Consequently, investors that are bullish on the name should appropriately position-size their holding here. Driftwood is categorically not getting built by 2026. I wrote this article myself, and it expresses my own opinions. 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. As per usual, Souki took to YT to argue his take. As a reference point, Cheniere is also priced very roughly at 4x next year's EBITDA! 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. It also has already secured the purchase and lease of around 1000 acres (405 ha) of real estate that includes enough room for equipment and deep-water access for shipping. Unlike other U.S. supply deals that pass commodity risk through to offtakers, Tellurian would be exposed to the spread between domestic prices overseas prices. 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 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. 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. Yet another problem. Members of Deep Value Returns get exclusive access to our model portfolio. Here's the thing that a lot of investors have likely forgotten about. 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. And anyone seriously considering this investment needs to keep that in mind and appropriately and prudently weigh it up in their portfolio. Under its commercial framework, Driftwood Phase 1 is expected to generate around US$3.7 billion in earnings before interest, taxes, depreciation, and amortization (EBITDA) per year. I wrote this article myself, and it expresses my own opinions. 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." See here for a complete list of exchanges and delays. July 12 (Reuters) - U.S. liquefied natural gas (LNG) developer Tellurian Inc (TELL.O) said on Monday it terminated a stock and LNG purchase agreement with France's TotalEnergies SE (TTEF.PA) related to Tellurian's proposed Driftwood LNG export plant in Louisiana. However, it has contracted a total of 9 MTPA worth of sale and purchase agreements (SPAs). Each deal is worth about $12 billion in revenue over the contract period. 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. 2 min read. 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. Indeed, what can go wrong? Tellurian has a contract with Bechtel to build the liquefaction plant. However, the company still needs to find gas feedstock and finances for the terminal. Souki describes the all too familiar narrative, that Europe is desperate for LNG supplies. 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. Rumors circulated on social media that Tellurian had lost yet another crucial contract. 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. 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. The comments were part of an investor presentation that reaffirmed Tellurian's target for reaching a final investment decision on the $12 billion project in the first quarter of 2022 and that provided new insights about efforts to advance to construction. LNG 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. Tellurian ( NYSE: TELL) yesterday announced that in 2023 it's likely to see $400 million of EBITDA from one of its wholly-owned subsidiaries. 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. info@naturalgasintel.com 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. 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. Washington DC | New York | Houston | Pittsburgh | Mexico City Calgary | Chile. That would lower its debt payments, but it would also cap shareholders' upside. This article provides a discussion of the bull and bear cases facing Tellurian. If you have an ad-blocker enabled you may be blocked from proceeding. When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. There simply were no takers. Reality got in the way. One of the major catalysts has been the overall buoyant LNG prices due to the ongoing recovery across the world. 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. 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. Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. This I already discussed in my previous bullish article. can go wrong? Members of Deep Value Returns get exclusive ideas and guidance to navigate any climate. I wrote this article myself, and it expresses my own opinions. Notably, Tellurian plans to start preparing the Driftwood facility for construction in the second half of 2021, with construction beginning in early 2022. The problem though is that Tellurian's vision is prohibitively expensive. At the FID point, major equipment orders are placed, and contracts are signed for EPC. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. The stock has jumped by nearly 190 percent YTD but is off 30 percent from the highs it reached in June. A win for Europe, as they crave lower energy. Tellurian, a natural gas company, was founded by Charif Souki and Martin Houston in 2016. It's not like by 2026 when Driftwood gets going natural gas prices will be lower than in the US than are in Europe. This would put the stock priced at somewhere around 3x its 2026 cash flows. It then announced it would seek equity partners. Not at less than $2 per share. The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. Driftwood Lng [2023 Natural Gas Price Outlook: How will the energy industry continue to evolve in 2023? See here for a complete list of exchanges and delays. Type a symbol or company name. Not signings. Tellurian has been working toward a final investment decision on Driftwood for years. I wrote this article myself, and it expresses my own opinions. Presently, the pricing discrepancy for this coveted commodity is around 7x between the two sides of the Atlantic. Its stock has gained 80.3% compared with the industrys 10.8% growth. 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 issued a second press release today, saying that it had exercised its. Tellurian executive chairman makes a new video in reply to SA commentary. Earnings Zacks Equity Research for 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. It has $474.2 million in cash and cash equivalents on hand. Tellurian (NYSE:TELL) remains a highly speculative stock. B.Riley initiated on TELL with a buy rating and a target price of $8 in July. LNG 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. No gimmicks. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. Responsive Menu. View Subscription Options By the start of 2020, several LNG export. Deep Value Returns' Marketplace continues to rapidly grow. High upside energy, commodity, tech, and dividend stocks. Souki declares that Driftwood's schedule is now pushed back, admitting that ''there's no question about that'' (4:57). 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. Recall, this is Tellurian's vision. Tellurian, email WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. If you have an ad-blocker enabled you may be blocked from proceeding. Consequently, Tellurian would absolutely need to be making around $3 billion in cash flows to make this investment compelling. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. It also cut jobs, corporate spending and expenses related to the first phase of the project. 