Tellurian Inc. has reported its 1Q19 results, continuing to build its integrated global natural gas business. Highlights can be found below.
- Signed a Heads of Agreement (HoA) with a subsidiary of Total S.A. (Total) for a US$500 million equity investment in the integrated Driftwood project, for the right to purchase 1 million tpy of LNG and for a 15-year sales and purchase agreement (SPA) with a right to acquire an additional 1.5 million tpy 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 US$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 Btu 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 Ltd. India.
- Received the order granting authorisation for the Driftwood project from the US Federal Energy Regulatory Commission (FERC) (includes Driftwood LNG, a proposed 27.6 million tpy 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 authorisation to non-free trade (non-FTA) agreement countries.
- Received the Section 10/Section 404 permit authorising activities within US waters from the US Army Corps of Engineers (USACE).
- 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).
- Tellurian ended its first quarter of 2019 with approximately US$88.3 million of cash and cash equivalents and approximately US$57.3 million in debt.
- Tellurian has a strong balance sheet consisting of approximately US$384.0 million in assets.
- Tellurian reported a net loss of approximately US$34.1 million, or US$0.16 per share (basic and diluted), for the three months ended 31 March 2019.
President and CEO, Meg Gentle, comments:
“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 finalising 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 US$8.00 of cash flow per share after ramp up.”
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/09052019/tellurian-reports-1q19-results/