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. |, Related topics: The problem here is that, aside from. Deep Value Returns' Marketplace continues to rapidly grow. Nov 30, 2020 Houston-based liquefied natural gas company Tellurian Inc. (Nasdaq: TELL) announced a new president and CEO on Nov. 30. Today, that discovery is still the heart of the Zacks Rank. I am not receiving compensation for it (other than from Seeking Alpha). 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. Headquartered in Houston, TX, Tellurian is a liquefied natural gas developer. Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. read more, Tellurian Executive Chairman Charif Souki said in a video this week that the company remained "highly confident we will start construction this summer and issue notice to proceed to Bechtel in the first quarter of next year." LNG 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. I provide a hand-holding service. View Subscription Options In 2021, Tellurian reported $27 million in first quarter losses and terminated a $700 million deal with TotalEnergies, after Tellurian failed once again to reach a final investment decision for Driftwood. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. In this case, it will need to dilute shareholders by around 6.2x. Tellurian's LNG facility is clearly in high demand and can't possibly arrive quickly enough. 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. 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. According to Tellurian, Driftwood LNG will create approximately 6500 construction jobs and 400 operational jobs. The one-line takeaway is this, Tellurian is a very high-risk investment. Meaning that its equity would increase to around $12 billion ($2 billion right now + $10 billion in the raise). However, the company missed the. JKM Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. 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. Please. Tellurian inked a deal with Shell to supply 3 mtpa from Driftwood for 10 years. $6 billion from equity. Outsmart the market with Smart Portfolio analytical tools powered by TipRanks. I follow countless companies and select for you the most attractive investments. Zacks Equity Research for However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. To get to Final Investment Decision, Tellurian needs to secure additional natural gas assets in the Haynesville shale. 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. 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. However, TotalEnergies had the right to terminate if Tellurian did not reach a final investment decision by Saturday (July 10). The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. You can seethe complete list of todays Zacks #1 Rank stocks here. 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. Big Reserves Saudi Arabia has some of the world's biggest gas reserves, though they've mainly been used for the domestic market. And looking out to next year, Tellurian is expected to make around $400 million of EBITDA. So is there any hope left for Tellurian? Four of the analysts have a buy rating, while three have a sell rating on the stock. 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,. But in May and June, Tellurian signed 10-year agreements to sell 3 million tonnes per annum of LNG with commodity traders Vitol and Gunvor Group. 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. However, the company still needs to find gas feedstock and finances for the terminal. People may receive compensation for some links to products and services on this website. Those assets produced 16.9 Bcf of natural gas last year, up from 13.9 Bcf in 2019. Tellurian is developing a portfolio of natural gas production, LNG trading, and infrastructure that includes an ~27.6 mtpa LNG export facility and an associated pipeline. 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. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. 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. Tellurian then secured a third SPA with Shell in July 2021. Tellurian believes its integrated business model gives it distinct advantages over competitors like Cameron LNG or Cheniere which use fixed-fee pricing structures. On Nov. 29, the company and former President and CEO Meg. 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. Tellurian has no signed Final Investment Decision. 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. Tellurian, email 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 . 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. Natural Gas Corporate Earnings Call list - 4Q2022, 2023 North American Pipeline, LNG & Market Hubs Map, This article is part of NGI's Shale Daily. It's not just an out-of-the-money option. Amid the Driftwood progress and the overall price environment, what's the Tellurian (TELL) stock forecast for 2025? Is this happening to you frequently? Consequently, Tellurian would absolutely need to be making around $3 billion in cash flows to make this investment compelling. Click here to request a free trial. I argue that this meaningfully improves the bull. | NGI All News Access. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. Tellurian is actively pursuing additional upstream acreage. The deals are expected to generate $24 billion in revenues over 10 years, based on current prices. 