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August 2018 Corporate Presentation – Tellurian Inc.

Tellurian Inc. · Aug 14, 2018 · 39 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. August 2018 Corporate Presentation – Tellurian Inc. – slide 1
    Corporate presentation August 2018
  2. August 2018 Corporate Presentation – Tellurian Inc. – slide 2
    Global call on U.S. natural gas U.S. supply push and global demand pull Output from selected shale basins(1) Global LNG production capacity Takeaway Supply infrastructure 221 infrastructure 150 101 Required 127 Required(3) 49…
  3. August 2018 Corporate Presentation – Tellurian Inc. – slide 3
    Global commodity requires low-cost solutions 902 LNG Storage - 2017 751 Japan + Korea terminals: 633 Bcf Bcf of LNG LNG vessels: 751 Bcf storage 609 of LNG 507 vessels 2017 2020 of 17 cargoes 13 loaded per day 2017…
  4. August 2018 Corporate Presentation – Tellurian Inc. – slide 4
    Managing three risks Construction Basin Basis Site selection and execution Adequate natural gas supply Reliable access to pipelines Successful projects require a sophisticated strategy to manage complex risks 5 Business model
  5. August 2018 Corporate Presentation – Tellurian Inc. – slide 5
    Building a low-cost global gas business Driftwood Holdings partnership integrated, low-cost Upstream 11,620 acres in the Haynesville with 1.4 Tcf resource Pipeline 7 billion(1) of pipeline infrastructure projects in…
  6. August 2018 Corporate Presentation – Tellurian Inc. – slide 6
    Business model Nasdaq: TELL Tellurian will offer equity interests in Driftwood Holdings Customer/Partner Driftwood Holdings will consist of a Production Company, a Pipeline Network and an LNG 60% Equity ownership 40% 100% Terminal…
  7. August 2018 Corporate Presentation – Tellurian Inc. – slide 7
    Tellurians differentiating factors Experienced World class Fixed cost EPC Regulatory Unique business management partners contract certainty model Management Guaranteed FERC Integrated: track record at lump sum scheduling Upstream…
  8. August 2018 Corporate Presentation – Tellurian Inc. – slide 8
    Driftwood LNG terminal Driftwood LNG terminal Land 1,000 acres near Lake Charles, LA Capacity 27.6 mtpa Up to 20 trains of 1.38 mtpa each Trains Chart heat exchangers GE LM6000 PF+ compressors 3 storage tanks Storage 235,000…
  9. August 2018 Corporate Presentation – Tellurian Inc. – slide 9
    LNG projects require supply optionality Bcf/d Dry natural gas production by basin, July 2018 year-to-date 30 26.6 25 10 mtpa plant with 1.5 bcf/d 20 feedgas requirement stresses 15 basin supply 10 8.3 8.2 5.2 5 3.2 2.8 2.2…
  10. August 2018 Corporate Presentation – Tellurian Inc. – slide 10
    Pipeline network 1 Driftwood Pipeline(1) Capacity (Bcf/d) 4.0 Bringing low-cost gas to Southwest Louisiana Cost ( billions) 2.2 Length (miles) 96 Diameter (inches) 48 Compression (HP) 274,000 Status FERC approval pending 2…
  11. August 2018 Corporate Presentation – Tellurian Inc. – slide 11
    Driftwood Holdings financing Full development Capacity (mtpa) 27.6 Capital investment ( billions) Liquefaction terminal(1) 15.2 Owners cost(2) 1.9 Driftwood pipeline(3) 2.2 HGAP (Haynesville & SCOOP/STACK) 1.4 PGAP (Permian)…
  12. August 2018 Corporate Presentation – Tellurian Inc. – slide 12
    Driftwood Holdings operating costs Total cost of 3/mmBtu locks in low cost of supply /mmBtu 0.75 0.22 0.79 3.00 0.36 2.25 0.88 Drilling and Operating Gathering, Contingency Delivered Liquefaction Total completion(1)…
  13. August 2018 Corporate Presentation – Tellurian Inc. – slide 13
    Margins and price signals Netback prices to the Gulf Coast(1) 2018 JKM forward prices up 2.33 since November 2017 Avg. 2018 /mmBtu Sep 2018 GCM(2) /mmBtu JKM price up 25 6 Aug 2018: 11 32% since 8.85/mmBtu Nov-17 10 20 9 15…
