Tellurian Reports First Quarter 2019 Results
May 08 2019 - 7:08AM
Business Wire
Tellurian Inc. (Tellurian) (NASDAQ: TELL) continued to build its
integrated global natural gas business during the first quarter of
2019. Notable Tellurian achievements:
Commercial
- Signed a Heads of Agreement (HOA) with
a subsidiary of Total S.A. (Total) for a $500 million equity
investment in the integrated Driftwood project, for the right to
purchase 1 million tonnes per annum (mtpa) of liquefied natural gas
(LNG) and for a 15-year sales and purchase agreement (SPA) with a
right to acquire an additional 1.5 mtpa of LNG at Japan Korea
Marker (JKM) prices
- Executed a common stock purchase
agreement (CSPA) with Total for approximately 19.9 million shares
of Tellurian common stock for approximately $200 million, subject
to reaching a final investment decision (FID) on the Driftwood
project and other closing conditions
- Entered into an agreement with an
unrelated third-party merchant pursuant to which Tellurian has
committed to purchase one cargo of LNG per quarter beginning in
June 2020 through October 2022; each cargo is expected to range
from 3.3 to 3.6 million mmBtu and will be purchased under delivered
ex-ship (DES) terms with the price being based on the JKM price in
effect at the time of purchase
- Further advanced the sale of LNG and
Driftwood Holdings’ partnership interests; completing agreements
with potential partners including Total and Petronet LNG Limited
INDIA
Regulatory
- Received the order granting
authorization for the Driftwood project from the U.S. Federal
Energy Regulatory Commission (FERC) (includes Driftwood LNG, a
proposed ~27.6 mtpa liquefaction export facility, and the
associated Driftwood pipeline, a 96-mile proposed pipeline
connecting to the facility)
- Received the Department of Energy,
Office of Fossil Energy (DOE/FE) order granting export
authorization to non-free trade (non-FTA) agreement countries
- Received the Section 10/Section 404
permit authorizing activities within U.S. waters from the U.S. Army
Corps of Engineers (USACE)
Pipeline
- Announced binding open seasons for
three pipelines intended to connect constrained shale production
and debottleneck other natural gas pipeline infrastructure
(includes the Permian Global Access Pipeline (PGAP), the
Haynesville Global Access Pipeline (HGAP), and the Delhi Connector
Pipeline (DCPL))
President and CEO Meg Gentle said, “Tellurian is now permitted
to construct, operate, and export LNG from the Driftwood project
and has a fully articulated engineering, procurement and
construction (EPC) plan in place with guaranteed schedule,
performance and cost from Bechtel. Our primary focus for the next
quarter is finalizing the Driftwood partnership financing. Total
has committed as the first partner of Driftwood and we expect to
execute final agreements with them by mid-June. We remain on
schedule to produce LNG in 2023 and generate $8.00 of cash flow per
share after ramp up.”
Estimated Driftwood project timeline Catalyst
Estimated timeline
Driftwood final investment decision
2019 Begin construction
2019 Begin operations 2023
Financial results
Tellurian ended its first quarter of 2019 with approximately
$88.3 million of cash and cash equivalents and approximately $57.3
million in debt. Tellurian has a strong balance sheet consisting of
approximately $384.0 million in assets.
Tellurian reported a net loss of approximately $34.1 million, or
$0.16 per share (basic and diluted), for the three months ended
March 31, 2019.
About Tellurian Inc.
Tellurian was founded by Charif Souki and Martin Houston and is
led by President and CEO Meg Gentle. Tellurian intends to create
value for shareholders by building a low-cost, global natural gas
business, profitably delivering natural gas to customers worldwide.
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. Tellurian is based in
Houston, Texas, and its common stock is listed on the Nasdaq
Capital Market under the symbol “TELL”.
For more information, please visit www.tellurianinc.com.
Follow us on Twitter at twitter.com/TellurianLNG
CAUTIONARY INFORMATION ABOUT FORWARD-LOOKING
STATEMENTS
This press release contains forward-looking statements within
the meaning of U.S. federal securities laws. The words
“anticipate,” “assume,” “believe,” “budget,” “estimate,” “expect,”
“forecast,” “initial,” “intend,” “may,” “plan,” “potential,”
“project,” “proposed,” “should,” “will,” “would,” and similar
expressions are intended to identify forward-looking statements.
