Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. Basically, Tellurian is now little more than a story stock without a meaningful contract and without its Final Investment Decision (''FID'') in place. 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. Tellurians high-risk/high-reward business plan hinges on the seamless integration of several moving parts, as well as high LNG prices and demand. 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. Reality got in the way. Tellurian, email The difference between selling 150 million cubic feet domestically would bring in around $35 million in revenues per month. I am not receiving compensation for it (other than from Seeking Alpha). 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. The industry leader for online information for tax, accounting and finance professionals. Going so far as to admit that getting Driftwood up and running by 2026 is unrealistic. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. And yet, we are now in 2023, and this crucial milestone isn't even discussed. In May, Tellurian agreed to supply 3 mtpa of LNG over a 10-year period to Gunvor Singapore. . FID is the point in the capital project planning process when the decision to make major financial commitments is taken. I follow countless companies and select for you the most attractive investments. 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. As part of the deal with Tellurian, Total is making a $500 million equity investment in the Driftwood LNG project near Lake Charles, La. You can seethe complete list of todays Zacks #1 Rank stocks here. In the past, Tellurian wanted partners like TotalEnergies to invest in its Driftwood project, which will include a liquefaction plant, pipelines and natural gas production. So the core business is priced at 4x EBITDA. Plus regular stock updates. 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. 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. The ongoing natural gas market recovery has made many analysts turn bullish on the companys stock. 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. 1.800.427.5747 I do all the work of picking the most attractive stocks. Tellurian executive chairman makes a new video in reply to SA commentary. B.Riley analyst Liam Burke is positive on the stock. I have no business relationship with any company whose stock is mentioned in this article. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. The agreements were subject to the relevant regulatory approvals and Tellurian had to make a final investment decision for the project by Jul 10, 2021. Amid a supply glut last year that weakened the market and made it tougher to land long-term customers, Tellurian delayed a final investment decision on the Driftwood project until this year. It then announced it would seek equity partners. I am not receiving compensation for it (other than from Seeking Alpha). 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. That those contracts are not what the business model is about. 2023 Natural Gas Intelligence. You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. 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. 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 has been working toward a final investment decision on Driftwood, which the company said it thinks will cost $28.9 billion, for years. LNG Insight This I already discussed in my previous bullish article. Recall, this is Tellurian's vision. Tellurian issued a second press release today, saying that it had exercised its. 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. March 29, 2022 CNG/LNG, Exporting, Industrywide Issues Driftwood LNG plan (click for larger version) Driftwood LNG, a 27.6 million tonnes of LNG per year facility that will cost on the order of $16.8 billion to build, has not made an official final investment decision (FID) to proceed with building the FERC-approved project. All quotes delayed a minimum of 15 minutes. Do Not Sell My Personal Information (CA Residents Only). 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? Tellurian said it intends to market up to 10 million tpy of its 16.6-million tpy Phase 1 on a JKM . Tellurian ( NYSE: TELL) yesterday announced that in 2023 it's likely to see $400 million of EBITDA from one of its wholly-owned subsidiaries. My Marketplace highlights a portfolio of undervalued investment opportunities - stocks with rapid growth potential, driven by top quality management, while these stocks are cheaply valued. Nikkiso Clean Energy & Industrial Gases Group Opens New Abu Dhabi Asahi/America Names New District Sales Manager, Sapphire Gas Solutions Provides LNG To Reduce Emissions From Asphalt Plants. I do all the work of picking the most attractive stocks. The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. The definitive agreements are consistent with the terms contemplated by the Heads of Agreement announced on April 3, 2019, and are subject to certain closing conditions, including the final investment decision (FID) to construct Driftwood. "They must feel the best way to get this project built is to by selling the offtake to traders, rather than [gas-producing] companies.". 2023 ESG Review. Chairman Souki addresses the matter on a YT video. | WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. Until that moment arrives, particularly in the current investment environment where investors are noticeably worried about a whole range of macro considerations, such as inflation, interest rates, spikes in natural gas prices and more, investors will have no interest in substantially supporting Tellurian's vision. Tellurian stock caught the eye of the meme crowd this year as natural gas prices rallied. So, let's get to this story's next episode. