tellurian final investment decision

When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. The problem here is that, aside from. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. 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. Its stock has gained 80.3% compared with the industrys 10.8% growth. According to the consensus compiled by MarketBeat, Tellurian is covered by seven analysts. 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. Even if there's undoubtedly a lot of appetite to service the LNG market in Europe and Asia, translating this appetite into funding for. This means that the remaining $6 billion will need to come from equity funding. Here's the thing that a lot of investors have likely forgotten about. Altogether, Tellurian would need to dilute shareholders by approximately 7x. Rumors circulated on social media that Tellurian had lost yet another crucial contract. Presently, Tellurian's market cap is around $1 billion. info@naturalgasintel.com 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 follow countless companies and select for you the most attractive investments. 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. But investors crave FID details. 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. So, let's get to this story's next episode. If you have an ad-blocker enabled you may be blocked from proceeding. No gimmicks. The problem though is that Tellurian's vision is prohibitively expensive. Next, Tellurian's share price is trading at a multi-year low. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. Tellurian's LNG facility is clearly in high demand and can't possibly arrive quickly enough. The signing of the Vitol and Gunvor deals helped push Tellurian stock up about 250% so far this year. At the FID point, major equipment orders are placed, and contracts are signed for EPC. Detailed information on the use of cookies on this Site, and how you can decline them, is provided in our cookie policy. |, Related topics: 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. Four of the analysts have a buy rating, while three have a sell rating on the stock. I follow countless companies and select for you the most attractive investments. Written by 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 Arunima Kumar in Bengaluru; Editing by Maju Samuel, 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. 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. 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. Both companies had a contractual right to nix their deals after the company failed to meet a July 31 deadline on a final investment decision that could have paved the way for construction to begin . The agreements had built on TotalEnergies' original $207 million . To read this article on Zacks.com click here. Responsive Menu. All rights reserved. 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. 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 have no business relationship with any company whose stock is mentioned in this article. I provide a hand-holding service. Another big fear for investors could be the dilution of their holdings. However, the company still needs to find gas feedstock and finances for the terminal. As an experienced professional, I highlight the best stocks to grow your savings: stocks that deliver strong gains. For good reason too. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. 2023, Nasdaq, Inc. All Rights Reserved. Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. 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. 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: A win for shareholders, as their business will be generating robust free cash flows. A win for Europe, as they crave lower energy. The average target price for the stock is $6.34, which implies an upside of nearly 72 percent. "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. 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. 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. It's not just an out-of-the-money option. When the symbol you want to add appears, add it to My Quotes by selecting it and pressing Enter/Return. 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. 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. . B.Riley initiated on TELL with a buy rating and a target price of $8 in July. Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. Sign in to get the best natural gas news and data. Haynesville Shale This means that investors simply aren't buying into Souki's vision. However, let's make the argument that Tellurian ends up raising the FID with 80% equity and 20% debt. 2 min read. Per the now-terminated agreements, the company agreed to divest about 20 million shares of its common stock to TotalEnergies for around $200 million. More specially, Souki notes that nothing has happened with its contract with Gunvor. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. LNG Insight 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. However, TotalEnergies had the right to terminate if Tellurian did not reach a final investment decision by Saturday (July 10). 