangles a carrot to investors, $400 million of EBITDA in 2023. 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. You can seethe complete list of todays Zacks #1 Rank stocks here. 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. 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. Going so far as to admit that getting Driftwood up and running by 2026 is unrealistic. Our Standards: The Thomson Reuters Trust Principles. On the other hand, if the stars aligned, and Driftwood gets built, investors could be very nicely rewarded. 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 . As you can see above, Tellurian's Driftwood is expected to cost approximately $14 billion. "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. Gas producer . I wrote this article myself, and it expresses my own opinions. 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. Next, Tellurian's share price is trading at a multi-year low. Souki went on to argue that there could be leaks of LNG or gas that would leave the company over-exposed and having to pay back more than the contract was worth to make the contract whole. Haynesville Shale One of the biggest stock catalysts remains the progress of its Driftwood project. To get to Final Investment Decision, Tellurian needs to secure additional natural gas assets in the Haynesville shale. Haynesville Shale The industry leader for online information for tax, accounting and finance professionals. However, the company missed the. DEEP VALUE RETURNS: The only Marketplace with real performance. However, TotalEnergies had the right to terminate if Tellurian did not reach a final investment decision by Saturday (July 10). The bigger question is what LNG prices will be in 2026. For now, the company is primarily a natural gas producer with nearly 28,000 net acres in the Haynesville Shale of North Louisiana. Responsive Menu. Each SPA is for 3 MTPA of LNG over a 10-year period. 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 said it intends to market up to 10 million tpy of its 16.6-million tpy Phase 1 on a JKM . 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. This I already discussed in my previous bullish article. Per the terms of the deal, TotalEnergies had an option to purchase 1.5 million tons per year of LNG from Tellurian. Is this happening to you frequently? 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. Deep Value Returns' Marketplace continues to rapidly grow. 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. some value. The company also reiterated that it is targeting a final investment decision for its LNG export facility in Texas before the end of the first quarter of 2023. 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. The company currently carries a Zack Rank #3 (Hold). Tellurian is a very volatile stock and not one for the faint-hearted. 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. Tellurian has no signed Final Investment Decision. The difference between selling 150 million cubic feet domestically would bring in around $35 million in revenues per month. Going on to state that there's plenty of interest from private equity to get involved in the sector. 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. Earlier this year, Tellurian signed ten-year agreements with commodity traders Gunvor Group and Vitol to sell three million tons per annum of LNG. Tellurian is actively pursuing additional upstream acreage. I wrote this article myself, and it expresses my own opinions. Phase 1 will consist of three plants with a combined capacity of 16.5 MTPA and an expected cost of US$16.8 billion. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. McKinsey uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. 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. Please. "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. The agreements had built on TotalEnergies' original $207 million . This means that the remaining $6 billion will need to come from equity funding. Tellurian, email Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. Create your Watchlist to save your favorite quotes on Nasdaq.com. Click here to request a trial. | As an experienced professional, I highlight the best stocks to grow your savings: stocks that deliver strong gains. 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. I provide a hand-holding service. Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. 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. Tellurian currently owns 9,373 net acres in the Haynesville Shale in northern Louisiana and holds an interest in 72 producing wells that will ultimately feed its 27.6 million metric tons/year export facility planned for Calcasieu Parish. swan event, that Driftwood one day actually gets built. Why? Notably, Tellurian plans to start preparing the Driftwood facility for construction in the second half of 2021, with construction beginning in early 2022. 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. Not signings. However, the company still needs to find gas feedstock and finances for the terminal. Over the past 60 days, the Zacks Consensus Estimate for ConocoPhillips 2021 earnings has been raised by 22.5%. Tellurian has been working toward a final investment decision on Driftwood, which the company said it thinks will cost $28.9 billion, for years. U.S. LNG exporters . I have no business relationship with any company whose stock is mentioned in this article. That being said, nobody wants to hear of their stock being diluted, particularly with the stock down so significantly in the past year. Follow the topics you want and receive the daily emails. Tellurian shares were trading around $4.42 per share, up about 0.4%, on Monday afternoon. Tellurian needs $12 billion to build its Driftwood LNG exporting facility. Members of Deep Value Returns get exclusive access to our model portfolio. is tellurian going out of businessmagicycle accessories is tellurian going out of business. However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. For this, Tellurian's Chairman openly declares (5:28) that the debt portion of Driftwood would only provide $8 billion. Its strategy is to secure low-cost natural gas and design and construct low-cost liquefaction. This is not a hindsight remark. I wrote this article myself, and it expresses my own opinions. Driftwood Lng 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. 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 year. 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. Another big fear for investors could be the dilution of their holdings. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. 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. The average target price for the stock is $6.34, which implies an upside of nearly 72 percent. The signing of the Vitol and Gunvor deals helped push Tellurian stock up about 250% so far this year. 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. I am not receiving compensation for it (other than from Seeking Alpha). The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. All Rights Reserved. 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. Follow the topics you want and receive the daily emails. We are all working together to compound returns. As per usual, Souki took to YT to argue his take. Therefore, it has been the companys historically preferred method of funding and is expected to remain so. Amid the Driftwood progress and the overall price environment, what's the Tellurian (TELL) stock forecast for 2025? Tellurian has said the first phase of Driftwood would cost about $16.8 billion and produce about 16.5 MTPA of LNG. Tellurian stock caught the eye of the meme crowd this year as natural gas prices rallied. ISSN 2158-8023 But common sense. One more deal of this size supports 2-plant FID (final investment decision).". Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. 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. Tellurian has no signed Final Investment Decision. "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 Intelligence. 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. Outsmart the market with Smart Portfolio analytical tools powered by TipRanks. 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