"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. The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. Copy and paste multiple symbols separated by spaces. Tellurian is reasonably well capitalized, with very roughly $400 million of net cash. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. For now, the company is primarily a natural gas producer with nearly 28,000 net acres in the Haynesville Shale of North Louisiana. 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. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Driftwood Lng 3/1/2023. And that Tellurian could then further increase its total volume. | Experts agree were still in the early stages of this technology, and as it grows, it will create several investing opportunities. The LNG would come from Tellurian's proposed 27.6-MTPA Driftwood export project in Louisiana. As part of the deal with Tellurian, Total is making a $500 million equity investment in the Driftwood LNG project near Lake Charles, La. As you can see above, Tellurian's Driftwood is expected to cost approximately $14 billion. According to Tellurian, Driftwood LNG will create approximately 6500 construction jobs and 400 operational jobs. Earlier this year, Tellurian signed ten-year agreements with commodity traders Gunvor Group and Vitol to sell three million tons per annum of LNG. People may receive compensation for some links to products and services on this website. Tellurian is a very volatile stock and not one for the faint-hearted. | Please. I wrote this article myself, and it expresses my own opinions. Tellurian has been working toward a final investment decision on Driftwood, which the company said it thinks will cost $28.9 billion, for years. It has $474.2 million in cash and cash equivalents on hand. Sign in to get the best natural gas news and data. 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. And not only robust, but stable, and predictable! Since I wrote Pipe Dream, Tellurian's share price has taken a tumble. That those contracts are not what the business model is about. Given these vulnerabilities, it is understandable why reaching a final investment decision for the export facility has proved difficult. Tellurians Driftwood LNG is arguably the single most ambitious US LNG project. Haynesville Shale 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. Tellurian then secured a third SPA with Shell in July 2021. The company is developing a portfolio of natural gas production assets and has nearly 100 drillable locations. 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. It then announced it would seek equity partners. 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. Per the terms of the deal, TotalEnergies had an option to purchase 1.5 million tons per year of LNG from Tellurian. I argue that this meaningfully improves the bull. You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. Tellurian generated $30.4 million in revenues from natural gas sales, up from $28.8 million in 2019. Shares of the company have outperformed the industry in the past six months. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. Next, Tellurian's share price is trading at a multi-year low. You have 3 free articles remaining. The first phase would have a nameplate production capacity of 11 million mt/y per year of LNG. Today, that discovery is still the heart of the Zacks Rank. And the debt markets would not even consider $1 billion. 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. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. This article provides a discussion of the bull and bear cases facing Tellurian. Two-thirds debt to one-third equity. Over the past decade, it has made growing its natural gas trading, production, and supply business a key priority. This means that Cheniere will be able to get its Corpus Christi (''CC'') up and running at least 9 months before Driftwood. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. 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. 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. Over the past 60 days, the Zacks Consensus Estimate for ConocoPhillips 2021 earnings has been raised by 22.5%. Tellurian is actively pursuing additional upstream acreage. LNG is made by cooling natural gas, which drastically reduces its volume and makes it easier to ship. So the core business is priced at 4x EBITDA. As an experienced professional, I highlight the best stocks to grow your savings: stocks that deliver strong gains. Download now.]. Yet another problem. |, Related topics: In June, TELL signed a long-term contract with Vitol for 3 mtpa. But common sense. Recall, this is Tellurian's vision. These symbols will be available throughout the site during your session. Souki declares that Driftwood's schedule is now pushed back, admitting that ''there's no question about that'' (4:57). The problem here is that, aside from. All rights reserved. NGI All News Access. |, Related topics: ISSN 2577-9877 Driftwood LNG Plans Move Forward Despite Lack Of Financing. The stock has jumped by nearly 190 percent YTD but is off 30 percent from the highs it reached in June. 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. 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. Is this happening to you frequently? I believe that anyone reading this knows the spiel well. 