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TI

TELLURIAN INC. /DE/ (TELL)·Q2 2023 Earnings Summary

Executive Summary

  • Q2 2023 was weak on financials: revenue fell to $31.9M and diluted EPS was -$0.11, driven by lower realized natural gas prices despite higher production volumes versus last year .
  • Operations progressed: Bechtel “is progressing very well” at Driftwood LNG with 9,000+ piles driven and initial concrete poured; the plant two site was prepped, and a new CFO (Simon Oxley) was hired to enhance project financing .
  • Upstream segment remained positive on non-GAAP: Adjusted EBITDA was $8.1M, though operating loss widened to $(28.7)M; production was 17.2 Bcf vs 9.0 Bcf in Q2 2022 .
  • Estimate context: S&P Global consensus was unavailable via our data pipeline; third-party reporting indicates a miss versus street EPS and revenue expectations (Zacks EPS consensus -$0.05; actual -$0.11; revenue ~$31.99M vs higher consensus), underscoring negative surprise risk .
  • Liquidity and assets: total assets were ~$1.3B, cash and equivalents ~$106.7M as of quarter end, providing baseline funding capacity while Driftwood financing remains the core catalyst .

What Went Well and What Went Wrong

What Went Well

  • Driftwood construction advancing: “Bechtel is progressing very well on Driftwood LNG construction,” with >9,000 piles driven and concrete poured for plant one and tanks; plant two site prepared for piling .
  • Executive bench strengthened: Hiring of former investment banker Simon Oxley as CFO to “significantly” enhance project financing efforts .
  • Upstream KPIs up YoY: net production rose to 17.2 Bcf vs 9.0 Bcf YoY; upstream Adjusted EBITDA positive at $8.1M .

What Went Wrong

  • Pricing headwinds: revenue declined to $31.9M from $61.3M YoY “driven by decreased realized natural gas prices,” overwhelming volume gains .
  • Profitability deterioration: consolidated net loss widened to ~$59.6M (EPS -$0.11), and upstream operating loss deepened to $(28.7)M .
  • Estimates miss signal: external sources show the quarter lagged consensus (EPS -$0.11 vs -$0.05; revenue shortfall), implying negative sentiment risk .

Financial Results

Consolidated Core Metrics (YoY and Seq)

MetricQ2 2022Q1 2023Q2 2023
Revenue ($USD Millions)$61.3 $50.9 $31.9
Net Loss ($USD Millions)~$0.035 ~$27.5 ~$59.6
Diluted EPS ($USD)$0.00 -$0.05 -$0.11
Upstream Adjusted EBITDA ($USD Millions, non-GAAP)$53.213 $29.799 $8.073

Upstream Segment Detail

MetricQ2 2022Q1 2023Q2 2023
Upstream Revenue ($USD Millions)$61.3 $50.9 $31.9
Operating Profit (Loss) ($USD Millions)$38.505 $(2.987) $(28.698)
Adjusted EBITDA ($USD Millions)$53.213 $29.799 $8.073

KPIs and Balance Sheet

KPIQ2 2022Q1 2023Q2 2023
Net Production (Bcf)9.0 19.3 17.2
Net AcresN/A30,915 31,117
Producing Wells (count)N/A152 157
Cash & Equivalents ($USD Millions)N/A~$150.0 ~$106.7
Total Assets ($USD Billions)N/A~$1.3 ~$1.3

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company guidanceQ2 2023Not providedNot providedMaintained (no formal quantitative guidance in reviewed materials)

Earnings Call Themes & Trends

Note: We were unable to locate an official Tellurian Q2 2023 earnings call transcript in our document corpus for this period.

TopicPrevious Mentions (Q4 2022)Previous Mentions (Q1 2023)Current Period (Q2 2023)Trend
Driftwood construction progressPhase one under construction; ~$474.2M cash YE; reserves growth Continued phase one progress Significant piling and concrete progress; plant two site prepped Improving execution cadence
Financing strategySeeking financing package; diligence underway $1.0B sale-leaseback LOI post-Q1; repaid $166.7M obligations CFO hire to enhance financing; continued efforts Building toward project-level financing
Upstream operationsProduction fourfold increase in 2022; strong Q4 upstream EBITDA Production 19.3 Bcf; EBITDA $29.8M Production 17.2 Bcf; EBITDA $8.1M Sequentially softer; YoY higher volume
Pricing/macroBenefited from 2022 higher prices Lower realized prices partially offset by volume Lower realized prices drove YoY revenue decline Price headwind persists
Management/talent——CFO appointment (Simon Oxley) Strengthening leadership

Management Commentary

  • “Bechtel is progressing very well on Driftwood LNG construction, having driven over 9,000 piles and poured over 10,000 cubic feet of concrete for plant one and the storage tanks, and having recently prepared plant two’s site for piling work.” – Octávio Simões, President & CEO .
  • “We also hired former investment banker Simon Oxley as Chief Financial Officer… significantly enhancing our project financing efforts.” – Octávio Simões .
  • Q1 financing update: “Repayed $166.7 million in principal balance of borrowing obligations… advanced Driftwood project funding through the execution of a $1.0 billion sale and leaseback letter of intent.” – Company release .

Q&A Highlights

  • No official Q2 2023 earnings call transcript was found in our filings and transcript databases for TELL during the Q2 window, suggesting either no call or no publicly available transcript for this period [ListDocuments returned none for earnings-call-transcript in period].
  • Investor communications emphasized construction progress and financing steps in the press release, not formal Q&A .

Estimates Context

  • S&P Global Wall Street consensus data for TELL Q2 2023 was unavailable via our pipeline, so an apples-to-apples S&P comparison cannot be provided at this time.
  • Third-party reporting indicates the quarter missed consensus: EPS -$0.11 vs Zacks consensus -$0.05, and revenue ~$31.99M below expectations, implying negative surprises on both lines .

Key Takeaways for Investors

  • The quarter’s negative price-driven revenue compression and wider net loss highlight sensitivity to natural gas realizations despite higher YoY production volumes; monitor gas price trajectory and hedging/contracting strategy .
  • Driftwood LNG execution milestones plus CFO hire are constructive toward financing; near-term stock catalysts hinge on tangible project-level financing and partner announcements .
  • Upstream non-GAAP profitability fell sharply q/q with adjusted EBITDA at $8.1M vs $29.8M in Q1; watch operating leverage as prices stabilize and as the company optimizes upstream cost base .
  • Liquidity stepped down (cash ~$106.7M vs ~$150.0M in Q1) while total assets held at ~$1.3B; financing progress remains critical to de-risk construction and equity trajectory .
  • With S&P Global consensus unavailable and third-party reports indicating misses, estimates likely need to adjust lower for upstream pricing dynamics; traders should expect heightened event risk around financing disclosures and LNG project updates .
  • The narrative has shifted toward demonstrating execution and financing capability rather than near-term earnings; positioning should account for binary outcomes tied to Driftwood LNG funding and partner sell-downs .