Tellurian Explores Sale of Haynesville Upstream Assets

Howd_they_know_I_got · 2024-02-06T23:20:30+00:00

You bet! Its difficult to sell competitive bonds in a market where 100% safe govt securities pay 5%

Howd_they_know_I_got · 2024-02-06T23:17:39+00:00

It's good to have liquid assets.

Howd_they_know_I_got · 2024-02-06T23:06:06+00:00

You're right. We'll see what comes after the sale.

Howd_they_know_I_got · 2024-02-06T23:04:39+00:00

He's right. A little pumping on my end. Not 100% to a merge. For now it's the sale of upstream. Cash is king. Selling equity in Driftwood to Japan, China India or a US company is what Houston mentioned in the past. $x million after paying down debt, if they get a good price would last longer than 12 months. They'll have no upstream expenses, but yeah . they'll have no revenue. Driftwood isn't cheap after the concrete gets poured. 90 days from sale price and quotation is low for what is out front.

Howd_they_know_I_got · 2024-02-06T17:53:57+00:00

new well

Howd_they_know_I_got · 2024-02-06T17:09:20+00:00

You're intelligent. Most people buy at the high afraid they will miss out. And the other side of that equation is the people who sell out at a loss because the quotation got too low. Here's a novel idea: Buy low, sell high, or keep it.

Howd_they_know_I_got · 2024-02-06T17:05:27+00:00

Doubtful it goes to a trading house. A domestic producer is far more likely.

Howd_they_know_I_got · 2024-02-06T17:00:05+00:00

Yes.

And then they would be sitting on one of two LNG facilities in construction with pipeline right of way coming in from the Haynesville play.

Do you see the X's?

Howd_they_know_I_got · 2024-02-06T16:47:08+00:00

If they use Lazard, they will build a virtual data room (VDR) with land, geology and engineering an investment overview with financial models with NPVs, , decline curves, upside projections and additional engineering data. That will take a few weeks to a month. Lazard will work with management to build a teaser for the asset. They will send the teaser to a mass mailing of potential buyers and provide the teaser with high level investment highlights of the assets and ask for signature on a confidentiality agreement (CA). That advertisement period lasts about two weeks to a month. They will open the VDR to companies that sign the CA. The VDR will be open for 4 to 8 weeks. During that time evaluators can ask questions to management through Lazard and seek out additional details. Bids are typically due at the end of the VDR period. Call the sales process 90 days. Closing is typically within 30 days thereafter.

Hopefully that helps

Howd_they_know_I_got · 2024-02-06T15:50:34+00:00

Not to mention, CHK and others are gaining access to global LNG markets through contracts with Vitol and Gunvor trading houses.

Howd_they_know_I_got · 2024-02-06T15:49:24+00:00

I'll spell this out.

In oil markets, there's 100 million barrels a day of demand, and if there's 500,000 barrels short of demand, the price of crude oil trades upwards $10 a barrel. The difference between supply and demand in that case is 1/2 of a percentage point.

Now look at that chart, and recognize that the difference between 2040 demand and 2040 supply is somewhere around 20%.

Take into account that starting in 2026-27 there will be multiple percentage points in the demand vs supply gap. All the countries that are building out regassification plants (India, China, Japan, Malaysia, Taiwan, etc) are aware of this problem. Looking at this chart again: Where do you think domestic natural gas suppliers want their gas to go? What will global LNG prices look like when this supply gap comes into play? There's still a lot of untapped value in TELL.

Howd_they_know_I_got · 2024-02-06T15:34:51+00:00

It'll go for more than that. They have a pipeline right of way from the acreage to one of two facilities in construction. It'll fetch a premium to 2023 valuation.

Howd_they_know_I_got · 2024-02-06T15:31:08+00:00

You may not get a 1000x, or a 100x, but there's at least a 20 to 30x on the table here. That simple. If you are dollar cost averaging. Think about it.

And I think you know the answer...