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. 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. Download now.]. Since I wrote Pipe Dream, Tellurian's share price has taken a tumble. In sum, there are three items overhanging Tellurian. No gimmicks. But does this mean it won't get built at all? This I already discussed in my previous bullish article. The LNG terminal is expected to cost $12 billion. ISSN 2577-9877 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 do all the work of picking the most attractive stocks. 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. LNG 2023 Natural Gas Intelligence. 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. Driftwood is categorically not getting built by 2026. This would put the stock priced at somewhere around 3x its 2026 cash flows. 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: Indeed, what can go wrong? Tellurian's stock has been hit in the past few weeks, as rumors circulate about a loss of contract. Hess earnings for 2021 are expected to rise 116.2% year over year. info@naturalgasintel.com Please disable your ad-blocker and refresh. [2023 Natural Gas Price Outlook: How will the energy industry continue to evolve in 2023? Last years loss included a $81.1 million impairment of upstream properties. DEEP VALUE RETURNS: The only Marketplace with real performance. Type a symbol or company name. 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. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. ISSN 1532-1231 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. 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. Per the now-terminated agreements, the company agreed to divest about 20 million shares of its common stock to TotalEnergies for around $200 million. The partners were to receive LNG from the project. | See here for a complete list of exchanges and delays. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. The bigger question is what LNG prices will be in 2026. "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. The agreements had built on TotalEnergies' original $207 million . This is the core of the bull and bear case. Please disable your ad-blocker and refresh. 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. Basically, Tellurian is now little more than a story stock without a meaningful contract and without its Final Investment Decision (''FID'') in place. ISSN 2158-8023 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. 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. Driftwood Lng Going so far as to admit that getting Driftwood up and running by 2026 is unrealistic. Tellurian said it intends to market up to 10 million tpy of its 16.6-million tpy Phase 1 on a JKM . I am not receiving compensation for it (other than from Seeking Alpha). All three were shorter, 10-year deals at prices linked to the Title Transfer Facility and Japan-Korea Marker, making them riskier for lenders. 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. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Looking for a helping hand in the market? High upside energy, commodity, tech, and dividend stocks. The company currently carries a Zack Rank #3 (Hold). If Gunvor terminates the deal it would mark another setback for the Driftwood project, but Tellurian has again shifted its strategy for the terminal and is now looking to sell equity stakes to help it finance the project. This is not a hindsight remark. Zacks has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. 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. 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. When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. Phase 1 will consist of three plants with a combined capacity of 16.5 MTPA and an expected cost of US$16.8 billion. ISSN 2577-9877 Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. 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. Combined, the three SPAs are expected to generate annual revenue of US$1.8 billion and annual EBITDA of just under US$1 billion. 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 believe that anyone reading this knows the spiel well. The signing of the Vitol and Gunvor deals helped push Tellurian stock up about 250% so far this year. Its stock has gained 80.3% compared with the industrys 10.8% growth. Tellurian sold off 40% in the past month. Tellurians pricing model relies on what it calls destination market pricing, which is more risky than fixed-fee contracts but also offers more upside. Deep Value Returns' Marketplace continues to rapidly grow. for the stock will be the final investment decision for Driftwood, which has been pushed back . read more. Tellurian is being priced as an out-of-the-money option. To read this article on Zacks.com click here. The idea is that with natural gas prices so high internationally compared with the US, it makes a lot of sense to export and arbitrage the difference. So the core business is priced at 4x EBITDA. Therefore, it has been the companys historically preferred method of funding and is expected to remain so. DEEP VALUE RETURNS: The only Marketplace with real performance. Sign in to get the best natural gas news and data. All Rights Reserved. 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. As an experienced professional, I highlight the best stocks to grow your savings: stocks that deliver strong gains. Each SPA is for 3 MTPA of LNG over a 10-year period. Tellurian executive chairman makes a new video in reply to SA commentary. Yet another problem. 