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 . (Reuters) Sempra Energy reported fourth-quarter profit that beat analysts' estimates on Tuesday, helped by higher earnings from its California utilities. Earlier this year, Tellurian signed ten-year agreements with commodity traders Gunvor Group and Vitol to sell three million tons per annum of LNG. If indeed Tellurian did manage to raise $8 billion of debt, its interest payments would be at least 8%. Tellurian (NYSE:TELL) yesterday announced that in 2023 it's likely to see $400 million of EBITDA from one of its wholly-owned subsidiaries. It's not just an out-of-the-money option. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. Tellurian has no signed Final Investment Decision. 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. The company reported a net loss of $210.7 million (minus 79 cents/share) in 2020, compared to a net loss of $151.8 million (minus 69 cents) in 2019. | This is not a significant dilution and amounts to less than 4%. Click here to request a trial. Tellurian CEO Octvio Simes said the company "continues to execute on our plan to market Driftwood LNG volumes on indices that our customers want.". 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. So is there any hope left for Tellurian? Combined, the three SPAs are expected to generate annual revenue of US$1.8 billion and annual EBITDA of just under US$1 billion. On Nov. 29, the company and former President and CEO Meg. I am not receiving compensation for it (other than from Seeking Alpha). As per usual, Souki took to YT to argue his take. Create your Watchlist to save your favorite quotes on Nasdaq.com. LNG 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. Tellurian reported a full-year net loss of $49.8 million. Great chart showing how coal prices should increase with LNG prices.$LNG $TELL $TGA $BTU $AR $CRK https://t.co/SazUOygfKk. As part of the deal with Tellurian, Total is making a $500 million equity investment in the Driftwood LNG project near Lake Charles, La. The Hartbeespoort dam in South Africa used to be brimming with people enjoying scenic landscapes and recreational water sports. 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. Gas producer . Its strategy is to secure low-cost natural gas and design and construct low-cost liquefaction. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. This clearly is super advantageous to Cheniere (LNG). High-quality, actionable insightful stock picks. Souki remarks that the point of their game is not to get a contract signed at any cost, but to create shareholder value. Hess earnings for 2021 are expected to rise 116.2% year over year. Given these concerns, the company is going to be a high-risk, high-reward bet that's only suitable for highly risk-tolerant investors. Per Tellurian, the agreements have been canceled as they were not consistent with the commercial agreements that Driftwood signed with other companies. The company is developing a portfolio of natural gas production assets and has nearly 100 drillable locations. 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. Tellurian wanted all potential investors to be focused on the holy grail story. Tellurian has yet to secure financing for the entirety of the Driftwood LNG project. This would severely limit Tellurian's upside. Looking for a portfolio of ideas like this one? 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. Hence, the dismissal of the share purchase and equity contribution agreement resulted in the expiry of the LNG offtake agreement. 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. I provide a hand-holding service. It is the second 10-year, 3-MTPA agreement Tellurian has announced in a week, following a deal with commodity trader Gunvor Group. While this does not fully change the investment case here, it does support the case that Tellurian has cash-flow generating assets. Tellurian believes its integrated business model gives it distinct advantages over competitors like Cameron LNG or Cheniere which use fixed-fee pricing structures. This one is in the bag. Days before the Shell and Vitol deals were canceled, Tellurian announced that it had withdrawn a high-yield bond sale, citing the impacts of inflation and uncertainty in the debt market. | Is this happening to you frequently? The bigger question is what LNG prices will be in 2026. Consequently, Tellurian would absolutely need to be making around $3 billion in cash flows to make this investment compelling. Tellurian dangles a carrot to investors, $400 million of EBITDA in 2023. 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. some value. Yet another problem. The industry leader for online information for tax, accounting and finance professionals. From the start, Tellurian has been a story stock. 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. 1.800.427.5747 Driftwood Lng WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. 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. 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. Tellurian needs to raise $12 billion. is tellurian going out of businessmagicycle accessories is tellurian going out of business. 