Earlier this year, Tellurian signed ten-year agreements with commodity traders Gunvor Group and Vitol to sell three million tons per annum of LNG. 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. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. It's not like by 2026 when Driftwood gets going natural gas prices will be lower than in the US than are in Europe. Chairman Souki addresses the matter on a YT video. Ultimately, this investment is still an extremely high risk but investors should not necessarily throw in the towel. Gas producer . 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. These symbols will be available throughout the site during your session. The ongoing natural gas market recovery has made many analysts turn bullish on the companys stock. All told, the facility would have 20 LNG trains and at least 24.9 million scf (705,000 m3) of storage capacity. This is not a hindsight remark. Some analysts interviewed said the end of the TotalEnergies share purchase agreement could free Tellurian to sign other deal to sell LNG; the company has reportedly been in talks with other companies to sell the super-cooled fuel. Is this happening to you frequently? Deep Value Returns' Marketplace continues to rapidly grow. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. Get access to 100,000+ more news articles & industry data. Sign in to get the best natural gas news and data. Our Standards: The Thomson Reuters Trust Principles. Souki calls Driftwood the holy grail of the business model (~3:42). Great chart showing how coal prices should increase with LNG prices.$LNG $TELL $TGA $BTU $AR $CRK https://t.co/SazUOygfKk. Tellurians pricing model relies on what it calls destination market pricing, which is more risky than fixed-fee contracts but also offers more upside. Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. Tellurian has said the first phase of Driftwood would cost about $16.8 billion and produce about 16.5 MTPA of LNG. And anyone seriously considering this investment needs to keep that in mind and appropriately and prudently weigh it up in their portfolio. Get them exclusively at Deep Value Returns. Follow the topics you want and receive the daily emails. Type a symbol or company name. Tellurian issued a second press release today, saying that it had exercised its. Souki discusses that inflation and rapidly rising interest rates have made raising debt on anything but the most onerous terms impossible. 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. | Tellurian is a very volatile stock and not one for the faint-hearted. Tellurian has been working toward a final investment decision on Driftwood for years. Driftwood LNG Plans Move Forward Despite Lack Of Financing. 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. B.Riley initiated on TELL with a buy rating and a target price of $8 in July. Market Realist is a registered trademark. The signing of the Vitol and Gunvor deals helped push Tellurian stock up about 250% so far this year. Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. | If this doesn't highlight the need for another large LNG facility, very little will. ISSN 2577-9877 Washington DC | New York | Houston | Pittsburgh | Mexico City Calgary | Chile. LNG ISSN 2577-9877 Is this happening to you frequently? 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). No gimmicks. Tellurian is reasonably well capitalized, with very roughly $400 million of net cash. Bitcoin, Like the Internet Itself, Could Change Everything. 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. Driftwood is categorically not getting built by 2026. Each deal is worth about $12 billion in revenue over the contract period. See here for a complete list of exchanges and delays. High upside energy, commodity, tech, and dividend stocks. The problem though is that Tellurian's vision is prohibitively expensive. And the debt markets would not even consider $1 billion. Tellurian sold off 40% in the past month. 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. I wrote this article myself, and it expresses my own opinions. We are all working together to compound returns. Deep Value Returns' Marketplace continues to rapidly grow. Please disable your ad-blocker and refresh. I wrote this article myself, and it expresses my own opinions. 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. $6 billion from equity. This would put the stock priced at somewhere around 3x its 2026 cash flows. Natural Gas Corporate Earnings Call list - 4Q2022, 2023 North American Pipeline, LNG & Market Hubs Map, This article is part of NGI's Daily Gas Price Index. ISSN 1532-1231 In August, TELL did a secondary share offering worth $35 million. Driftwood Lng Not only has Tellurian struggled to get its Final Investment Decision (''FID'') going for months. 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. This is of course if Driftwood ends up getting built at all. The LNG terminal is expected to cost $12 billion. View Subscription Options Reality got in the way. 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. Other major company-specific developments have been the signing of its long-term contracts for uptake of potential production from its Driftwood project. It has $474.2 million in cash and cash equivalents on hand. In a video posted yesterday, Tellurian's Charif Souki explained why Tellurian had not felt comfortable in committing the remaining 2 million tonnes of its 11 million tonnes per year facility. Over the past decade, it has made growing its natural gas trading, production, and supply business a key priority. Building its highly coveted Driftwood will cost $14 billion. Looking for a portfolio of ideas like this one? This clearly is super advantageous to Cheniere (LNG). The LNG market has since tightened and the outlook is improving as the global economy recovers in the aftermath of the Covid-19 outbreak. As per usual, Souki took to YT to argue his take. 