  14. August 2018 Corporate Presentation – Tellurian Inc. – slide 14
    Returns to Driftwood Holdings partners(1) U.S. Gulf Coast netback price (/mmBtu) 6.00 10.00 15.00 Driftwood LNG, FOB U.S. Gulf Coast (3.00) (3.00) (3.00) Margin (/mmBtu) 3.00 7.00 12.00 Annual partner cash flow ( millions)(2)…
  15. August 2018 Corporate Presentation – Tellurian Inc. – slide 15
    Value to Tellurian Inc. Cash flow analysis Analyst estimates, NAV and trading range per share 80 Annual cash flows Full development ( millions) 70 USGC netback Margin(1) Full 60 (/mmBtu) (/mmBtu) Phase 1(2) development(2) 50…
  16. August 2018 Corporate Presentation – Tellurian Inc. – slide 16
    Marketing process Driftwood Holdings 2018 Activity Q1 Q2 Q3 Q4 Launch marketing Feb 15 25 customer/partners in data room Narrow candidates Negotiate agreements Commercialize Phase 1 by Q3 or Q4 2018 17 Business model
  17. August 2018 Corporate Presentation – Tellurian Inc. – slide 17
    Conclusions A global LNG demand pull has coincided with a supply push from the U.S., signaling the need for additional liquefaction capacity Successful projects manage risks related to construction of infrastructure, supply basin…
  18. August 2018 Corporate Presentation – Tellurian Inc. – slide 18
    Contact us Amit Marwaha Joi Lecznar Director, Investor Relations & Finance SVP, Public Affairs & Communication +1 832 485 2004 +1 832 962 4044 amit.marwahatellurianinc.com joi.lecznartellurianinc.com TellurianLNG 19 Contacts
  19. August 2018 Corporate Presentation – Tellurian Inc. – slide 19
    2017 Additional detail
  20. August 2018 Corporate Presentation – Tellurian Inc. – slide 20
    Site characteristics determine long-run costs Access to pipeline infrastructure Access to power and water Support from local communities Site size over 1,000 acres Insulated from surge, wind, and local populations Berth…
  21. August 2018 Corporate Presentation – Tellurian Inc. – slide 21
    Construction budget breakdown(1) (2) Owners' costs Equipment and materials 12% 24% Contingency and provisional 24% sums (3) 17% Direct labor 24% Overhead (mostly labor) Notes: (1) Based on Driftwood LNG full…
  22. August 2018 Corporate Presentation – Tellurian Inc. – slide 22
    Owning pipeline infrastructure mitigates basis risk Can you reach your selected basin For how long Tolling model SPA model Equity model Customer incurs risk Developer incurs risk Own the infrastructure Competition between…
  23. August 2018 Corporate Presentation – Tellurian Inc. – slide 23
    Low-cost LNG is built before the fence line Illustrative cost inflation Basis +1-2/mmBtu in costs from long-term cost Pipeline access and control escalation as legacy agreements roll off of infrastructure is key Basin…
  24. August 2018 Corporate Presentation – Tellurian Inc. – slide 24
    Corpus Christi LNG and Driftwood LNG examples Corpus Christi LNG Driftwood LNG ( billions) T1-2 T3 T1-3 Plants 1-3 Capacity (mtpa) 9.0 4.5 13.5 16.5 EPC 7.8 2.4 10.2 10.3 Pipeline 0.4 0.0 0.4 1.5(1) Owners cost & contingency(2)…
  25. August 2018 Corporate Presentation – Tellurian Inc. – slide 25
    Driftwood Holdings financing 2-Plant Case 3-Plant Case Full development Capacity (mtpa) 11.0 16.6 27.6 Capital investment ( billions) Liquefaction terminal(1) 7.6 10.3 15.2 Owners cost(2) 1.1 1.5 1.9 Driftwood pipeline(3) 1.1 1.5…
  26. August 2018 Corporate Presentation – Tellurian Inc. – slide 26
    Regulatory and cost certainty Regulatory schedule clarity Guaranteed lump sum turnkey contract with Bechtel per tonne Catalyst Estimated timeline 700 Final Environmental Impact Statement 12 October 2018 550 FERC order and…
  27. August 2018 Corporate Presentation – Tellurian Inc. – slide 27