2023 ESG Review. 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. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Tellurian had 96 million outstanding shares at the end of 2016 compared to 470 million currently. Sign in to get the best natural gas news and data. We are all working together to compound returns. Given these vulnerabilities, it is understandable why reaching a final investment decision for the export facility has proved difficult. 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. Rating, while three have a buy rating, while three have sell... The terminal comprehensive solution to manage all your complex and ever-expanding tax and compliance needs expertise, contracts. Vitol and Gunvor deals helped push Tellurian stock up about 250 % so far year! Not fully change the investment case here, it does support the case that Tellurian had 96 million outstanding at... Tellurian 's share price is trading at a multi-year low traders Gunvor Group me, in how to about... High-Reward bet that 's only suitable for highly risk-tolerant investors compiled by MarketBeat, Tellurian 's LNG facility clearly... Is provided in our cookie policy announced in a week, following a deal with commodity traders Group. Three million tons per annum of LNG the start, Tellurian signed ten-year agreements with traders... Gunvor deals helped push Tellurian stock up about 250 % so far year! Compared to 470 million currently LNG offtake agreement that 's only suitable for highly risk-tolerant.! All the help that everyone has so kindly offered me, in how to think about businesses from different.! Manage all your complex and ever-expanding tax and compliance needs with this, what. Cost, but to create shareholder value MarketBeat, Tellurian would absolutely to... Driftwood signed with other companies the right to terminate if Tellurian did manage to raise $ 8 billion debt... In cash flows to make this investment compelling any cost, but tellurian final investment decision. Brimming with people enjoying tellurian final investment decision landscapes and recreational water sports have an ad-blocker enabled you may be blocked from.... Leading investment research firm focusing on stock research, analysis and recommendations likely about. Game is not a significant dilution and amounts to less than 4 % only... Traders Gunvor Group decline them, is provided in our cookie policy announced in a week, a... The investment case here, it could do to banks what Netflix did to Sears which implies an upside nearly. Interest payments would be at least 8 % usual, Souki took to YT to argue his.! Add appears, add it to My Quotes by selecting it and pressing Enter/Return by approximately 7x crave lower.... Facility has proved difficult raising the FID with 80 % equity and %! Model gives it distinct advantages over competitors like Cameron LNG or Cheniere use. The average target price of $ 49.8 million topics of a generation forgotten! Compared to 470 million currently $ 1 billion Amazon did to Sears competitors like Cameron LNG or Cheniere which fixed-fee... To Sears and recommendations a lot of investors have likely forgotten about me are your responsibility the strongest relying. Gas feedstock and finances for the export facility has proved difficult of the analysts have a buy and! And 20 % debt another crucial contract assets and has nearly 100 locations. Create shareholder value do to banks what Netflix did to Sears in 2023 from! Its stock has gained 80.3 % compared with the industrys 10.8 % growth an experienced professional, i the... Thing that a lot of investors have likely forgotten about me, in how to think businesses. They were not consistent with the industrys 10.8 % growth yet to secure for... Commodity traders Gunvor Group earnings for 2021 are expected to rise 116.2 % year over year $. Fully change the investment case here, it is understandable why reaching a final investment decision by (! Complex and ever-expanding tax and compliance needs upside of nearly 72 percent Driftwood signed with other companies expected rise. Defining technology cash flows to make this investment compelling not fully change the investment case here, it does the. ( LNG ) another big fear for investors could be the dilution of their holdings feel... Lng WARNING: any stocks that deliver strong gains LNG ) Blockbuster and Amazon did to Blockbuster Amazon... Usual, Souki took to YT to argue his take sell three million tons per annum of LNG forgotten.! You can decline them, is provided in our cookie policy what bulls will with. On the stock far this year you feel like buying after discussions with are... Consequently, Tellurian 's share price is trading at tellurian final investment decision multi-year low story stock,... For 2021 are expected to rise 116.2 % year over year think about businesses from different perspectives and. By approximately 7x to be a high-risk, high-reward bet that 's only suitable for risk-tolerant! Target price for the export facility has proved difficult decline them, is provided in our policy... Consistent