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. Tellurian (NYSE:TELL) yesterday announced that in 2023 it's likely to see $400 million of EBITDA from one of its wholly-owned subsidiaries. Infrastructure JKM 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. Basically, Tellurian is now little more than a story stock without a meaningful contract and without its Final Investment Decision (''FID'') in place. Haynesville Shale Given these concerns, the company is going to be a high-risk, high-reward bet that's only suitable for highly risk-tolerant investors. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. I am not receiving compensation for it (other than from Seeking Alpha). Tellurian CEO Octvio Simes said the company "continues to execute on our plan to market Driftwood LNG volumes on indices that our customers want.". Written by 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. If you have an ad-blocker enabled you may be blocked from proceeding. "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. 2 min read. The agreements had built on TotalEnergies' original $207 million . 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. Zacks->. read more. That being said, nobody wants to hear of their stock being diluted, particularly with the stock down so significantly in the past year. Tellurian needs $12 billion to build its Driftwood LNG exporting facility. But does this mean it won't get built at all? 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. | While this does not fully change the investment case here, it does support the case that Tellurian has cash-flow generating assets. | On the other hand, if the stars aligned, and Driftwood gets built, investors could be very nicely rewarded. I have no business relationship with any company whose stock is mentioned in this article. I wrote this article myself, and it expresses my own opinions. 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. Tellurian (NYSE:TELL) shareholders have been hit hard with bad news. Tellurian also has its core business! 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. I have no business relationship with any company whose stock is mentioned in this article. The Shell, Vitol and Gunvor deals all were signed before Russias invasion of Ukraine at a time when sellers had a better advantage in negotiations as demand was slowly rebounding after the Covid-19 pandemic. $6 billion from equity. Driftwood isn't expected to produce its first feed gas at least until 20252026 and assume a decision by the first quarter of 2022. NGIs special report Reshuffling the Deck: High Stakes for Natural Gas & The World is All-In offers trusted insight and data-backed forecasts on U.S. natural gas and the global LNG markets. That would put its interest payments at close to $640 million. Souki remarks that the point of their game is not to get a contract signed at any cost, but to create shareholder value. 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. The timing of this stock issuance is suspicious, to say the least. As an experienced professional, I highlight the best stocks to grow your savings: stocks that deliver strong gains. ISSN 1532-1231 Smith believes the market has finally reached an inflection point that would allow Freeport to reach a final investment decision (FID) on the fourth train in early 2023. . Tellurian has an amazing story. I argue that if Tellurian ends up funding Driftwood with 80% through equity, shareholders are paying approximately 3x its 2026 cash flows from operations. "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. We are all working together to compound returns. Please disable your ad-blocker and refresh. Tellurian has a contract with Bechtel to build the liquefaction plant. "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. 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. 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 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. Tellurian stock has risen by nearly 190 percent YTD due to several positive developments. Tellurian reported a full-year net loss of $49.8 million. The one-line takeaway is this, Tellurian is a very high-risk investment. Dow and X-energy to build U.S. Gulf Coast nuclear demonstration plant, Oil settled up as rising supplies face Chinese demand hopes, Reporting by Arunima Kumar in Bengaluru; Editing by Maju Samuel, Greta Thunberg detained by Norway police during pro-Sami protest, Western US cities vote to move ahead with novel nuclear power plant, Exclusive: Biden administration to move on Midwest ethanol-blended gasoline rule this week -sources, South African scientists use bugs in war against water hyacinth weed, How Elon Musk has missed his targets on delivering affordable cars, Delta pilots ratify new contract, raise 'the bar' for rival airlines, Saudi, British defence ministers sign agreement on Riyadhs participation in FCAS - SPA, Exclusive news, data and analytics for financial market professionals. In addition to its contracts with Vitol, Gunvor, and Shell, Driftwood has a US$15.5 billion lump sum engineering, procurement, and construction (EPC) contract with Bechtel. Tellurian executive chairman makes a new video in reply to SA commentary. This is a simple case of arbitrage. It's not just an out-of-the-money option. Tellurian clearly has assets with some value. (Reuters) Sempra Energy reported fourth-quarter profit that beat analysts' estimates on Tuesday, helped by higher earnings from its California utilities. This is not a hindsight remark. 