Tellurian Inc. (Exact name of registrant as specified in its charter)

Transcription

1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): March 27, 2017 Tellurian Inc. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 1201 Louisiana Street, Suite 3100, Houston, TX (Address of principal executive offices) (Zip Code) Registrant s telephone number, including area code: (832) (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: Written communications pursuant to Rule 425 under the Securities Act (17 CFR ) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR e-4(c))

2 Item 7.01 Regulation FD Disclosure. On March 27, 2017, Tellurian Inc. (the Corporation ) will deliver an investor presentation at the Scotia Howard Weil Energy Conference in New Orleans, Louisiana. The Corporation will post the investor presentation to its website, A copy of the investor presentation is attached as Exhibit 99.1 to this Current Report on Form 8-K is incorporated herein by reference. The information in this Current Report on Form 8-K, including the information set forth in Exhibit 99.1, is being furnished shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act ), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. Item 9.01 (d) Financial Statements Exhibits. Exhibits. See Exhibit Index.

3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: March 26, 2017 TELLURIAN INC. By: /s/ Antoine J. Lafargue Antoine J. Lafargue Chief Financial Officer

4 EXHIBIT INDEX Exhibit No. Description 99.1 Tellurian Inc. Investor Presentation dated March 27, 2017

5 NASDAQ: TELL Investor presentation Scotia Howard Weil Conference March 27, 2017 Meg Gentle, President & CEO Exhibit 99.1

6 Notice Securities The Exchange information Act in of this 1934, presentation as amended. includes All statements forward-looking other than statements statements within of historical the meaning fact are of forward-looking Section 27A of the statements. Securities The Act words of 1933, anticipate, as amended, assume, Section believe, 21E of the budget, looking statements. estimate, The expect, forward-looking forecast, statements initial, intend, in this presentation may, plan, relate potential, to, among other project, things, should, our business will, would, prospects, future similar costs, expressions financial are results, intended liquidity to identify financing, forward- regulatory analyses made permitting by us in light developments of our experience future our dem perception supply of historical affecting trends, current general conditions, energy expected markets. future Our developments, forward-looking statements other factors are that based we on believe assumptions are appropriate under results the or performance circumstances. expressed These statements or implied are by subject the forward-looking to numerous known statements. unknown These risks risks uncertainties uncertainties, include which those may described cause actual in the results Risk to Factors be materially section different of Exhibit from 99.1 any to future Current Report on Form 8-K/A filed with the Securities Exchange Commission (the SEC ) on March 15, 2017 other filings with the SEC, which are incorporated by reference our this presentation. Many of the forward-looking statements in this presentation relate to events or developments anticipated to occur numerous years in the future, which increases the in likelihood presentation that speak actual only results as of will the date differ hereof. materially Although from those we may indicated from time in such to time forward-looking voluntarily update statements. our prior The forward-looking forward-looking statements, statements we made disclaim in or in any connection commitment with to this as required by securities laws. This presentation contains information about projected EBITDA of Tellurian. EBITDA is not a financial measure determined in accordance with do so U.S. except generally comparable accepted to similarly accounting titled measures principles reported ( GAAP ), by other should companies. not be viewed It would as a not substitute be possible for any without financial unreasonable measure determined efforts to reconcile in accordance the projected with GAAP GAAP information is not necessarily to net income, the most directly comparable GAAP financial measure. Similarly, projected future cash flows as set forth herein may differ from cash flows determined in presented accordance herein GAAP. with

7 Introducing Inception: In Tellurian February Inc. 2016, (NASDAQ: Charif Souki TELL) Strategy: Low-cost provider capable of & optimizing Martin Houston an integrated co-founded value Tellurian chain Investments Inc. Project: Engineering Driftwood Construction: (DW), Bechtel, a ~26 Chart mtpa & GE developing export facility a simplified, near Lake cheaper Charles, LA Development Funding: $60 million contributed by management, family & friends; $25 million solution Merger: Tellurian Investments Magellan Petroleum (Ticker: MPET) closed a reverse subsidiary invested merger by GE; on February $207 million 10, invested The by transaction Total exchange, where Tellurian shareholders are majority owners of the combined entity. Company renamed Tellurian Inc ticker became NASDAQ: is TELL. structured As of as Monday, a tax free March equity 2017, there were 199,706,159 shares outsting. 13,