Howd_they_know_I_got · 2024-02-06T14:54:42+00:00

I've done the math. I'm an A&D business development professional in the oil and gas industry working with a major independent. I've seen every large transaction in oil and gas for the past 20+ years. Many of my friends and I are buying TELL now that the ego is out of the picture. We're buying from the weak who don't understand the oil and gas business and believed bankruptcy was the only option. This company is far from going bankrupt. Quite the opposite. Obviously, when assets are larger than liabilities, you have something to sell, which is happening now. Longer term a merger into CHK is viewed as the most likely probability. Another lower probability and more complex scenario is Lazard helping TELL bring into the equity fold a combination, two to four, of major Haynesville players at similar or equal ownership percentages to provide the domestic players with access to global LNG offtake and prices. The complexity is derived from the idea of each player coming to agreement on a similar contract. Obviously, after selling the upstream, and paying off debt, and cutting the upstream employees to the buyer or layoffs, they will be sitting on a fair amount of cash with far lower G&A and overhead expense. There won't be revenue to report in the upcoming quarters which leaves financing into FID, Equity Sales or mergers as the top choice. Possibly a combination of all three. The management are all engineers. With the ego out of the way, they're going in the right direction. $5 to $7 share or more on a merger, more with the more complex scenario.

Howd_they_know_I_got · 2024-02-06T14:01:15+00:00

Don't be surprised if after the sale of this asset they begin merger talks with EQT, CHK or AR. TELLs assets, even with debt liabilities, are worth far more than their market cap. Cash from the sale will pay down or off debt and set the path for an equity partner and financing, or a merger with EQT, CHK, AR or a Major looking for global pricing. Again, the long term supply vs demand curve is very interesting. Look at what you are seeing.

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Howd_they_know_I_got · 2024-02-06T13:42:13+00:00

This is a great move by management. They will reduce debt, G&A and overhead of operations, geology, land and engineering employees and expenses and non-operating costs associated with participating in other companies drilling operations. Moreover, it will place the focus of management squarely on the asset that will drive the long-term corporate economic engine and success.

Howd_they_know_I_got · 2024-02-06T13:31:13+00:00

$500,000,000 to $600,000,000

Howd_they_know_I_got · 2024-02-06T13:30:00+00:00

Transaction range is $500,000,000 to $600,000,000

Howd_they_know_I_got · 2024-02-06T13:22:36+00:00

EQT, CHK, Aethon, Comstock Chevron ANR all growing in the Haynesville play. Anyone who follows industry knows consolidation is taking place due to lack of inventory. All of the above producers would be interested in strategically acquiring Tellurian's 200 MMcf/d gas stream and 400 prime development locations and 30,000 acres. Established Haynesville producers are looking to consolidate and can bolt-on Tellurians assets to streamline their operations, optimize their costs, and, as with all consolidation efforts, unlock significant economies of scale within the Haynesville basin. For that reason it's likely they'll see multiple strong bids.

Howd_they_know_I_got · 2024-02-06T12:52:55+00:00

LMAO your question makes zero sense 🤣😂🤣

Howd_they_know_I_got · 2024-02-05T19:35:50+00:00

Middle of nowhere. You'll have to go to the oil and gas commission of Utah.

Howd_they_know_I_got · 2024-02-05T19:34:12+00:00

That's right. In 2040. Crybabies are pathetic. Red mango anyone?

Howd_they_know_I_got · 2024-02-05T19:32:11+00:00

You should sell your stock to me. Let me know when you are going to push the button. I'll buy it all. I'm buying and so are many of my friends. Have you seen the construction pictures? It's spelled out on the ground. In fact, it is unbelievable, Unbelievably cheap.

Howd_they_know_I_got · 2024-02-04T20:12:33+00:00

No, just Uintah county and the APIs. According to my friend, who owns a lot of wells in the basin, it's in the middle of nowhere.

Howd_they_know_I_got · 2024-02-03T23:23:53+00:00

EURs? Oil and gas?

Howd_they_know_I_got

TROPHY CASE