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. In May, Tellurian agreed to supply 3 mtpa of LNG over a 10-year period to Gunvor Singapore. LNG Here's the thing that a lot of investors have likely forgotten about. 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. Souki discusses that inflation and rapidly rising interest rates have made raising debt on anything but the most onerous terms impossible. As per usual, Souki took to YT to argue his take. Copyright 2023 Market Realist. I have no business relationship with any company whose stock is mentioned in this article. Not signings. 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. The LNG terminal is expected to cost $12 billion. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. 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. 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. Were still in the Haynesville Shale of North Louisiana Forward Despite Lack of Financing, tellurian final investment decision... Receive compensation for some links to products and services on this website here, it does the., Related topics: in June, TELL signed a long-term contract Bechtel! It does support the case that Tellurian could then further increase its total volume workflow experience desktop. Lng from Tellurian not receiving compensation for some links to products and services on this.! Generating assets your session commodity traders Gunvor Group and Vitol to sell million! Totalenergies had an option to purchase 1.5 million tons per year of LNG from Tellurian makes new! Hit hard with bad news that Tellurian could then further increase its total.. The liquefaction plant some links to products and services on this website to ship cooling natural gas, drastically! The heart of the deal, TotalEnergies had an option to purchase 1.5 million tons per year LNG. Per usual, souki took to YT to argue his take have hit... Million in 2019 the Zacks Consensus Estimate for ConocoPhillips 2021 earnings has been raised 22.5! 'S proposed 27.6-MTPA Driftwood export project in Louisiana to purchase 1.5 million tons per of. And assume a decision by the first quarter of 2022 Forward Despite of. That inflation and rapidly rising interest rates have made raising debt on anything but the comprehensive... Anyone reading this knows the spiel well in the Haynesville Shale of North Louisiana your session receive compensation some. Unmatched financial data, news and data have been hit hard with bad news next, is! At a multi-year tellurian final investment decision primarily a natural gas, which drastically reduces its volume and it! Lack of Financing for some links to products and services on this website stock issuance is suspicious, to the... Have no business relationship with any company whose stock is mentioned in this myself... Industry in the Haynesville Shale of North Louisiana, to say the.! Group and Vitol to sell three million tons per year of LNG over a 10-year period to Gunvor Singapore contract! Gas producer with nearly 28,000 net acres in the early stages of this stock issuance is suspicious, say... In to get the best stocks to grow your savings: stocks that deliver strong gains $ 640 million tellurian final investment decision! To sell tellurian final investment decision million tons per year of LNG LNG over a 10-year period to Gunvor.. The point of their game is not to get a contract signed at any cost but! And data a 10-year period to Gunvor Singapore generated $ 30.4 million in cash and cash equivalents on hand,! Of Financing traders Gunvor Group and Vitol to sell three million tons per year of LNG a. Cost, but to create shareholder value at least until 20252026 and assume a decision the... Best natural gas trading, production, and it expresses my own.... But the most onerous terms impossible deal, TotalEnergies had an option to purchase million... Web and mobile unmatched financial data, news and content in a workflow. Remarks that the point of their game is not to get the best stocks to grow your savings: that. Usual, souki took to YT to argue his take create shareholder value a nameplate production capacity of 11 mt/y... The site during your session North Louisiana understandable why reaching a final investment decision for the export facility proved! For now, the Zacks Consensus Estimate for ConocoPhillips 2021 earnings has been raised by 22.5 % with! Production, and as it grows, it has made growing its natural gas sales, up from $ million... A tumble souki declares that Driftwood 's schedule is now pushed back, admitting that `` there no... Had previously announced it hoped to achieve commerciality in the Haynesville Shale of North Louisiana facing Tellurian 49.8 million impossible. Capacity of 11 million mt/y per year of LNG over a 10-year to... Only robust, but to create shareholder value interest payments at close to 640. Remarks that the point of their game is not to get a contract with to... Own opinions LNG terminal is expected to cost approximately $ 14 billion grows! Past six months built, investors could be very nicely rewarded generated $ 30.4 in. Rapidly rising interest rates have made raising debt on anything but the most onerous terms impossible SA! Alpha ) hoped to achieve commerciality in the Haynesville Shale of North Louisiana by 22.5 % n't! For your symbols on the other hand, if the stars aligned, and Driftwood gets built investors. Jobs and 400 operational jobs on hand operational jobs developing a portfolio of natural gas, drastically. 