Tellurian to cut costs and exercise discipline amid LNG market...

Tellurian to cut costs and exercise discipline amid LNG market uncertainly

Tellurian Inc. has announced that it plans to cut corporate spending and is seeking to reorganise financing for its 2019 term loan.

This action has been prompted by uncertain market conditions that include weak global demand for LNG and low prices.

Meg Gentle, President and CEO of Tellurian, made the following statement:

“Given current global financial market conditions and increasing restrictions on travel caused by the onset of Coronavirus, we are taking the steps necessary to focus on preserving the value we have created at Tellurian and Driftwood LNG.

To this end we will reduce our corporate overhead to approximately US$6 million per month and have initiated discussions with our lender to extend the maturity of our 2019 term loan due in May 2020.”

Gentle added,

“We have just returned from a visit to India where we continued discussions with Petronet and agreed to extend our MOU to 31 May 2020. We continue to see very strong growth in LNG demand from Asia in general, and India in particular, in spite of world conditions.

We are highly confident that when travel restrictions are eased, we will be able to finalise several negotiations to complement the Petronet agreement and allow us to reach final investment decision (FID). With the new corporate overhead structure, we have a long runway to execute on our business model.”


PetroChina declares force majeure on some natural gas imports

Reuters is reporting that PetroChina has suspended some of its natural gas contracts, including both LNG and pipeline imports.

According to the report, the company has issued a force majeure notice to its suppliers of pipeline gas, in addition to at least one LNG supplier, however details of the notice have not yet been confirmed.

This action has been prompted due to a severe seasonal decline in demand, which has compounded the ongoing impact of the coronavirus outbreak on consumption.


Takeover offer for LNGL recommended to shareholders

LNG Limited (LNGL) has announced that it has entered into a bid implementation agreement (BIA) with LNG9 Pte Ltd (LNG9) pursuant to which LNG9 will make an offer to acquire all of the issued ordinary shares of LNGL under the terms of an off-market takeover bid.

LNGL has over the last year evaluated many potential corporate and asset transactions to provide liquidity and value for shareholders and considers that the LNG9 offer is the most attractive offer currently available for LNGL shareholders.

The Directors of LNGL will therefore unanimously recommend that LNGL shareholders accept the offer in the absence of a superior proposal being received.


Proposal highlights

• LNG9 desires to acquire 100% of the outstanding LNGL shares, which includes all shares underlying the outstanding LNGL sponsored ADRs (LNGLY), and to potentially take the company private.
• Under the terms of the offer, LNGL shareholders will receive US$0.13 in cash per share (or the Australian dollar equivalent), valuing the share capital of LNGL at approximately US$75 million.
• The offer price approximates A$0.198 per LNGL share, applying an A$/US$ exchange rate of approximately 0.66/1 as of 27 February 2020, the trading day prior to the date of this announcement.
• The offer represents a 72% premium to the closing price of LNGL’s shares on the ASX of A$0.115 on the trading day prior to the date of this announcement, valuing the share capital of LNGL at approximately A$114 million, and a 48% premium to LNGL’s 30-day volume weighted average price (VWAP) on ASX of A$0.133 over the 30 trading days prior to the date of this announcement.
• The offer is subject to LNG9 receiving acceptances in respect of at least 90% of ordinary shares and to other conditions in the company’s full release.
• Additionally, First Wall Street Capital Corp. (Lender) has agreed to provide bridge financing to LNGL in the form of a non-revocable senior secured convertible note financing facility, for the purposes of facilitating ongoing marketing and development of LNGL’s projects, and to meet LNGL’s working capital requirements, including its transaction costs.

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