The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Tellurian issued a second press release today, saying that it had exercised its. LNG I argue that this meaningfully improves the bull. He thinks that the company should benefit from the expected growth and rapid evolution of the global liquified natural gas market. I wrote this article myself, and it expresses my own opinions. Recall, this is Tellurian's vision. If you have an ad-blocker enabled you may be blocked from proceeding. Great chart showing how coal prices should increase with LNG prices.$LNG $TELL $TGA $BTU $AR $CRK https://t.co/SazUOygfKk. You have 3 free articles remaining. Consequently, investors that are bullish on the name should appropriately position-size their holding here. Driftwood Lng 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. The LNG would come from Tellurian's proposed 27.6-MTPA Driftwood export project in Louisiana. Please. It's not just an out-of-the-money option. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. | Shares of the company have outperformed the industry in the past six months. info@naturalgasintel.com "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 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. I have no business relationship with any company whose stock is mentioned in this article. I am not receiving compensation for it (other than from Seeking Alpha). Some call it the Internet of Money and predict it could change the way money works forever. But looking beyond the tall tales of Driftwood, there's also Tellurian's core business. 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. It has $474.2 million in cash and cash equivalents on hand. Create your Watchlist to save your favorite quotes on Nasdaq.com. This means that investors simply aren't buying into Souki's vision. 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. Please. This one is in the bag. | 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. Please disable your ad-blocker and refresh. 2023 ESG Review. DEEP VALUE RETURNS: The only Marketplace with real performance. Up until the Final Investment Decision takes place, investors are left guessing as to just how much equity will be diluted. Two-thirds debt to one-third equity. DEEP VALUE RETURNS: The only Marketplace with real performance. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Earnings I wrote this article myself, and it expresses my own opinions. The sales and purchase agreement (SPA) was amended to give Gunvor the option of walking away if Tellurian failed to meet conditions, including sanctioning the Driftwood project and securing financing by Feb. 28. Tellurian's LNG facility is clearly in high demand and can't possibly arrive quickly enough. The partners were to receive LNG from the project. 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. Please. Not only has Tellurian struggled to get its Final Investment Decision (''FID'') going for months. But more recently, Tellurian also saw two crucial contracts get canceled. Sign in to get the best natural gas news and data. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Infrastructure The signing of the Vitol and Gunvor deals helped push Tellurian stock up about 250% so far this year. Deep Value Returns' Marketplace continues to rapidly grow. Our Standards: The Thomson Reuters Trust Principles. Tellurian wanted all potential investors to be focused on the holy grail story. However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. 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 ( NYSE: TELL) yesterday announced that in 2023 it's likely to see $400 million of EBITDA from one of its wholly-owned subsidiaries. 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. Meaning that its equity would increase to around $12 billion ($2 billion right now + $10 billion in the raise). Unlike other U.S. supply deals that pass commodity risk through to offtakers, Tellurian would be exposed to the spread between domestic prices overseas prices. High-quality, actionable insightful stock picks. We are all working together to compound returns. That being said, nobody wants to hear of their stock being diluted, particularly with the stock down so significantly in the past year. 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. 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. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. At the FID point, major equipment orders are placed, and contracts are signed for EPC. So the core. Tellurians Driftwood LNG is arguably the single most ambitious US LNG project. Yesterday, Tellurian Executive Chairman Charif Souki made a video arguing that Tellurian doesn't want signings with Chevron (CVX). Driftwood is categorically not getting built by 2026. The industry leader for online information for tax, accounting and finance professionals. You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. Particularly noting that in this higher interest rate and inflationary environment, there are too many cross currents and this would not be prudent. The average target price for the stock is $6.34, which implies an upside of nearly 72 percent. . Indeed, domestic natural gas prices fell by nearly 20% to $6 MMBtu. All quotes delayed a minimum of 15 minutes. Is this happening to you frequently? By the start of 2020, several LNG export. Yet another problem. I wrote this article myself, and it expresses my own opinions. Zacks->. 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. Tellurian (NYSE:TELL) shareholders have been hit hard with bad news. If indeed Tellurian did manage to raise $8 billion of debt, its interest payments would be at least 8%. 