I follow countless companies and select for you the most attractive investments. Its stock has gained 80.3% compared with the industrys 10.8% growth. Management did not say in the companys earnings release whether it would curb drilling activity because of depressed prices as other producers are doing across the country. swan event, that Driftwood one day actually gets built. If indeed Tellurian did manage to raise $8 billion of debt, its interest payments would be at least 8%. 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. High upside energy, commodity, tech, and dividend stocks. Bitcoin, Like the Internet Itself, Could Change Everything. Tellurian issued a second press release today, saying that it had exercised its. Saudi Arabia to Use $110 Billion Gas Field for Blue Hydrogen Hess earnings for 2021 are expected to rise 116.2% year over year. Well, there's always hope. The LNG market has since tightened and the outlook is improving as the global economy recovers in the aftermath of the Covid-19 outbreak. Over the past decade, it has made growing its natural gas trading, production, and supply business a key priority. Shares of the company have outperformed the industry in the past six months. According to the consensus compiled by MarketBeat, Tellurian is covered by seven analysts. Driftwood Lng One of the biggest stock catalysts remains the progress of its Driftwood project. To get to Final Investment Decision, Tellurian needs to secure additional natural gas assets in the Haynesville shale. The company currently carries a Zack Rank #3 (Hold). Sign in to get the best natural gas news and data. Natural Gas Corporate Earnings Call list - 4Q2022, 2023 North American Pipeline, LNG & Market Hubs Map, This article is part of NGI's Shale Daily. Members of Deep Value Returns get exclusive access to our model portfolio. Looking for a helping hand in the market? This would severely limit Tellurian's upside. Going forward, a lot will depend on the FID. Combined, the three SPAs are expected to generate annual revenue of US$1.8 billion and annual EBITDA of just under US$1 billion. Please disable your ad-blocker and refresh. Tellurian has no signed Final Investment Decision. 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. Get access to 100,000+ more news articles & industry data. Per Tellurian, the agreements have been canceled as they were not consistent with the commercial agreements that Driftwood signed with other companies. 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 first phase would have a nameplate production capacity of 11 million mt/y per year of LNG. The agreements had built on TotalEnergies' original $207 million . I wrote this article myself, and it expresses my own opinions. Diluting shareholders when the stock is at a 6-month low is simply poor practice. Tellurian, email 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. The one-line takeaway is this, Tellurian is a very high-risk investment. Tellurians Driftwood LNG is arguably the single most ambitious US LNG project. Not even with an 11.25% coupon. . Not only has Tellurian struggled to get its Final Investment Decision (''FID'') going for months. Tellurian is being priced as an out-of-the-money option. 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. As an experienced professional, I highlight the best stocks to grow your savings: stocks that deliver strong gains. High upside energy, commodity, tech, and dividend stocks. 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. Please. Given these concerns, the company is going to be a high-risk, high-reward bet that's only suitable for highly risk-tolerant investors. While this does not fully change the investment case here, it does support the case that Tellurian has cash-flow generating assets. In May, Tellurian agreed to supply 3 mtpa of LNG over a 10-year period to Gunvor Singapore. The industry leader for online information for tax, accounting and finance professionals. 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Now, the visitors are greeted to the sight of boats stuck in a sea of invasive green water hyacinth weed. Since I wrote Pipe Dream, Tellurian's share price has taken a tumble. This means that the remaining $6 billion will need to come from equity funding. 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. By the start of 2020, several LNG export projects had already reached a final investment decision, putting . All rights reserved. Why? some value. All rights reserved. NGIs special report Reshuffling the Deck: High Stakes for Natural Gas & The World is All-In offers trusted insight and data-backed forecasts on U.S. natural gas and the global LNG markets. 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 . Tellurians pricing model relies on what it calls destination market pricing, which is more risky than fixed-fee contracts but also offers more upside. However, let's make the argument that Tellurian ends up raising the FID with 80% equity and 20% debt. The LNG would come from Tellurian's proposed 27.6-MTPA Driftwood export project in Louisiana. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. 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. This is the core of the bull and bear case. Driftwood LNG Plans Move Forward Despite Lack Of Financing. 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. Gunvor Big Reserves Saudi Arabia has some of the world's biggest gas reserves, though they've mainly been used for the domestic market. I wrote this article myself, and it expresses my own opinions. The company estimates that the 27.6 mmty facility would cost $25 billion to build. Everyone knows the risks. 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. Indeed, domestic natural gas prices fell by nearly 20% to $6 MMBtu. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. The essence of the video states that Tellurian wants profits. Chairman Souki addresses the matter on a YT video. B.Riley analyst Liam Burke is positive on the stock. No gimmicks. Another big fear for investors could be the dilution of their holdings. However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. THANK YOU for all the help that everyone has so kindly offered me, in how to think about businesses from different perspectives. In August, TELL did a secondary share offering worth $35 million. Washington DC | New York | Houston | Pittsburgh | Mexico City Calgary | Chile. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. Not at less than $2 per share. Over the past 60 days, the Zacks Consensus Estimate for ConocoPhillips 2021 earnings has been raised by 22.5%. 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. I have no business relationship with any company whose stock is mentioned in this article. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. The problem here is that, aside from. The bigger question is what LNG prices will be in 2026. The stock has jumped by nearly 190 percent YTD but is off 30 percent from the highs it reached in June. 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. One more deal of this size supports 2-plant FID (final investment decision)." 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