Sign in

You're signed outSign in or to get full access.

TI

TELLURIAN INC. /DE/ (TELL)·Q3 2023 Earnings Summary

Executive Summary

  • Q3 2023 revenue was $43.2 million with a net loss of $65.4 million (EPS -$0.12), as lower realized natural gas prices outweighed strong production growth; management highlighted progress on financing and construction for Driftwood LNG and reaffirmed first LNG in 2027 .
  • Upstream production increased to 19.5 Bcf (vs. 11.4 Bcf YoY), but average realized price fell to $2.22/Mcf (vs. $7.07/Mcf YoY), compressing profitability despite volumes rising .
  • Management is actively engaging counterparties for equity partnerships, LNG offtake, and pipeline investment; over $1 billion has been invested in the fully permitted Driftwood project .
  • Wall Street consensus estimates via S&P Global were unavailable for TELL this quarter due to a missing CIQ mapping; comparison to estimates cannot be provided (values would be retrieved from S&P Global).
  • Near-term stock reaction catalysts: concrete milestones on Driftwood financing/offtake, pipeline funding progress, and confirmation of the 2027 LNG start timeline .

What Went Well and What Went Wrong

What Went Well

  • Upstream volumes increased materially: “Tellurian’s upstream segment continues to provide growing natural gas production, improving significantly over the third quarter of last year” (19.5 Bcf vs. 11.4 Bcf YoY) .
  • Positive outlook: “we see natural gas prices on the rise through year end,” which could support upstream economics if realized .
  • Strategic progress: “We are having a number of discussions with counterparties for both equity partnership and liquefied natural gas (LNG) offtake for the Driftwood project and investment in the Driftwood Line 200/300 pipeline,” with “over one billion dollars” invested and first LNG target maintained for 2027 .

What Went Wrong

  • Pricing headwinds drove revenue decline YoY: revenue fell to $43.2 million (from $81.1 million) driven by decreased realized natural gas prices despite higher volumes .
  • Profitability deterioration: upstream operating swung to a loss of ($12.6) million from a $40.1 million profit YoY; adjusted EBITDA fell to $18.3 million from $69.5 million YoY .
  • Average realized price compressed severely: $2.22/Mcf vs. $7.07/Mcf YoY, underscoring commodity-driven pressure on quarterly results .

Financial Results

Consolidated Financials vs Prior Periods

MetricQ1 2023Q2 2023Q3 2023
Revenue ($USD Millions)$50.9 $32.0 $43.2
Net Income ($USD Millions)($27.5) ($59.6) ($65.4)
EPS ($USD, Basic & Diluted)-$0.05 -$0.11 -$0.12

Upstream Segment Results

MetricQ1 2023Q2 2023Q3 2023
Net Production (Bcf)19.3 17.2 19.5
Revenue ($USD Millions)$50.9 $31.9 $43.2
Operating (Loss) Profit ($USD Millions)($2.9) ($28.7) ($12.6)
Adjusted EBITDA ($USD Millions)$29.8 $8.1 $18.3
Average Realized Price ($/Mcf)N/AN/A$2.22

KPIs and Balance Sheet

MetricQ1 2023Q2 2023Q3 2023
Net Acres30,915 31,117 31,149
Producing Wells (count)152 157 159
Cash & Cash Equivalents ($USD Millions)$150.0 $106.7 $59.3
Total Assets ($USD Billions)~$1.3 ~$1.3 ~$1.3

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Driftwood LNG first LNG timingProject milestoneNot explicitly stated in prior press releases“remain on target to produce first LNG in 2027” Maintained
Natural gas price outlookRemainder of 2023Not provided“we see natural gas prices on the rise through year end” New commentary
Equity/offtake/pipeline engagementOngoingNot quantifiedActive discussions for equity partnerships, LNG offtake, and pipeline investment Update on progress