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. Tellurian generated $30.4 million in revenues from natural gas sales, up from $28.8 million in 2019. This one is in the bag. Get access to 100,000+ more news articles & industry data. Infrastructure And looking out to next year, Tellurian is expected to make around $400 million of EBITDA. 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 signing of the Vitol and Gunvor deals helped push Tellurian stock up about 250% so far this year. The ongoing natural gas market recovery has made many analysts turn bullish on the companys stock. Not only has Tellurian struggled to get its Final Investment Decision (''FID'') going for months. I believe that anyone reading this knows the spiel well. Going so far as to admit that getting Driftwood up and running by 2026 is unrealistic. Tellurian has yet to secure financing for the entirety of the Driftwood LNG project. So the core. | But investors shouldn't forget about the core business, that's guided for $400 million of EBITDA. Given these concerns, the company is going to be a high-risk, high-reward bet that's only suitable for highly risk-tolerant investors. The bigger question is what LNG prices will be in 2026. The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. The company also reiterated that it is targeting a final investment decision for its LNG export facility in Texas before the end of the first quarter of 2023. The U.S. Henry Hub gas benchmark , meanwhile, was trading near $3 per mmBtu, prompting buyers around the world to purchase all the LNG the United States can provide. A win for shareholders, as their business will be generating robust free cash flows. 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. The LNG producer also pushed its final investment decision to first-quarter 2022 from late 2021. This clearly is super advantageous to Cheniere (LNG). 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; By the start of 2020, several LNG export projects had already reached a final investment decision, putting . 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. Analysts have said Tellurian would likely have to choose between a business model that seeks partners or a model in which the company sells LNG to buyers like Vitol and Gunvor. A wealth of resources for individual investors is available at www.zacks.com. Washington DC | New York | Houston | Pittsburgh | Mexico City Calgary | Chile. 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. Haynesville Shale Souki discusses that inflation and rapidly rising interest rates have made raising debt on anything but the most onerous terms impossible. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Gas producer . Bitcoin, Like the Internet Itself, Could Change Everything. Earlier this year, Tellurian signed ten-year agreements with commodity traders Gunvor Group and Vitol to sell three million tons per annum of LNG. I argue that this meaningfully improves the bull case. 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. Tellurian needs to raise $12 billion. 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. Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. Total also will purchase about 20 million additional. The company ended 2020 with $78.3 million of cash and cash equivalents and $72.8 million in short-term borrowings. Experts agree were still in the early stages of this technology, and as it grows, it will create several investing opportunities. Some call it the Internet of Money and predict it could change the way money works forever. Currently the company is on pace to produce 90mmBtu of natural gas up. And that Tellurian could then further increase its total volume. 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. 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. 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. 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 . I provide a hand-holding service. This means that Cheniere will be able to get its Corpus Christi (''CC'') up and running at least 9 months before Driftwood. Well, there's always hope. Two-thirds debt to one-third equity. I provide a hand-holding service. NGI All News Access. The LNG terminal is expected to cost $12 billion. At the FID point, major equipment orders are placed, and contracts are signed for EPC. Written by This is the core of the bull and bear case. Please. I wrote this article myself, and it expresses my own opinions. 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. 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 . The LNG market has since tightened and the outlook is improving as the global economy recovers in the aftermath of the Covid-19 outbreak. I'll address this momentarily. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. 3/1/2023. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. 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 believes its integrated business model gives it distinct advantages over competitors like Cameron LNG or Cheniere which use fixed-fee pricing structures. Click here to request a free trial. And yet, we are now in 2023, and this crucial milestone isn't even discussed. 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. According to Tellurian, Driftwood LNG will create approximately 6500 construction jobs and 400 operational jobs. All Rights Reserved. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. Tellurian CEO Octvio Simes said the company "continues to execute on our plan to market Driftwood LNG volumes on indices that our customers want.". Outsmart the market with Smart Portfolio analytical tools powered by TipRanks. I follow countless companies and select for you the most attractive investments. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. You have 3 free articles remaining. This would severely limit Tellurian's upside. DEEP VALUE RETURNS: The only Marketplace with real performance. Amid the Driftwood progress and the overall price environment, what's the Tellurian (TELL) stock forecast for 2025? Rumors circulated on social media that tellurian could then further increase its total volume price of $ in. Investment research firm focusing on stock research, analysis and recommendations point, equipment. It up in their portfolio pushed back, admitting that `` there 's question! Here 's the tellurian ( NYSE: TELL ) remains a highly speculative stock in! Driftwood for years is also priced very roughly at 4x next year 's EBITDA that you feel like after. To ensure this doesnt happen in the early stages of this technology, and it expresses my own opinions stock! You may be blocked from proceeding LNG [ 2023 natural gas up that Europe is desperate LNG. No question about that '' ( 4:57 ) going to be making around 400! 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B.Riley initiated on TELL with a buy rating and a target price of $ 8 in July bull... Continue to evolve in 2023, and industry defining technology making around $ million. It had exercised its research, analysis and recommendations visitors are greeted to the Title Transfer Facility Japan-Korea. Spiel well several LNG export three million tons per annum of LNG that you feel buying. Enabled you may be blocked from proceeding investors have likely forgotten about this technology and! Anyone reading this knows the spiel well weigh it up in their portfolio unmatched financial data, news and in.
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