Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2017 | |
| Accounting Policies [Abstract] | |
| Basis of Presentation |
Basis of Presentation
Our Consolidated Financial Statements were prepared in accordance with GAAP. The Consolidated Financial Statements include the accounts of Tellurian Inc. and its wholly and majority owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
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| Segments |
Segments
Management allocates resources and assesses financial performance on a consolidated basis. As such, for the purposes of financial reporting under GAAP during the years ended December 31, 2017 and 2016, the Company operated as a single operating segment.
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| Use of Estimates |
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. Management evaluates its estimates and related assumptions on a regular basis. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates.
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| Fair Value |
Fair Value
The Company uses three levels of the fair value hierarchy of inputs to measure the fair value of an asset or a liability. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are inputs other than quoted prices included within Level 1 that are directly or indirectly observable for the asset or liability. Level 3 inputs are inputs that are not observable in the market.
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| Goodwill |
Goodwill
Goodwill resulting from a business combination is not subject to amortization. The Company tests such goodwill at the reporting unit level for impairment on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount.
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| Revenue Recognition |
Revenue Recognition
Revenues associated with sales of natural gas, condensate, LNG and all other sources are recorded when title passes to the customer, net of royalties, discounts and allowances, as applicable. Purchases and sales of inventory with the same counterparty that are entered into in contemplation of one another (including buy/sell arrangements) are combined and recorded on a net basis and reported in “LNG Sales” on the Consolidated Statements of Operations. Payments received relating to future revenues are deferred and recognized when all revenue recognition criteria are met.
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| Cash Equivalents |
Cash Equivalents
We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents.
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| Concentration of Cash |
Concentration of Cash
We maintain cash balances at financial institutions, which may at times be in excess of federally insured levels. We have not incurred losses related to these balances to date.
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| Property, Plant and Equipment Cost Basis |
Property, Plant and Equipment
Natural gas development and production activities are accounted for using the successful efforts method of accounting. Costs incurred to acquire a property (whether unproved or proved) are capitalized when incurred. Lease rentals are expensed as incurred. Natural gas exploratory costs are expensed as incurred and costs to develop proved reserves are capitalized. All costs related to production, general corporate overhead, and similar activities are expensed as incurred. We deplete our natural gas reserves using the units-of-production method.
Fixed assets are recorded at cost. We depreciate our property, plant and equipment, excluding land, using the straight-line depreciation method over the estimated useful life of the asset. Upon retirement or other disposition of property, plant and equipment, the cost and related accumulated depreciation are removed, and the resulting gains or losses are recorded in our Statements of Operations. Management tests property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of property, plant and equipment might not be recoverable.
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| Accounting for LNG Development Activities |
Accounting for LNG Development Activities
As we have been in the preliminary stage of developing the Driftwood terminal, substantially all of the costs to date related to such activities have been expensed. These costs primarily include professional fees associated with FEED studies and applying to FERC for authorization to construct our terminals and other required permitting for the Driftwood Project.
Costs incurred in connection with a project to develop the Driftwood terminal shall generally be treated as development expenses until the project has reached the notice-to-proceed state (“NTP State”) and the following criteria (the “NTP Criteria”) have been achieved: (i) regulatory approval has been received, (ii) financing for the project is available and (iii) management has committed to commence construction. In addition to the above, certain costs incurred prior to achieving the NTP State will be capitalized though the NTP Criteria have not been met. Costs to be capitalized prior to achieving the NTP State include land purchase costs, land improvement costs, costs associated with preparing the facility for use and any fixed structure construction costs (fence, storage areas, drainage, etc.). Furthermore, activities directly associated with detailed engineering and/or facility designs shall be capitalized.
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| Share-Based Compensation |
Share-Based Compensation
Share-based payment transactions are measured based on grant-date estimated fair value. For awards containing only service conditions or performance conditions deemed probable of occurring, the fair value is recognized as expense over the requisite service period using the straight-line method. We recognize compensation cost for awards with performance conditions if and when we conclude that it is probable that the performance condition will be achieved. For awards where the performance or market condition is not considered probable, compensation cost is not recognized until the performance or market condition becomes probable. We reassess the probability of vesting at each reporting period for awards with performance conditions and adjust compensation cost based on our probability assessment.
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| Income Taxes |
Income Taxes
Income taxes are accounted for using the asset and liability approach. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to carryforwards and differences between financial statement carrying amounts of assets and liabilities and their respective tax basis. Management assesses the realizability of deferred tax assets and recognizes valuation allowances as appropriate.
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| Earnings Per Share |
Earnings Per Share
Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS reflects potential dilution and is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period increased by the number of additional common shares that would have been outstanding if the potential common shares had been issued and were dilutive.
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