Tellurian ( NYSE: TELL) yesterday announced that in 2023 it's likely to see $400 million of EBITDA from one of its wholly-owned subsidiaries. B.Riley analyst Liam Burke is positive on the stock. I have no business relationship with any company whose stock is mentioned in this article. 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. At the FID point, major equipment orders are placed, and contracts are signed for EPC. 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. ISSN 2158-8023 Our Standards: The Thomson Reuters Trust Principles. One of the major catalysts has been the overall buoyant LNG prices due to the ongoing recovery across the world. Tellurian dangles a carrot to investors, $400 million of EBITDA in 2023. Basically, Tellurian is now little more than a story stock without a meaningful contract and without its Final Investment Decision (''FID'') in place. Per the terms of the deal, TotalEnergies had an option to purchase 1.5 million tons per year of LNG from Tellurian. Please. High upside energy, commodity, tech, and dividend stocks. 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. We are all working together to compound returns. Responsive Menu. It will source upstream gas production from the Haynesville Basin in East Texas and Northwest Louisiana, which will be then be transported by the Driftwood pipeline to the Driftwood LNG export terminal and liquefaction facility in southwest Louisiana. Tellurian sold off 40% in the past month. Tellurian has a contract with Bechtel to build the liquefaction plant. Tellurian is a very volatile stock and not one for the faint-hearted. 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. 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." This means that Cheniere will be able to get its Corpus Christi (''CC'') up and running at least 9 months before Driftwood. 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. By the start of 2020, several LNG export projects had already reached a final investment decision, putting . All Rights Reserved. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. 2023, Nasdaq, Inc. All Rights Reserved. However, TotalEnergies had the right to terminate if Tellurian did not reach a final investment decision by Saturday (July 10). Each deal is worth about $12 billion in revenue over the contract period. Not at less than $2 per share. The LNG would come from Tellurian's proposed 27.6-MTPA Driftwood export project in Louisiana. Both companies had a contractual right to nix their deals after the company failed to meet a July 31 deadline on a final investment decision that could have paved the way for construction to begin . 2 min read. Get access to 100,000+ more news articles & industry data. Shares of the company have outperformed the industry in the past six months. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. I do all the work of picking the most attractive stocks. And the debt markets would not even consider $1 billion. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Please disable your ad-blocker and refresh. Tellurian said it intends to market up to 10 million tpy of its 16.6-million tpy Phase 1 on a JKM . Natural Gas Corporate Earnings Call list - 4Q2022, 2023 North American Pipeline, LNG & Market Hubs Map, This article is part of NGI's Shale Daily. Do Not Sell My Personal Information (CA Residents Only). WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. To read this article on Zacks.com click here. Indeed, domestic natural gas prices fell by nearly 20% to $6 MMBtu. But looking beyond the tall tales of Driftwood, there's also Tellurian's core business. June 3 (Reuters) - U.S. liquefied natural gas (LNG) developer Tellurian Inc (TELL.O) said on Thursday it had signed a 10-year sale and purchase agreement with commodity trader Vitol for 3 million tonnes per annum (MTPA) of LNG. All rights reserved. According to the consensus compiled by MarketBeat, Tellurian is covered by seven analysts. It's not just an out-of-the-money option. I wrote this article myself, and it expresses my own opinions. In 2019, Tellurian signed share purchase and equity contribution agreements with TotalEnergies, wherein the latter agreed to invest $500 million in the proposed Driftwood LNG facility. Tellurian generated $30.4 million in revenues from natural gas sales, up from $28.8 million in 2019. Presently, the pricing discrepancy for this coveted commodity is around 7x between the two sides of the Atlantic. Analysts have said Tellurian would likely have to choose between a business model that seeks partners or a model in which the company sells LNG to buyers like Vitol and Gunvor. Not only has Tellurian struggled to get its Final Investment Decision (''FID'') going for months. The essence of the video states that Tellurian wants profits. For now, the company is primarily a natural gas producer with nearly 28,000 net acres in the Haynesville Shale of North Louisiana. I argue that this meaningfully improves the bull. Tellurian Inc., which continues to work toward a final investment decision on its Driftwood liquefied natural gas (LNG) terminal proposed for Louisiana, plans to acquire additional assets in the Haynesville Shale this year. 