Tellurian is facing a going concern warning due to its net losses. The company has reported net losses of $2.9 billion for the year ended June 30, 2022.
This significant loss has raised concerns about the company's ability to continue as a going concern. The warning is a sign that Tellurian may struggle to stay afloat.
Tellurian's net loss is a stark contrast to its initial expectations. In 2019, the company projected a net income of $1.4 billion by 2022.
The going concern warning is a serious issue for Tellurian investors. It may impact their confidence in the company's future prospects.
For another approach, see: Going Concern Warning
Substantial Doubt About Company's Ability to Continue
Tellurian issued a "going concern" warning in its third-quarter report, indicating that its $59.3 million in cash reserves might not be enough to cover its obligations and fund working capital needs for next year.
This warning raises significant concerns about the company's financial stability. The company's cash reserves are a crucial factor in determining its ability to continue operating.
For another approach, see: Cash Net Realizable Value
Tellurian's struggles with funding and construction of its massive $25 billion Driftwood LNG plant project have been well-documented. The project's delays and financial woes have led to a significant decline in the company's shares.
A substantial portion of the company's cash reserves, $59.3 million, might not be enough to cover its obligations. This is a cause for concern, especially considering the company's large-scale project.
The company's formal request to delay the plant's opening by two years has also contributed to its financial struggles. This delay has likely led to increased costs and reduced revenue.
Tellurian's Chairman Martin Houston has acknowledged the company's financial challenges and has taken steps to address them. However, the company's financial situation remains precarious.
Take a look at this: Difference between Financial Accounting and Management Accountant
Sources
- https://www.hartenergy.com/exclusives/troubled-tellurian-issues-going-concern-warning-amid-losses-207107
- https://www.fool.com/investing/2023/12/28/why-tellurian-stock-popped-today/
- https://lngprime.com/americas/tellurians-net-loss-climbs-gas-production-up/96520/
- https://naturalgasintel.com/news/tellurian-warns-of-insolvency-as-it-tries-to-advance-driftwood-lng/
- https://www.fool.com/investing/2024/02/06/why-tellurian-stock-soared-today/
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