TELL Tellurian Inc

On April 4, 2023, Tellurian Inc. (the “Company”) entered into a binding letter of intent (the “LOI”) with a New York-based institutional investor with approximately $120 billion in assets under management (the “Investor”) regarding the sale and leaseback of approximately 800 acres of land (the “Property”) owned and/or leased by Driftwood LNG LLC, a wholly owned subsidiary of the Company or an affiliate (“Driftwood LNG”), to be used for the proposed Driftwood liquefied natural gas terminal facility (the “Driftwood terminal”) in Lake Charles, Louisiana.

Pursuant to the LOI, the transaction (the “Transaction”) will consist of (i) the sale by Driftwood LNG, and purchase by a special purpose entity to be formed by the Investor (the “Purchaser”), of Driftwood LNG’s interests in the Property for $1.0 billion pursuant to a purchase and sale agreement (the “Purchase Agreement”) and (ii) upon (and as a condition to) the closing of the transactions contemplated by the Purchase Agreement, a 40-year lease of the Property from the Purchaser to Driftwood LNG pursuant to a master lease (the “Master Lease”). Terms of the Master Lease will include, among others, (i) a capitalization rate of 8.75%, (ii) annual rent escalators of 3.00%, (iii) a requirement that Driftwood LNG post a letter of credit equal to 12 months of rent, (iv) a requirement that the equity investors in Driftwood LNG or its affiliates be joint and several contingent guarantors of the Master Lease (the “Contingent Guarantors”) and (v) a requirement that the Contingent Guarantors hold an investment grade rating of BBB or higher or attain an equivalent shadow credit rating, or be otherwise acceptable to the Purchaser. The LOI contemplates that the parties will use commercially reasonable efforts to finalize the Purchase Agreement and Master Lease on or before July 14, 2023. The LOI will terminate on July 14, 2023 if Driftwood LNG fails to identify the Contingent Guarantors by such date and will terminate on July 31, 2023 if the Purchaser elects, in its sole discretion, not to approve such Contingent Guarantors. The LOI is binding on the parties but is subject to the negotiation of definitive transaction documents and the approval of those documents by the Company’s board of directors.

The closing of the Transaction will occur on the later of (i) 91 days after the Purchase Agreement is executed by the parties thereto and (ii) the satisfaction of the closing conditions in the Purchase Agreement, including Driftwood LNG securing financing commitments for Phase 1 of the Driftwood project on terms satisfactory to the Purchaser.