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. So is there any hope left for Tellurian? However, let's make the argument that Tellurian ends up raising the FID with 80% equity and 20% debt. Copy and paste multiple symbols separated by spaces. All told, the facility would have 20 LNG trains and at least 24.9 million scf (705,000 m3) of storage capacity. 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. Create your Watchlist to save your favorite quotes on Nasdaq.com. . However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. All quotes delayed a minimum of 15 minutes. For good reason too. Haynesville Shale "They must feel the best way to get this project built is to by selling the offtake to traders, rather than [gas-producing] companies.". I provide a hand-holding service. 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; Reality got in the way. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. All Rights Reserved. We are all working together to compound returns. 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. Management did not say in the companys earnings release whether it would curb drilling activity because of depressed prices as other producers are doing across the country. LNG I argue that if Tellurian ends up funding Driftwood with 80% through equity, shareholders are paying approximately 3x its 2026 cash flows from operations. 2 min read. Our Standards: The Thomson Reuters Trust Principles. Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. Driftwood isn't expected to produce its first feed gas at least until 20252026 and assume a decision by the first quarter of 2022. Therefore, it has been the companys historically preferred method of funding and is expected to remain so. Indeed, what can go wrong? It's not just an out-of-the-money option. Please. Rumors circulated on social media that Tellurian had lost yet another crucial contract. And the debt markets would not even consider $1 billion. In June, TELL signed a long-term contract with Vitol for 3 mtpa. Tellurian Inc . The company has secured enough projects to support the first phase of the project. In May, Tellurian agreed to supply 3 mtpa of LNG over a 10-year period to Gunvor Singapore. Tellurian dangles a carrot to investors, $400 million of EBITDA in 2023. The essence of the video states that Tellurian wants profits. Responsive Menu. Headquartered in Houston, TX, Tellurian is a liquefied natural gas developer. Each deal is worth about $12 billion in revenue over the contract period. A story that's going to be a win-win for all parties. This I already discussed in my previous bullish article. Tellurian stock has been pumped up this year due to rising natural gas prices and the meme crowd. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. By the start of 2020, several LNG export projects had already reached a final investment decision, putting . 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. Tellurian is being priced as an out-of-the-money option. Please. Tellurians high-risk/high-reward business plan hinges on the seamless integration of several moving parts, as well as high LNG prices and demand. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. 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. No gimmicks. 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. Get them exclusively at Deep Value Returns. 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. NGI All News Access. This is not a significant dilution and amounts to less than 4%. It's not just an out-of-the-money option. But investors crave FID details. [2023 Natural Gas Price Outlook: How will the energy industry continue to evolve in 2023? LNG And that Tellurian could then further increase its total volume. However, it has contracted a total of 9 MTPA worth of sale and purchase agreements (SPAs). High-quality, actionable insightful stock picks. 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. NGI All News Access. 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. But common sense. When the symbol you want to add appears, add it to My Quotes by selecting it and pressing Enter/Return. Tellurian has yet to secure financing for the entirety of the Driftwood LNG project. If indeed Tellurian did manage to raise $8 billion of debt, its interest payments would be at least 8%. We are all working together to compound returns. Get access to 100,000+ more news articles & industry data. The U.S. Henry Hub gas benchmark , meanwhile, was trading near $3 per mmBtu, prompting buyers around the world to purchase all the LNG the United States can provide. Thats an increase from 14.3 Bcf in 2021 when the company held 11,060 net acres. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Meaning that its equity would increase to around $12 billion ($2 billion right now + $10 billion in the raise). Part of this decline is due to the companys share offering in August. It's a high beta stock. Some call it the Internet of Money and predict it could change the way money works forever. I do all the work of picking the most attractive stocks. 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. $6 billion from equity. The average target price for the stock is $6.34, which implies an upside of nearly 72 percent. | 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. Those assets produced 16.9 Bcf of natural gas last year, up from 13.9 Bcf in 2019. Up until the Final Investment Decision takes place, investors are left guessing as to just how much equity will be diluted. Recall, this is Tellurian's vision. 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. 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 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. Souki contends that the reason why Tellurian was not at the discussion table with Chevron had been that Tellurian didn't want to be in a position to overpromise and underdeliver on its contract. Not even with an 11.25% coupon. I believe that anyone reading this knows the spiel well. | 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. This is of course if Driftwood ends up getting built at all. Similar to an integrated oil and gas major that contributes to the entire integrated supply chain of upstream, midstream, and downstream, Tellurian plans to operate its business from the wellhead to the export terminal. Type a symbol or company name. "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. 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. It then announced it would seek equity partners. | Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. Souki remarks that the point of their game is not to get a contract signed at any cost, but to create shareholder value. Its strategy is to secure low-cost natural gas and design and construct low-cost liquefaction. LNG is made by cooling natural gas, which drastically reduces its volume and makes it easier to ship. Detailed information on the use of cookies on this Site, and how you can decline them, is provided in our cookie policy. As per usual, Souki took to YT to argue his take. 1.800.427.5747 Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. 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. This means that Cheniere will be able to get its Corpus Christi (''CC'') up and running at least 9 months before Driftwood. To read this article on Zacks.com click here. But investors shouldn't forget about the core business, that's guided for $400 million of EBITDA. 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