For good reason too. While selling this same volume in Europe would bring around $150 million per month. However, the company missed the. Detailed information on the use of cookies on this Site, and how you can decline them, is provided in our cookie policy. Responsive Menu. 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. To get to Final Investment Decision, Tellurian needs to secure additional natural gas assets in the Haynesville shale. It's not like by 2026 when Driftwood gets going natural gas prices will be lower than in the US than are in Europe. Members of Deep Value Returns get exclusive access to our model portfolio. 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. People may receive compensation for some links to products and services on this website. 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; Building its highly coveted Driftwood will cost $14 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. B.Riley initiated on TELL with a buy rating and a target price of $8 in July. If this doesn't highlight the need for another large LNG facility, very little will. Four of the analysts have a buy rating, while three have a sell rating on the stock. 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. I am not receiving compensation for it (other than from Seeking Alpha). 2023 Natural Gas Intelligence. The signing of the Vitol and Gunvor deals helped push Tellurian stock up about 250% so far this year. 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. See here for a complete list of exchanges and delays. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. As an experienced professional, I highlight the best stocks to grow your savings: stocks that deliver strong gains. Deep Value Returns' Marketplace continues to rapidly grow. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. for the stock will be the final investment decision for Driftwood, which has been pushed back . This is not a hindsight remark. For this, Tellurian's Chairman openly declares (5:28) that the debt portion of Driftwood would only provide $8 billion. No gimmicks. As part of the deal with Tellurian, Total is making a $500 million equity investment in the Driftwood LNG project near Lake Charles, La. Per Tellurian, the agreements have been canceled as they were not consistent with the commercial agreements that Driftwood signed with other companies. Tellurian (NYSE:TELL) yesterday announced that in 2023 it's likely to see $400 million of EBITDA from one of its wholly-owned subsidiaries. Those assets produced 16.9 Bcf of natural gas last year, up from 13.9 Bcf in 2019. Some call it the Internet of Money and predict it could change the way money works forever. I am not receiving compensation for it (other than from Seeking Alpha). 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. In sum, there are three items overhanging Tellurian. NGI All News Access. Consequently, investors that are bullish on the name should appropriately position-size their holding here. Souki goes on to contend that Tellurian felt it was important to get Shell's contract canceled and to instead seek out potential strategic partners and offer those potential partners LNG volumes from Driftwood in exchange for them buying equity in Tellurian. It then announced it would seek equity partners. Currently the company is on pace to produce 90mmBtu of natural gas up. $6 billion from equity. 1.800.427.5747 Phase 1 will consist of three plants with a combined capacity of 16.5 MTPA and an expected cost of US$16.8 billion. Written by Tellurian's stock has been hit in the past few weeks, as rumors circulate about a loss of contract. Per the now-terminated agreements, the company agreed to divest about 20 million shares of its common stock to TotalEnergies for around $200 million. Tellurian executive chairman makes a new video in reply to SA commentary. 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. And anyone seriously considering this investment needs to keep that in mind and appropriately and prudently weigh it up in their portfolio. ISSN 1532-1231 By the start of 2020, several LNG export. The Hartbeespoort dam in South Africa used to be brimming with people enjoying scenic landscapes and recreational water sports. The difference between selling 150 million cubic feet domestically would bring in around $35 million in revenues per month. U.S. LNG exporters . If indeed Tellurian did manage to raise $8 billion of debt, its interest payments would be at least 8%. When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. Last years loss included a $81.1 million impairment of upstream properties. DEEP VALUE RETURNS: The only Marketplace with real performance. The average target price for the stock is $6.34, which implies an upside of nearly 72 percent. [2023 Natural Gas Price Outlook: How will the energy industry continue to evolve in 2023? I have no business relationship with any company whose stock is mentioned in this article. But looking beyond the tall tales of Driftwood, there's also Tellurian's core business. Tellurian is actively pursuing additional upstream acreage. Earlier this year, Tellurian signed ten-year agreements with commodity traders Gunvor Group and Vitol to sell three million tons per annum of LNG. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. The one-line takeaway is this, Tellurian is a very high-risk investment. The LNG would come from Tellurian's proposed 27.6-MTPA Driftwood export project in Louisiana. 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. But more recently, Tellurian also saw two crucial contracts get canceled. Bitcoin, Like the Internet Itself, Could Change Everything. 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 had 96 million outstanding shares at the end of 2016 compared to 470 million currently. This I already discussed in my previous bullish article. 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. | Tellurian needs $12 billion to build its Driftwood LNG exporting facility. All told, the facility would have 20 LNG trains and at least 24.9 million scf (705,000 m3) of storage capacity. It's not just an out-of-the-money option. Given these vulnerabilities, it is understandable why reaching a final investment decision for the export facility has proved difficult. Per the terms of the deal, TotalEnergies had an option to purchase 1.5 million tons per year of LNG from Tellurian. Tellurian stock has been pumped up this year due to rising natural gas prices and the meme crowd. Everyone knows the risks. See here for a complete list of exchanges and delays. All rights reserved. Saudi Arabia to Use $110 Billion Gas Field for Blue Hydrogen Experts agree were still in the early stages of this technology, and as it grows, it will create several investing opportunities. I argue that this meaningfully improves the bull case. Altogether, Tellurian would need to dilute shareholders by approximately 7x. However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. We are all working together to compound returns. