If you have an ad-blocker enabled you may be blocked from proceeding. Thats an increase from 14.3 Bcf in 2021 when the company held 11,060 net acres. You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. Tellurian has an amazing story. Ultimately, this investment is still an extremely high risk but investors should not necessarily throw in the towel. As per usual, Souki took to YT to argue his take. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. 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 company said in its year-end earnings report that it intends to pursue potential acquisitions of properties or companies that own Haynesville assets with proceeds from stock, cash on hand or financing. I do all the work of picking the most attractive stocks. The LNG terminal is expected to cost $12 billion. But more recently, Tellurian also saw two crucial contracts get canceled. Its stock has gained 80.3% compared with the industrys 10.8% growth. 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. Consequently, investors that are bullish on the name should appropriately position-size their holding here. Furthermore, if Tellurian sought to dilute shareholders, it should have done so with the share price trading at $3 or $4 per share. I wrote this article myself, and it expresses my own opinions. Tellurian is developing a portfolio of natural gas production, LNG trading, and infrastructure that includes an ~27.6 mtpa LNG export facility and an associated pipeline. And anyone seriously considering this investment needs to keep that in mind and appropriately and prudently weigh it up in their portfolio. Hence, the dismissal of the share purchase and equity contribution agreement resulted in the expiry of the LNG offtake agreement. 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 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. LNG 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. 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. Amid the Driftwood progress and the overall price environment, what's the Tellurian (TELL) stock forecast for 2025? If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. However, the company missed the. 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. 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. I wrote this article myself, and it expresses my own opinions. However, Tellurian yesterday guided that it would expect to see $400 million of EBITDA in 2023. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. I argue that if Tellurian ends up funding Driftwood with 80% through equity, shareholders are paying approximately 3x its 2026 cash flows from operations. The bigger question is what LNG prices will be in 2026. Please. 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 . Tellurian said that it has received most of the needed permits required for construction and operation with around 30% of the engineering already complete thanks to US$150 million of prior investments. Nov 30, 2020 Houston-based liquefied natural gas company Tellurian Inc. (Nasdaq: TELL) announced a new president and CEO on Nov. 30. Presently, Tellurian's market cap is around $1 billion. A wealth of resources for individual investors is available at www.zacks.com. Follow the topics you want and receive the daily emails. This is not a significant dilution and amounts to less than 4%. Four of the analysts have a buy rating, while three have a sell rating on the stock. Not signings. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. I wrote this article myself, and it expresses my own opinions. In this case, it will need to dilute shareholders by around 6.2x. 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. People may receive compensation for some links to products and services on this website. 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. Per the terms of the deal, TotalEnergies had an option to purchase 1.5 million tons per year of LNG from Tellurian. Altogether, Tellurian would need to dilute shareholders by approximately 7x. 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 ( NYSE: TELL) yesterday announced that in 2023 it's likely to see $400 million of EBITDA from one of its wholly-owned subsidiaries. Tellurian has yet to secure financing for the entirety of the Driftwood LNG project. Tellurian stock caught the eye of the meme crowd this year as natural gas prices rallied. In June, TELL signed a long-term contract with Vitol for 3 mtpa. B.Riley analyst Liam Burke is positive on the stock. But does this mean it won't get built at all? Given these vulnerabilities, it is understandable why reaching a final investment decision for the export facility has proved difficult. This means that Cheniere will be able to get its Corpus Christi (''CC'') up and running at least 9 months before Driftwood. Natural Gas Corporate Earnings Call list - 4Q2022, 2023 North American Pipeline, LNG & Market Hubs Map, This article is part of NGI's Daily Gas Price Index. By the start of 2020, several LNG export. Indeed, what can go wrong? Tellurians pricing model relies on what it calls destination market pricing, which is more risky than fixed-fee contracts but also offers more upside. 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. JKM Get access to 100,000+ more news articles & industry data. Haynesville Shale See here for a complete list of exchanges and delays. Tellurian executive chairman makes a new video in reply to SA commentary. Why? I am not receiving compensation for it (other than from Seeking Alpha). 