Tellurian Inc. is exploring alternatives for the sale of its upstream enterprise within the Haynesville Shale as the corporate evaluations its technique relating to the Driftwood LNG challenge, a liquefied pure gasoline (LNG) export facility being constructed on the Calcasieu River west financial institution in Louisiana.
“As we commercialize Driftwood LNG, Tellurian has been reviewing its technique, together with the dynamics of the U.S. pure gasoline market within the context of world LNG demand”, Tellurian CEO Octávio Simões mentioned in an announcement Tuesday. “We’ve got concluded that there are different gasoline provide methods obtainable to us from varied basins and our possession of upstream belongings will not be vital at this stage of Tellurian’s growth. We’ve got a considerable variety of drilling areas that we consider will likely be extremely engaging to grease and gasoline producers that may develop them extra shortly than we might”.
“By unlocking the total worth of those high-quality belongings, we goal to considerably scale back our debt, additional scale back our common and administrative bills, and supply more money, enabling us to develop Driftwood LNG. At present, this method is extra engaging than issuing fairness to fund our 2024 growth actions and dealing capital wants”, Simões added.
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Tellurian produced 19.5 billion cubic toes (Bcf) of pure gasoline for the quarter ended September 30, 2023. Tellurian’s pure gasoline belongings embody 31,149 web acres, pursuits in 159 producing wells and over 400 drilling areas, in response to the discharge.
Driftwood LNG LLC, owned by Tellurian, is growing an LNG manufacturing and export terminal on the west financial institution of the Calcasieu River, south of Lake Charles, Louisiana, that’s focused to export as much as 27.6 million metric tons of LNG globally as soon as accomplished, in response to the corporate’s web site.
In the meantime, the corporate’s new chairman, Martin Houston, wrote in a letter to shareholders, “We proceed to work with Bechtel on the location at Driftwood beneath the LNTP2 (restricted discover to proceed) program and discover choices for extra scope relying on the progress on the commercialization entrance. We’re balancing our spend throughout Driftwood, the upstream firm and G&A [general and administrative expenses]”.
Martin, who was vice chairman and the corporate’s co-founder, changed former chairman Charif Souki in December. Souki will now not function an government or officer of the corporate or maintain any managerial obligations, though he stays a member of the board, in response to an earlier information launch.
Concerning the Biden’s administration’s pause of all new and pending purposes for export authorization to Non-Free Commerce Settlement (Non-FTA) nations, Martin wrote, “We have already got our license to export LNG to Non-FTA International locations which is legitimate by way of 2050. As we get nearer to finishing development, we plan to regulate the in-service date situation beneath that license to accommodate our development timeline”.
“We are going to proceed to watch the DOE’s evaluation course of assessment and any impacts it might need to our Non-FTA export license. I might add that within the meantime, the worldwide demand outlook for LNG has not modified, so any shortage will drive alternative for Tellurian”, Martin continued.
Tellurian’s board in December additionally appointed former Common Counsel Daniel Belhumeur as President of Tellurian, and former Deputy Common Counsel Meredith Mouer as Common Counsel and Chief Compliance Officer of Tellurian.
“This is a vital second for Tellurian as we navigate a number of key initiatives”, Simões mentioned in an earlier assertion. “We’re targeted on unlocking shareholder worth by way of execution of potential growth and business companions at Driftwood LNG, whereas additionally evaluating choices to refinance our current debt, streamline prices and enhance our steadiness sheet. These administration adjustments guarantee alignment and continuity. I stay up for working with Daniel as he oversees key capabilities whereas I prioritize bringing Driftwood LNG, now with rising business momentum, to last funding determination”.
“We’ve got the management staff in place to execute our strategic priorities, and collectively we’ll transfer the enterprise ahead”, Belhumeur mentioned.
To contact the writer, electronic mail rocky.teodoro@rigzone.com
