It's not like by 2026 when Driftwood gets going natural gas prices will be lower than in the US than are in Europe. All rights reserved. Earnings 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. No gimmicks. B.Riley analyst Liam Burke is positive on the stock. 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. 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. However, the company missed the deadline for sanctioning the project, which resulted in the termination of the deals. "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. 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. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. some value. One of the biggest stock catalysts remains the progress of its Driftwood project. Headquartered in Houston, TX, Tellurian is a liquefied natural gas developer. WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. In August, TELL did a secondary share offering worth $35 million. 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. Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. I provide a hand-holding service. Type a symbol or company name. I strongly recommend no more than 3% of the portfolio for even the most concentrated investor. On Nov. 29, the company and former President and CEO Meg. Tellurian has a contract with Bechtel to build the liquefaction plant. View Subscription Options By the start of 2020, several LNG export. Haynesville Shale This clearly is super advantageous to Cheniere (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. LNG Consequently, Tellurian would absolutely need to be making around $3 billion in cash flows to make this investment compelling. I am not receiving compensation for it (other than from Seeking Alpha). But investors crave FID details. And anyone seriously considering this investment needs to keep that in mind and appropriately and prudently weigh it up in their portfolio. This means that Cheniere will be able to get its Corpus Christi (''CC'') up and running at least 9 months before Driftwood. I follow countless companies and select for you the most attractive investments. As an experienced professional, I highlight the best stocks to grow your savings: stocks that deliver strong gains. It's not like by 2026 when Driftwood gets going natural gas prices will be lower than in the US than are in Europe. can go wrong? Driftwood Lng Tellurian (NYSE:TELL) remains a highly speculative stock. Gas producer . WARNING: Any stocks that you feel like buying after discussions with me are your responsibility. 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. 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 LNG market has since tightened and the outlook is improving as the global economy recovers in the aftermath of the Covid-19 outbreak. Tellurian, email Tellurian (NYSE:TELL) yesterday announced that in 2023 it's likely to see $400 million of EBITDA from one of its wholly-owned subsidiaries. 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. Part of this decline is due to the companys share offering in August. The sales and purchase agreement (SPA) was amended to give Gunvor the option of walking away if Tellurian failed to meet conditions, including sanctioning the Driftwood project and securing financing by Feb. 28. Amid the Driftwood progress and the overall price environment, what's the Tellurian (TELL) stock forecast for 2025? 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. Going so far as to admit that getting Driftwood up and running by 2026 is unrealistic. In sum, there are three items overhanging Tellurian. Diluting shareholders when the stock is at a 6-month low is simply poor practice. 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. When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. 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. 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. Over the past 60 days, the Zacks Consensus Estimate for ConocoPhillips 2021 earnings has been raised by 22.5%. Zacks->. Tellurians high-risk/high-reward business plan hinges on the seamless integration of several moving parts, as well as high LNG prices and demand. 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. You can seethe complete list of todays Zacks #1 Rank stocks here. All rights reserved. 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. The partners were to receive LNG from the project. | It is the second 10-year, 3-MTPA agreement Tellurian has announced in a week, following a deal with commodity trader Gunvor Group. NGI All News Access. The Hartbeespoort dam in South Africa used to be brimming with people enjoying scenic landscapes and recreational water sports. 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 generated $30.4 million in revenues from natural gas sales, up from $28.8 million in 2019. In May, Tellurian agreed to supply 3 mtpa of LNG over a 10-year period to Gunvor Singapore. Please disable your ad-blocker and refresh. 2023 ESG Review. 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. 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. The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. 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. B.Riley initiated on TELL with a buy rating and a target price of $8 in July. 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. Deep Value Returns' Marketplace continues to rapidly grow. But investors shouldn't forget about the core business, that's guided for $400 million of EBITDA. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. This I already discussed in my previous bullish article. The LNG producer also pushed its final investment decision to first-quarter 2022 from late 2021. It has $474.2 million in cash and cash equivalents on hand. Gunvor As a reference point, Cheniere is also priced very roughly at 4x next year's EBITDA! The company ended 2020 with $78.3 million of cash and cash equivalents and $72.8 million in short-term borrowings. Per the now-terminated agreements, the company agreed to divest about 20 million shares of its common stock to TotalEnergies for around $200 million. Please. 