Tellurian Inc. (TELL)

Tellurian Inc (TELL) stock dropped by 13.82% on Friday, and cratered roughly 42.7% this week due to several key factors affecting the company's operations and prospects. Here are the key highlights:

• CEO Resignation and Asset Purchase Rejection:

1. CEO Resignation: Tellurian's current CEO, Octávio Simões, resigned early, adding to the company's leadership turmoil. Lower-level executives, Samik Mukherjee and Daniel Belhumeur, have been put in charge of operations and finance duties, respectively. This leadership change comes after the company's founder and former CEO, Charif Souki, was ousted late last year.
2. Rejection of Asset Purchase: A potential buyer for Tellurian's partially completed Driftwood LNG export plant in Louisiana, The Williams Companies, passed on purchasing the asset. The executive vice president of strategy for Williams, Chad Zamarin, stated that while the project is permitted and has a speed to market, it lacks the necessary commercial contracts on the demand side.

• Financial and Operational Challenges: Tellurian has faced challenges with canceled offtake agreements and difficulty in securing financing, particularly as interest rates spiked in 2022 and natural gas prices have cratered in 2023 and this year. The Driftwood LNG export plant is in the early stages of construction and is estimated to cost $14.5 billion to complete its first stage and $25 billion for its total capacity.
• Market Reaction: The news of CEO resignation and the rejection of the asset purchase likely contributed to the significant decline in Tellurian's stock price. Investors may view these developments as indicative of the company's ongoing struggles to secure financing and bring the Driftwood project to completion. In conclusion, Tellurian's stock decline reflects the company's challenges in securing financing, completing its LNG export plant, and navigating leadership changes. The rejection of the asset purchase and ongoing operational difficulties have further exacerbated investor concerns, leading to a sharp decline in the stock price.

Shares of Tellurian Inc. (TELL) dropped by 19.07% from $0.7484 to $0.6057 in the trading on Friday, November 3, 2023. The reason why TELL down is due to the company's recent earnings report, which failed to meet market expectations.

• Earnings Miss and Natural Gas Price Decline: Tellurian reported earnings that missed expectations, with a GAAP net loss of -$0.12 per share in the third quarter, compared to an expected loss of -$0.08 per share. Despite increasing natural gas production by 71%, the company faced a significant decline in average natural gas prices realized, dropping from $7.07/Mcf in the year-ago quarter to $2.22/Mcf in the third quarter of 2023.
• Driftwood Project Funding Concerns: The company's main asset, the Driftwood liquefied natural gas plant, remains under construction. While management stated that discussions regarding equity raises or offtake agreements to complete funding are ongoing, the need for financing is pressing. The company has already invested over $1 billion in development and advanced construction and aims to start production in 2027, with a possible extension to 2029.
• Rising Interest Rates and Financial Challenges: Tellurian faces financial challenges, with rising interest rates and a declining stock price making it more expensive to raise the necessary funds to complete the project. The company's balance sheet shows approximately $60 million in cash, with conditions raising substantial doubt about its ability to continue as a going concern within one year.