Co rpo rate pre se ntatio n June 2018 Cautio nar y state me nts - PowerPoint PPT Presentation

Co rpo rate pre se ntatio n June 2018

Cautio nar y state me nts F o rwa rd-lo o king sta te me nts T he info rma tio n in this pre se nta tio n inc lude s “fo rwa rd-lo o king sta te me nts” within the me a ning o f Pla ns fo r the Pe rmia n Glo b a l Ac c e ss Pipe line a nd Ha yne sville Glo b a l Ac c e ss Pipe line pro je c ts Se c tio n 27A o f the Se c uritie s Ac t o f 1933, a s a me nde d, a nd Se c tio n 21E o f the Se c uritie s E xc ha ng e disc usse d he re in a re in the e a rly sta g e s o f de ve lo pme nt a nd nume ro us a spe c ts o f the pro je c ts, Ac t o f 1934, a s a me nde d. All sta te me nts o the r tha n sta te me nts o f histo ric a l fa c t a re fo rwa rd-lo o king suc h a s de ta ile d e ng ine e ring a nd pe rmitting , ha ve no t c o mme nc e d . Ac c o rding ly, the na ture , sta te me nts. T he wo rds “a ntic ipa te ,” “a ssume ,” “b e lie ve ,” “b udg e t,” “e stima te ,” “e xpe c t,” timing , sc o pe a nd b e ne fits o f tho se pro je c ts ma y va ry sig nific a ntly fro m o ur c urre nt pla ns due to a “fo re c a st,” “initia l,” “inte nd,” “ma y,” “mo de l,” “pla n,” “po te ntia l,” “pro je c t,” “sho uld,” “will,” wide va rie ty o f fa c to rs, inc luding future c ha ng e s to the pro po sa ls. Altho ug h the Driftwo o d pipe line “wo uld,” a nd simila r e xpre ssio ns a re inte nde d to ide ntify fo rwa rd-lo o king sta te me nts. T he fo rwa rd- pro je c t is sig nific a ntly mo re a dva nc e d in te rms o f e ng ine e ring , pe rmitting a nd o the r fa c to rs, its lo o king sta te me nts in this pre se nta tio n re la te to , a mo ng o the r thing s, future c o ntra c ts a nd c o ntra c t c o nstruc tio n, b udg e t a nd timing a re a lso sub je c t to sig nific a nt risks a nd unc e rta intie s. te rms, ma rg ins, re turns a nd pa yb a c k pe rio ds, future c a sh flo ws a nd pro duc tio n, e stima te d ultima te re c o ve rie s, we ll pe rfo rma nc e a nd de live ry o f L NG, future c o sts, pric e s, fina nc ia l re sults, ne t a sse t T he info rma tio n o n slide s 7, 8, 9, 10, 11 a nd 12 is me a nt fo r illustra tive purpo se s o nly a nd do e s no t va lue s, ra te s o f re turn, liq uidity a nd fina nc ing , re g ula to ry a nd pe rmitting de ve lo pme nts, c o nstruc tio n purpo rt to sho w e stima te s o f a c tua l future fina nc ia l pe rfo rma nc e . Simila rly, NAV a nd o the r a nd pe rmitting o f pipe line s a nd o the r fa c ilitie s, future de ma nd a nd supply a ffe c ting L NG a nd e stima te s o f future e q uity va lue s a re pre se nte d fo r illustra tive purpo se s a nd do no t purpo rt to sho w g e ne ra l e ne rg y ma rke ts a nd o the r a spe c ts o f o ur b usine ss a nd o ur pro spe c ts a nd tho se o f o the r future tra ding va lue s o f a ny se c uritie s. industry pa rtic ipa nts. T he fo rwa rd-lo o king sta te me nts ma de in o r in c o nne c tio n with this pre se nta tio n spe a k o nly a s o f the Our fo rwa rd-lo o king sta te me nts a re b a se d o n a ssumptio ns a nd a na lyse s ma de b y us in lig ht o f o ur da te he re o f. Altho ug h we ma y fro m time to time vo lunta rily upda te o ur prio r fo rwa rd-lo o king e xpe rie nc e a nd o ur pe rc e ptio n o f histo ric a l tre nds, c urre nt c o nditio ns, e xpe c te d future sta te me nts, we disc la im a ny c o mmitme nt to do so e xc e pt a s re q uire d b y se c uritie s la ws. de ve lo pme nts, a nd o the r fa c to rs tha t we b e lie ve a re a ppro pria te unde r the c irc umsta nc e s. T he se sta te me nts a re sub je c t to nume ro us kno wn a nd unkno wn risks a nd unc e rta intie s whic h ma y c a use Re se rve s a nd re so urc e s a c tua l re sults to b e ma te ria lly diffe re nt fro m a ny future re sults o r pe rfo rma nc e e xpre sse d o r implie d b y the fo rwa rd-lo o king sta te me nts. T he se risks a nd unc e rta intie s inc lude tho se de sc rib e d in the “Risk F a c to rs” se c tio n o f o ur Annua l Re po rt o n F o rm 10-K fo r the fisc a l ye a r e nde d De c e mb e r 31, 2017 E stima te s o f no n-pro ve d re se rve s a nd re so urc e s a re b a se d o n mo re limite d info rma tio n, a nd a re file d with the Se c uritie s a nd E xc ha ng e Co mmissio n (the “SE C”) o n Ma rc h 15, 2018 a nd o the r filing s sub je c t to sig nific a ntly g re a te r risk o f no t b e ing pro duc e d, tha n a re e stima te s o f pro ve d re se rve s. with the SE C, whic h a re inc o rpo ra te d b y re fe re nc e in this pre se nta tio n. Ma ny o f the fo rwa rd-lo o king sta te me nts in this pre se nta tio n re la te to e ve nts o r de ve lo pme nts a ntic ipa te d to o c c ur nume ro us ye a rs in the future , whic h inc re a se s the like liho o d tha t a c tua l re sults will diffe r ma te ria lly fro m tho se indic a te d in suc h fo rwa rd-lo o king sta te me nts. 2 Disc la ime r