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. | Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Type a symbol or company name. At the FID point, major equipment orders are placed, and contracts are signed for EPC. I have no business relationship with any company whose stock is mentioned in this article. Tellurian needs to raise $12 billion. Recall, this is Tellurian's vision. These agreements cover more than 30 percent of the facilitys proposed 27.6 mtpa capacity. 2023 ESG Review. Here's the thing that a lot of investors have likely forgotten about. 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. Outsmart the market with Smart Portfolio analytical tools powered by TipRanks. Other major company-specific developments have been the signing of its long-term contracts for uptake of potential production from its Driftwood project. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. 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. . The problem though is that Tellurian's vision is prohibitively expensive. The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. 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. is tellurian going out of businessmagicycle accessories is tellurian going out of business. Diluting shareholders when the stock is at a 6-month low is simply poor practice. 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. Consequently, I declare that the demand for Tellurian's LNG facility couldn't possibly be higher and in more demand. Follow the topics you want and receive the daily emails. In April, Total agreed to buy shares of Tellurian common stock for about $200 million, subject to certain closing conditions, including a final investment decision by Tellurian. Members of Deep Value Returns get exclusive ideas and guidance to navigate any climate. Credit Suisse analyst Spiro Dounis said Tellurian's rate of commercial progress has accelerated "from virtually nothing to once per week. 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. NGI All News Access. DEEP VALUE RETURNS: The only Marketplace with real performance. 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. $8 billion to come from debt. 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. Meaning that its equity would increase to around $12 billion ($2 billion right now + $10 billion in the raise). 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. B.Riley initiated on TELL with a buy rating and a target price of $8 in July. By using this Site or clicking on "OK", you consent to the use of cookies. Tellurian (NYSE:TELL) shareholders have been hit hard with bad news. LNG Those assets produced 16.9 Bcf of natural gas last year, up from 13.9 Bcf in 2019. All rights reserved. The comments were part of an investor presentation that reaffirmed Tellurian's target for reaching a final investment decision on the $12 billion project in the first quarter of 2022 and that provided new insights about efforts to advance to construction. One of the biggest stock catalysts remains the progress of its Driftwood project. 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 said it planned to make a final investment decision on its $30 billion Driftwood project, which includes pipelines and production fields in addition to the liquefaction plant, in. Offers may be subject to change without notice. No gimmicks. Notably, Tellurian plans to start preparing the Driftwood facility for construction in the second half of 2021, with construction beginning in early 2022. Reality got in the way. 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 remarks that the point of their game is not to get a contract signed at any cost, but to create shareholder value. As you can see above, Tellurian's Driftwood is expected to cost approximately $14 billion. 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. Last years loss included a $81.1 million impairment of upstream properties. Saudi Arabia to Use $110 Billion Gas Field for Blue Hydrogen 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's stock has been hit in the past few weeks, as rumors circulate about a loss of contract. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. Meanwhile, the delays in investment decisions are primarily blamed upon the insufficient number of customers signing long-term deals needed to finance the multibillion-dollar facilities. 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. Another big fear for investors could be the dilution of their holdings. | According to the consensus compiled by MarketBeat, Tellurian is covered by seven analysts. Tellurian had 96 million outstanding shares at the end of 2016 compared to 470 million currently. In sum, there are three items overhanging Tellurian. Earnings 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. "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. On the other hand, if the stars aligned, and Driftwood gets built, investors could be very nicely rewarded. Since then, natural gas prices have been on a wild ride. Plus regular stock updates. Been on a wild ride his take FID point, major equipment orders are,. % growth problem though is that Tellurian 's Driftwood is expected to cost $ 12.! Four of the deal, TotalEnergies had an option to purchase 1.5 million tons per year LNG. End of 2016 compared to 470 million currently Value Returns get exclusive ideas guidance! What it calls destination market pricing, which is more risky than fixed-fee contracts also... Approximately 7x million tons per year of LNG from Tellurian of its Driftwood project caught eye... 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