8 Global gas dem CAGR expecting 450 steady North growth America Incremental 1.2% S & gas C America dem 0.8% : 3500 Asia 105 Pacific Bcf/d ( Europe mtpa) Average 0.9% CIS annual 0.04% gas 3000 dem Africa growth: 350 Middle 7 Bcf/d East (50 2.2% mtpa) Africa Bcf/d 3.0% mtpa 2500 equivalent Asia Pacific 2.9% Middle East Total 1.6% CIS Europe S & C America North America

9 90 mtpa) mtpa 80 additional 600 North liquefaction America 4.1% construction Average annual required to meet dem the call growth: on 2 Bcf/d by 2025 (15 mtpa) (1) Bcf/d 70 S equivalent & C America mtpa 5.6% Africa Europe CAGR Incremental 4.6% Middle dem East : 6.8% Middle 30 Bcf/d East ( % Asia Pacific 3.9% Total 4.2% Asia Pacific Europe South America North America Africa % of global gas dem growth expected to be supplied from new sources 90 mtpa of liquefaction construction will require more than 2020 $65 plant BN capacity of capital 4 Source: Source: BP BP Energy Energy Outlook Outlook (2017), (2017), Wood Wood Mackenzie Mackenzie (Q4 (Q4 2016) 2016) 5 (1) Note: 15 mtpa of incremental dem per year, over next 5 years, where consumption is 85% of

10 12% Growth in Asia / Middle East dem in Source: IHS Markit Waterborne 6

11 Commodity $/MMBtu Global prices energy improving prices from early 2016 benchmark lows $12 $10 $8 $6 JKM 11% Brent 14% Brent $4 Henry Hub TTF $- Coal $2 Apr-15 Source(s): Jul-15 ICE, Oct-15 Platts Jan-16 via Globalview, Apr-16 Jul-16 Tellurian Oct-16 estimates Jan-17 Apr-17 7 Jul-17 Oct-17 Jan-18 Apr-18

12 Next generation liquefaction Cost matters $/MMBtu Average est. DES to Asia breakeven costs for projects awaiting FID Assumes $50 / Bbl oil price environment $12.00 $10.00 $8.41 $8.37 $8.01 $7.95 $7.74 $8.00 Transport cost $6.00

13 Seeking Henry Hub lowest Gas cost Price gas Breakeven, supply.. $/MMBtu. after $3.64 transport, $3.19 $3.38 after-tax, $3.00 full $3.00 cycle, $ % $2.87 IRR $2.92 $3.92 Wet Gas Terryville Field Haynesville Eagle Ford $2.63 Alpine $2.71 High Alpine $2.51 $2.54 High Barnett Marcellus Shale Shale Marcellus - - NE NE Shale Core Super Marcellus Shale Rich SW SW Marcellus Shale Liquids Marcellus Upper Shale Red Utica Dry Shale Shale Dry Gas Utica Overpressured Normal Core Rich Pressured Analysis assumes oil price of $50 / Bbl Lower service costs, improved technology efficiency will improve netbacks over time Source: Gas Other company filings, Credit Suisse estimates, Tellurian 9

14 Driftwood L: 1,000-acre : ~26 site mtpa near Lake export Charles, facility LA in Louisiana Liquefaction Trains: 20 trains, Nameplate each producing Capacity: 1.3 ~26 mtpa mtpa Storage: storage tanks, each 235,000 m3? 1.3 mtpa Chart heat exchangers? GE LM6000 compressors Marine: Pipeline: 3 96 marine mile pipeline berths for? ~4 ship Bcf/d docking Estimated Cost: $ /tonne EPC of cost capacity? ~26 mtpa? Multiple = ~$13-16 interconnects BN(1) 10 (1) Excludes owners costs, financing related costs contingencies Liquefaction $4.00 pipe

15 Key Project project partners partners EPC World Founders leader have in deep the relationship industry, with Bechtel: has built trains trains with producing Tellurian s 120 executive mtpa to date Bechtel expected to wrap the Chart technology liquefaction interface team Liquefaction World-class technology Driftwood cold to box use manufacturer the Integrated for Pre-cooled all technologies Single Mixed supplied Refrigerant more than (IPSMR ) 10,000 brazed Equity aluminum partners liquefaction heat exchanger process (BAHX) Turbines cores more compressors than 500 for service GE Delivered Oil & Gas refrigerant has 25+ compressors years of experience turbines in for some technology Partnering to set new low cost stard for installed horsepower of the world s largest projects Strategic Invested Investor $25 million Invested Globally $207 integrated million, portfolio 23% ownership experienced in Tellurian Inc. 11 company