Co nte nts  Busine ss mode l  Driftwo o d a sse ts  Ma rke t funda me nta ls  Additio na l de ta il 3

Glo bal c all o n U.S. natur al gas U.S. supply push… … and global de mand pull Output fro m se le c te d sha le b a sins (1) Glo b a l L NG pro duc tio n c a pa c ity mtpa mtpa T a ke a wa y Supply infra struc ture 221 infra struc ture 150 127 Re q uire d 101 Re q uire d (3) Unde r c o nstruc tio n 46 49 Unde r Othe r c o nstruc tio n 49 U.S. 565 532 382 344 (2) 2017 2025 Gro wth 2017 2025 Ne w c a pa c ity Bc f/ d 51 71 20 46 75 29 So urc e : Wo o d Ma c ke nzie , T e lluria n Re se a rc h. No te s: (1) Inc lude s the Pe rmia n, Ha yne sville , Utic a , Ma rc e llus, Ana d a rko , E a g le F o rd . (2) Ba se d o n a d e ma nd g ro wth e stima te o f 4.5% po st-2020. (3) Ca pa c ity re q uire d to me e t d e ma nd g ro wth po st-2020. 4 Busine ss mo de l

Building a lo w-c o st glo bal gas busine ss Driftwood Holding s pa rtne rship – inte g ra te d, low- c ost Upstre a m 11,620 a c re s in the Ha yne sville with 1.4 T c f re so urc e ~$7 b illio n (1) o f pipe line infra struc ture pro je c ts in de ve lo pme nt Pipe line L iq ue fa c tio n ~$15 b illio n o f liq ue fa c tio n infra struc ture in de ve lo pme nt Ma rke ting I nte rna tio na l de live ry o f L NG c a rg o e s sta rte d in 2017 No te : (1) HGAP a nd PGAP pro je c ts a re in e a rly sta g e s a nd re ma in und e r re vie w. 5 Busine ss mo de l

