Tellurian sees 47% production growth in Q2

Aug 3, 2022 naturalgasworld.com

Early construction work continuing at Driftwood LNG project site.

by: Dale Lunan

US natural gas company Tellurian said August 3 it increased natural gas production in Q2 2022 by 47% from Q1 and expects to see output climb again with an agreement in July to acquire more producing assets.

“Tellurian’s business model provides a unique proposition amongst US LNG producers,” Tellurian CEO Octavio Simoes said. “By having our own natural gas production, we create cash from domestic sales that we can use for further investment, and upon completion of Driftwood LNG, we have an economic hedge for natural gas purchases which creates additional value for our shareholders and Tellurian.”

Net natural gas production in Q2 this year increased to 9bn ft³ from 2.1bn ft³ in Q2 2021, while revenues from natural gas sales – on the back of the production gains and robust commodity prices – soared to $61.3mn from $5.6mn in the same period a year ago.

Tellurian ended the second quarter – in which it reported a net loss of $35,000 but operating profit of $38.5mn – with $823mn of cash on hand and assets of about $1.34bn.

Subsequent to the end of the quarter, the company entered into an agreement to acquire 5,000 net acres of... shale play, with 44 producing wells. The acquisition will increase Tellurian’s Haynesville position to about 20,000 net acres, 126 producing wells and more than 275 potential drilling locations.

Simoes added that early works are continuing at the site of Tellurian’s planned 27.6mn mt/yr Driftwood LNG terminal in Louisiana, with piles being driven to set the foundation for the first phase, which will consist of two trains and 11mn mt/yr of liquefaction capacity.

Tellurian seals Haynesville shale acquisition

Jul 13, 2022 2:55:pm

The transaction was made through Tellurian's wholly-owned subsidiary Tellurian Production.

by: Callum Cyrus

Tellurian said July 13 it had paid $125mn for natural gas assets in the Haynesville Shale from two privately-held equity funds, EnSight IV Energy Partners and EnSight Haynesville Partners.

The transaction was made through Tellurian's wholly-owned subsidiary Tellurian Production (TPC), but is still subject to customary closing adjustments. TPC's 2022 production forecast is now 140mn ft³/day, up from 39mn ft³/day last year. The extra gas will also support the hedge position for Tellurian's 27.6mn metric tons/yr Driftwood LNG plant, when it arrives on stream in 2026.

The Haynesville asset portfolio spans around 5,000 net acres in Louisiana, yielding around 45mn ft³/day to EnSight's equity share. It has proved reserves of around 108bn ft³ of natural gas, and a PV-10 projected value of around $180mn.

Tellurian president and CEO Octavio Simoes said: "Tellurian continues to focus on two critical pathways - progressing Driftwood LNG and continuing to increase our upstream footprint. "This transaction grows our 2023 estimated natural gas production by ~30%, increases upstream asset-level EBITDA by ~25%, and expands upon our existing platform.”

TPC president John Howie added: "We have been diligently growing our natural gas production and reserves in the Haynesville. 

"These assets provide Tellurian with both cash flow and a physical hedge for Driftwood LNG.  The EnSight asset is a great fit with Tellurian’s existing position in the Haynesville shale and allows us to step into an ongoing development program and bring online significant additional natural gas volumes in the fourth quarter of 2022.”