Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. Souki contends that the reason why Tellurian was not at the discussion table with Chevron had been that Tellurian didn't want to be in a position to overpromise and underdeliver on its contract. To get to Final Investment Decision, Tellurian needs to secure additional natural gas assets in the Haynesville shale. In August, TELL did a secondary share offering worth $35 million. 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. LNG Insight I argue that this meaningfully improves the bull. 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. Tellurian is reasonably well capitalized, with very roughly $400 million of net cash. It is the second 10-year, 3-MTPA agreement Tellurian has announced in a week, following a deal with commodity trader Gunvor Group. Tellurians Driftwood LNG is arguably the single most ambitious US LNG project. 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. 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: But investors crave FID details. 2 min read. 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. Copy and paste multiple symbols separated by spaces. The essence of the video states that Tellurian wants profits. Saudi Arabia to Use $110 Billion Gas Field for Blue Hydrogen Please. Sempra said this week it's finalizing funding for part of that project and hopes to make a final investment decision by the end of March. 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. This one is in the bag. Looking for a portfolio of ideas like this one? Meaning that its equity would increase to around $12 billion ($2 billion right now + $10 billion in the raise). LNG See here for a complete list of exchanges and delays. This is the core of the bull and bear case. No gimmicks. Gunvor Not at less than $2 per share. 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. Our Standards: The Thomson Reuters Trust Principles. All quotes delayed a minimum of 15 minutes. 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. B.Riley analyst Liam Burke is positive on the stock. One more deal of this size supports 2-plant FID (final investment decision)." Tellurian has said the first phase of Driftwood would cost about $16.8 billion and produce about 16.5 MTPA of LNG. 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. Tellurian (NYSE:TELL) shareholders have been hit hard with bad news. Rumors circulated on social media that Tellurian had lost yet another crucial contract. In May, Tellurian agreed to supply 3 mtpa of LNG over a 10-year period to Gunvor Singapore. 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. DEEP VALUE RETURNS: The only Marketplace with real performance. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. The company ended 2020 with $78.3 million of cash and cash equivalents and $72.8 million in short-term borrowings. 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. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. DEEP VALUE RETURNS: The only Marketplace with real performance. It's not just an out-of-the-money option. By the start of 2020, several LNG export. View Subscription Options I am not receiving compensation for it (other than from Seeking Alpha). It's not like by 2026 when Driftwood gets going natural gas prices will be lower than in the US than are in Europe. What Souki doesn't address is that Tellurian was expecting to sign its Final Investment Decision in the summer of 2022. It's a high beta stock. The company said in its year-end earnings report that it intends to pursue potential acquisitions of properties or companies that own Haynesville assets with proceeds from stock, cash on hand or financing. I have no business relationship with any company whose stock is mentioned in this article. Tellurian currently owns 9,373 net acres in the Haynesville Shale in northern Louisiana and holds an interest in 72 producing wells that will ultimately feed its 27.6 million metric tons/year export facility planned for Calcasieu Parish. Going so far as to admit that getting Driftwood up and running by 2026 is unrealistic. 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 . Deep Value Returns' Marketplace continues to rapidly grow. Detailed information on the use of cookies on this Site, and how you can decline them, is provided in our cookie policy. [2023 Natural Gas Price Outlook: How will the energy industry continue to evolve in 2023? Plus regular stock updates. info@naturalgasintel.com Type a symbol or company name. Washington DC | New York | Houston | Pittsburgh | Mexico City Calgary | Chile. As you can see above, Tellurian's Driftwood is expected to cost approximately $14 billion. Tellurian dangles a carrot to investors, $400 million of EBITDA in 2023. read more. When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. If this doesn't highlight the need for another large LNG facility, very little will. I wrote this article myself, and it expresses my own opinions. I strongly recommend no more than 3% of the portfolio for even the most concentrated investor. In April, Total agreed to buy shares of Tellurian common stock for about $200 million, subject to certain closing conditions, including a final investment decision by Tellurian. 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. People may receive compensation for some links to products and services on this website. All Rights Reserved. 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. 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. Earlier this year, Tellurian signed ten-year agreements with commodity traders Gunvor Group and Vitol to sell three million tons per annum of LNG. Written by But common sense. 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. . Souki goes on to contend that Tellurian felt it was important to get Shell's contract canceled and to instead seek out potential strategic partners and offer those potential partners LNG volumes from Driftwood in exchange for them buying equity in Tellurian. 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 . 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. 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. 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. I am not receiving compensation for it (other than from Seeking Alpha). That would lower its debt payments, but it would also cap shareholders' upside. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. View Subscription Options To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. 2023 ESG Review. The company is developing a portfolio of natural gas production assets and has nearly 100 drillable locations. When the symbol you want to add appears, add it to My Quotes by selecting it and pressing Enter/Return. 1.800.427.5747 Some call it the Internet of Money and predict it could change the way money works forever. Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. $8 billion to come from debt. 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; Altogether, Tellurian would need to dilute shareholders by approximately 7x. Why? Experts agree were still in the early stages of this technology, and as it grows, it will create several investing opportunities. It then announced it would seek equity partners. Please disable your ad-blocker and refresh. And the debt markets would not even consider $1 billion. A story that's going to be a win-win for all parties. Nov 30, 2020 Houston-based liquefied natural gas company Tellurian Inc. (Nasdaq: TELL) announced a new president and CEO on Nov. 30. 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. This means that investors simply aren't buying into Souki's vision. Here's the thing that a lot of investors have likely forgotten about. Per Tellurian, the agreements have been canceled as they were not consistent with the commercial agreements that Driftwood signed with other companies. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. ISSN 2158-8023 Tellurian issued a second press release today, saying that it had exercised its. All rights reserved. The first phase would have a nameplate production capacity of 11 million mt/y per year of LNG. 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 said it plans to start preparing the Driftwood site for construction later this summer, with construction beginning in the first quarter of 2022. read more. Tellurians pricing model relies on what it calls destination market pricing, which is more risky than fixed-fee contracts but also offers more upside. More specially, Souki notes that nothing has happened with its contract with Gunvor. All told, the facility would have 20 LNG trains and at least 24.9 million scf (705,000 m3) of storage capacity. I wrote this article myself, and it expresses my own opinions. In June, TELL signed a long-term contract with Vitol for 3 mtpa. This would put the stock priced at somewhere around 3x its 2026 cash flows. Up until the Final Investment Decision takes place, investors are left guessing as to just how much equity will be diluted. Tellurian needs to raise $12 billion. Not only has Tellurian struggled to get its Final Investment Decision (''FID'') going for months. 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. However, the company still needs to find gas feedstock and finances for the terminal. Members of Deep Value Returns get exclusive access to our model portfolio. Looking for more investing ideas like this one? Four of the analysts have a buy rating, while three have a sell rating on the stock. Since I wrote Pipe Dream, Tellurian's share price has taken a tumble. 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