Item 8.01 Other Events.

Tellurian Inc. (the "Company") continues to evaluate, and discuss with potential partners, the scope and other aspects of the Driftwood Project in light of the evolving economic environment, investor needs and other factors. As a result of these discussions, the Company is evaluating certain potential changes to the project that, among other things, could significantly reduce the overall cost of Phase 1 of the project. Whether the Company implements changes to the project will be based on a variety of factors, including the results of the Company's continuing analysis, changing business conditions and investor feedback. To date, approximately 30% of the engineering for Phase 1 of the Driftwood LNG terminal has been completed with Bechtel Oil, Gas and Chemicals, Inc.

Although the Company has not completed its financial statements as of and for the quarter ended June 30, 2020, as of June 30, 2020, on an unaudited basis, the Company's capital resources consisted of approximately $88.3 million of cash and cash equivalents on a consolidated basis, of which approximately $40.1 million was maintained at a wholly owned subsidiary of Tellurian Production Holdings LLC. Subsequently, in early July, the Company collected a receivable of approximately $7.0 million from the sale of an LNG cargo to an unrelated third party. As disclosed in the Company's proxy statement for the 2020 annual stockholders' meeting, the Company has agreed to reimburse one of its directors for certain expenses associated with a lawsuit with Cheniere Energy, Inc. In addition to amounts paid as of June 30, 2020, the Company expects to incur related expenses of approximately $4.5 million.

Declines in natural gas prices are likely to lead to the Company incurring substantial impairment charges relating to its reserves and the carrying value of its assets, including in the second quarter of 2020. Relatedly, absent a significant increase in those prices, the proved undeveloped reserves reflected in the Company's December 31, 2020 annual reserve report may be substantially reduced relative to the proved undeveloped reserves included in the Company's December 31, 2019 reserve report, and the PV-10 and standardized measure value of the reserves may decline accordingly.

© Edgar Online, source Glimpses