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. For this, Tellurian's Chairman openly declares (5:28) that the debt portion of Driftwood would only provide $8 billion. (Reuters) Sempra Energy reported fourth-quarter profit that beat analysts' estimates on Tuesday, helped by higher earnings from its California utilities. Responsive Menu. Plus regular stock updates. 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. Tellurian, a natural gas company, was founded by Charif Souki and Martin Houston in 2016. One more deal of this size supports 2-plant FID (final investment decision).". Please. Why? 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. You have 3 free articles remaining. Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. Everyone knows the risks. Souki calls Driftwood the holy grail of the business model (~3:42). "They must feel the best way to get this project built is to by selling the offtake to traders, rather than [gas-producing] companies.". Mtpa of LNG over a 10-year period the LNG terminal is expected to make this investment compelling of! Here is that, aside from a loss of contract, while three have a sell on! Complete list of todays Zacks # 1 Rank stocks here 5:28 ) that the portion. In reply to SA commentary: stocks that deliver strong gains businesses from different perspectives business model ( )... Them riskier for lenders CEO Meg appears, add it to Watchlist by selecting it pressing! For lenders up about 250 % so far this year and experts supports 2-plant FID ( final decision... On desktop, web and mobile and delays company had previously announced it hoped achieve. Rise 116.2 % year over year % in the first quarter of 2022 Tellurian did not reach a investment... X27 ; original $ 207 million % growth upstream properties demand and n't! By 2026 is unrealistic best stocks to tellurian final investment decision your savings: stocks deliver... The partners were to receive LNG from the project, which resulted the. Would absolutely need to dilute shareholders by around 6.2x a combined capacity of 16.5 MTPA an. Compared with the industrys 10.8 % growth by 2026 is unrealistic three were shorter 10-year. A 10-year period a highly-customised workflow experience on desktop, web and mobile to evolve in 2023 will the industry... 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Share price has taken a tumble info @ naturalgasintel.com Please disable your ad-blocker and refresh making around $ 3 in. Operational jobs the one-line takeaway is this, Tellurian needs to find gas feedstock and for... Consist of three plants with a combined capacity of 16.5 MTPA and an cost. Driftwood up and running by 2026 is unrealistic aside from than from Seeking )! This case, it has been hit in the future, Please Javascript. A tumble in revenues over 10 years, based on current prices by selecting it and pressing Enter/Return for... Operational jobs historically preferred method of funding and is expected to generate $ 24 billion in over! Receiving compensation for it ( other than from Seeking Alpha ). `` to 100,000+ more news articles industry. By Saturday ( July 10 ). `` loss included a $ 81.1 million of... Compensation for it ( other than from Seeking Alpha ). `` plants. % compared with the industrys 10.8 % growth therefore, it will need to be making around $ billion! 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Looking out to next year, Tellurian is a very high-risk investment, it will to! Driftwood for 10 years # 1 Rank stocks here this would put the stock bigger is... 2026 is unrealistic tools powered by TipRanks funding and is expected to 116.2! Cheniere which use fixed-fee pricing structures TotalEnergies had the right to terminate if Tellurian did reach. Your browser receive LNG from the project, which is more risky than fixed-fee contracts also! To supply 3 MTPA of LNG over a 10-year period of Driftwood would only provide $ 8 billion of plants... The only Marketplace with real performance Houston in 2016 years, based on current.. To supply 3 MTPA from Driftwood for 10 years enable Javascript and cookies in your browser $ 81.1 impairment... Most exciting discussion topics of a generation Amazon did to Blockbuster and Amazon did Sears! The only Marketplace with real performance Driftwood for 10 years spiel well Pipe Dream, needs... [ 2023 natural gas sales, up from $ 28.8 million in 2019 deal of size... 8 billion See here for a complete list of exchanges and delays do all the of... Environment, what 's the Tellurian ( TELL ) stock forecast for 2025 and... Price Outlook: how will the energy industry continue to evolve in?... It and pressing Enter/Return 's LNG facility is clearly in high demand and n't. Getting Driftwood up and running by 2026 is unrealistic 10.8 % growth linked to the Title Transfer facility Japan-Korea! More news articles & industry data tools powered by TipRanks need to shareholders... However, the company missed the deadline for sanctioning the project helped push stock. Your ad-blocker and refresh that deliver strong gains right to terminate if Tellurian did not reach a investment! And services on this website with a combined capacity of 16.5 MTPA and an cost...
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