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October 2018 Corporate Presentation – Tellurian Inc.

Tellurian Inc. · Oct 26, 2018 · 39 slides

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Slides

  1. October 2018 Corporate Presentation – Tellurian Inc. – slide 1
    Corporate presentation October 2018
  2. October 2018 Corporate Presentation – Tellurian Inc. – slide 2
    Recent updates 3 Recent Updates
  3. October 2018 Corporate Presentation – Tellurian Inc. – slide 3
    Driftwood financing update Introducing levered structure Driftwood schedule Provides Partners with lower equity investment and non- Estimated Catalyst consolidated debt timeline Reduces equity investment to 500 per tonne Final…
  4. October 2018 Corporate Presentation – Tellurian Inc. – slide 4
    Driftwood Holdings levered structure Equity Levered Based on Full Development (5 plants) structure structure Project capacity (mtpa) 27.6 27.6 Partners equity ( billion) 24 8 Investment ( per tonne) 1,500 500 Project debt (…
  5. October 2018 Corporate Presentation – Tellurian Inc. – slide 5
    Driftwood Holdings financing Full Development Equity structure (previous) Levered structure (current) billions billions 7.5 7.0 0.9 0.9 2.2 3.5 2.2 7.3 7.3 20.0 1.9 1.9 24.0 Total capital uses: 28 billion Total capital…
  6. October 2018 Corporate Presentation – Tellurian Inc. – slide 6
    Core presentation 7 Core presentation
  7. October 2018 Corporate Presentation – Tellurian Inc. – slide 7
    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 mtpa mtpa Supply 716 220-372 infrastructure Takeaway 152 152 107-259 mtpa 150…
  8. October 2018 Corporate Presentation – Tellurian Inc. – slide 8
    Global commodity requires low-cost solutions 967 LNG Storage - 2018 Japan + Korea terminals: 697 Bcf Bcf of LNG 821 LNG vessels: 821 Bcf storage of LNG 609 517 vessels 2018 2020 of 18 cargoes loaded 15 per day 2018…
  9. October 2018 Corporate Presentation – Tellurian Inc. – slide 9
    Integrated to manage three risks Basin Basis Construction 11,620 Haynesville acres 7 billion of pipeline projects, 15 billion liquefaction 1.4 Tcf of resource providing access to Haynesville, project in Louisiana Intend to…
  10. October 2018 Corporate Presentation – Tellurian Inc. – slide 10
    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…
  11. October 2018 Corporate Presentation – Tellurian Inc. – slide 11
    Pipeline network Bringing low-cost gas to Southwest Louisiana 1 Driftwood Pipeline(1) Capacity (Bcf/d) 4.0 Cost ( billions) 2.2 Length (miles) 96 Diameter (inches) 48 Compression (HP) 274,000 2 Status FERC approval pending 2…
  12. October 2018 Corporate Presentation – Tellurian Inc. – slide 12
    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…
  13. October 2018 Corporate Presentation – Tellurian Inc. – slide 13
    Expecting to eliminate HH price risk Henry Hub gas price (price index for most U.S LNG projects) Opportunities for further gas supply cost savings: /mmBtu Buy Henry Hub gas when prices are lower than 2.25 (curtail Haynesville…
  14. October 2018 Corporate Presentation – Tellurian Inc. – slide 14
    Business model Integrated model Production Company, Pipeline Partners Network, LNG Terminal (8 billion in equity) Variable and operating costs expected to be 3.00/mmBtu FOB 60% Equity ownership 40% 100% Financing Driftwood…
  15. October 2018 Corporate Presentation – Tellurian Inc. – slide 15
    Driftwood Holdings financing Full Development Capacity (mtpa) 27.6 Capital investment ( billions) Liquefaction terminal(1) 15.2 Owners cost & contingency(2) 1.9 Driftwood pipeline(3) 2.2 HGAP 1.4 PGAP 3.7 Upstream 2.2 Fees(4)…
  16. October 2018 Corporate Presentation – Tellurian Inc. – slide 16
    Driftwood Holdings operating costs /mmBtu 1.50 0.75 0.22 4.50 0.79 3.00 0.36 2.25 0.88 Drilling & Operating Gathering, Contingency Delivered Liquefaction Total variable Debt (3) FOB (1) completion processing & &…
  17. October 2018 Corporate Presentation – Tellurian Inc. – slide 17
    Margins and price signals Netback prices to the Gulf Coast(1) 2018 JKM forward strip up 2.33 since November 2017 /mmBtu /mmBtu 20 13 Oct 2018 GCM(2) Avg. Cal 2018 Sep-18 19 October 2018: 12 JKM +38% 8.29/mmBtu since Nov-17 15…
  18. October 2018 Corporate Presentation – Tellurian Inc. – slide 18
    Returns to Driftwood Holdings partners U.S. Gulf Coast netback price (/mmBtu) 6.00 8.00 10.00 15.00 Driftwood LNG, FOB U.S. Gulf Coast (4.50) (4.50) (4.50) (4.50) (/mmBtu) Margin (/mmBtu) 1.50 3.50 5.50 10.50 Annual partner cash…
  19. October 2018 Corporate Presentation – Tellurian Inc. – slide 19