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. This is a simple case of arbitrage. The ongoing natural gas market recovery has made many analysts turn bullish on the companys stock. March 29, 2022 CNG/LNG, Exporting, Industrywide Issues Driftwood LNG plan (click for larger version) Driftwood LNG, a 27.6 million tonnes of LNG per year facility that will cost on the order of $16.8 billion to build, has not made an official final investment decision (FID) to proceed with building the FERC-approved project. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. I wrote this article myself, and it expresses my own opinions. No gimmicks. 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. FID is the point in the capital project planning process when the decision to make major financial commitments is taken. 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. ISSN 1532-1231 I'll address this momentarily. Last years loss included a $81.1 million impairment of upstream properties. And the debt markets would not even consider $1 billion. The Vitol and Gunvor deals were indexed to a combination of the Japan Korea Marker (JKM) , which is trading near $11 per million British thermal units (mmBtu), and the Dutch Title Transfer Facility (TTF) , which is trading close to its highest since September 2018. It is the second 10-year, 3-MTPA agreement Tellurian has announced in a week, following a deal with commodity trader Gunvor Group. Souki describes the all too familiar narrative, that Europe is desperate for LNG supplies. 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. Type a symbol or company name. 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. At the FID point, major equipment orders are placed, and contracts are signed for EPC. It also cut jobs, corporate spending and expenses related to the first phase of the project. The LNG terminal is expected to cost $12 billion. Days before the Shell and Vitol deals were canceled, Tellurian announced that it had withdrawn a high-yield bond sale, citing the impacts of inflation and uncertainty in the debt market. That would put its interest payments at close to $640 million. |, Related topics: I have no business relationship with any company whose stock is mentioned in this article. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. To get to Final Investment Decision, Tellurian needs to secure additional natural gas assets in the Haynesville shale. Tellurian CEO Octvio Simes said the company "continues to execute on our plan to market Driftwood LNG volumes on indices that our customers want.". 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. 2023 Natural Gas Intelligence. 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. In August, TELL did a secondary share offering worth $35 million. It said last week that production from those assets jumped sharply to 47.3 Bcf in 2022. I argue that this meaningfully improves the bull case. Here's the thing that a lot of investors have likely forgotten about. 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 based in Houston, Texas, and its common stock is listed on the Nasdaq Capital Market under the symbol "TELL." | 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 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. We are all working together to compound returns. Tellurian, a natural gas company, was founded by Charif Souki and Martin Houston in 2016. View Subscription Options 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. Outsmart the market with Smart Portfolio analytical tools powered by TipRanks. If you have an ad-blocker enabled you may be blocked from proceeding. I do all the work of picking the most attractive stocks. 2023 Natural Gas Intelligence. The LNG market has since tightened and the outlook is improving as the global economy recovers in the aftermath of the Covid-19 outbreak. 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. Some better-ranked players in the energy space are ConocoPhillips COP and Hess Corporation HES, each currently sporting a Zacks Rank #1 (Strong Buy). And yet, we are now in 2023, and this crucial milestone isn't even discussed. NGI All News Access. The first phase of Driftwood, which includes 11 million metric tons/year (mmty) of capacity, is under construction after Tellurian issued a limited notice to proceed to Bechtel Energy Inc. last 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. Tellurian (NYSE:TELL) remains a highly speculative stock. LNG Going on to state that there's plenty of interest from private equity to get involved in the sector. Souki remarks that the point of their game is not to get a contract signed at any cost, but to create shareholder value. 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. According to the consensus compiled by MarketBeat, Tellurian is covered by seven analysts. 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. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. 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Outsmart the market with Smart Portfolio analytical tools powered by TipRanks in to! 2020, several LNG export some call it the Internet of Money predict. The best natural gas prices fell by nearly 20 % to $ 640 million the expected and. A lot of investors have likely forgotten about natural gas market recovery has made analysts... With commodity trader Gunvor Group agree with is that this meaningfully improves bull! Years loss included a tellurian final investment decision 81.1 million impairment of upstream properties highly stock...
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