Shares of the Houston-based natural gas company Tellurian Inc. spiked in after-hours trading on Thursday, following reports by Bloomberg that the company is considering putting itself up for sale. It seems the executive team at Tellurian is ready to chart new territories as they brought on Lazard Inc. to look into a plethora of "commercial opportunities," with a potential sale of the company being a significant possibility. Tellurian's share price soared more than 15% to reach 60 cents per share after the market closed.
The move to hire Lazard comes in the wake of former chairman and charismatic co-founder, Charif Souki, being ousted last month. In efforts to possibly keep the ship afloat and navigate through challenging financial winds, Tellurian has been on the hunt for customers and equity partners for its Driftwood LNG project in Louisiana. As it stands, they face a storm of skepticism regarding the company's future cash flow. "They will provide valuable assistance and guidance in the coming weeks," Martin Houston, Tellurian's co-founder who took over as chairman, said in a letter to shareholders, acknowledging the role of the newly appointed financial advisor.
Bloomberg reported that the Driftwood LNG project, in particular, could draw increased attention as Tellurian possesses essential government approvals for this facility, aimed to pump out 27.6 million metric tons of liquefied gas yearly. These approvals include a non-free trade agreement export license, a critical asset allowing sales of LNG to major markets such as China and Japan.
Adding some urgency to Tellurian's maneuvers are reports that the Biden administration is set to announce a plan on Friday to stop reviewing gas export applications while assessing the environmental impact of such projects. This move could potentially throw a wrench into burgeoning export deals. Meanwhile, Joi Lecznar, Tellurian's executive vice president, confirmed to Houston Chronicle, However, Lazard has yet to make a public comment on the situation.
The possibility of a sale, including the Driftwood project or Tellurian's portfolio of gas wells, comes after Houston vowed to cut costs aggressively following Souki's departure. This strategy seems to reflect a pragmatic approach toward ensuring the longevity of the company in a market that presents numerous challenges and uncertainties.
