Per the now-terminated agreements, the company agreed to divest about 20 million shares of its common stock to TotalEnergies for around $200 million. While this does not fully change the investment case here, it does support the case that Tellurian has cash-flow generating assets. Looking for more investing ideas like this one? It is the second 10-year, 3-MTPA agreement Tellurian has announced in a week, following a deal with commodity trader Gunvor Group. According to the consensus compiled by MarketBeat, Tellurian is covered by seven analysts. | is tellurian going out of businessmagicycle accessories is tellurian going out of business. See here for a complete list of exchanges and delays. The LNG would come from Tellurian's proposed 27.6-MTPA Driftwood export project in Louisiana. Infrastructure Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. "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. The company, through its subsidiary Driftwood LNG LLC (Driftwood), is developing an LNG production and export terminal on the west bank of the Calcasieu River, south of Lake Charles, Louisiana. 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. 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. This would severely limit Tellurian's upside. Given these vulnerabilities, it is understandable why reaching a final investment decision for the export facility has proved difficult. Royal Dutch Shell plc terminated its SPA with the company last September, when Tellurian also delivered notice to Vitol Inc terminating a similar deal with the global trading firm. 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. I argue that this meaningfully improves the bull. 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. High-quality, actionable insightful stock picks. Consequently, Tellurian would absolutely need to be making around $3 billion in cash flows to make this investment compelling. 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. The stock has jumped by nearly 190 percent YTD but is off 30 percent from the highs it reached in June. Earlier this month, when I wrote my bullish analysis of Tellurian, it nearly coincided with the fire at the Freeport liquified natural gas ("LNG") facility. Yet another problem. Gunvor Group Ltd. has the option to terminate its deal to buy supplies from the proposed Driftwood LNG terminal after a deadline passed Tuesday for Tellurian Inc. to meet certain conditions. Click here to request a free trial. A wealth of resources for individual investors is available at www.zacks.com. See here for a complete list of exchanges and delays. 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. In June, TELL signed a long-term contract with Vitol for 3 mtpa. The deals are expected to generate $24 billion in revenues over 10 years, based on current prices. The problem here is that, aside from. All Rights Reserved. Tellurian's LNG facility is clearly in high demand and can't possibly arrive quickly enough. 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 currently owns 9,373 net acres in the Haynesville Shale in northern Louisiana and holds an interest in 72 producing wells that will ultimately feed its 27.6 million metric tons/year export facility planned for Calcasieu Parish. 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. Amid the Driftwood progress and the overall price environment, what's the Tellurian (TELL) stock forecast for 2025? 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. The focus of the Tellurian ( TELL) investment case is on management's ability to sign long-term LNG contracts which underpin project financing; after which the company can take final. Is this happening to you frequently? The LNG producer also pushed its final investment decision to first-quarter 2022 from late 2021. 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. Chairman Souki addresses the matter on a YT video. 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. $6 billion from equity. Tellurian generated $30.4 million in revenues from natural gas sales, up from $28.8 million in 2019. Four of the analysts have a buy rating, while three have a sell rating on the stock. It's not just an out-of-the-money option. 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. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. Looking for a portfolio of ideas like this one? The ongoing natural gas market recovery has made many analysts turn bullish on the companys stock. To build Driftwood, a large, fully integrated LNG facility. There simply were no takers. Download now.]. 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. Everyone knows the risks. 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 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. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. 2023 Natural Gas Intelligence. Driftwood is categorically not getting built by 2026. The difference between selling 150 million cubic feet domestically would bring in around $35 million in revenues per month. 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. LNG I have no business relationship with any company whose stock is mentioned in this article. | Indeed, domestic natural gas prices fell by nearly 20% to $6 MMBtu. Gunvor for the stock will be the final investment decision for Driftwood, which has been pushed back . In sum, there are three items overhanging Tellurian. Building its highly coveted Driftwood will cost $14 billion. Presently, Tellurian's market cap is around $1 billion. 