T e llur ian’s diffe r e ntiating fac to r s E xpe r ie nc e d Wor ld c lass F ixe d c ost E PC Re gulator y Unique busine ss manage me nt par tne r s c ontr ac t c e r tainty mode l     Ma na g e me nt Gua ra nte e d F E RC I nte g ra te d: ― Upstre a m re se rve s tra c k re c o rd a t lump sum sc he duling ― Pipe line ne two rk Che nie re a nd turnke y no tic e indic a te s ― L BG Gro up c o ntra c t with pe rmits will b e NG te rmina l Be c hte l re c e ive d b y   45% o f T e lluria n Ja nua ry 2019 L NG de live re d F OB  o wne d b y $15.2 b illio n fo r U.S. Gulf Co a st a t fo unde rs a nd 27.6 mtpa $3.00/ mmBtu ma na g e me nt c a pa c ity 6 Busine ss mo de l

Busine ss mo de l Na sda q : T E L L  T e lluria n will o ffe r e q uity inte re st in Driftwo o d Ho lding s Custome r / Par tne r  Driftwo o d Ho lding s will c o nsist o f a Pro duc tio n Co mpa ny, a Pipe line Ne two rk a nd a n L NG ~60% ~40% 100% E quity owne rship T e rmina l (~27.6 mtpa )  E quity will c ost ~$1,500 pe r tonne Dr iftwood Holdings  Custo me r/ Pa rtne r will re c e ive e q uity L NG a t ta ilg a te o f Driftwo o d L NG te rmina l a t c o st  ating c osts e xpe c te d to b e Var iable and ope r ~12 OB (inc luding ma inte na nc e ) ~$3.00/ mmBtu F mtpa Pr oduc tion Pipe line L NG T e llur ian Company Ne twor k T e r minal Mar ke ting ~16 mtpa  T e llur ian will r e tain ~12 mtpa and ~40% of the asse ts Custome r s  E stimate d ~$2 billion annual c ash flow to T e llur ian 7 Busine ss mo de l

Dr iftwo o d Ho ldings’ c o nstr uc tio n budge t Phase 1 (1) ull de ve lopme nt (1) Sc e nar io F Capac ity (mtpa) 11.0 27.6 Upstre a m re so urc e ne e d (2) , T c f ~15 ~40 Inve stme nt ($ billions) ― T e rmina l $ 7.6 $ 15.2 ― Pipe line (3) $ 1.1 $ 2.2 ― Owne r's c o sts a nd o the r $ 1.1 $ 2.1 ― Upstre a m – a c q uisitio n $ 1.0 $ 2.0 ― Upstre a m – drilling c a pe x (ne t o f sa le s) (4) $ 1.2 $ 2.5 T otal $ 12.0 $ 24.0 T r ansac tion pr ic e ($ pe r tonne ) $1,500 $1,500 Capac ity split mtpa % mtpa % ─ Pa rtne r 8.0 16.0 72% 58% ─ T e lluria n 3.0 11.6 28% 42% No te s: (1) Pha se 1 o f the E PC a g re e me nt re fle c ts 2 pla nts, 1 b e rth, a nd 2 ta nks; full d e ve lo pme nt re fle c ts 5 pla nts, 3 b e rths, a nd 3 ta nks. (3) Pipe line a sse t fund ing to b e re vie we d fo llo wing re sults o f o pe n se a so n; illustra tive fina nc ia ls inc lud e Driftwo o d pipe line o nly. (2) Re so urc e ne e d fo r 30-ye a r pe rio d . (4) F o r Pha se 1, d rilling c a pita l e xpe nd iture s o f $3.4 b illio n, ne t o f $2.2 b illio n o f g a s sa le s. 8 Busine ss mo de l