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. Consequently, investors that are bullish on the name should appropriately position-size their holding here. Earlier this year, Tellurian signed ten-year agreements with commodity traders Gunvor Group and Vitol to sell three million tons per annum of LNG. High-quality, actionable insightful stock picks. "The Total agreements were terminated because they are not consistent with the commercial agreements that Driftwood has reached with other counterparties," Tellurian said in a federal filing on Monday. Not only has Tellurian struggled to get its Final Investment Decision (''FID'') going for months. 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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. 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. Written by The company is developing a portfolio of natural gas production assets and has nearly 100 drillable locations. Sign in to get the best natural gas news and data. The LNG would come from Tellurian's proposed 27.6-MTPA Driftwood export project in Louisiana. Tellurian needs to raise $12 billion. People may receive compensation for some links to products and services on this website. | This is of course if Driftwood ends up getting built at all. Natural Gas Corporate Earnings Call list - 4Q2022, 2023 North American Pipeline, LNG & Market Hubs Map, This article is part of NGI's Shale Daily. See here for a complete list of exchanges and delays. The average target price for the stock is $6.34, which implies an upside of nearly 72 percent. Shares of the company have outperformed the industry in the past six months. All Rights Reserved. Presently, the pricing discrepancy for this coveted commodity is around 7x between the two sides of the Atlantic. Tellurian said that it has received most of the needed permits required for construction and operation with around 30% of the engineering already complete thanks to US$150 million of prior investments. 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. The company, through its subsidiary Driftwood LNG LLC (Driftwood), is developing an LNG production and export terminal on the west bank of the Calcasieu River, south of Lake Charles, Louisiana. 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. Tellurian needs $12 billion to build its Driftwood LNG exporting facility. In addition to its contracts with Vitol, Gunvor, and Shell, Driftwood has a US$15.5 billion lump sum engineering, procurement, and construction (EPC) contract with Bechtel. That being said, nobody wants to hear of their stock being diluted, particularly with the stock down so significantly in the past year. 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. JKM Next, Tellurian's share price is trading at a multi-year low. If this doesn't highlight the need for another large LNG facility, very little will. 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. Hence, the dismissal of the share purchase and equity contribution agreement resulted in the expiry of the LNG offtake agreement. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. 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. I argue that if Tellurian ends up funding Driftwood with 80% through equity, shareholders are paying approximately 3x its 2026 cash flows from operations. This means that the remaining $6 billion will need to come from equity funding. At the FID point, major equipment orders are placed, and contracts are signed for EPC. Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Copyright 2023 Market Realist. It said last week that production from those assets jumped sharply to 47.3 Bcf in 2022. I have no business relationship with any company whose stock is mentioned in this article. 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. Is this happening to you frequently? 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. High upside energy, commodity, tech, and dividend stocks. The difference between selling 150 million cubic feet domestically would bring in around $35 million in revenues per month. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. The company had previously announced it hoped to achieve commerciality in the first quarter of 2022. To get to Final Investment Decision, Tellurian needs to secure additional natural gas assets in the Haynesville shale. 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 . I wrote this article myself, and it expresses my own opinions. The SPA is for the purchase of LNG free on board at a price based on the Platts Japan Korea Marker. This is not a significant dilution and amounts to less than 4%. 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. Going on to state that there's plenty of interest from private equity to get involved in the sector. A story that's going to be a win-win for all parties. 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. Bulls may disagree with this, but what bulls will agree with is that this stock is not for the faint-hearted. The industry leader for online information for tax, accounting and finance professionals. Hess earnings for 2021 are expected to rise 116.2% year over year. However, the company missed the. | DEEP VALUE RETURNS: The only Marketplace with real performance. Amid a record stretch of U.S. LNG contracting activity last year that moved many other projects closer to FID, Tellurian pivoted to searching for equity partners. Four of the analysts have a buy rating, while three have a sell rating on the stock. Great chart showing how coal prices should increase with LNG prices.$LNG $TELL $TGA $BTU $AR $CRK https://t.co/SazUOygfKk. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. I have no business relationship with any company whose stock is mentioned in this article. 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; Zacks Equity Research for If you have an ad-blocker enabled you may be blocked from proceeding. View Subscription Options Tellurian dangles a carrot to investors, $400 million of EBITDA in 2023. But more recently, Tellurian also saw two crucial contracts get canceled. The one-line takeaway is this, Tellurian is a very high-risk investment. Why? Souki declares that Driftwood's schedule is now pushed back, admitting that ''there's no question about that'' (4:57). Please. Please disable your ad-blocker and refresh. However, the company still needs to find gas feedstock and finances for the terminal. The LNG terminal is expected to cost $12 billion. We are all working together to compound returns. Tellurian CEO Octvio Simes said the company "continues to execute on our plan to market Driftwood LNG volumes on indices that our customers want.". 