Tellurian Inc.'s (TELL:NYSE American) Q2/23 revenue and earnings per share (EPS) were below forecasts due to lower-than-expected natural gas production and prices, reported ROTH Capital Partners analyst John White in an Aug. 7 research note. Tellurian is building liquefied natural gas (LNG) infrastructure and developing resources along the U.S.' Gulf Coast.
"Tellurian continues to execute its integrated strategy by progressing construction of its Driftwood project and through the production and sales of natural gas," White wrote. Driftwood LNG is the company's new liquefied natural gas export facility being built in Louisiana.
Material Gain Projected
Despite this underperformance in Q2/23, which ended June 30, 2023, ROTH maintained its US$3.30 per share target price on the Texas-based energy firm.
Given it is currently trading at about US$1.66 per share, the return to target implies a significant return for investors of 99%.
Tellurian is still a Buy.
Production Up Year Over Year
White presented Tellurian's Q2/23 results.
The natural gas company generated US$32 million (US$32M) in revenues, not even half of ROTH's estimate of US$76.6 million (US$76.6M).
Similarly, Q2/23 EPS came in at (US$0.11), also below ROTH's forecast of US$0.03.
Tellurian produced 17,200,000,000 cubic feet (17.2 Bcf) of natural gas, which compares to 9 Bcf produced at the same time last year.
Construction Update
White reported that the construction of Driftwood LNG is progressing "very well." To date, more than 9,000 piles have been driven, and more than 10,000 cubic feet of concrete have been poured for the first plant and the storage tanks.
Regarding the second plant, preparations for piling work were just completed.
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Disclosures for Roth, Tellurian Inc., August 7, 2023
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Disclosures: ROTH makes a market in shares of Tellurian Inc. and as such, buys and sells from customers on a principal basis. Shares of Tellurian Inc. may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used Page 3 of 4 TELLURIAN INC. Flash Note - August 7, 2023 as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH. Copyright 2023. Member: FINRA/SIPC.
