Headquartered in Houston, TX, Tellurian Inc. TELL has announced that, with the approval of the shareholders, the company is now closer to locking the deal of its acquisition by Woodside Energy for $1.2 billion, along with its Driftwood LNG export project.
The shareholders’ approval for the acquisition will help solve the financial issues of the company as it has been struggling to fund the Driftwood LNG project and looking for partners.
Overview of TELL’s Agreement With Woodside
TELL, through a press release dated July21, 2024, announced that the company has entered into an agreement with Woodside Energy for its acquisition for an all-cash transaction of about $900 million. The enterprise value of the acquisition would be approximately $1.2 billion, including net debt.
By the terms of the agreement, Woodside will acquire all the outstanding shares of Tellurian for $1.00 per share, which will provide substantial value to the shareholders. This acquisition will relieve TELL of the financial problems it had been facing to fund the Driftwood LNG project. Since the Driftwood project is fully permitted and is in its pre-final investment decision stage, Woodside Energy will be in a better position to bring the required capital and expertise to complete the project.
The agreement was unanimously approved by the boards of both Tellurian and Woodside but required shareholders’ approval to proceed with the acquisition.
Long-Term Outlook of the Acquisition
The buyout, which is projected to be completed by the last quarter of the year, would help Woodside to be positioned as a global LNG powerhouse.
Woodside’s current LNG production, estimated at 10 Million tons per annum of equity, would get boosted to a scalable level. Getting a position in the United States would also allow the company to serve the global customers in a better way and also tap the marketing opportunities in the Atlantic and Pacific Basins.
TELL’s Zacks Rank and Key Picks
Headquartered in Houston, United States, Tellurian Inc. develops low-cost liquefied natural gas projects. The company owns and operates natural gas liquefaction and storage facilities and loading terminals. Currently, TELL has a Zacks Rank #4 (Sell).
Investors interested in the energy sector might look at some other stocks like Targa Resources Corp. TRGP,Core Laboratories Inc. CLBand Nine Energy Service, Inc. NINE.While Targa Resources currently sports a Zacks Rank #1 (Strong Buy), Core Laboratories and Nine Energy carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Targa Resources Corp. is an energy infrastructure company that derives its revenues from gathering, compressing, treating, processing and selling natural gas. The Zacks Consensus Estimate for TRGP's 2024 earnings indicates 61.20% year-over-year growth.
Core Laboratories Inc. provides reservoir description and production enhancement services and products to the oil and gas industry, principally in the United States, Canada and internationally. CLB’s expected EPS (earnings per share) growth rate for three to five years is currently 22.20%, which compares favorably with the industry's growth rate of 14.50%.
Nine Energy Service, Inc. provides onshore completion and production services for unconventional oil and gas resource development. NINE’s expected EPS growth rate for the current quarter is 23.08%, which compares favorably with the industry's growth rate of 7.31%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
