Tellurian expands investment bankers’ remit to include full sale option

March 18, 2024
The company behind the Driftwood LNG project also said chief executive officer Octávio Simões has resigned and will be an advisor until June.

Tellurian Inc., Houston, has expanded work with investment bank Lazard Frères & Co. LLC beyond selling the company’s upstream natural gas assets to include other possible transactions, including a sale of the entire company.

Tellurian disclosed the update in a US Securities and Exchange Commission (SEC) filing on the same morning it also said that chief executive officer Octávio Simões resigned his post Mar. 15 and will instead work as an advisor until June 5. The company directors earlier this month chose not to renew Simões’ contract (OGJ Online, March 4, 2024).

Samik Mukherjee, an executive vice-president who also leads the company’s work on the 27.6-million tonne/year (tpy) Driftwood LNG plant under construction in Louisiana, has been appointed president of Tellurian Investments and will jointly run all of Tellurian alongside president Daniel Belhumeur.

In its regulatory filing detailing the Lazard change—which also included word of a deal to have brokerage Virtu Americas LLC sell up to $366 million worth of Tellurian shares on the open market—the company said it has asked the investment bankers to also explore “alternative debt and equity financings, the sale of equity interests in Driftwood or Tellurian, a potential sale of the company [and] assisting in securing commercial partners,” among other options.

The change comes about a month after the US Federal Energy Regulatory Commission (FERC) granted Tellurian an extension until spring 2029 to put Driftwood in service and export its LNG. The company has so far invested about $1 billion into the project, where construction is about 30% complete, and is looking to finance much of the remaining work. To that end, the comapany in early February put its upstream division up for sale (OGJ Online, Feb. 6, 2024).

Investors had applauded that announcement, which came with Simões saying a possible sale would be “more attractive than issuing equity” to fund Driftwood work. Word of a potential companywide sale and share offering sent shares of Tellurian (Ticker: TELL) down sharply. In early-afternoon trading, shares were trading around $0.68, down 29% on the day. The stock is down more than 40% over the past 6 months, cutting its market capitalization to about $550 million.