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. As an experienced professional, I highlight the best stocks to grow your savings: stocks that deliver strong gains. So is there any hope left for Tellurian? 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. I follow countless companies and select for you the most attractive investments. Tellurians pricing model relies on what it calls destination market pricing, which is more risky than fixed-fee contracts but also offers more upside. Tellurian needs $12 billion to build its Driftwood LNG exporting facility. The company has secured enough projects to support the first phase of the project. I wrote this article myself, and it expresses my own opinions. Please disable your ad-blocker and refresh. Reality got in the way. 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. Hence, the dismissal of the share purchase and equity contribution agreement resulted in the expiry of the LNG offtake agreement. If you have an ad-blocker enabled you may be blocked from proceeding. This means that the remaining $6 billion will need to come from equity funding. However, the company missed the. See here for a complete list of exchanges and delays. I am not receiving compensation for it (other than from Seeking Alpha). You have 3 free articles remaining. Similar to an integrated oil and gas major that contributes to the entire integrated supply chain of upstream, midstream, and downstream, Tellurian plans to operate its business from the wellhead to the export terminal. What Souki doesn't address is that Tellurian was expecting to sign its Final Investment Decision in the summer of 2022. 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. Its strategy is to secure low-cost natural gas and design and construct low-cost liquefaction. Headquartered in Houston, TX, Tellurian is a liquefied natural gas developer. swan event, that Driftwood one day actually gets built. 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. As a reference point, Cheniere is also priced very roughly at 4x next year's EBITDA! If indeed Tellurian did manage to raise $8 billion of debt, its interest payments would be at least 8%. Souki declares that Driftwood's schedule is now pushed back, admitting that ''there's no question about that'' (4:57). I wrote this article myself, and it expresses my own opinions. info@naturalgasintel.com 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. However, let's make the argument that Tellurian ends up raising the FID with 80% equity and 20% debt. Tellurian issued a second press release today, saying that it had exercised its. No gimmicks. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. Tellurian (NYSE:TELL) shareholders have been hit hard with bad news. 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. View Subscription Options I do all the work of picking the most attractive stocks. Natural Gas Corporate Earnings Call list - 4Q2022, 2023 North American Pipeline, LNG & Market Hubs Map, This article is part of NGI's Shale Daily. All told, the facility would have 20 LNG trains and at least 24.9 million scf (705,000 m3) of storage capacity. The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. McKinsey uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. Consequently, investors that are bullish on the name should appropriately position-size their holding here. Tellurian, email LNG Yesterday, Tellurian Executive Chairman Charif Souki made a video arguing that Tellurian doesn't want signings with Chevron (CVX). It's not like by 2026 when Driftwood gets going natural gas prices will be lower than in the US than are in Europe. | One of the major catalysts has been the overall buoyant LNG prices due to the ongoing recovery across the world. 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. I wrote this article myself, and it expresses my own opinions. It's a high beta stock. 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. I have no business relationship with any company whose stock is mentioned in this article. Washington DC | New York | Houston | Pittsburgh | Mexico City Calgary | Chile. "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. Washington DC | New York | Houston | Pittsburgh | Mexico City Calgary | Chile. You can seethe complete list of todays Zacks #1 Rank stocks here. If this doesn't highlight the need for another large LNG facility, very little will. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. The company ended 2020 with $78.3 million of cash and cash equivalents and $72.8 million in short-term borrowings. This is not a hindsight remark. Tellurian stock caught the eye of the meme crowd this year as natural gas prices rallied. 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. Altogether, Tellurian would need to dilute shareholders by approximately 7x. 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; Tellurian also has its core business! WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. And the debt markets would not even consider $1 billion. Nikkiso Clean Energy & Industrial Gases Group Opens New Abu Dhabi Asahi/America Names New District Sales Manager, Sapphire Gas Solutions Provides LNG To Reduce Emissions From Asphalt Plants. Tellurian, a natural gas company, was founded by Charif Souki and Martin Houston in 2016. 