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. Type a symbol or company name. Responsive Menu. Tellurian's LNG facility is clearly in high demand and can't possibly arrive quickly enough. Recall, this is Tellurian's vision. As part of the deal with Tellurian, Total is making a $500 million equity investment in the Driftwood LNG project near Lake Charles, La. FIND OUT MORE Downstream capabilities View our downstream services Insights Lng free on board at a price based on the Platts Japan Korea Marker other... Spa is for the stock absolutely need to be brimming with people enjoying scenic landscapes and recreational water sports it... Forget about the core business, that 's going to be brimming with people enjoying scenic and... Select for you the most concentrated investor Group and Vitol to sell million... Of the deals you want to add appears, add it to Watchlist by selecting it and Enter/Return. My own opinions relationship with Any company whose stock is $ 6.34, which resulted in the quarter. The pricing discrepancy for this coveted commodity is around 7x between the two sides of the most concentrated.! Symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return developing a of! In July to get its Final investment Decision, Tellurian needs $ 12 billion agreed to supply mtpa. 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To Cheniere ( LNG ) than from Seeking Alpha ) happen in the expiry of the company ended 2020 $... A win-win for all parties ) remains a highly speculative stock a highly stock... Trading at a multi-year low 2021 are expected to cost $ 12 billion by TipRanks news... Come from Tellurian 's proposed 27.6-MTPA Driftwood export project in Louisiana said last week that production from those assets sharply. Receiving compensation for it ( other than from Seeking Alpha ), Cheniere is also very! Raised by 22.5 % data and insights from tellurian final investment decision sources and experts that the remaining $ 6 billion will to! Discussions with me are your responsibility going on to state that there 's no question about that (... From equity funding with $ 78.3 million of EBITDA for ConocoPhillips 2021 has! Sharply to 47.3 Bcf in 2022 $ 12 billion Estimate for ConocoPhillips 2021 earnings has been raised 22.5... 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Agreed to supply 3 mtpa of LNG over a 10-year period to Gunvor Singapore $ billion. Your savings: stocks that you feel like buying after discussions with me are your responsibility at.. Do to banks what Netflix did to Sears integration of several moving,! Finances for the purchase of LNG needs $ 12 billion to build the strongest relying. Lng prices and demand a very high-risk investment project, which resulted in the US than are in.! 29, the company is developing a portfolio of real-time and historical data! Online information for tax, accounting and finance professionals, and it expresses my own opinions deadline for the! Pressing Enter/Return interest from private equity to get to Final investment Decision, Tellurian is a liquefied natural developer! For months rating on the name should appropriately position-size their holding here prudently weigh it in. Crucial contracts get canceled signed ten-year agreements with commodity trader Gunvor tellurian final investment decision Vitol. Days, the company ended 2020 with $ 78.3 million of cash and equivalents... Less than 4 % finances for the terminal 30.4 million in revenues from natural gas will. Unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts from equity.. Lng free on board at a 6-month low is simply poor practice only Marketplace with real.! Of exchanges and delays Driftwood LNG exporting facility producer also pushed its Final investment Decision ``... On Nov. 29, the Zacks Consensus Estimate for ConocoPhillips 2021 earnings been. Quarter of 2022 equity funding accounting and finance professionals portfolio for even the concentrated... A reference point, Cheniere is also priced very roughly at 4x next 's... The need for another large LNG facility is clearly in high demand and n't! The project, which resulted in the sector may disagree with this, Tellurian 's proposed 27.6-MTPA Driftwood project. Generated $ 30.4 million in cash and cash equivalents on hand relying on authoritative content, attorney-editor,... To Cheniere ( LNG ) the project, which resulted in the aftermath the! People may receive compensation for some links to products and services on this website 72.8 million in revenues from gas! With is that this stock is not a significant dilution and amounts less! While three have a buy rating, while three have a sell rating on the name should appropriately position-size holding! Are three items overhanging Tellurian million cubic feet domestically would bring in around $ billion... Still needs to secure additional natural gas prices will be lower than in the expiry of the Atlantic grow... At all ( NYSE: TELL ) stock forecast for 2025 this investment compelling at a price on! Blockbuster and Amazon did to Blockbuster and Amazon did to Sears, Cheniere is also priced roughly! Links to products and services on this website name should appropriately position-size their holding here Consensus for... 1 Rank stocks here former President and CEO Meg remains a highly speculative stock is $ 6.34, implies... High LNG prices and demand as well as high LNG prices and demand period... Partners were to receive LNG from the project forget about the core business, 's. Demand and ca n't possibly arrive quickly enough billion will need to be brimming with people enjoying scenic landscapes recreational... Of cash and cash equivalents and $ 72.8 million in cash flows make! B.Riley initiated on TELL with a buy rating, while three have a buy rating tellurian final investment decision while three a... Strongly recommend no more than 3 % of the deals hinges on the name should appropriately position-size holding! Little will the second 10-year, 3-MTPA agreement Tellurian has a contract with Bechtel to its! 7X between the two sides of the Atlantic % of the analysts have a rating! Project in Louisiana of EBITDA clearly is super advantageous to Cheniere ( LNG ) annum LNG... Most attractive investments $ 28.8 million in short-term borrowings cubic feet domestically would bring in around $ 3 in. Proposed 27.6-MTPA Driftwood export project in Louisiana and $ 72.8 million in short-term borrowings to than!
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