HOUSTON - Tellurian (NYSE:TELL) Inc. (NYSE American: TELL), a Houston-based natural gas company, announced today an amendment to the terms of certain debt instruments aimed at enhancing the company's near-term liquidity. This strategic financial move is designed to provide Tellurian with the necessary flexibility to successfully complete the sale of its upstream assets.
The amendment includes a reduction in the company's minimum cash balance requirement, which will potentially free up capital. Additionally, Tellurian has been granted the ability to make upcoming interest payments in-kind rather than in cash. These changes are intended to improve the company's capital structure and support its ongoing project and strategic priorities.
Octávio Simões, CEO of Tellurian, stated that the amendment is "pivotal towards establishing a sustainable capital structure" and emphasized its significance in advancing the Driftwood LNG project. He also noted that the amendment would allow the company to maximize shareholder value through the anticipated sale of upstream assets while maintaining focus on commercializing Driftwood LNG.
Tellurian Inc. is working on developing a low-cost, global natural gas business, which includes the Driftwood LNG export facility with a projected capacity of approximately 27.6 million tonnes per annum (mtpa), and an associated pipeline.
This news is based on a press release statement from Tellurian Inc.
InvestingPro Insights
In light of Tellurian Inc.'s recent strategic financial maneuvering, real-time data from InvestingPro offers a more granular view of the company's financial health and market performance. With a market capitalization of approximately $572.49 million and a negative P/E ratio reflecting a challenging earnings landscape, Tellurian's efforts to amend debt terms appear to be a response to its significant debt burden and the difficulties it may face in making interest payments.
InvestingPro Data indicates that Tellurian has experienced a notable revenue decline, with the last twelve months as of Q3 2023 showing a decrease of 26.45%. This contraction in revenue is further underscored by a quarterly revenue drop of 46.67% in Q3 2023. Despite these setbacks, the company's gross profit margin remains at a resilient 41.6%, indicating a degree of underlying operational efficiency.
Moreover, the company's stock has seen a strong return over the last month, with a 42.99% increase, and an even more impressive three-month return of 62.76%. These figures suggest a recent uptick in investor confidence, which could be buoyed by the company's latest strategic decisions. However, it's important to note that Tellurian's stock price movements have historically been quite volatile, as highlighted by one of the InvestingPro Tips.
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