    Value to Tellurian Inc. 2 Plants 5 Plants USGC Annual cash Cash flow Annual cash Cash flow netback Margin(1) flows(2) per share(3) flows(2) per share(3) (/mmBtu) (/mmBtu) ( millions) (/share) (/millions) (/share) 6.00 1.50 235 0.95…
  20. October 2018 Corporate Presentation – Tellurian Inc. – slide 20
    Marketing process Driftwood Holdings 2018 Activity Q1 Q2 Q3 Q4 Launch marketing Feb 15 35 customers/partners in data room Narrow candidates Negotiate agreements Commercialization by Q4 2018 21 Marketing process
  21. October 2018 Corporate Presentation – Tellurian Inc. – slide 21
    Tellurian differentiated to provide value Experienced World-class Fixed-cost EPC Regulatory Unique business management partners contract certainty model Management Guaranteed FERC Integrated track record at lump sum scheduling…
  22. October 2018 Corporate Presentation – Tellurian Inc. – slide 22
    Contact us Amit Marwaha Social media Director, Investor Relations & Finance +1 832 485 2004 TellurianLNG amit.marwahatellurianinc.com Joi Lecznar SVP, Public Affairs & Communication +1 832 962 4044…
  23. October 2018 Corporate Presentation – Tellurian Inc. – slide 23
    Additional detail 24 Additional detail
  24. October 2018 Corporate Presentation – Tellurian Inc. – slide 24
    Demand pull Demand outlook mtpa Demand(2) 600 107-259 mtpa of new liquefaction 91-220 mtpa capacity required 500 potential by 2025(1) growth 400 Under 300 construction 200 In operation 100 0 2015 2016 2017 2018 2019…
  25. October 2018 Corporate Presentation – Tellurian Inc. – slide 25
    Owning pipeline infrastructure mitigates basis risk Tolling model SPA model Equity model Customer incurs risk Developer incurs risk Own the infrastructure Competition between customers Developer consolidates pipeline True cost…
  26. October 2018 Corporate Presentation – Tellurian Inc. – slide 26
    Building a low-cost global gas business April February December Feb/March June Management, Merge with Raise Announce Raise friends and Magellan approximately open seasons approximately family invest Petroleum, 100 million in for…
  27. October 2018 Corporate Presentation – Tellurian Inc. – slide 27
    Funding and ownership Sources (1) ( millions) 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.…
  28. October 2018 Corporate Presentation – Tellurian Inc. – slide 28
    Driftwood vs. competitors cost per tonne Capacity, mtpa 27.6 31.2 10.0 16.5 14.0 9.0 15.6 9.0 8.9 5,025 4,144 3,774 (2) 2,657 2,214 (1) 1,603 1,654 1,270 1,428 Driftwood Qatar New Mozambique Yamal LNG Canada APLNG…
  29. October 2018 Corporate Presentation – Tellurian Inc. – slide 29
    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,…
  30. October 2018 Corporate Presentation – Tellurian Inc. – slide 30
    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…
  31. October 2018 Corporate Presentation – Tellurian Inc. – slide 31
    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 32…
  32. October 2018 Corporate Presentation – Tellurian Inc. – slide 32
    Construction budget breakdown (1) Owners' costs Equipment and materials 12% 24% Contingency and provisional 24% sums (2) 17% Direct labor 24% Overhead (mostly labor) Notes: Based on Driftwood LNG full development. (1)…
  33. October 2018 Corporate Presentation – Tellurian Inc. – slide 33
    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 & contingency(2) 1.1 1.5 1.9 Driftwood…
  34. October 2018 Corporate Presentation – Tellurian Inc. – slide 34
    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 16.6 EPC 7.8 2.4 10.2 10.3 Pipeline 0.4 0.0 0.4 1.5(1) Owners cost, contingency &…
  35. October 2018 Corporate Presentation – Tellurian Inc. – slide 35
    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 feedgas requirement 20 stresses basin supply 15 10 8.3 8.2 5.2 5 3.2 2.8 2.2…
  36. October 2018 Corporate Presentation – Tellurian Inc. – slide 36
    Production Company strategy Objectives Current assets Acquire and develop long-life, low-cost natural Tellurian acquired 11,620 net acres in the Haynesville gas resources shale for 87.8 million in Q4 2017 Low geological risk…
  37. October 2018 Corporate Presentation – Tellurian Inc. – slide 37
    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…
  38. October 2018 Corporate Presentation – Tellurian Inc. – slide 38
    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…
  39. October 2018 Corporate Presentation – Tellurian Inc. – slide 39
    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…

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