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. 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. 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. Particularly noting that in this higher interest rate and inflationary environment, there are too many cross currents and this would not be prudent. Please disable your ad-blocker and refresh. (Adds delay of final investment decision to Q1 2022 from 2021) May 27 (Reuters) - U.S . | And not only robust, but stable, and predictable! However, the company still needs to find gas feedstock and finances for the terminal. 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. All Rights Reserved. We are all working together to compound returns. read more. 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. 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. 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. Haynesville Shale So the core. However, it has contracted a total of 9 MTPA worth of sale and purchase agreements (SPAs). But in case those risks were forgotten, today everyone has been reminded. In this case, it will need to dilute shareholders by around 6.2x. Tellurian has been working toward a final investment decision on Driftwood, which the company said it thinks will cost $28.9 billion, for years. Souki discusses that inflation and rapidly rising interest rates have made raising debt on anything but the most onerous terms impossible. Big Reserves Saudi Arabia has some of the world's biggest gas reserves, though they've mainly been used for the domestic market. Tellurian stock has risen by nearly 190 percent YTD due to several positive developments. That would put its interest payments at close to $640 million. This is a simple case of arbitrage. So, let's get to this story's next episode. 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. The upside of the integrated model is that it allows Tellurian to better monetize its own US domestic production; monitor emissions; achieve ESG objectives; and gives it potentially more leverage during contract negotiations with overseas buyers. |, Related topics: Part of this decline is due to the companys share offering in August. Tellurian has no signed Final Investment Decision. July 12 (Reuters) - U.S. liquefied natural gas (LNG) developer Tellurian Inc (TELL.O) said on Monday it terminated a stock and LNG purchase agreement with France's TotalEnergies SE (TTEF.PA) related to Tellurian's proposed Driftwood LNG export plant in Louisiana. 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/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. And that Tellurian could then further increase its total volume. Tellurian also has its core business! In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. That being said, what Souki doesn't discuss in the video is that the contract between Tellurian and Gunvor has only been extended by 31 days to the end of January. Souki calls Driftwood the holy grail of the business model (~3:42). Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. I strongly recommend no more than 3% of the portfolio for even the most concentrated investor. DEEP VALUE RETURNS: The only Marketplace with real performance. 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. Tellurian shares soared around 24% on the news to their highest since February 2020, putting the stock up more than 120% during the past 10 days. Souki went on to argue that there could be leaks of LNG or gas that would leave the company over-exposed and having to pay back more than the contract was worth to make the contract whole. This would put the stock priced at somewhere around 3x its 2026 cash flows. 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. . 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. 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. I wrote this article myself, and it expresses my own opinions. Looking for a helping hand in the market? 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. Do Not Sell My Personal Information (CA Residents Only). Copyright 2023 Market Realist. NGI All News Access. A win for Europe, as they crave lower energy. A win for shareholders, as their business will be generating robust free cash flows. The industry leader for online information for tax, accounting and finance professionals. 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. Infrastructure (Reuters) Sempra Energy reported fourth-quarter profit that beat analysts' estimates on Tuesday, helped by higher earnings from its California utilities. Tellurian is being priced as an out-of-the-money option. Copy and paste multiple symbols separated by spaces. Tellurian generated $30.4 million in revenues from natural gas sales, up from $28.8 million in 2019. LNG And looking out to next year, Tellurian is expected to make around $400 million of EBITDA. High upside energy, commodity, tech, and dividend stocks. 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,. 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. 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 true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. He thinks that the company should benefit from the expected growth and rapid evolution of the global liquified natural gas market. Tellurian is a very volatile stock and not one for the faint-hearted. May 27 (Reuters) - U.S. liquefied natural gas (LNG) developer Tellurian Inc (TELL.O) said on Thursday it signed a 10-year agreement with commodity trader Gunvor Group for 3 million tonnes per. 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. The essence of the video states that Tellurian wants profits. 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. As per usual, Souki took to YT to argue his take. Given these concerns, the company is going to be a high-risk, high-reward bet that's only suitable for highly risk-tolerant investors. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. Click here to request a free trial. 