Is Tellurian going out of business? If you are also presently asking this question, then you are not alone. Tellurian has been in the spotlight lately because of its present financial challenges and market fluctuations.

While it is not uncommon to see companies in the energy sector experience ups and downs, the huge name Tellurian has built for itself over the years has made these circulating speculations about the company of particular interest to many people.

The company recently made some smart business moves and came up with a couple of ambitious projects, the news of them pulling back on a huge $1 billion bond sale and facing ongoing financial challenges has made many to begin doubting their future.

So, is Tellurian going out of business, really? Just keep reading to discover the latest updates about this iconic company in the natural gas industry.

Is Tellurian Going Out of Business?

Is Tellurian going out of business? Let’s take a closer look at what’s happening with the company to get a clearer picture. So far, there has been no word from Tellurian’s management hinting at an imminent closure.

Even though this lack of confirmation leaves many of us scratching our heads, what we know is that until there is an official statement concerning this, the answer will still be no, Tellurian is not going out of business yet.

Digging a bit deeper, it’s clear that the situation with Tellurian is quite complicated. Yes, the company has faced some tough times recently, like pulling back a significant bond sale and dealing with uncertainties around the Driftwood LNG project. These issues definitely raise eyebrows.

But there’s another side to the story. As of the latest reports from the third quarter, Tellurian appears financially solid, with $210.8 million in cash reserves and zero debt. This shows a degree of financial health that can’t be ignored.

So, is Tellurian going out of business? Based on what we know now, there’s no official indication of that. What’s evident, though, is that Tellurian currently stands as a risky but potentially rewarding bet for investors.

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A Closer Look at Tellurian

Now that we know Tellurian is not likely going out of business any time soon, let’s take a moment to get more familiar with the company.

Really, Tellurian Inc. isn’t just any company; it’s a powerhouse in the natural industry. The company is stationed in Houston, Texas, and was born from the vision of Charif Souki and Martin Houston in 2016.

With its sights set on revolutionizing the liquefied natural gas (LNG) industry, Tellurian aimed to shake things up by offering prices that were 15 to 20 percent lower than its competitors.

Its ambitious entry into the public market in 2017, marked by a strategic merger with Magellan and bolstered by hefty investments such as Total’s $207 million for a 23 percent stake, positioned Tellurian as a force to be reckoned with in the energy sector.

At the heart of Tellurian’s operations is the Driftwood LNG project in Louisiana, a clear indication of the company’s innovative spirit. This project isn’t just any facility; it’s designed to churn out 27.6 million tonnes of LNG each year for export. This made it capable of drawing in heavyweight partners like Total, Petronet, and Vitol.

With a whopping estimated cost of $30 billion, the Driftwood project shows Tellurian’s commitment to being a key player in the global energy market. Despite this, the road hasn’t been easy.

Tellurian has faced many challenges, including construction delays, geopolitical shifts, volatile fuel prices, and the pandemic, each adding layers of complexity to its journey. So, if you hear people asking, ‘Is Tellurian going out of business?’ today, there is definitely a reason they are asking such a question.

Rumors About Tellurian Sale Debunked

In recent developments, Tellurian has taken a firm stance against the whirlwind of speculation suggesting the company might be up for sale. After appointing Lazard as a financial advisor, following the departure of co-founder Charif Souki, the air was rife with speculation.

However, Tellurian, which has faced hurdles advancing its ambitious $14.5 billion Driftwood LNG project in Louisiana, clarified that the decision to bring Lazard on board was all about enhancing the value of its vast asset base, not preparing for a sale.

The appointment of Lazard as a financial advisor in December, coinciding with the departure of co-founder Charif Souki and Martin Houston stepping in as chairman, seemed to many as a prelude to a sale.

However, Martin Houston’s strong rebuttal in a shareholder statement emphasized that the move was aimed at leveraging Lazard’s expertise to enhance the company’s asset value, not to prepare for a sale.

Despite losing significant partners like Shell, Vitol, and Trafigura, the company reassures investors and stakeholders of its determination to succeed. Furthermore, the company’s assertion that it possesses an export license valid until 2050, despite recent pauses by the Biden administration on new LNG export licenses, reinforces the idea that Tellurian is far from calling it quits.

This series of strategic decisions and clarifications helps dispel the rumors of a sale and, in a way, signals that Tellurian is not going out of business anytime soon.

What’s the Financial Status of Tellurian – Is it Facing Financial Challenges?

Tellurian’s financial health is another aspect of the company that has been under close monitoring by the public. Yes, it’s a topic of interest to many people. Despite boasting a considerable cash cushion, recent figures paint a less rosy picture.

Specifically, Tellurian experienced a significant increase in its net loss in the second quarter of 2023 compared to the previous quarter. This downturn in financial performance was accompanied by a noticeable drop in production, signaling deeper financial issues at play.

The root of the problem seems to lie in the fluctuating prices of natural gas, which have directly impacted Tellurian’s bottom line. To add to the company’s woes, there’s also been a noticeable decrease in production at the Haynesville Shale.

What is the Status of Driftwood LNG?

Remember, the Driftwood LNG project stands as a cornerstone in Tellurian’s strategy. It has shown both the company’s ambitions and its challenges. Despite the setbacks in its journey, there has been tangible progress on the ground, particularly in the construction phase led by Bechtel.

This work lays the foundation for what could be a transformative asset for Tellurian. Yet, the path ahead is shadowed with uncertainty. The request to the Federal Energy Regulatory Agency (FERC) for an extension until 2029 for project completion hints at potential hurdles that could delay the project’s timeline.

Driftwood’s potential to produce initially about 11 million tonnes per year, with prospects of ramping up to 27.6 million tonnes, is crucial for Tellurian’s leap forward. The project’s completion date, however, remains uncertain.

While Tellurian has set its sights on beginning production by 2027, the request for an extension to 2029 suggests a cautious approach, possibly preparing for unforeseen challenges or planning for a staggered rollout.

Why is Tellurian Stock Also Down?

Tellurian’s stock has also taken a hit, largely due to the turbulence around its flagship Driftwood LNG project and concerns over the company’s financial stability.

The decision to pull back a significant bond sale, when viewed alongside a patchy financial record and the volatile market condition, has chipped away at investor confidence, resulting in the company’s stock going down by the day.

This has not only raised questions about Tellurian’s immediate future but also left shareholders feeling the pinch as they watch the stock’s performance.

Is Tellurian Going Out of Business – Final Thought

In wrapping up, it’s clear that while Tellurian faces significant challenges, including financial hurdles and uncertainties with its mother project, the company isn’t going out of business.

Despite the setbacks and a dip in stock value, Tellurian’s journey is still ongoing. The company is presently doing everything to stabilize and grow.

So, for those wondering about Tellurian’s fate, the answer, for now, is that the company is not waiving the white flag yet. Therefore, let’s just keep our eyes open and hope for the best for the company in the following months.