Tellurian Leadership Shake-Up: Tellurian, the U.S. liquefied natural gas (LNG) developer, made a strategic move, ousting its chairman and co-founder, Charif Souki, from the executive officer role. This decision comes on the heels of auditors expressing concerns about the company’s financial capacity to meet future obligations.
Charif Souki, a key figure in the creation of the U.S. LNG export market in 1996, played a pivotal role in transforming Cheniere Energy into a major LNG exporter. However, replicating this success at Tellurian proved elusive for Souki.
Having co-founded Tellurian in 2016 after departing Cheniere Energy, Souki will now step down as an executive officer, with Martin Houston set to assume the role of chairman. Despite this change, Souki will retain a position on the company’s board.
Tellurian’s stock experienced a modest uptick of 4% in extended trading, reaching 78 cents. This marks a notable shift from its 2019 high of $11.19. The decline followed the withdrawal of initial backers, including LNG traders Vitol and Shell, from the critical Driftwood export project.
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The Driftwood strategy underwent multiple revisions over the years, failing to attract sufficient clients for its ambitious $14.5 billion first-phase facility with a 27.6 million metric ton per annum capacity.
Recently, auditors issued a going concern warning, raising concerns about Tellurian’s financial stability. Construction of the initial Driftwood phase had commenced, funded by equity sales and a small gas-production unit.
Ben Dell, Managing Partner at Kimmeridge, a private equity firm, sees the management change as a signal of a shift in direction, emphasizing a newfound emphasis on discipline and profitability. Dell, a vocal critic of Souki’s spending practices, believes this change is a positive step.
Tellurian faced setbacks over the years, losing potential customers for Driftwood, with Gunvor Singapore Pte Ltd terminating its contract in August. Souki’s removal signifies Tellurian’s recognition of the need for significant measures to secure the company’s future, particularly given its heavy reliance on the success of the Driftwood LNG project.
Alex Munton, Director of Global Gas and LNG Research at Rapidan Group, emphasizes that despite this shift, the company remains dedicated to executing its plan for completing Driftwood LNG construction. Souki, in a recent statement, hinted at resorting to the proven methods of U.S. LNG projects, a strategy he had previously been skeptical about. The coming months will reveal Tellurian’s ability to navigate these changes and steer its LNG ambitions to success.
Our Reader’s Queries
What is the future of Tellurian?
According to 5 analysts, Tellurian Inc (NYSE American: TELL) is expected to see a significant increase in its stock price over the next 12 months. The median target price is 2.50, which is a whopping 246.98% increase from the current price of 0.72. The high estimate is 5.00, while the low estimate is 0.40.
Who is the CEO of Tellurian?
Tellurian Inc, led by President and CEO Octávio Simões, generated a revenue of $28.77 million in 2019. The company has a team of 172 employees as of 2018 and their website is www.tellurianinc.com.
Who owns Tellurian LNG?
In 2016, Tellurian was established by Charif Souki and Martin Houston, two renowned figures in the industry. Charif, who founded Cheniere Energy, was responsible for initiating the first-ever liquefied natural gas (LNG) exports from the United States Lower 48. Meanwhile, Martin is credited with introducing the concept of LNG destination flexibility, which transformed LNG into a commodity.
Is Tellurian profitable?
Tellurian’s net loss for the quarter ended September 30, 2023, was approximately $65.4 million, or $0.12 per share (basic and diluted). This is a significant increase from the net loss of approximately $14.2 million, or $0.03 per share (basic and diluted), for the same period in 2022.