    Production Company strategy Objectives Current assets Acquire and develop long-life, low-cost natural gas Tellurian acquired 11,620 net acres in the Haynesville resources shale for 87.8 million in Q4 2017 Low geological risk…
  28. August 2018 Corporate Presentation – Tellurian Inc. – slide 28
    100 Tcf available resources in Haynesville Driftwood Holdings plans to fund and purchase 15 Tcf Potential Target size: acquisition targets: Range of resources per target (Tcf)(1): Large 15 Tcf 15 Medium 9 to 15 Tcf 9 15…
  29. August 2018 Corporate Presentation – Tellurian Inc. – slide 29
    Demand pull Demand outlook mtpa 500 127 mtpa of new Demand(2) liquefaction capacity required 107 mtpa 400 by 2025(1) Under 300 construction 200 In operation 100 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024…
  30. August 2018 Corporate Presentation – Tellurian Inc. – slide 30
    U.S. natural gas needs global market access 13 Bcf/d of incremental production; associated gas at risk of flaring without infrastructure investment LNG liquefaction terminal Operating/under construction Future Required future…
  31. August 2018 Corporate Presentation – Tellurian Inc. – slide 31
    Building a low-cost global gas business 2016 2017 2018 60 Upstream million acquisition Pipeline 207 100 50 115 Merger open 25 million million million million LSTK seasons million April/ January February June November December…
  32. August 2018 Corporate Presentation – Tellurian Inc. – slide 32
    Funding and ownership Sources (1) ( million) Ownership(1)(2) (%) Bechtel Mgmt, investment, family and ATM Free Float Total 50 friends, 60 program, 38% 19% GE 10 investment, 25 576 million 241 million shares Total C.…
  33. August 2018 Corporate Presentation – Tellurian Inc. – slide 33
    Driftwood vs. competitors cost per tonne Capacity, mtpa 9.5 27.6 10.0 16.5 13.0 9.0 15.6 9.0 8.9 5,025 4,144 3,774 2,657 per tonne 2,083 1,500 1,603 1,654 1,428 Qatar New Driftwood Mozambique Yamal LNG Canada APLNG…
  34. August 2018 Corporate Presentation – Tellurian Inc. – slide 34
    Integrated model prevalent internationally Projects include: Americas Europe Mideast/Africa Australasia IOC Atlantic LNG, Snohvit, Yamal Angola LNG, EG LNG, APLNG, Darwin, Peru LNG, LNG LNG Damietta, ELNG, Yemen GLNG, Gorgon,…
  35. August 2018 Corporate Presentation – Tellurian Inc. – slide 35
    Driftwood schedule Months - 12 24 36 48 (1) Sabine Cameron First wave Cove Point Corpus (1) Southern (1) Freeport DWLNG Second wave Magnolia Golden Pass Lake Charles Venture Global Pre-filing FERC…
  36. August 2018 Corporate Presentation – Tellurian Inc. – slide 36
    Key terms of EPC agreements with Bechtel 700 per tonne 550 490 500 380 Phase 1 Phase 2 Phase 3 Phase 4 Total Capacity 11.0 5.5 5.5 5.5 27.6 Trains 8 4 4 4 20 Storage facilities 2 0 1 0 3 Berths 1 1 1 0 3 37…
  37. August 2018 Corporate Presentation – Tellurian Inc. – slide 37
    Pipeline Network Gillis Market Area Permian Supply Area Haynesville Supply Area Interconnects Interconnects Interconnects KMPL CTPL Texas Gas ETC Comanche OXY Northern Natural Crosstex CenterPoint Texas Gas TETCO Cameron Pine…
  38. August 2018 Corporate Presentation – Tellurian Inc. – slide 38
    PGAP connects constrained gas to SWLA Takeaway constraints in the Permian Southwest Louisiana demand Bcf/d Texas Louisiana 16 Eunice, LA 14 Permian Gillis, LA production 12 Southwest Louisiana firm demand(1)(2) 10 (bcf/d) 12…
  39. August 2018 Corporate Presentation – Tellurian Inc. – slide 39
    Haynesville type curve comparison Comparative type curve statistics Cumulative production normalized to 7,500(3) Tellurian Peer A Peer B Peer C Peer D Bcf 6.0 Type curve detail Peer D NLA core / NLA Peer B De Soto / North…

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