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2023)Current Period (Q3 2023)Trend
Driftwood construction progress“Bechtel is progressing very well” with piling and concrete poured (Q2) Reaffirmed construction progress; over $1B invested and fully permitted Steady progress; milestone language maintained
Financing/partnersQ1: $1.0B sale-leaseback LOI; adding commitments; focused on bank debt/equity discussions “discussions with counterparties for equity partnership and LNG offtake,” pipeline investment Advancing commercial engagement
Upstream productionVolumes up vs 2022 in Q1 and Q2 19.5 Bcf, +71% YoY Growth maintained
Commodity pricing/macroNot explicitly guided prior“prices on the rise through year end” More constructive near-term outlook
Leadership/organizational updatesCFO appointment (Q2) Post-Q3: new President and GC; Chairman named (December) Governance changes post-quarter

Note: No Q3 2023 earnings call transcript was found in our document set; themes above reflect press releases and 8-K disclosures .

Management Commentary

  • “Tellurian’s upstream segment continues to provide growing natural gas production, improving significantly over the third quarter of last year, and we see natural gas prices on the rise through year end.” — CEO Octávio Simões (Q3) .
  • “We are having a number of discussions with counterparties for both equity partnership and liquefied natural gas (LNG) offtake for the Driftwood project and investment in the Driftwood Line 200/300 pipeline… invested over one billion dollars… remain on target to produce first LNG in 2027.” — CEO Octávio Simões (Q3) .
  • “Bechtel is progressing very well on Driftwood LNG construction… significantly enhancing our project financing efforts.” — CEO Octávio Simões (Q2) .
  • “We have invested or received commitments for nearly $2 billion of the project costs… continue discussions with partners who want to join us…” — CEO Octávio Simões (Q1) .
  • Post-Q3 leadership note: Chairman Martin Houston emphasized confidence in the leadership team and strategic priorities (Dec press release) .

Q&A Highlights

  • No Q3 2023 earnings call transcript was available in our dataset; therefore, no Q&A themes or clarifications can be provided from a call [ListDocuments: earnings-call-transcript returned none].

Estimates Context

  • Wall Street consensus estimates via S&P Global were unavailable for TELL due to a missing CIQ mapping, preventing comparison of actuals to consensus for Q1–Q3 2023 (Values would be retrieved from S&P Global).
  • In absence of estimates, investors should anchor analysis on production, realized pricing, and upstream profitability trends disclosed in company filings .

Key Takeaways for Investors

  • Volume growth continues in the upstream segment, but realized price declines drove revenue and margin pressure; watch for confirmation of the “prices on the rise” outlook translating to improved quarterly revenue and EBITDA .
  • Driftwood LNG remains on a 2027 first-LNG timeline with construction progress and over $1B invested; near-term equity/offtake announcements and pipeline financing would be meaningful catalysts .
  • Liquidity decreased across 2023 (cash from $150.0M in Q1 to $59.3M in Q3); balance sheet strengthening actions are notable and should be monitored in subsequent filings .
  • Adjusted EBITDA recovered sequentially from Q2 to Q3 ($8.1M → $18.3M), but remains well below prior-year levels; ongoing commodity price recovery is key to profitability normalization .
  • Lack of consensus estimates limits “beat/miss” framing; positioning should focus on concrete project and financing milestones and realized price trajectories until coverage comparables are restored (Values would be retrieved from S&P Global).
  • Governance changes post-Q3 (new Chairman, President, and GC) signal a focus on execution and financing processes; monitor any strategic updates and cost control initiatives .
  • Short-term: trade around commodity price moves and any Driftwood financing/offtake headlines; medium-term: thesis hinges on achieving Driftwood FID and securing bank/equity financing to underpin the 2027 LNG start .

Appendix: Non-GAAP Reconciliation Reference

  • Upstream segment Adjusted EBITDA reconciliation (Q3): operating loss ($12.553M) + DD&A $22.940M + allocated corporate G&A $7.928M = Adjusted EBITDA $18.315M .
  • Upstream segment Adjusted EBITDA reconciliation (Q2): operating loss ($28.698M) + DD&A $24.489M + allocated corporate G&A $12.282M = Adjusted EBITDA $8.073M .
  • Upstream segment Adjusted EBITDA reconciliation (Q1): operating loss ($2.987M) + DD&A $21.492M + allocated corporate G&A $11.294M = Adjusted EBITDA $29.799M .