From the start Tellurian Inc (NYMARKET: TELL) strategy has been delaying a FID (final investment choice) as late as possible taking money deposits from the investors without having the monetary capability to build a such project.
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Tellurian IRs Promise
Tellurian IR has assured to provide lng cargoes baked at a $3.5/ mmbtu FOB U.S Gulf to the investors however completely omitting the upstream sector cost.
Tellurian IRs discussions have inflated their task cash-flows in some cases by a factor of 17X.
In parallel, the fits have actually carried out a $ 201.3 M benefit shares prepare off-balance sheets diluting the business and have never stopped ransacking the company. What a method to administer a “LNG start-up”.
What are the probabilistic odds of tendering a positive FID at Driftwood?
Driftwood hasnt the sufficient gas supply ( by money, equity gap or production) to cover the Netbacks SP&A.
We know that: a) The gas supply and/or a favorable IRR ( internal rate of return) and b) funding are condition precedents to state a FID.
https://ir.stockpr.com/tellurianinc/sec-filings-email/content/0001104659-22-001897/tm221671d1_8k.htm
$ 905M is the amount of cash raised in stocks since December 2021 (and the company wants $ 200M more of it ). This is the very same company that has invested $50-75M in FID (at a cost basis) and owns a mere $ 80-95M of gas acreage as properties. Where did the cash go?
https://www.statskingdom.com/probability-calculator.html
We assign a. 25 probability to both p( a) and p( b). P( A U B) we select.35.
If a and b are 2 reliant occasions, the possibility for Tellurian to declare an industrial FID on Driftwood is 15%.
The job is stagnating forward: in truth the odds of a non last financial investment decision (FID) for Driftwood are 85%.
Now for a select group of insiders to benefit the likelihood of getting paid given a NO FID in 2022 is 100%.
As Souki and his gang are becoming millionaires, you get poorer and poorer. What you get is an asymmetry.
Dividing The Bonus
At Tellurian we are so big that we divide the reward into 2 classifications.
Lebanese Lance Granmayeh gets 500K +805 K ST-award+ 2.4 M “long-term award”
King Souki is targeting a 1.2 M income, a 3.6 M “short-term 2021 award plus 14M long-term award.
BIG keith TEAGUE chooses 750K plus his $1M award and his $3M 2021 long term award.
Source: ieefa.org
Driftwood LNG is genuinely a loss-center for the investors while the execs take it to the BANK. Like Enron in the end, everybody had or understood suspicion it was a fraud in Houston.
Because the project does not move on inevitably there is a reset down the roadway and what the executives are truly concerned about first is their seat expenses, and secondly a $ 200M bonus plan that can not emerge when the FID is canceled.
What the suits signal next is that Tellurian will move some of the $200M pile directly into the payroll:
” On January 6, 2022, the Compensation Committee of the Board authorized, effective since January 1, 2022, increases in the base salaries of Mr. Simões (from $725,000), Mr. Teague (from $580,000), Mr. Granmayeh (from $460,000), Mr. Belhumeur (from $460,000) and Mr. Sharafeldin (from $412,000), in each case in exchange for the applicable called executive officer accepting the aforementioned modifications to his existing equity-based award contracts”. – Tellurian SEC Form 8K 6/1/2022
Tellurian is the quintessential example of a LNG retail scams: Its brain-master understands that he can take the cash without having to return it back.
At the college we will teach Tellurian inc in the manual books like we teach Enron Corp
. Every participant with a piece of the action in the scheme, NYSE AMEX, the drive-by medias, Tellurian IR, Renee C. Pirrong have all some serious soul searching to do.
The fun is just beginning.
Post by The Driftwood 22 DISCLOSURE Project
Disclaimer
The author might have brief position in stock.
Upgraded on Jan 11, 2022, 12:52 pm