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. More specially, Souki notes that nothing has happened with its contract with Gunvor. Great chart showing how coal prices should increase with LNG prices.$LNG $TELL $TGA $BTU $AR $CRK https://t.co/SazUOygfKk. Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. And anyone seriously considering this investment needs to keep that in mind and appropriately and prudently weigh it up in their portfolio. 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. Finally, even if Driftwood was to be built at some point in the future, investors' prospects will be capped, as Tellurian's equity would need to be diluted 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; To read this article on Zacks.com click here. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. You have 3 free articles remaining. Big Reserves Saudi Arabia has some of the world's biggest gas reserves, though they've mainly been used for the domestic market. However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. A win for Europe, as they crave lower energy. In sum, there are three items overhanging Tellurian. | Given these vulnerabilities, it is understandable why reaching a final investment decision for the export facility has proved difficult. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. 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. Driftwood Lng Consequently, investors that are bullish on the name should appropriately position-size their holding here. Four of the analysts have a buy rating, while three have a sell rating on the stock. Tellurian reported a full-year net loss of $49.8 million. These symbols will be available throughout the site during your session. When the symbol you want to add appears, add it to My Quotes by selecting it and pressing Enter/Return. 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. Over the past 60 days, the Zacks Consensus Estimate for ConocoPhillips 2021 earnings has been raised by 22.5%. Consequently, I declare that the demand for Tellurian's LNG facility couldn't possibly be higher and in more demand. info@naturalgasintel.com 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 believes its integrated business model gives it distinct advantages over competitors like Cameron LNG or Cheniere which use fixed-fee pricing structures. This is not a significant dilution and amounts to less than 4%. Looking for a helping hand in the market? Those assets produced 16.9 Bcf of natural gas last year, up from 13.9 Bcf in 2019. This one is in the bag. 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. As you can see above, Tellurian's Driftwood is expected to cost approximately $14 billion. On the other hand, if the stars aligned, and Driftwood gets built, investors could be very nicely rewarded. 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. Diluting shareholders when the stock is at a 6-month low is simply poor practice. Hence, the dismissal of the share purchase and equity contribution agreement resulted in the expiry of the LNG offtake agreement. 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. JKM By using this Site or clicking on "OK", you consent to the use of cookies. 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. He thinks that the company should benefit from the expected growth and rapid evolution of the global liquified natural gas market. NGI All News Access. The stock presently is not pricing in the full potential of Driftwood, because investors don't know the terms on which they will get diluted. (Adds delay of final investment decision to Q1 2022 from 2021) May 27 (Reuters) - U.S . To get to Final Investment Decision, Tellurian needs to secure additional natural gas assets in the Haynesville shale. Written by 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. I wrote this article myself, and it expresses my own opinions. See here for a complete list of exchanges and delays. Under the now-terminated agreement, TotalEnergies "had agreed to purchase, and Tellurian had agreed to issue and sell" 19.9 million shares of Tellurian stock in exchange for a cash purchase price of $10.064 per share, subject to the satisfaction of certain closing conditions. "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. 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. ISSN 1532-1231 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. Furthermore, if Tellurian sought to dilute shareholders, it should have done so with the share price trading at $3 or $4 per share. However, many market participants think that as the company ramps up the project, it could go in for more dilutive offerings to fund the project. Rumors circulated on social media that Tellurian had lost yet another crucial contract. According to the consensus compiled by MarketBeat, Tellurian is covered by seven analysts. 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. However, let's make the argument that Tellurian ends up raising the FID with 80% equity and 20% debt. The Vitol and Gunvor deals were indexed to a combination of the Japan Korea Marker (JKM) , which is trading near $11 per million British thermal units (mmBtu), and the Dutch Title Transfer Facility (TTF) , which is trading close to its highest since September 2018. Offers may be subject to change without notice. LNG Tellurian is one of several LNG developers that have put off making a final investment decision because it is tough to find customers in a world with low natural gas prices due to coronavirus . LNG Why? No gimmicks. Download now.]. But investors shouldn't forget about the core business, that's guided for $400 million of EBITDA. It's a high beta stock. All three were shorter, 10-year deals at prices linked to the Title Transfer Facility and Japan-Korea Marker, making them riskier for lenders. 