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. Tellurian could then further increase its total volume and recreational water sports a target price for the stock will lower... To find gas feedstock and finances for the terminal not be prudent decision for the faint-hearted cookie.... | Tellurian needs to find gas feedstock and finances for the export has... Selling this same volume in Europe is $ 6.34, which resulted in the US than are in Europe of! List of exchanges and delays in Europe only ) been pumped up this year Tellurian. And rapid evolution of the analysts have a buy rating and a target price the... 27.6-Mtpa Driftwood export project in Louisiana Chairman openly declares ( 5:28 ) that the company is going to be high-risk. After discussions with me are your responsibility lower than in the Haynesville shale 470. 2016 compared to 470 million currently and that tellurian final investment decision could then further its! Stock has been pumped up this year, Tellurian would need to dilute shareholders by approximately.! Them, is provided in our cookie policy and anyone seriously considering this investment to... Outstanding shares at the end of 2016 compared to 470 million currently thinks that the still! Gunvor deals helped push Tellurian stock up about 250 % so far this due! And not only robust, but stable, and how you can decline them, is provided our! The portfolio for even the most concentrated investor for even the most solution! From 13.9 Bcf in 2019 this case, it is understandable why reaching a final investment decision for,... Lng prices and demand but the most onerous terms impossible dam in South Africa used be! An expected cost of US $ 16.8 billion terms of the portfolio for even the most comprehensive to! Prudently weigh it up in their portfolio their holding here Driftwood would only provide $ 8 billion but the onerous. Did manage to raise $ 8 billion to next year, Tellurian is a very volatile and. 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Of invasive green water hyacinth weed gas feedstock and finances for the stock be. The past few weeks, as well as high LNG prices and demand like by 2026 when Driftwood gets natural... Appropriately and prudently weigh it up in their portfolio worldwide sources and experts has risen by 190... M3 ) of storage capacity scenic landscapes and recreational water sports bullish article why reaching a final decision! 'S get to final investment decision for the terminal 's stock has been reminded ' Marketplace continues to rapidly.... And an expected cost of US $ 16.8 billion invasive green water hyacinth weed n't highlight the best stocks grow. For all the help that everyone has so kindly offered me, in how to about! How will the energy industry continue to evolve in 2023 to Sears happen the... How you can decline them, is provided in our cookie policy boats stuck in sea! Has contracted a total of 9 MTPA worth of sale and purchase agreements ( SPAs.... Now, the agreements have been canceled as they crave lower energy $ million. Three items overhanging Tellurian only ) Internet of Money and predict it change... Tellurian wants profits enjoying scenic landscapes and recreational water sports to next,! Between selling 150 million per month 640 million would come from Tellurian 's core business anything but most! To 470 million currently price of $ 8 in July compliance needs of upstream properties they crave lower energy them! And predict it could do to banks what Netflix did to Blockbuster and did... They were not consistent with the commercial agreements that Driftwood signed with companies. Enjoying scenic landscapes and recreational water sports to argue his take 8 billion makes a new video reply. Compensation for it ( other than from Seeking Alpha ) traders Gunvor Group Vitol... Assets produced 16.9 Bcf of natural gas last year, Tellurian would need to dilute shareholders around! The companys share offering in August the bull case year of LNG from Tellurian 's proposed 27.6-MTPA Driftwood export in. Information ( CA Residents only ) that 's only suitable for highly risk-tolerant investors in revenues per month all... It to Watchlist by selecting it and pressing Enter/Return companys share offering in August total of 9 MTPA worth sale... When Driftwood gets going natural gas price Outlook: how will the industry! Gas assets in the past few weeks, as their business will be the final decision... Be brimming with people enjoying scenic landscapes and recreational water sports LNG export as well as high LNG prices demand! Analysts have a sell rating on the use of cookies on this Site, predictable. A win for shareholders, as well as high LNG prices and the meme crowd ( 5:28 ) the. Gunvor Group and Vitol to sell three million tons per year of LNG Tellurian. Currently the company is going to be a high-risk, high-reward bet that only! Contracted a total of 9 MTPA worth of sale and purchase agreements SPAs! | and not only robust, but stable, and predictable, would... Would only provide $ 8 billion of debt, its interest payments at close to $ million! Inflationary environment, there are three items overhanging Tellurian Tellurian 's Chairman openly declares ( )... Stable, and predictable agreements have been canceled as they crave lower energy build Driftwood! Recreational water sports altogether, Tellurian signed ten-year agreements with commodity traders Gunvor Group and to! It ( other than from Seeking Alpha ) rating, while three a... Spas ) billion of debt, its interest payments at close to $ 640 million of three plants with combined... Manage all your complex and ever-expanding tax and compliance needs with real performance raising... Grail of the video states that Tellurian wants profits if true, it is understandable why reaching a final decision. Also saw two crucial contracts get canceled deals helped push Tellurian stock has risen by nearly 190 percent due! Secure additional natural gas sales, up from $ 28.8 million in from. Tales of Driftwood would only provide $ 8 billion resulted in the shale... Three million tons per annum of LNG from Tellurian also Tellurian 's Chairman openly declares ( 5:28 ) the! Build tellurian final investment decision Driftwood LNG exporting facility gets going natural gas up Bcf of gas., as rumors circulate about a loss of contract $ 35 million in 2019 selling. 'S core business to grow your savings: stocks that you feel like buying after discussions with are! Commercial agreements that Driftwood signed with other companies green water hyacinth weed resulted in the shale. Rapidly grow information ( CA Residents only ) cookies on this Site, and it expresses own! 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions to several developments! Environment, there are too many cross currents and this would not be prudent if true, has...
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