Forward-looking statements herein relate to, among other things,
the capacity, timing, and other aspects of the Driftwood project, a
potential equity investment by Total in the Driftwood project and
Tellurian, a potential purchase by Total of LNG from the Driftwood
terminal, the parties’ ability to enter into definitive agreements
on terms contemplated by the HOA and to close the related
transactions, the parties’ ability to close the transactions
contemplated by the CSPA, the expected size of LNG cargo purchases
from an unrelated third-party merchant, and projected annual cash
flow per share. These statements involve a number of known and
unknown risks, which may cause actual results to differ materially
from expectations expressed or implied in the forward-looking
statements. These risks include the matters discussed in Item 1A of
Part I of the Annual Report on Form 10-K of Tellurian for the
fiscal year ended December 31, 2018, and other Tellurian filings
with the Securities and Exchange Commission, all of which are
incorporated by reference herein. There can be no assurance that
Tellurian and Total will enter into definitive agreements on the
terms contemplated by the HOA or at all or that Total’s potential
equity investment in Driftwood Holdings or Tellurian, or the
transactions contemplated by the HOA, will be completed. FID is
subject to the completion of financing arrangements that may not be
completed within the time frame expected or at all. Achieving FID
will require substantial amounts of financing in addition to that
contemplated by the HOA, the CSPA and related agreements, and
Tellurian believes that it may enter into discussions with
potential sources of such financing and Total in order to achieve
commercial terms acceptable to all parties.
Accordingly, the definitive agreements contemplated by the HOA,
if entered into, may have terms that differ significantly from
those set forth in the HOA. The cost of construction of the
Driftwood terminal is based on the EPC contracts with Bechtel and
is subject to adjustment by change orders, including for
consideration of cost escalation associated with the issuance of a
“notice to proceed” with respect to the Driftwood terminal after
December 31, 2017. Cost estimates may change due to various
factors, such as cost overruns, change orders, delays in
construction, legal and regulatory requirements, site issues,
increased component and material costs, escalation of labor costs,
labor disputes, changes in commodity prices, changes in foreign
currency exchange rates, increased spending to maintain Tellurian’s
construction schedule and other factors. Tellurian’s projected
annual cash flow per share of over $8.00 is based on the 5-plant
case and assumes, among other things, a U.S. Gulf Coast netback
price of $8.00/mmBtu, a $4.50/mmBtu cost of LNG, $3.50/mmBtu
margins, and approximately 267 million shares outstanding after the
issuance of approximately 20 million shares pursuant to the CSPA
and the conversion of approximately 6.1 million shares of existing
Series C convertible preferred stock issued to Bechtel. The
projected annual cash flow per share set forth in this press
release may differ from cash flow determined in accordance with
U.S. generally accepted accounting principles. The projected cash
flow information is meant for illustrative purposes only and does
not purport to be an estimate of actual future financial
performance. The projected cash flow assumes the completion of
certain acquisition, financing and other transactions, which may
not be completed on the assumed terms or at all. The
forward-looking statements in this press release speak as of the
date of this release. Although Tellurian may from time to time
voluntarily update its prior forward-looking statements, it
disclaims any commitment to do so except as required by securities
laws.
Earnings podcast
On May 8, 2019, Tellurian will post to its website,
tellurianinc.com, a podcast discussing its results of operations
and financial condition as of and for the quarter ended March 31,
2019 and other aspects of its business and operations. The
podcast may be found under the “News and presentations” tab.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190508005417/en/
Media:
Joi LecznarSVP Public Affairs and CommunicationPhone
+1.832.962.4044joi.lecznar@tellurianinc.com
Investors:
Amit MarwahaDirector, Investor RelationsPhone
+1.832.485.2004amit.marwaha@tellurianinc.com
Tellurian (AMEX:TELL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Tellurian (AMEX:TELL)
Historical Stock Chart
From Apr 2023 to Apr 2024