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. The average target price for the stock is $6.34, which implies an upside of nearly 72 percent. Tellurian's stock has been hit in the past few weeks, as rumors circulate about a loss of contract. I believe that anyone reading this knows the spiel well. DEEP VALUE RETURNS: The only Marketplace with real performance. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. 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 is based in Houston, Texas, and its common stock is listed on the Nasdaq Capital Market under the symbol "TELL." 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. I'll address this momentarily. See here for a complete list of exchanges and delays. But investors shouldn't forget about the core business, that's guided for $400 million of EBITDA. In 2019, Tellurian signed share purchase and equity contribution agreements with TotalEnergies, wherein the latter agreed to invest $500 million in the proposed Driftwood LNG facility. The 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. However, the company missed the. Zacks->. I am not receiving compensation for it (other than from Seeking Alpha). Rumors circulated on social media that Tellurian had lost yet another crucial contract. 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. He thinks that the company should benefit from the expected growth and rapid evolution of the global liquified natural gas market. Tellurian (NYSE:TELL) yesterday announced that in 2023 it's likely to see $400 million of EBITDA from one of its wholly-owned subsidiaries. Today, that discovery is still the heart of the Zacks Rank. 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. Haynesville Shale This is a simple case of arbitrage. If you have an ad-blocker enabled you may be blocked from proceeding. 1.800.427.5747 Tellurian had 96 million outstanding shares at the end of 2016 compared to 470 million currently. 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. Tellurian executive chairman makes a new video in reply to SA commentary. Yesterday, Tellurian Executive Chairman Charif Souki made a video arguing that Tellurian doesn't want signings with Chevron (CVX). Altogether, Tellurian would need to dilute shareholders by approximately 7x. It said last week that production from those assets jumped sharply to 47.3 Bcf in 2022. Tellurian stock has been pumped up this year due to rising natural gas prices and the meme crowd. Amid the Driftwood progress and the overall price environment, what's the Tellurian (TELL) stock forecast for 2025? I wrote this article myself, and it expresses my own opinions. Another big fear for investors could be the dilution of their holdings. See here for a complete list of exchanges and delays. 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. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. So the core business is priced at 4x EBITDA. Why? 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. Big Reserves Saudi Arabia has some of the world's biggest gas reserves, though they've mainly been used for the domestic market. Click here to request a free trial. High upside energy, commodity, tech, and dividend stocks. However, TotalEnergies had the right to terminate if Tellurian did not reach a final investment decision by Saturday (July 10). Part of this decline is due to the companys share offering in August. By the start of 2020, several LNG export. 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. I wrote this article myself, and it expresses my own opinions. Please. 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. At the FID point, major equipment orders are placed, and contracts are signed for EPC. 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. It is the second 10-year, 3-MTPA agreement Tellurian has announced in a week, following a deal with commodity trader Gunvor Group. Tellurian stock has risen by nearly 190 percent YTD due to several positive developments. read more. DEEP VALUE RETURNS: The only Marketplace with real performance. I have no business relationship with any company whose stock is mentioned in this article. I argue that this meaningfully improves the bull case. Looking for more investing ideas like this one? A win for Europe, as they crave lower energy. You can seethe complete list of todays Zacks #1 Rank stocks here. 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. Looking for a helping hand in the market? A story that's going to be a win-win for all parties. You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. Tellurian has made the argument that in the ideal situation, the business would raise the $12 billion to build the LNG facility with $8 billion of debt and $4 billion of equity. 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, it has contracted a total of 9 MTPA worth of sale and purchase agreements (SPAs). Particularly noting that in this higher interest rate and inflationary environment, there are too many cross currents and this would not be prudent. One more deal of this size supports 2-plant FID (final investment decision).". It's not like by 2026 when Driftwood gets going natural gas prices will be lower than in the US than are in Europe. As an experienced professional, I highlight the best stocks to grow your savings: stocks that deliver strong gains. It then announced it would seek equity partners. Tellurian Inc., which continues to work toward a final investment decision on its Driftwood liquefied natural gas (LNG) terminal proposed for Louisiana, plans to acquire additional assets in the Haynesville Shale this year. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. 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