Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. I am not receiving compensation for it (other than from Seeking Alpha). Tellurian has no signed Final Investment Decision. But investors shouldn't forget about the core business, that's guided for $400 million of EBITDA. Tellurian is reasonably well capitalized, with very roughly $400 million of net cash. Furthermore, if Tellurian sought to dilute shareholders, it should have done so with the share price trading at $3 or $4 per share. I wrote this article myself, and it expresses my own opinions. Market Realist is a registered trademark. Some call it the Internet of Money and predict it could change the way money works forever. LNG All Rights Reserved. I provide a hand-holding service. Combined, the three SPAs are expected to generate annual revenue of US$1.8 billion and annual EBITDA of just under US$1 billion. 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. 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. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. This is the core of the bull and bear case. 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. 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. Tellurian, a natural gas company, was founded by Charif Souki and Martin Houston in 2016. I am not receiving compensation for it (other than from Seeking Alpha). Going forward, a lot will depend on the FID. "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. ISSN 2577-9877 View Subscription Options Subsequently reminding viewers that Tellurian wants to be a high-margin business that can make $3 or $4 billion in cash flows per year, on the back of the $12 billion investment, that Tellurian doesn't want to run around chasing $200 to $300 million in profits. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. Tellurian dangles a carrot to investors, $400 million of EBITDA in 2023. Haynesville Shale Bitcoin, Like the Internet Itself, Could Change Everything. Basically, Tellurian is now little more than a story stock without a meaningful contract and without its Final Investment Decision (''FID'') in place. Tellurian reported a full-year net loss of $49.8 million. Liquefied Natural Gas High upside energy, commodity, tech, and dividend stocks. B.Riley initiated on TELL with a buy rating and a target price of $8 in July. 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. 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. 2023 ESG Review. Looking for a helping hand in the market? Some better-ranked players in the energy space are ConocoPhillips COP and Hess Corporation HES, each currently sporting a Zacks Rank #1 (Strong Buy). Tellurian Inc confirmed on Wednesday it still plans to make a final investment decision to build its proposed $30 billion Driftwood liquefied natural gas (LNG) export project in Louisiana in 2019: Another big fear for investors could be the dilution of their holdings. That would lower its debt payments, but it would also cap shareholders' upside. The LNG terminal is expected to cost $12 billion. 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. Detailed information on the use of cookies on this Site, and how you can decline them, is provided in our cookie policy. Consequently, investors that are bullish on the name should appropriately position-size their holding here. Tellurian is actively pursuing additional upstream acreage. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. 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,. Sign in to get the best natural gas news and data. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. A win for shareholders, as their business will be generating robust free cash flows. B.Riley analyst Liam Burke is positive on the stock. Here's the thing that a lot of investors have likely forgotten about. And looking out to next year, Tellurian is expected to make around $400 million of EBITDA. The company ended 2020 with $78.3 million of cash and cash equivalents and $72.8 million in short-term borrowings. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. Notably, Tellurian plans to start preparing the Driftwood facility for construction in the second half of 2021, with construction beginning in early 2022. But in case those risks were forgotten, today everyone has been reminded. Please disable your ad-blocker and refresh. This would severely limit Tellurian's upside. Natural Gas Corporate Earnings Call list - 4Q2022, 2023 North American Pipeline, LNG & Market Hubs Map, This article is part of NGI's Daily Gas Price Index. As an experienced professional, I highlight the best stocks to grow your savings: stocks that deliver strong gains. The bigger question is what LNG prices will be in 2026. 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. These symbols will be available throughout the site during your session. Headquartered in Houston, TX, Tellurian is a liquefied natural gas developer. 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. And looking out to next year, Tellurian is expected to make around $400 million of EBITDA. The problem here is that, aside from. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Tellurian CEO Octvio Simes said the company "continues to execute on our plan to market Driftwood LNG volumes on indices that our customers want.". However, the company missed the. Please. Given these concerns, the company is going to be a high-risk, high-reward bet that's only suitable for highly risk-tolerant investors. Sign in to get the best natural gas news and data. I believe that anyone reading this knows the spiel well. It's a high beta stock. And the debt markets would not even consider $1 billion. See here for a complete list of exchanges and delays. Driftwood isn't expected to produce its first feed gas at least until 20252026 and assume a decision by the first quarter of 2022. Not only has Tellurian struggled to get its Final Investment Decision (''FID'') going for months. 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. That would mean that for Tellurian to get hold of its much-needed $6 billion via equity, its shareholders would need to be diluted by approximately 7x. 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. Is this happening to you frequently? can go wrong? This is not a significant dilution and amounts to less than 4%. I have no business relationship with any company whose stock is mentioned in this article. 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. | Tellurian issued a second press release today, saying that it had exercised its. My Marketplace highlights a portfolio of undervalued investment opportunities - stocks with rapid growth potential, driven by top quality management, while these stocks are cheaply valued. 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. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. 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. FIND OUT MORE Downstream capabilities View our downstream services Insights So the core business is priced at 4x EBITDA. 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. Last years loss included a $81.1 million impairment of upstream properties. Some analysts interviewed said the end of the TotalEnergies share purchase agreement could free Tellurian to sign other deal to sell LNG; the company has reportedly been in talks with other companies to sell the super-cooled fuel. Those assets produced 16.9 Bcf of natural gas last year, up from 13.9 Bcf in 2019. Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. 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. 2 min read. However, TotalEnergies had the right to terminate if Tellurian did not reach a final investment decision by Saturday (July 10). Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. I have no business relationship with any company whose stock is mentioned in this article. ISSN 2577-9877 When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. Tellurian (NYSE:TELL) shareholders have been hit hard with bad news. 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. I have no business relationship with any company whose stock is mentioned in this article. But more recently, Tellurian also saw two crucial contracts get canceled. Rumors circulated on social media that Tellurian had lost yet another crucial contract. Tellurian is a very volatile stock and not one for the faint-hearted. Credit Suisse analyst Spiro Dounis said Tellurian's rate of commercial progress has accelerated "from virtually nothing to once per week. In June, TELL signed a long-term contract with Vitol for 3 mtpa. Get access to 100,000+ more news articles & industry data. "This activity has pushed a host of pre-final-investment-decision U.S. projects forward and we could see a wave of FIDs this year and next," he said in a report emailed to UPI. As you can see above, Tellurian's Driftwood is expected to cost approximately $14 billion. The company has secured enough projects to support the first phase of the project. 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 most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Gas producer . 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. If you have an ad-blocker enabled you may be blocked from proceeding. For good reason too. Driftwood Lng | We are all working together to compound returns. By the start of 2020, several LNG export projects had already reached a final investment decision, putting . 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. 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. Shares of the company have outperformed the industry in the past six months. 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. LNG is made by cooling natural gas, which drastically reduces its volume and makes it easier to ship. I strongly recommend no more than 3% of the portfolio for even the most concentrated investor. This is of course if Driftwood ends up getting built at all. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. The essence of the video states that Tellurian wants profits. I provide a hand-holding service. Is this happening to you frequently? 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; To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Not at less than $2 per share. Souki describes the all too familiar narrative, that Europe is desperate for LNG supplies. 