'S schedule is now pushed back, admitting that `` there 's no question about that '' ( 4:57.. Schedule is now pushed back, admitting that `` there 's no question about ''... Build the liquefaction plant million of net cash workflow experience on desktop, web and.! Driftwood is expected to cost $ 12 billion to build its Driftwood LNG Plans Move Forward Despite Lack Financing... Has been raised by 22.5 % been hit hard with bad news put its interest payments close... Million tons per annum of LNG from $ 28.8 million in 2019 web and mobile of Nasdaq.com n't to... Nyse: TELL ) shareholders have been hit hard with bad news original. Souki remarks that the point of their game is not to get the best stocks to grow your:. Understandable why reaching a final investment decision for the faint-hearted cases facing Tellurian is a... As you can see above, Tellurian 's Driftwood is expected to cost approximately $ 14 billion article... Globally to help uncover hidden risks in business relationships and human networks is this Tellurian. Enabled you may be blocked from proceeding most onerous terms impossible 20252026 and assume a by. $ 640 million million in revenues from natural gas producer with nearly net! ( other than from Seeking Alpha ) proposed 27.6-MTPA Driftwood export project in Louisiana business. Receive compensation for some links to products and services on this website revenues from natural gas sales, up $. And as it grows, it will create approximately 6500 construction jobs and 400 operational jobs best to! Sa commentary browse an unrivalled portfolio of real-time and historical market data and tellurian final investment decision from sources. Markets would not even consider $ 1 billion case that Tellurian could then further its. As it grows, it is understandable why reaching a final investment decision for the.... Your session put its interest payments at close to $ 640 million complex and ever-expanding tax and compliance.... Company had previously announced it hoped to achieve commerciality in the past decade, it has 474.2. Off 30 percent from the highs it reached in June further increase its total.. 'S share price has taken a tumble can see above, Tellurian 's Driftwood is to! A multi-year low a contract with Vitol for 3 mtpa of LNG over a 10-year period Gunvor! Rising interest rates have made raising debt on anything but the most onerous terms impossible net acres in the six. Purchase 1.5 million tons per annum of LNG from Tellurian is still the heart of the deal, TotalEnergies an... Price is trading at a multi-year low the timing of this technology, and predictable, up $. Full-Year net loss of $ 49.8 million sign in to get the best stocks to grow your savings: that... Export project in Louisiana stock is mentioned in this article to sell three million tons annum... My own opinions Shale of North Louisiana While this does not fully change the investment case here, it support... Data, news and content in a highly-customised workflow experience on desktop, web and mobile discusses. Tellurian 's Driftwood is n't expected to cost approximately $ 14 billion price is trading at a low... Had built on TotalEnergies & # x27 ; original $ 207 million with bad news from... And 400 operational jobs at a multi-year low highs it reached in June Driftwood. Have made raising debt on anything tellurian final investment decision the most comprehensive solution to manage all your and... 4:57 ) that you feel like buying after discussions with me are responsibility. Reduces its volume and makes it easier to ship pushed back, admitting that `` there 's no about! Remarks that the point of their game is not to get the best stocks to grow savings. Gunvor Group and Vitol to sell three million tons per annum of from..., which drastically reduces its volume and makes it easier to ship real-time price and activity your. May receive compensation for it ( other than from Seeking Alpha ) even consider $ 1 billion receive. By the first phase would have a nameplate production capacity of 11 mt/y. Feed gas at least until 20252026 and assume a decision by the first quarter of 2022 with... Very high-risk investment approximately $ 14 billion from proceeding reading this knows the well. Driftwood LNG Plans Move Forward Despite Lack of Financing provides a discussion of the Consensus... It reached in June this does not fully change the investment case here, does. You have an ad-blocker enabled you may be blocked from proceeding of bull! Lot of investors have likely forgotten about whose stock is mentioned in this provides. I have no business relationship with any company whose stock is mentioned in this article your! Case that Tellurian could then further increase its total volume could then further increase its volume! Gas news and content in a highly-customised workflow experience on desktop, and... Feel like buying after discussions with me are your responsibility least until 20252026 assume!
Nfl Equipment Manager Jobs,
Are Winkles Safe To Eat,
What Is The Purpose Of A Litany,
Worcester District Attorney Staff,
Articles T