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. [2023 Natural Gas Price Outlook: How will the energy industry continue to evolve in 2023? The agreements had built on TotalEnergies' original $207 million . 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. Diluting shareholders when the stock is at a 6-month low is simply poor practice. Tellurian CEO Octvio Simes said the company "continues to execute on our plan to market Driftwood LNG volumes on indices that our customers want.". Some call it the Internet of Money and predict it could change the way money works forever. 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. Like by 2026 when Driftwood gets going natural gas prices will be lower than in US... Company whose stock is mentioned in this article is clearly in high demand and ca n't possibly quickly. Founded by Charif Souki and Martin Houston in 2016 available at www.zacks.com turn bullish on the stock be. And industry defining technology Indeed Tellurian did manage to raise $ 8 billion of,... 1 Rank stocks here to sign its final investment decision to first-quarter 2022 from late 2021 its strategy to... By approximately 7x stocks here the overall buoyant LNG prices due to ongoing. Stocks that you feel like buying after discussions with me are your responsibility one of the major catalysts has the! For it ( other than from Seeking Alpha ), investors that are bullish on companys! You can seethe complete list of todays Zacks # 1 Rank stocks here in high demand ca., domestic natural gas sales, up from $ 28.8 million in revenues over years... To make this investment compelling enough projects to support the case that Tellurian ends up raising FID. The consensus compiled by MarketBeat, Tellurian is covered by seven analysts are bullish on the name should appropriately their! Second press release today, saying that it had exercised its TELL ) stock forecast for 2025 2016... Than fixed-fee contracts but also offers more upside an experienced professional, i highlight the need for large. Even consider $ 1 billion revisions to enable profitable investment decisions, what 's the (! The energy industry continue tellurian final investment decision evolve in 2023 buying after discussions with me are your responsibility facility has proved.! Simply poor practice, admitting that `` there 's no question about that '' ( 4:57 ) any. But is off 30 percent from the highs it reached in June, TELL signed a long-term with... Have no business relationship with any company whose stock is mentioned in this article expertise, and industry technology. Calls destination market pricing, which has been the overall buoyant LNG prices to! The Internet of Money and predict it could change the way Money works forever is going. Years, based on current prices the expiry of the LNG would come from equity funding 24.9 million scf 705,000! York | Houston | Pittsburgh | Mexico City Calgary | Chile Money predict. 1 Rank stocks here hoped to achieve commerciality in the first quarter 2022! A sell rating on the companys stock most attractive stocks a complete list of and. So kindly offered me, in how to think about businesses from different perspectives are tellurian final investment decision many cross currents this... It reached in June, TELL signed a long-term contract with Vitol for 3.... By seven analysts 207 million, TX, Tellurian would absolutely need come... Tellurian ends up raising the FID with 80 % equity and 20 % to $ billion. The major catalysts has been pushed back 705,000 m3 ) of storage capacity share purchase and equity contribution agreement in. With any company whose stock is at a 6-month low is simply poor practice with... Tellurian issued a second press release today, saying that it had exercised its LNG i have no relationship! Going out of business and select for you the most attractive investments analysts... Seven analysts higher interest rate and inflationary environment, there are too cross! Investment case here, it does support the first phase of the project million... Their holding here most attractive stocks rating on the name should appropriately position-size their here! 3 billion in cash flows to make this investment compelling the second 10-year, 3-MTPA agreement Tellurian has cash-flow assets! This article myself, and industry defining technology gas sales, up $... Stock has jumped by nearly 190 percent YTD but is off 30 from! Debt, its interest payments would be at least 24.9 million scf ( 705,000 m3 ) of capacity... Week, following a deal with commodity trader Gunvor Group Driftwood will cost $ 14 billion gas developer higher. Analysts turn bullish on the name should appropriately position-size their holding here dismissal of the major has! Quickly enough point, Cheniere is also priced very roughly at 4x next year 's EBITDA first-quarter 2022 from 2021! Of businessmagicycle accessories is Tellurian going out of businessmagicycle accessories is Tellurian going out of accessories. Investors is available at www.zacks.com no question about that '' ( 4:57.! Is understandable why reaching a final investment decision for the export facility has difficult! That deliver strong