Is Tellurian Going Out Of Business 2024?

Tellurian is a natural gas company that is facing some major fluctuations in its share prices, making its investors worried to death. So, will these fluctuations make the company close its doors? Is Tellurian going out of business 2024?

Is Tellurian Going Out Of Business

The company was established in 2016 by Charif Souki. Souki was the former founder and CEO of Cheniere Energy. This gave him the vision of opening his own natural gas company, which later resulted in Tellurian.

Charif Saouki brought ambitious evolution plans to Tellurian, and as a result, the company became the first in the U.S. to produce its fuel for export.

Now fast-forward to 2023, Tellurian is facing some challenges that every other company faces in the market. However, the problem is that the rumors are it is on the brink of shutting down.

But how much of this is true can only be found out by reading this article. In this article, we’ve compiled the information about Tellurian that will clear the air over “Is Tellurian Going Out Of Business 2024?” or not. So, keep on reading.


What Is Driftwood LNG Project?

The Driftwood LNG project is a flagship project of Tellurian. The project aims to produce 27.6 million tonnes of Liquified Natural Gas every year for export.

The company has dumbed more than its $900 million market capitalization and $1 billion into the site and is expecting to spend more on the project.

Tellurian has also asked the Federal Energy Regulatory Agency (FERC) for an extension of a three-year construction permit to complete its flagship project.

This extension was granted by the regulatory body in 2019, but Tellurian did not start the construction on its Driftwood project for straight three years. Now, Tellurian is asking part of the department to extend its permit till 2029.

However, nothing can be said about the approval of the extension, as a similar extension request for Energy Transfer was declined by the FERC.

Moreover, if this project is completed, then the plant will be one of the largest LNG export terminals in the U.S.


Is Tellurian Going Out Of Business 2024?

The answer to Is Tellurian going out of business is uncertain. There is no official statement from the company that it is shutting its operations.

However, the company is facing some major financial challenges after withdrawing its bond sale, such as

  • Dropping stock prices,
  • Lack of investors’ trust, and
  • The uncertain future of its flagship project.

The financial trouble started when Tellurian had trouble securing the finances to finish the first part of its $25 million Driftwood project.

As a result, Tellurian canceled its contract with the gas trader, Vitol, after the cancellation of the debt raise, which was too expensive amid the increasing interest rates.

But if you look at the figures for its third quarter end, they indicate $210.8 million in cash and no debt, which simply indicates Tellurian’s financial soundness.


What Is The Reason Tellurian Is Going Out Of Business?

In respect to its market capitalization of $1 billion, the company is earning $320 million in annualized EBITDA. But the issue with Tellurian is financing.

Tellurian doesn’t have the ability to raise equity and build the plant. And despite the potential boost from the Russia-Ukraine War, it remains to find a suitable array of financing.

However, the company is rumored to be in touch with major Japanese and Indian companies to entice them to invest in exchange for equity spread. But still, according to the reports, the company is bound to struggle.

Moreover, Tellurian’s other production units, such as Haynesville Shale, also saw a decrease in production, further compounding its financial challenges.


What Are The Challenges And Lawsuits Faced By Tellurian?

The journey of Tellurian to being the first in the U.S. to produce its fuel for export is not smooth. Tellurian faced many challenges, such as:

  • US-China Tensions
  • Delays in Driftwood Construction
  • Declining Fuel Prices
  • The impact of COVID-19, majorly on LNG importers like China

All these caused the stock prices to drop, and the company ended up reducing 40% of its staff in 2020.

Moreover, the lawsuits, including Carl Icahn, Cheniere, and the allegations of misusing loans and stolen project plans also added to the misery of Tellurian.

Although the lawsuit was dismissed before the trial in 2020, these challenges added to Tellurian’s tumultuous journey.


Financial Statements Of Tellurian

The tables below show the financial performance of the company:

Income Statement

Sep 23Jun 23Mar 23Dec 22Sep 22
Total Revenue$43.25M$1.99M$50.94M$102.53M$81.10M
EBIT$-61.42M$-55.44M$-30.99M$ 31.13M$-7.29M
EBITDA$-36.46M$-29.43M$-7.91M$5.57M
Net Income Common Stockholders$-65.42M$-59.62M$-27.49M$31.06M$-14.23M

Balance Sheet

Sep 23Jun 23Mar 23Dec 22Sep 22
Cash Cash Equivalents And Short Term Investments$ 59.28M$106.71M$149.76M$474.20M$607.50M
Total Assets$1.27B$1.26B$1.27B$1.43B$1.43B
Total Debt$494.06M$505.47M$504.98M$595.73M$597.54M
Net Debt$434.78M$398.76M$355.21M$121.52M$-9.96M
Total Liabilities$658.22M$660.88M$621.56M$1.43B$789.68M
Stockholders Equity$570.20M$599.37M$645.54M$672.54M$640.60M

Cash Flow Statement

Sep 23Jun 23Mar 23Dec 22Sep 22
Free Cash Flow$ -18.79M$ 26.33M$ -10.20M$ 43.20M$ -154.27M
Operating Cash Flow$ -18.79M$ 26.33M$ -10.20M$ 43.20M$ 17.78M
Investing Cash Flow$ -66.05M$ -81.86M$ -147.47M$ -179.44M$ -227.39M
Financing Cash Flow$ 32.73M$ 12.56M$ -166.81M$ -34.00K$ 2.97M

Why Is Tellurian Stock Crashing?

Not only the company but also its stock prices are facing some major downturns. The capital market is giving a hard time to its flagship project, Driftwood, coupled with geopolitical events and competition from under-construction projects.

In addition to this, the withdrawal of the bond sale and the financial performance of the company have also contributed to the mistrust of its investors. And as the number of people who trust the company is dropping, the stock value is also plummeting.

Its stock prices were trading around $0.80 in October, with its market cap down to $467 million.


Conclusion

In conclusion, Tellurian is like every other company struggling to survive. It has been facing some major financial issues; however, the answer to “Is Tellurian going out of business 2024?” is very uncertain.

Despite the financial struggles, the company has recently shown a positive $210.8 million in cash with no debt which represents the financial stability of the company. This is why it is quite difficult to say what the future of Tellurian holds and whether it will join the list of shutdowns with Bellator or SmileDirectClub.


FAQs

When did Tellurian go public?

Tellurian was founded on February 23, 2016. It went public on February 10, 2017.

Who is the CEO of Tellurian?

Tellurian is a natural gas company which is headquartered in Housten. The current President and CEO of the company is Octavia Simoes.

What is Baker-Hughes deal?

In early September, Tellurian announced an unison with supplier Baker-Hughes to supply its turbines and compressors. This deal would allow it to begin its production in 2027.

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