16 Driftwood estimated project timeline June regulatory FERC Q1 FERC approval Construction Engineering First Regulatory plant Full pipeline Marketing All Financing plants Pre-Filing Liquefaction application development filing begins, funding pending raised operational Bechtel engaged operations to Pre-filing operational notice Review Offices Process $60 MM Management, friends & family complete robust FEED Jun 2016 London Singapore $25 MM GE Feb 2016 Dec 2016 Draft Resource Reports $207 MM Total established LSTK EPC in Contract Engaged Dec Project 2016 Proceed Launch with of marketing 2017 Gastech Opportunistic Conference capital March raising Notice & 2018 to expected expected Q1 mid-2017 construction Full April FERC 2017 Application FERC effort Order in Arrange Tokyo at project the Financing financing Advisor mid-2018 expected mid-2018 Sales Purchase Agreements Liquefaction project financial close expected 1H 2018 expected mid-2018 LSTK=Lump-sum turnkey bank group 12 expected

17 Driftwood $/tonne project cost cost $3,500 competitive $3,000 US $1,500 Projects $1,000 Under $500 construction $2,500 Awaiting Final Investment Decision (FID) Driftwood $2,000 $ Commercial Start 1998 up Year of Alaska New Guinea Brunei Indonesia Darussalam US East United Russia Arab West Emirates Cameroon Malaysia Canada Australia West Qatar Mozambique Trinidad Tanzania Tobago Nigeria Oman Egypt Equatorial Guinea Norway Russia East Yemen Peru Angola Papua 13 Source: IHS, Tellurian

18 Tellurian Low Cost Supply value to Procure shareholders Low Cost Construction Work gas with supply contractors at lower cost to lower than capital marginal spending production to between within US Low Cost Financing Efficient financing of project simple capital structure $500 $600 / tonne Fast Mover Advantage Faster to market than competing projects expect FID mid 2018

19 Driftwood illustration of constructed facility 15 14

20 Maintaining Tellurian a Simple Capital Structure Equity (NASDAQ:TELL) Inc. Issuances(2) ESTIMATED Terminal Construction(1) KEY METRICS $/ton ~$ Units Amount Project preferred equity equity / Driftwood Terminal Construction Cost(1) $ bn ~$13-16 Driftwood Project Project finance finance Pipeline Construction(1) $ bn ~$1.5-2 debt Terminal Project Finance % ~70 Pipeline Project Finance % ~80 Pipeline Note: (1) debt Excludes owners & financing related costs 16 (2) GE preferred equity currently at level of first-tier subsidiary

21 DW. & Pipeline Key Figures Notes: (1) (2) Estimated Subject to construction pricing & timing costs of before capital owners raise. Assumes costs, financing equity cost costs of capital contingencies. is 11%. Pending finalump-sum turnkey EPC contract with Bechtel. (3) Notice EBITDA on page is calculated 2 of this as presentation total revenue for (liquefaction, additional information. procurement fees) less operating costs (operating, corporate), & transportation costs. EBITDA is non-gaap a measure. See (4) 17 Assumes 200 mm common shares outsting.

22 Thank you

23 Investor Investor Contacts Amit Marwaha, Relations David Castaneda, Public Joi Lecznar, Relations

24 Appendix 20 19

25 Leadership Charif Souki, team Founded Cheniere Chairman A lifelong entrepreneur, Energy, Charif the first has spent 20 export years company raising in the investing United capital States, growing in a range it of to industries a $9 Bn company globally while serving as CEO from 2002 to 2015 Martin Spent Houston, three decades Vice at Chairman Conducted business in BG over Group 40 countries plc, a FTSE in an 10 energy international career spanning integrated 35 oil years gas company, retiring in November 2013 as Chief Operating Officer an executive director Meg Former Gentle, EVP CEO of Marketing President Previously served as Chief at Financial Cheniere Officer Energy, of based Cheniere in London, Energy, Engl a multibillion dollar company managing Cheniere Energy s liquidity, negotiating $25 billion of debt equity financings turning Cheniere into Keith Former Teague, EVP, Chief Asset Operating Group at Cheniere Officer Responsible for the development, construction Energy, based operation in Houston, of Cheniere s Texas 21 natural gas terminal pipeline assets

