Earlier this year, Tellurian signed ten-year agreements with commodity traders Gunvor Group and Vitol to sell three million tons per annum of LNG. Tellurian, email The downside is that it is extremely capital-intensive and places a lot more industry, macroeconomic, and geopolitical risks on Tellurian rather than a diversified network of partners. 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. The essence of the video states that Tellurian wants profits. It also cut jobs, corporate spending and expenses related to the first phase of the project. Earnings While this does not fully change the investment case here, it does support the case that Tellurian has cash-flow generating assets. Sign in to get the best natural gas news and data. Reality got in the way. 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. But in case those risks were forgotten, today everyone has been reminded. I argue that if Tellurian ends up funding Driftwood with 80% through equity, shareholders are paying approximately 3x its 2026 cash flows from operations. Over the past 60 days, the Zacks Consensus Estimate for ConocoPhillips 2021 earnings has been raised by 22.5%. Please. You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. The company currently carries a Zack Rank #3 (Hold). We are all working together to compound returns. Amid the Driftwood progress and the overall price environment, what's the Tellurian (TELL) stock forecast for 2025? Tellurian generated $30.4 million in revenues from natural gas sales, up from $28.8 million in 2019. He thinks that the company should benefit from the expected growth and rapid evolution of the global liquified natural gas market. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. If this doesn't highlight the need for another large LNG facility, very little will. JKM ISSN 2577-9877 The industry leader for online information for tax, accounting and finance professionals. NGI All News Access. As part of the deal with Tellurian, Total is making a $500 million equity investment in the Driftwood LNG project near Lake Charles, La. 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. See here for a complete list of exchanges and delays. . 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. This is not a significant dilution and amounts to less than 4%. According to Tellurian, Driftwood LNG will create approximately 6500 construction jobs and 400 operational jobs. 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. Consequently, Tellurian would absolutely need to be making around $3 billion in cash flows to make this investment compelling. Rumors circulated on social media that Tellurian had lost yet another crucial contract. The bigger question is what LNG prices will be in 2026. Since then, natural gas prices have been on a wild ride. Tellurian is being priced as 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. I am not receiving compensation for it (other than from Seeking Alpha). Tellurian then secured a third SPA with Shell in July 2021. Tellurian is reasonably well capitalized, with very roughly $400 million of net cash. "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. 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." 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. Zacks has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. Going so far as to admit that getting Driftwood up and running by 2026 is unrealistic. Click here to request a trial. Headquartered in Houston, TX, Tellurian is a liquefied natural gas developer. Haynesville Shale 2023 Natural Gas Intelligence. 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. Tellurian, email 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. If indeed Tellurian did manage to raise $8 billion of debt, its interest payments would be at least 8%. 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. 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. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. 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. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. | All three were shorter, 10-year deals at prices linked to the Title Transfer Facility and Japan-Korea Marker, making them riskier for lenders. FIND OUT MORE Downstream capabilities View our downstream services Insights The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. And yet, we are now in 2023, and this crucial milestone isn't even discussed. 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. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. Indeed, what can go wrong? See here for a complete list of exchanges and delays. The company estimates that the 27.6 mmty facility would cost $25 billion to build. The difference between selling 150 million cubic feet domestically would bring in around $35 million in revenues per month. Responsive Menu. 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. Tellurian clearly has assets with some value. Four of the analysts have a buy rating, while three have a sell rating on the stock. Tellurian sold off 40% in the past month. 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. 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. [2023 Natural Gas Price Outlook: How will the energy industry continue to evolve in 2023? B.Riley analyst Liam Burke is positive on the stock. Please. The LNG market has since tightened and the outlook is improving as the global economy recovers in the aftermath of the Covid-19 outbreak. 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. I wrote this article myself, and it expresses my own opinions. You have 3 free articles remaining. Tellurian has no signed Final Investment Decision. Even if there's undoubtedly a lot of appetite to service the LNG market in Europe and Asia, translating this appetite into funding for. Presently, Tellurian's market cap is around $1 billion. I am not receiving compensation for it (other than from Seeking Alpha). $6 billion from equity. 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. Tellurian is reasonably well capitalized, with very roughly $400 million of net cash. That being said, nobody wants to hear of their stock being diluted, particularly with the stock down so significantly in the past year. However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. DEEP VALUE RETURNS: The only Marketplace with real performance. Zacks Equity Research for As per usual, Souki took to YT to argue his take. Tellurian has an amazing story. 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. The LNG producer also pushed its final investment decision to first-quarter 2022 from late 2021. High upside energy, commodity, tech, and dividend stocks. This is a simple case of arbitrage. So is there any hope left for Tellurian? Market Realist is a registered trademark. These symbols will be available throughout the site during your session. All told, the facility would have 20 LNG trains and at least 24.9 million scf (705,000 m3) of storage capacity. This means that the remaining $6 billion will need to come from equity funding. Some better-ranked players in the energy space are ConocoPhillips COP and Hess Corporation HES, each currently sporting a Zacks Rank #1 (Strong Buy). In this case, it will need to dilute shareholders by around 6.2x. Zacks->. But investors crave FID details. Another big fear for investors could be the dilution of their holdings. A wealth of resources for individual investors is available at www.zacks.com. You can seethe complete list of todays Zacks #1 Rank stocks here. Looking for more investing ideas like this one? Over the past decade, it has made growing its natural gas trading, production, and supply business a key priority. 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. . Tellurian (NYSE:TELL) shareholders have been hit hard with bad news. Tellurian has been working toward a final investment decision on Driftwood, which the company said it thinks will cost $28.9 billion, for years. I am not receiving compensation for it (other than from Seeking Alpha). When the symbol you want to add appears, add it to My Quotes by selecting it and pressing Enter/Return. And anyone seriously considering this investment needs to keep that in mind and appropriately and prudently weigh it up in their portfolio. 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. Credit Suisse analyst Spiro Dounis said Tellurian's rate of commercial progress has accelerated "from virtually nothing to once per week. Combined, the three SPAs are expected to generate annual revenue of US$1.8 billion and annual EBITDA of just under US$1 billion. 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 . 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. Deep Value Returns' Marketplace continues to rapidly grow. Driftwood Lng 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. No gimmicks. 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. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. I'll address this momentarily. Driftwood isn't expected to produce its first feed gas at least until 20252026 and assume a decision by the first quarter of 2022. Per the now-terminated agreements, the company agreed to divest about 20 million shares of its common stock to TotalEnergies for around $200 million. Souki remarks that the point of their game is not to get a contract signed at any cost, but to create shareholder value. 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.

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