Quiver Quantitative - Charif Souki, a prominent figure in the American LNG industry, has ended his journey with Tellurian (TELL), the gas-export company he co-founded. Tellurian announced Souki's departure in a regulatory filing, indicating a separation and release agreement that led to Souki resigning from his board seat. This move follows an earlier announcement this month where Souki was terminated without cause from his position as executive chairman, despite remaining on the board. The leadership restructuring at Tellurian also included the appointment of vice chairman and co-founder Martin Houston as the new board chairman and the introduction of a new president.
Souki's exit marks the conclusion of a dynamic and often turbulent tenure at Tellurian. Known for his bold persona and advocacy for liquefied natural gas (LNG), Souki faced challenges in securing financing for a major gas-liquifying terminal on the Gulf Coast. This difficulty persisted despite an increased global demand for U.S. LNG following Russia’s invasion of Ukraine. Souki's career in the energy sector is notable, transitioning from a restaurateur to an energy mogul, and this isn't his first experience being ousted from an LNG company he helped establish.
Market Overview: -Energy stocks mixed, with U.S. oil benchmarks hovering near multi-month lows due to demand concerns. -LNG-related names, however, saw increased volatility following the news of Souki's departure from Tellurian. -Broader markets remained cautious, awaiting key economic data releases later in the week.
Key Points: -Tellurian announced the separation and release agreement with co-founder and executive chairman Charif Souki. -Souki resigned from the board, marking the end of his tumultuous tenure at the company he helped build. -Tellurian faces ongoing challenges in financing its large-scale Driftwood LNG export project, despite the current boom in global LNG demand. -This is not Souki's first departure from a major LNG company - he was previously ousted from Cheniere Energy in 2015.
Looking Ahead: -Tellurian's future leadership and the fate of the Driftwood project remain uncertain with Souki's departure. -Investors will keep a close eye on Tellurian's ability to secure funding and navigate the competitive LNG market. -Souki's potential resurfacing in the energy sector, and its implications for the industry, will also be closely watched.
In 2015, Cheniere Energy (LNG), another LNG company co-founded by Souki, removed him from his position following Carl Icahn's significant investment in the company and subsequent criticism of Souki’s expansion strategy. Under Souki's leadership, Cheniere achieved a milestone by becoming the first U.S. company to export LNG from the mainland, positioning the country as a leading global LNG exporter. His termination from Cheniere resulted in a substantial compensation package, reflecting the significant achievements under his guidance.
In contrast, the severance package from Tellurian is notably smaller. Souki will receive a cash severance of $6.43 million, a $1 million lump payment, and approximately $660,000 in travel-related benefits, among other compensations. Despite this more modest exit payout, Souki's influence in the LNG industry and his role in shaping the U.S. energy export landscape remain significant. His Tellurian stock holdings are valued at around $1.2 million.
This article was originally published on Quiver Quantitative