26 Leadership Antoine Lafargue, team Antoine became CFO Chief of Financial Tellurian Officer Officer, Chief Financial Officer, Treasurer Inc. on February Corporate 10, Secretary He served from August as Magellan 5, 2016 Petroleum s to the merger President, with Tellurian Chief Executive Previously Joined Tellurian served after as Magellan 40 years at Petroleum s BG Group, SVP where Strategy he held many Business senior Development management positions Chief in Commercial General Operations, Officer Howard Project Celet, Management, SVP Projects Business Development Company Business Operations Pat Deep Outtrim, operational SVP Government experience includes Regulatory stint as Affairs VP operations at BG Group s Atlantic permitting, Patricia is responsible expansion for of government seven US regulatory import terminals. activities, permitting regulatory compliance oversees the HSE groups. Ms. Outtrim has assisted in the site development, Her Spent background 12 years at includes BG Group management responsible of for NG the vehicle North projects, American hazard/risk, natural gas siting, trading cost marketing analysis business, as well as as code well compliance as serving on Mark various Evans, investment SVP Gas Supply Prior to BG Group, Mark was employed at Duke Energy in various natural gas trading marketing roles for over 10 years Tarek Souki, SVP Marketing management Trading committees office, Tarek back joined office Tellurian finance in April functions 2016, previously for its trading he was operations the VP Finance Business Development of Cheniere Marketing Inc. based in London where he built out led the middle 22 Prior to Cheniere, Tarek spent 14 years working for various financial institutions including most recently at Credit Suisse

27 Experience Key management matters World class leadership team Founder -Cheniere Energy team Charif COO Souki of BG Martin Group, Houston FTSE Meg Former Gentle Annualized equity CAGR 10 company Cheniere Energy EVP Marketing/CFO at ~40% Seasoned from management Pioneered team Operations destination Legal/Regulatory Structured >$25 Commercial/Financing bn during flexible tenure at Cheniere Keith Howard Teague Celet Daniel Pat Belhumeur Outrim Mark Antoine Evans Lafargue Tarek Mark Stubbe Souki Deep Singapore bench & strength London Marketing Working Integration with Bechtel, Efficiency professionals globally operations Chart, GE on EPC

28 DW DW vs. layout: traditional 5.2 mtpa Traditional plant design Redundancy necessary: if 1 layout: 4.5 mtpa Larger Gas pre-treatment footprint: 3 facility cold boxes entire need circuit compressor is affected is out of service, more l, more pipe Redundancy GE LM2500 built-in: (x6): smaller if 1 compressor turbine Cold is boxes Single (x3): treatment 3 cold out boxes, of service, one GE refrigerant LM6000 -only PF+ (x4): that loop cheapest (x4): means pre requires you need less 6 circuit turbines, is affected 3 for each l, refrigerant less pipe gas Gas IPSMR dollar per installed horsepower = circuits, to produce 4.5 mtpa technology uses single mixed more production per acre refrigerant; design scaled loop up Chart from mid-scale cold boxes design, (x4): rather 24 than down from top

29 Timeline to FID status Winter/Spring FERC Gastech Summer/Fall CWC World Winter/Spring FERC NTP Summer/Fall EPC FID Construction begins Marketing/SPAs World Gas Conference Engineering Liquefaction Regulatory development funding Marketing raised Financing $60 MM Management, friends & family complete Bechtel engaged robust FEED to Pre-filing Jun 2016 notice London Offices established Singapore in $207 MM Total Feb 2016 Dec 2016 $25 MM GE Draft LSTK Resource EPC Contract Reports Full FERC Application Dec Engaged 2016 Launch Project Financing of marketing Advisor Opportunistic in Gastech capital Conference raising 2017 & 2018 expected mid-2017 effort in Tokyo at the Notice FERC Order to Proceed Arrange with expected project financing Q bank March group 2017 expected construction mid-2018 April expected expected mid-2018 mid-2018 Sales Purchase Agreements Liquefaction project financial close expected 1H 25

30 The New world FIDs are needs projects construction under Assuming needs to no start new today decade market will return to deficit by market balanced FIDs just are as market necessary enters beginning construction balance expected to sanctioned soon, the global 2018 to keep come online next Source: IHS, Tellurian 26

31 Global 100 cost curve DW in lower quartile of potential FID projects Kitimat (Downstream only) Pacific Northwest Lake 70 Charles Abadi F Corpus $ 60 Browse Christi F (T4-5) Cameron (T4-5) /boe) Freeport (T4) Tanzania US (Br Tangguh (Train 3) Coral South Area 4Driftwood ent 50 Fortuna F Area 40 1 Area 4 PNG T3 Breakeven, 30 11% ralia Canada 21% Africa/Aust Indonesia % USA 58% 0 Source: Citi, Wells Fargo, Tellurian 2022E NFID Production, Mboed 27