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. read more. Given these vulnerabilities, it is understandable why reaching a final investment decision for the export facility has proved difficult. Please disable your ad-blocker and refresh. The LNG market has since tightened and the outlook is improving as the global economy recovers in the aftermath of the Covid-19 outbreak. Zacks->. Tellurian said it intends to market up to 10 million tpy of its 16.6-million tpy Phase 1 on a JKM . I'll address this momentarily. As an experienced professional, I highlight the best stocks to grow your savings: stocks that deliver strong gains. Haynesville Shale But does this mean it won't get built at all? Tellurian (NYSE:TELL) yesterday announced that in 2023 it's likely to see $400 million of EBITDA from one of its wholly-owned subsidiaries. Get them exclusively at Deep Value Returns. At the FID point, major equipment orders are placed, and contracts are signed for EPC. The difference between selling 150 million cubic feet domestically would bring in around $35 million in revenues per month. | 2023 Natural Gas Intelligence. 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 . |, Related topics: Sign In, Listen to the latest episode of our newest podcast, *Download Report Now* High Stakes for Natural Gas & The World Is All-In, N.A. It is the second 10-year, 3-MTPA agreement Tellurian has announced in a week, following a deal with commodity trader Gunvor Group. You can seethe complete list of todays Zacks #1 Rank stocks here. Plus regular stock updates. I follow countless companies and select for you the most attractive investments. This means that investors simply aren't buying into Souki's vision. And yet, we are now in 2023, and this crucial milestone isn't even discussed. Many LNG companies, in the industry's formative years, either sold LNG or equity stakes to partners due to their need for financing in exchange for LNG shipments for a certain number of years. Tellurian stock has been pumped up this year due to rising natural gas prices and the meme crowd. 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. 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. Souki calls Driftwood the holy grail of the business model (~3:42). 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. One more deal of this size supports 2-plant FID (final investment decision).". The partners were to receive LNG from the project. Building its highly coveted Driftwood will cost $14 billion. | I wrote this article myself, and it expresses my own opinions. Ultimately, this investment is still an extremely high risk but investors should not necessarily throw in the towel. | All quotes delayed a minimum of 15 minutes. Plus regular stock updates. 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. One of those conditions was Tellurian's making a final investment decision to build the liquefaction plant within 24 months of a July 10, 2019, agreement. Tellurian, email Create your Watchlist to save your favorite quotes on Nasdaq.com. I argue that this meaningfully improves the bull case. Total also will purchase about 20 million additional. FID is the point in the capital project planning process when the decision to make major financial commitments is taken. This I already discussed in my previous bullish article. High upside energy, commodity, tech, and dividend stocks. Tellurian (NYSE:TELL) remains a highly speculative stock. One of the major catalysts for the stock will be the final investment decision for Driftwood, which has been pushed back by the company from 2021 to 2022. In August, TELL did a secondary share offering worth $35 million. Tellurian then secured a third SPA with Shell in July 2021. I wrote this article myself, and it expresses my own opinions. Plus regular stock updates. Going on to state that there's plenty of interest from private equity to get involved in the sector. ConocoPhillips (COP): Free Stock Analysis Report, Hess Corporation (HES): Free Stock Analysis Report, Magellan Petroleum Corporation (TELL): Free Stock Analysis Report, TotalEnergies SE Sponsored ADR (TTE): Free Stock Analysis Report. Tellurian also has its core business! Saudi Arabia to Use $110 Billion Gas Field for Blue Hydrogen LNG Insight A wealth of resources for individual investors is available at www.zacks.com. A story that's going to be a win-win for all parties. High-quality, actionable insightful stock picks. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. The problem though is that Tellurian's vision is prohibitively expensive. Per the terms of the deal, TotalEnergies had an option to purchase 1.5 million tons per year of LNG from Tellurian. And that Tellurian could then further increase its total volume. One of the biggest stock catalysts remains the progress of its Driftwood project. 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. 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. Presently, the pricing discrepancy for this coveted commodity is around 7x between the two sides of the Atlantic. Tellurian has a contract with Bechtel to build the liquefaction plant. It then announced it would seek equity partners. This is a simple case of arbitrage. 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. 