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. |, Related topics: When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. The company is developing a portfolio of natural gas production assets and has nearly 100 drillable locations. Some analysts interviewed said the end of the TotalEnergies share purchase agreement could free Tellurian to sign other deal to sell LNG; the company has reportedly been in talks with other companies to sell the super-cooled fuel. The company currently carries a Zack Rank #3 (Hold). Gas producer . Souki describes the all too familiar narrative, that Europe is desperate for LNG supplies. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. Download now.]. It's not just an out-of-the-money option. So, let's get to this story's next episode. I believe that anyone reading this knows the spiel well. 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. 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. Presently, Tellurian's market cap is around $1 billion. Tellurian has said the first phase of Driftwood would cost about $16.8 billion and produce about 16.5 MTPA of LNG. No gimmicks. Please disable your ad-blocker and refresh. Great chart showing how coal prices should increase with LNG prices.$LNG $TELL $TGA $BTU $AR $CRK https://t.co/SazUOygfKk. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. NGI All News Access. Since then, natural gas prices have been on a wild ride. From the start, Tellurian has been a story stock. 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. You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. 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. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. 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. Deep Value Returns' Marketplace continues to rapidly grow. The partners were to receive LNG from the project. I follow countless companies and select for you the most attractive investments. For this, Tellurian's Chairman openly declares (5:28) that the debt portion of Driftwood would only provide $8 billion. That would put its interest payments at close to $640 million. JKM ISSN 1532-1231 Tellurian, however, has not yet made that decision, making Driftwood one of more than a dozen North American LNG projects that have repeatedly pushed back decisions to start construction due primarily to an insufficient number of customers signing the long-term deals needed to finance the multi-billion-dollar facilities. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. I have no business relationship with any company whose stock is mentioned in this article. Plus regular stock updates. Since I wrote Pipe Dream, Tellurian's share price has taken a tumble. Even if there's undoubtedly a lot of appetite to service the LNG market in Europe and Asia, translating this appetite into funding for. Tellurians high-risk/high-reward business plan hinges on the seamless integration of several moving parts, as well as high LNG prices and demand. If you have an ad-blocker enabled you may be blocked from proceeding. [2023 Natural Gas Price Outlook: How will the energy industry continue to evolve in 2023? However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. Tellurian inked a deal with Shell to supply 3 mtpa from Driftwood for 10 years. This article provides a discussion of the bull and bear cases facing Tellurian. Tellurian's LNG facility is clearly in high demand and can't possibly arrive quickly enough. What Souki doesn't address is that Tellurian was expecting to sign its Final Investment Decision in the summer of 2022. Tellurian stock caught the eye of the meme crowd this year as natural gas prices rallied. A wealth of resources for individual investors is available at www.zacks.com. Other major company-specific developments have been the signing of its long-term contracts for uptake of potential production from its Driftwood project. Those assets produced 16.9 Bcf of natural gas last year, up from 13.9 Bcf in 2019. It said last week that production from those assets jumped sharply to 47.3 Bcf in 2022. Two-thirds debt to one-third equity. Building its highly coveted Driftwood will cost $14 billion. 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. LNG 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. 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. 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. Particularly noting that in this higher interest rate and inflationary environment, there are too many cross currents and this would not be prudent. Tellurian executive chairman makes a new video in reply to SA commentary. 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. This is of course if Driftwood ends up getting built at all. 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 Scott DiSavino and Jessica Resnick-Ault; Editing by Marguerita Choy and Leslie Adler, 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. Is a very volatile stock and not one for the faint-hearted story stock, it... 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