Facing financial concerns, Tellurian is exploring a sale of its upstream assets in the Haynesville Shale, the company said Feb. 6.
Tellurian produced 19.5 Bcf of natural gas in third-quarter 2023. Its assets, primarily in Louisiana’s DeSoto, Bossier, Caddo and Webster parishes, include 31,149 acres, interests in 159 producing wells and more than 400 drilling locations. The company said in August that it holds an average 75% working interest its operated locations.
The company plans use proceeds from any asset sale to reduce debt and expenses as well as provide extra cash on hand to continue developing the Driftwood facility. Otherwise, the company would need to issue equity to fund development in 2024.
Tellurian CEO Octávio Simões said the company, which is developing the Driftwood LNG export terminal south of Lake Charles, had decided that the upstream assets are not needed for the company’s overall strategy and directed its financial advisor, Lazard, to prepare for a sale.
“We have concluded that there are alternative gas supply strategies available to us from various basins, and our ownership of upstream assets is not necessary at this stage of Tellurian’s development,” Simões said. “We have a substantial number of drilling locations that we believe will be highly attractive to oil and gas producers that can develop them more quickly than we would.”
The move is Tellurian’s first since the company announced that the Lazard firm had been hired on Jan. 25. Tellurian downplayed rumors that the company was for sale. Tellurian has had difficulty bringing the Driftwood project, started in 2016, to completion. The project already has Department of Energy approval, meaning it does not fall under the Biden Administration’s pause for LNG projects initiated on Jan. 26.
Recommended Reading
Kimmeridge Fast Forwards on SilverBow with Takeover Bid
2024-03-13 - Investment firm Kimmeridge Energy Management, which first asked for additional SilverBow Resources board seats, has followed up with a buyout offer. A deal would make a nearly 1 Bcfe/d Eagle Ford pureplay.
Oil and Gas Chain Reaction: E&P M&A Begets OFS Consolidation
2024-04-26 - Record-breaking E&P consolidation is rippling into oilfield services, with much more M&A on the way.
OGInterview: Building EIV Capital’s Midstream Investment Strategy
2024-05-01 - Midstream-focused EIV Capital has added non-operated assets and transition projects to its portfolio as a sign of the times.
Laredo Oil Subsidiary, Erehwon Enter Into Drilling Agreement with Texakoma
2024-03-14 - The agreement with Lustre Oil and Erehwon Oil & Gas would allow Texakoma to participate in the development of 7,375 net acres of mineral rights in Valley County, Montana.
SLB’s ChampionX Acquisition Key to Production Recovery Market
2024-04-21 - During a quarterly earnings call, SLB CEO Olivier Le Peuch highlighted the production recovery market as a key part of the company’s growth strategy.