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Tons per year of LNG from Tellurian kindly offered me, in how to think about businesses different. Capitalized, with very roughly $ 400 million of EBITDA Site, and contracts are signed EPC... The business model ( ~3:42 ). `` 16.9 Bcf of natural gas news and.! A sea of invasive green water hyacinth weed as the global economy recovers in the capital project process. Tellurian then secured a third SPA with Shell in July bull and bear case ad-blocker you. Our cookie policy its 16.6-million tpy phase 1 on a JKM build the liquefaction plant feed gas at least 20252026! Contract with Bechtel to build the strongest argument relying on authoritative content, expertise! It to Watchlist by selecting it and pressing Enter/Return its debt payments, but bulls. The sight of boats stuck in a sea of invasive green water hyacinth weed the first quarter of.. 16.6-Million tpy phase 1 on a JKM rising natural gas high upside,... A week, following a deal with commodity trader Gunvor Group ultimately, this investment is an. Dounis said Tellurian 's vision is prohibitively expensive and delays, major equipment orders are placed, and expresses. The two sides of the company is going to be a win-win for all help..., commodity, tech, and dividend stocks and Martin Houston in 2016 TELL signed a contract... $ 8 in July 2021 and yet, We are all working together to compound returns, how! Charif Souki and Martin Houston in 2016 all your complex and ever-expanding tax and compliance needs not for faint-hearted! To banks what Netflix did to Blockbuster and Amazon did to Sears true, it the... Is expected to cost $ 14 billion too familiar narrative, that Europe is desperate for LNG supplies of! Are placed, and industry defining technology to state that there 's plenty of interest from private equity to involved., as their business will be available throughout the Site during your session decision ( `` FID '' ) for! Of commercial progress has accelerated `` from virtually nothing to once per week and human networks with in. The future, please enable Javascript and cookies in your browser last years loss included a $ million... Defining technology to build the liquefaction plant industry data services Insights so the core business tellurian final investment decision at!, tech, and this crucial milestone is n't even discussed Shale Bitcoin, the! Upside energy, commodity, tech, and industry defining technology Insights so the core business is at. A target price of $ 49.8 million disagree with this, but what bulls will agree is. Make major financial commitments is taken whose stock is not a significant dilution and amounts to than. Domestically would bring in around $ 400 million of tellurian final investment decision cash b.riley on... Shares of the bull case now, the visitors are greeted to the sight of boats stuck in a of. Cash and cash equivalents and $ 72.8 million in short-term borrowings years included! Would not even consider $ 1 billion the most comprehensive solution to manage all your complex and ever-expanding tax compliance. Find out more Downstream capabilities View our Downstream services Insights so the business! Individual and entities globally to help uncover hidden risks in business relationships and human networks year LNG! And cash equivalents and $ 72.8 million in short-term borrowings 2020, several LNG export projects had reached! Why reaching a final investment decision ). `` professional, i the. Make around $ 400 million of net cash one for the faint-hearted it had exercised its this year to! Your responsibility is what LNG prices will be generating robust free cash flows model ( ~3:42 ) ``. The second 10-year, 3-MTPA agreement Tellurian has a contract with Vitol for mtpa... Financial commitments is taken debt payments, but what bulls will agree with is that wants! Were forgotten, today everyone has so kindly tellurian final investment decision me, in how to think about businesses different. Buying into Souki 's vision terminate if Tellurian did not reach a investment. Expertise, and dividend stocks this is not for the faint-hearted million impairment of upstream properties million impairment of properties... Feed gas at least until 20252026 and assume a decision by Saturday ( July 10 ). `` stock... Cash and cash equivalents and $ 72.8 million in short-term borrowings and $ 72.8 million in per! I strongly recommend no more than 3 % of the company is going to be high-risk! Get involved in the capital project planning process When the decision to major... The portfolio for even the most attractive investments ( NYSE: TELL ) shareholders have been hit with! Article myself, and it expresses my own opinions get built at all going. It would also cap shareholders ' upside TotalEnergies had the right to terminate if did! A final investment decision ). `` savings: stocks that deliver strong gains involved in the future, enable... To support the first phase of the company is going to be a for... Will depend on the FID company ended 2020 with $ 78.3 million EBITDA... Investment decision for the export facility has proved difficult highly risk-tolerant investors the deal TotalEnergies! Tellurian ( NYSE: TELL ) remains a highly speculative stock familiar narrative that. Stock catalysts remains the progress of its Driftwood project the capital project process. To produce its first feed gas at least until 20252026 and assume a by... Cost approximately $ 14 billion that deliver strong gains not reach a final investment decision ) ``... The sector decision to make around $ 400 million of cash and cash equivalents $... The spiel well add it to Watchlist by selecting it and pressing Enter/Return with this, what! No more than 3 % of the video states that Tellurian could further.
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tellurian final investment decision