Woodside Energy Group Ltd. has entered into a definitive agreement to buy Driftwood LNG developer Tellurian Inc. for approximately $900 million, Tellurian said on July 21.

Subsidiaries of Australian E&P Woodside Energy will acquire all the outstanding shares of Tellurian for $1 per share in an all-cash transaction.

The acquisition price represents a 75% premium to Tellurian’s closing price of $0.571 per share on July 19 and a 48% premium to Tellurian’s 30-day volume weighted average price, the company said in a press release.

Tellurian said the company’s value was tied to its “fully permitted" Driftwood project, which the company described as being in advanced stages of pre-final investment decision (FID), and its premier site. Tellurian also attributed value to the company’s “strong relationships” with Bechtel, Baker Hughes and Chart Industries.

The implied total enterprise value of the transaction, including net debt, is approximately $1.2 billion, the company said.

Tellurian has faced financial uncertainty since November. The company sold its Haynesville Shale upstream assets to Aethon on July 1 in a $260 million transaction. On July 9, the Federal Energy Regulatory Commission upheld an earlier decision to extend the completion date for Driftwood LNG to 2029.

In a July 21 letter to shareholders, Martin Houston, executive chairman of Tellurian’s board, said that “despite our recent progress, we’ve been clear that the company’s situation necessitated an exploration of all possible alternatives, including a potential sale.”

In the press release announcing the deal, Houston said the Woodside transaction provides “substantial and certain value for our shareholders.”

The company’s board and senior management weighed an immediate and significant cash return against the risks and costs associated with the timeline to FID and determined “that this offer is in our shareholders’ best interest,” Houston said.

“Woodside is a highly credible operator, with better access to financial resources and a greater ability to manage offtake risk, and I am confident it is the right developer to take Driftwood forward,” he said.

The transaction, which was unanimously approved by Woodside and Tellurian’s boards of directors, is expected to close in fourth-quarter 2024, subject to customary closing conditions. The deal will require approval from Tellurian’s shareholders and regulatory approvals.

Driftwood LNG, Tellurian’s proposed export project in Calcasieu Parish, Louisiana, would have a liquefaction capacity of up to 27.6 million tonnes per annum (mtpa). The project includes up to 20 liquefaction trains, three full containment LNG storage tanks and three marine berths, Tellurian said in a recent SEC filing.

Tellurian most recently reiterated estimates that the total cost of the Driftwood project was around $25 billion, including owners’ costs, transaction costs and contingencies but excluding interest costs incurred during construction and other financing costs.

Lazard is serving as financial adviser and Akin Gump Strauss Hauer & Feld LLP is serving as legal counsel to Tellurian.