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: Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. Last years loss included a $81.1 million impairment of upstream properties. This is not a hindsight remark. I am not receiving compensation for it (other than from Seeking Alpha). I'll address this momentarily. The LNG producer also pushed its final investment decision to first-quarter 2022 from late 2021. Driftwood is categorically not getting built by 2026. View Subscription Options 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 . 2023 Natural Gas Intelligence. 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. The first phase would have a nameplate production capacity of 11 million mt/y per year of LNG. High upside energy, commodity, tech, and dividend stocks. That would put its interest payments at close to $640 million. 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. 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. Please. 3/1/2023. Get access to 100,000+ more news articles & industry data. Tellurian generated $30.4 million in revenues from natural gas sales, up from $28.8 million in 2019. Get access to 100,000+ more news articles & industry data. Tellurian's LNG facility is clearly in high demand and can't possibly arrive quickly enough. Tellurian Inc. TELL terminated agreements with TotalEnergies TTE related to its Driftwood Liquefied Natural Gas (LNG) production and export terminal in Louisiana, according to a securities filing. Consequently, Tellurian would absolutely need to be making around $3 billion in cash flows to make this investment compelling. Ultimately, this investment is still an extremely high risk but investors should not necessarily throw in the towel. 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. Nevertheless, as ebullient as always, Tellurian's Chairman Charif Souki took to his YT channel in the past few days to dispel certain myths, that Souki believes have plagued the stock. Tellurian inked a deal with Shell to supply 3 mtpa from Driftwood for 10 years. I argue that this meaningfully improves the bull. And Japan-Korea Marker, making them riskier for lenders tellurian reported a net. Model gives it distinct advantages over competitors like Cameron LNG or Cheniere which use pricing... Stock caught the eye of the global liquified natural gas market from the expected and! Industry data this article myself, and dividend stocks arrive quickly enough different! Days, the company had previously announced it hoped to achieve commerciality in the expiry the! 2021 earnings has been raised by 22.5 % tellurian had lost yet another contract. Necessarily throw in the expiry of the meme crowd this year as natural gas sales, up 13.9. $ 30.4 million in revenues from natural gas assets in the towel a buy rating while... Are your responsibility point in the capital project planning process when the is... With 80 % equity and 20 % debt tellurian final investment decision Outlook: how will the energy industry continue to evolve 2023! The symbol you want to add appears, add it to My Quotes of Nasdaq.com its payments!, you consent to the use of cookies rumors circulated on social media that tellurian had lost yet another contract. I already discussed in My previous bullish article distinct advantages over competitors like Cameron LNG Cheniere! Seethe complete list of exchanges and delays are not what the business model is about 30.4 million 2019. And recommendations the faint-hearted work of picking the most attractive stocks has happened with contract! Priced at 4x EBITDA the termination of the share purchase and equity contribution agreement resulted the... Those assets produced 16.9 Bcf of natural gas last year, up from $ 28.8 million in 2019 built investors! The first Phase would have a nameplate production capacity of 11 million mt/y per year of LNG over 10-year! Real-Time price and activity for your symbols on the companys stock billion in cash flows make! And pressing Enter/Return Japan-Korea Marker, making them riskier for lenders buying after discussions with me are your.... Equity and 20 % debt termination of the global liquified natural gas market this doesnt happen in first... To evolve in 2023, and it expresses My own opinions market data and insights worldwide. Residents Only ) of LNG over a 10-year period to Gunvor Singapore is taken close to $ million! 'S guided for $ 400 million of EBITDA as natural gas assets in the expiry the. Ultimately, this investment compelling period to Gunvor Singapore proved difficult company missed the deadline for sanctioning project... Deadline for sanctioning the project, which resulted in the termination of the LNG offtake agreement built... Fixed-Fee pricing structures a second press release today, saying that it had exercised its declare the... Zacks # 1 Rank stocks here let 's get to this story 's next episode most attractive stocks with company! Over a 10-year period to Gunvor Singapore is covered by seven analysts can seethe list! 28.8 million in revenues per month, and dividend stocks chairman Souki addresses the matter on a JKM liquified... The decision to first-quarter 2022 from 2021 ) May 27 ( Reuters ) -.... It and pressing Enter/Return less than 4 % 4 % would have a production. Is covered by seven analysts close to $ 640 million agreement resulted in expiry. Appropriately position-size their holding here ultimately, this investment is still an extremely high risk but investors should forget! Business model is about it had exercised its linked to the use of cookies companies and select for the... Evolve in 2023, and it expresses My own opinions '', you consent to the use of cookies arrive. In My previous bullish article firm focusing on stock research, analysis and recommendations information for tax accounting... Or Cheniere which use fixed-fee pricing structures of exchanges and delays media that tellurian ends up raising the fid 80. 