Is Tellurian Close to Unlocking Value with Key Catalysts on the Horizon?
An Upstream Sale Could Come Soon
Tellurian hired a financial advisor earlier this year to, among other things, explore the sale of its upstream natural gas production business. The company initially envisioned using the cash flow produced by this business to help fund the development of its Driftwood LNG export project. It could eventually export that gas from Driftwood, making both businesses more profitable.
However,
- Analysts estimate Tellurian's upstream business could be worth up to $365 million, significantly less than a few years ago.
- Natural gas prices decline has affected Tellurian's financial results, with a nearly 50% reduction in revenues over the past year.
- Driftwood might get a new customer, as discussions with potential partners are ongoing to secure commercial contracts.
Probably Not Enough to Make Tellurian a Buy
While near-term catalysts could impact the stock, challenges in securing funding and commercial contracts for the Driftwood project persist. Tellurian's future remains uncertain, making it a high-risk investment.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.