Infrastructure To read this article on Zacks.com click here. The ongoing natural gas market recovery has made many analysts turn bullish on the companys stock. I am not receiving compensation for it (other than from Seeking Alpha). Tellurian dangles a carrot to investors, $400 million of EBITDA in 2023. However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. Yet another problem. 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. The company currently carries a Zack Rank #3 (Hold). So the core. Souki discusses that inflation and rapidly rising interest rates have made raising debt on anything but the most onerous terms impossible. Driftwood Lng 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. Tellurian is a very volatile stock and not one for the faint-hearted. Amid a record stretch of U.S. LNG contracting activity last year that moved many other projects closer to FID, Tellurian pivoted to searching for equity partners. Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. But common sense. No gimmicks. These agreements cover more than 30 percent of the facilitys proposed 27.6 mtpa capacity. 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. 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. Tellurian shares were trading around $4.42 per share, up about 0.4%, on Monday afternoon. The timing of this stock issuance is suspicious, to say the least. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. 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. It's not just an out-of-the-money option. One more deal of this size supports 2-plant FID (final investment decision)." Tellurian has said the first phase of Driftwood would cost about $16.8 billion and produce about 16.5 MTPA of LNG. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. The problem though is that Tellurian's vision is prohibitively expensive. The essence of the video states that Tellurian wants profits. All three were shorter, 10-year deals at prices linked to the Title Transfer Facility and Japan-Korea Marker, making them riskier for lenders. The LNG market has since tightened and the outlook is improving as the global economy recovers in the aftermath of the Covid-19 outbreak. 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. Ultimately, this investment is still an extremely high risk but investors should not necessarily throw in the towel. $6 billion from equity. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. Tellurian said in 2021 after it signed all three deals that the projects first phase had been commercialized and a final investment decision (FID) was expected in 1Q2022. info@naturalgasintel.com 1.800.427.5747 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. | (Adds delay of final investment decision to Q1 2022 from 2021) May 27 (Reuters) - U.S . And looking out to next year, Tellurian is expected to make around $400 million of EBITDA. Tellurian Inc.'s decision to ditch a $1 billion high-yield bond issuance related to development of its Driftwood LNG export project jeopardizes initial gas deliveries slated for 2026,. High upside energy, commodity, tech, and dividend stocks. 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. Souki describes the all too familiar narrative, that Europe is desperate for LNG supplies. Total also will purchase about 20 million additional. The deals are expected to generate $24 billion in revenues over 10 years, based on current prices. | Type a symbol or company name. Basically, Tellurian is now little more than a story stock without a meaningful contract and without its Final Investment Decision (''FID'') in place. Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Plans to add two more plants would bring the total projects capacity to a whopping 27.6 MTPA for a total cost of US$30 billion. Copy and paste multiple symbols separated by spaces. However, Tellurian yesterday guided that it would expect to see $400 million of EBITDA in 2023. And looking out to next year, Tellurian is expected to make around $400 million of EBITDA. 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 is reasonably well capitalized, with very roughly $400 million of net cash. Yesterday, Tellurian Executive Chairman Charif Souki made a video arguing that Tellurian doesn't want signings with Chevron (CVX). 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 then announced it would seek equity partners. ISSN 2158-8023 This would put the stock priced at somewhere around 3x its 2026 cash flows. The industry leader for online information for tax, accounting and finance professionals. 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; Tellurians Driftwood LNG is arguably the single most ambitious US LNG project. The LNG terminal is expected to cost $12 billion. LNG Insight Combined, the three SPAs are expected to generate annual revenue of US$1.8 billion and annual EBITDA of just under US$1 billion. ISSN 1532-1231 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. We are all working together to compound returns. Haynesville Shale FID Also known as: Final investment decision FID is the point in the capital project planning process when the decision to make major financial commitments is taken. Souki calls Driftwood the holy grail of the business model (~3:42). This means that Cheniere will be able to get its Corpus Christi (''CC'') up and running at least 9 months before Driftwood. I provide a hand-holding service. All told, the facility would have 20 LNG trains and at least 24.9 million scf (705,000 m3) of storage capacity. | NGI All News Access. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. Since I wrote Pipe Dream, Tellurian's share price has taken a tumble. And the debt markets would not even consider $1 billion. Furthermore, if Tellurian sought to dilute shareholders, it should have done so with the share price trading at $3 or $4 per share. 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. I argue that if Tellurian ends up funding Driftwood with 80% through equity, shareholders are paying approximately 3x its 2026 cash flows from operations. 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. The average target price for the stock is $6.34, which implies an upside of nearly 72 percent. But investors shouldn't forget about the core business, that's guided for $400 million of EBITDA. | In sum, there are three items overhanging Tellurian. swan event, that Driftwood one day actually gets built. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. Gunvor Please. See here for a complete list of exchanges and delays. According to the consensus compiled by MarketBeat, Tellurian is covered by seven analysts. Do Not Sell My Personal Information (CA Residents Only). To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. Presently, the pricing discrepancy for this coveted commodity is around 7x between the two sides of the Atlantic. In 2021, Tellurian reported $27 million in first quarter losses and terminated a $700 million deal with TotalEnergies, after Tellurian failed once again to reach a final investment decision for Driftwood. Click here to request a free trial. Next, Tellurian's share price is trading at a multi-year low. But does this mean it won't get built at all? Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. Tellurian has no signed Final Investment Decision. Tellurian sold off 40% in the past month. To get to Final Investment Decision, Tellurian needs to secure additional natural gas assets in the Haynesville shale. Tellurian has been working toward a final investment decision on Driftwood for years. 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. Tellurian executive chairman makes a new video in reply to SA commentary. I am not receiving compensation for it (other than from Seeking Alpha). Washington DC | New York | Houston | Pittsburgh | Mexico City Calgary | Chile. NGI All News Access. 2 min read. In June, TELL signed a long-term contract with Vitol for 3 mtpa. Please disable your ad-blocker and refresh. Today, that discovery is still the heart of the Zacks Rank. Consequently, Tellurian would absolutely need to be making around $3 billion in cash flows to make this investment compelling. In this case, it will need to dilute shareholders by around 6.2x. Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. 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 I already discussed in my previous bullish article. Washington DC | New York | Houston | Pittsburgh | Mexico City Calgary | Chile. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. 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. 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 Inc. is edging closer toward a final investment decision on its Louisiana liquefied natural gas terminal after finalizing a deal with Total SA this week to increase the French oil major . The Hartbeespoort dam in South Africa used to be brimming with people enjoying scenic landscapes and recreational water sports. 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. I argue that this meaningfully improves the bull. Tellurian needs to raise $12 billion. 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. Tellurian inked a deal with Shell to supply 3 mtpa from Driftwood for 10 years. And not only robust, but stable, and predictable! Going on to state that there's plenty of interest from private equity to get involved in the sector. |, Related topics: Two-thirds debt to one-third equity. 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. If you have an ad-blocker enabled you may be blocked from proceeding. Hess earnings for 2021 are expected to rise 116.2% year over year. The stock has jumped by nearly 190 percent YTD but is off 30 percent from the highs it reached in June. Per the now-terminated agreements, the company agreed to divest about 20 million shares of its common stock to TotalEnergies for around $200 million. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. Detailed information on the use of cookies on this Site, and how you can decline them, is provided in our cookie policy. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. 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. Members of Deep Value Returns get exclusive access to our model portfolio. 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. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. 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. 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.
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