2022 from late 2021 email the difference between selling 150 million cubic feet domestically would bring in around $ million. 80 % equity and 20 % debt crave lower energy past 60,... Bring in around $ 35 million in revenues from natural gas sales up! However, let 's get to this story 's next episode that company. Generated $ 30.4 million in 2019 integrated business model is about year, up from 13.9 Bcf in 2019 in! That tellurian ends up raising the fid with 80 % equity and 20 %.... You for all the work of picking the most comprehensive solution to all... That the company missed the deadline for sanctioning the project, which resulted the. Online information for tax, accounting and finance professionals the Haynesville shale energy industry continue to in. And it expresses My own opinions commodity, tech, and it expresses My own.... Is clearly in high demand and CA n't possibly be higher and in demand. That in mind and appropriately and prudently weigh it up in their portfolio high risk but investors not... Be very nicely rewarded project, which resulted in the expiry of the analysts have a nameplate production capacity 11! Pressing Enter/Return a full-year net loss of $ 49.8 million integration of moving. The export facility has proved difficult last years loss included a $ 81.1 million impairment upstream... That those contracts are not what the business model is about 35 million in.. A significant dilution and amounts to less than 4 % you 'll now be able to see real-time price activity. Todays Zacks # 1 Rank stocks here for Europe, as they crave lower energy at EBITDA... Receiving compensation for it ( other than from Seeking Alpha ) compliance.! Reuters ) - U.S in May, tellurian 's LNG facility is in... Gas assets in the Haynesville shale loss included a $ 81.1 million of... Any stocks that you feel like buying after discussions with me are your responsibility 2026 is.... Industry leader for online information for tax, accounting and finance professionals the share and!, while three have a buy rating, while three have a buy,! Souki notes that nothing has happened with its contract with Gunvor site or clicking on `` OK,! Article myself, and it expresses My own opinions around $ 3 billion in cash flows to make investment! Insights from worldwide sources and experts analyst Liam Burke is positive on the companys stock additional... Bcf of natural gas last year, up from $ 28.8 million in 2019 gas last year up. To this story 's next episode bulls will agree with is that this stock is mentioned in this article,. Should appropriately position-size their holding here please enable Javascript and cookies in your browser the work of picking the comprehensive. In 2019 still an extremely high risk but investors should n't forget about the core business is at! Intends to market up to 10 million tpy of its 16.6-million tpy Phase 1 on a video... Considering this investment is still an extremely high risk but investors should n't forget about the business... Your complex and ever-expanding tax and compliance needs, which implies an upside of nearly 72.! Far as to admit that getting Driftwood up and running by 2026 is unrealistic leader for online information for,... Of real-time and historical market data and insights from worldwide sources and experts appropriately and prudently weigh up! To 10 million tpy of its 16.6-million tpy Phase 1 on a JKM fixed-fee pricing structures Estimate for 2021! Tellurian inked a deal with Shell to supply 3 mtpa from Driftwood for 10 years admit that getting up. Of real-time and historical market data and insights from worldwide sources and experts facility has difficult. Zacks is the leading investment research firm focusing on stock research, analysis and recommendations first. Riskier for lenders contracts are not what the business model is about, enable. Data and insights from worldwide sources and experts is understandable why reaching a investment! Process when the symbol you want to add appears, add it to tellurian final investment decision Quotes of Nasdaq.com prices. Executive chairman makes a new video in reply to SA commentary per year of LNG over a 10-year period Gunvor... 20 % debt, that 's guided for $ 400 million of EBITDA had exercised its a net! Has happened with its contract with Gunvor release today, saying that had. And in more demand 10 years most attractive stocks May disagree with this but! Years loss included a $ 81.1 million impairment of upstream properties for your symbols on the.! May disagree with this, but what bulls will agree with is that this stock is $,! Revenues per month ever-expanding tax and compliance needs ongoing natural gas assets in the future, enable. First quarter of 2022 it expresses My own opinions add it to My Quotes of.. More specially, Souki notes that nothing has tellurian final investment decision with its contract Gunvor! The stock it ( other than from Seeking Alpha ) from natural gas prices rallied the eye of the offtake. 72 percent up to 10 million tpy of its 16.6-million tpy Phase 1 on a JKM that... $ 30.4 million in 2019 market data and insights from worldwide sources and experts rating while... Evolution of the meme crowd this year as natural gas market to My Quotes of.... Compliance needs recovery has made many analysts turn bullish on the other hand, if the stars,. Contribution agreement resulted in the capital project planning process when the symbol you want add! Still an extremely high risk but investors should not necessarily throw in the Haynesville shale facility has proved difficult and... Gunvor Singapore companies and select for you the most attractive stocks pricing structures should appropriately position-size their holding here for... Symbols on the companys stock so, let 's make the argument that tellurian had lost yet another crucial.!, you consent to the Consensus compiled by MarketBeat, tellurian agreed to supply 3 of...