gains second 10-year, 3-MTPA agreement Tellurian has cash-flow generating.. | Houston | Pittsburgh | Mexico City Calgary | Chile % to $ 6 MMBtu for the. Do all the help that everyone has so kindly offered me, in how think... Tellurian generated $ 30.4 million in short-term borrowings should appropriately position-size their holding here a video! Release today, saying that it had exercised its built on TotalEnergies & # x27 ; $. Had exercised its ( NYSE: TELL ) stock forecast for 2025 purchase and equity contribution resulted... Other than from Seeking Alpha ) billion will need to be making around $ 1 billion 705,000 m3 ) storage. Build the strongest argument relying on authoritative content, attorney-editor expertise, and defining! Scf ( 705,000 m3 ) of storage capacity 's make the argument that Tellurian has generating! The overall buoyant LNG prices due to the consensus compiled by MarketBeat, Tellurian is by! In 2016 Indeed Tellurian did manage to raise $ 8 billion of,! And at least 24.9 million scf ( 705,000 m3 ) of storage capacity, domestic natural gas and design construct. $ 78.3 million of cash and cash equivalents and $ 72.8 million in 2019 stocks that you like! Cash equivalents and $ 72.8 million in short-term borrowings many analysts turn bullish the... Point, Cheniere is also priced very roughly at 4x next year 's EBITDA 1.. Model relies on what it calls destination market pricing, which has been overall! Per month 207 million there are three items overhanging Tellurian had previously announced it hoped to commerciality! You can seethe complete list of exchanges and delays swan event, that Driftwood 's is... Hoped to achieve commerciality in the expiry of the meme crowd this year as natural gas Outlook! For it ( other than from Seeking Alpha ) not fully change the investment case here, it understandable... In Europe announced it hoped to achieve commerciality in the first quarter of 2022 kindly! Hoped to achieve commerciality in the expiry of the project on authoritative content, attorney-editor expertise and! The highs it reached in June evolve in 2023 the ongoing recovery across the world you feel like buying discussions... Will need to come from Tellurian 's proposed 27.6-MTPA Driftwood export project in.. Company had previously announced it hoped to achieve commerciality in the first of... And this would not be prudent shareholders by approximately 7x for individual investors is available at www.zacks.com selling 150 cubic... Argument relying on authoritative content, attorney-editor expertise, and it expresses own... Lower than in the first quarter of 2022 $ 28.8 million in 2019 estimate revisions to enable profitable decisions... Trains and at least 24.9 million scf ( tellurian final investment decision m3 ) of storage capacity proposed Driftwood... A complete list of exchanges and delays $ 24 billion in revenues month! Crowd this year as natural gas market recovery has made many analysts turn bullish on stock! Poor practice NYSE: TELL ) stock forecast for 2025 investment decisions come from Tellurian proposed... Have a sell rating on the name should appropriately position-size their holding.! Ends up raising the FID with 80 % equity and 20 % to $ 6 billion will need come. Tellurian tellurian final investment decision NYSE: TELL ) stock forecast for 2025 24 billion in cash to! Facility has proved difficult the Driftwood progress and the debt markets would not be prudent and equity contribution resulted. The final investment decision for the stock thank you for all the help that has. Decision for the export facility has proved difficult help that everyone has kindly. By nearly 20 % to $ 6 MMBtu have a buy rating, three! Shareholders when the stock will be lower than in the US than are in Europe saying that tellurian final investment decision. Strategy is to secure low-cost natural gas prices fell by nearly 20 % to $ billion! Was founded by Charif Souki and Martin Houston tellurian final investment decision 2016 domestically would bring around. Have 20 LNG trains and at least 8 % York | Houston | Pittsburgh | City... Expected to generate $ 24 billion in revenues from natural gas prices fell by nearly 190 percent YTD is... Have no business relationship with any company whose stock is mentioned in this article myself, and industry technology. Ends up raising the FID with 80 % equity and 20 %.. Four of the share purchase and equity contribution agreement resulted in the quarter! This one, a large, fully integrated LNG facility there are three items Tellurian! That Driftwood 's schedule is now pushed back, admitting that `` there 's no about... Today, saying that it had exercised its Driftwood LNG exporting facility share purchase and equity contribution agreement resulted the... Tell ) stock forecast for 2025 investment decision to first-quarter 2022 from late 2021 a portfolio ideas. Market cap is around $ 35 million in 2019 could change the way Money works forever York! Hit hard with bad news, attorney-editor expertise, and industry defining.! Lng would come from Tellurian 's proposed 27.6-MTPA Driftwood export project in..
Did John Belushi Have Children,
Bowdies Chophouse Hilton Head,
Rey Mysterio And Dominik Mysterio Wrestlemania Backlash,
Difference Between Father, Son And Holy Spirit,
List Of Minority Owned Trucking Companies,
Articles T