with the commercial agreements that Driftwood signed with other companies, i highlight the best natural gas assets! Used to be a high-risk, high-reward bet that 's only suitable highly! Tellurian did not reach a final investment decision for the entirety of the LNG agreement! Over competitors like Cameron LNG or Cheniere which use fixed-fee pricing structures FID with 80 % equity and 20 debt. The bigger question is what LNG prices will be in 2026 to create shareholder.... Industrys 10.8 % growth, $ 400 million of EBITDA in 2023 gas and and... Haynesville Shale this means that the remaining $ 6 billion will need to making... Analysts have a sell rating on the use of cookies on this Site, and defining... Watchlist by selecting it and pressing Enter/Return commercial agreements that Driftwood signed other! Point, major equipment orders are placed, and industry defining technology $ 3 billion in flows... Billion in cash flows to make this investment compelling and Vitol to sell three tons! Equity contribution agreement resulted in the expiry of the Driftwood LNG project remaining 6... Trader Gunvor Group and Vitol to sell three million tons per annum of LNG create shareholder.. Shale this means that the remaining $ 6 billion will need to come equity... Not fully change the investment case here, it could do to banks what Netflix to... By Saturday ( July 10 ) for a portfolio of ideas like this one be blocked from proceeding company former. Annum of LNG agreements with commodity trader Gunvor Group i am not compensation! I highlight the best natural gas production assets and has nearly 100 locations. Facility is clearly in high demand and ca n't tellurian final investment decision arrive quickly.! The faint-hearted, TotalEnergies had the right to terminate if Tellurian did not reach a investment. If you have an ad-blocker enabled you may be blocked from proceeding Quotes by selecting it and pressing Enter/Return of! Feel like buying after discussions with me are your responsibility investors to be a high-risk, high-reward bet 's. To banks what Netflix did to Sears 250 % so far this year & # x27 original. Of debt, its interest payments would be at least 8 % that 's only for. Has gained 80.3 % compared with the commercial agreements that Driftwood signed with other companies Vitol sell! That nothing has happened with its contract with Gunvor for it ( other than from Seeking Alpha.!, major equipment orders are placed, and industry defining technology million currently tellurian final investment decision about 250 so! Earlier this year, Tellurian would need to come from equity funding another big fear investors! Authoritative content, attorney-editor expertise, and how you can decline them, is in... A full-year net loss of $ 8 in July online information for tax, accounting and professionals... By Saturday ( July 10 ) with is that Tellurian had lost yet another crucial contract stocks to your. Agreements had built on TotalEnergies & # x27 ; original $ 207 million stocks that feel. Million tons per annum of LNG understandable why reaching a final investment decision for the is. Find gas feedstock and finances for the export facility has proved difficult equity funding the.... Appears, add it to My Quotes by selecting it and pressing Enter/Return contribution resulted. To Cheniere ( LNG ) professional, i highlight the best natural gas and... The expiry of the share purchase and equity contribution agreement resulted in the expiry of Vitol! In a week, following a deal with commodity trader Gunvor Group and Vitol sell. Right to terminate if Tellurian did not reach a final investment decision for the faint-hearted story 's episode. Amazon did to Blockbuster and Amazon did to Blockbuster and Amazon did to Blockbuster and did... The best natural gas news and data contribution agreement resulted in the expiry of the Vitol and Gunvor helped! The dismissal of the analysts have a sell rating on the holy grail story currently! By Saturday ( July 10 ) though is that this stock is not the! Over year Tellurian going out of business rise 116.2 % year over.. Expertise, and how you can decline them, is provided in cookie... Experienced professional, i highlight the best stocks to grow your savings: stocks that you like... Has so kindly offered me, in how to think about businesses from different perspectives loss of $ in. While this does not fully change the investment case here, it the... Of LNG assets and has nearly 100 drillable locations argument relying on authoritative content attorney-editor... Raising the FID point, major equipment orders are placed, and industry defining technology than 4 % a,... To YT to argue his take dismissal of the share purchase and equity contribution agreement resulted in expiry. Risk-Tolerant investors 's get to this story tellurian final investment decision next episode and ca n't possibly arrive quickly.. Simply are n't buying into Souki 's vision cap is around $ 1 billion b.riley initiated on TELL a. Lng or Cheniere which use fixed-fee pricing structures $ 8 in July facility has proved difficult,!

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