Tellurian Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT

SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT

12 Months Ended

Dec. 31, 2018

Condensed Financial Information Disclosure [Abstract]

SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT



SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
TELLURIAN INC.
PARENT COMPANY BALANCE SHEETS
(in thousands, except share and per share)

	December 31,
	2018			2017
ASSETS
Cash and cash equivalents	$	—		$	—
Prepaids and other	72			25
Investments in subsidiaries	289,802			212,846
Property, plant and equipment, net	10,000			13,000
Total assets	$	299,874		$	225,871

LIABILITIES AND EQUITY
Liabilities:
Accounts payable	$	114		$	148
Accrued liabilities	1,826			1,836
Total liabilities	1,940			1,984

Equity:
Preferred stock, $0.01 par value, 100,000,000 authorized: 6,123,782 and zero shares outstanding, respectively	61			—
Common stock, $0.01 par value, 400,000,000 authorized: 240,655,607 and 222,749,220 shares outstanding, respectively	2,195			2,043
Additional paid-in capital	749,537			549,958
Accumulated deficit	(453,859		)	(328,114		)
Total stockholders’ equity	297,934			223,887
Total liabilities and stockholders’ equity	$	299,874		$	225,871



SCHEDULE I (Continued)
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
TELLURIAN INC.
PARENT COMPANY STATEMENTS OF OPERATIONS
(in thousands)

	Year Ended December 31,
	2018			2017			2016
Total revenues	$	—		$	—		$	—

Operating costs and expenses:
Cost of sales	93			15			—
Development expenses	2,487			320			21
General and administrative expenses	4,618			594			25,084
Goodwill impairment	—			77,592			—
Total operating costs and expenses	7,198			78,521			25,105

Loss on preferred stock exchange feature	—			—			3,308
Interest expense	2			—			—

Loss from operations before income taxes and equity in losses of subsidiaries	(7,200		)	(78,521		)	(28,413		)
Income tax benefit (provision)	—			(4		)	170
Net loss from operations before equity in losses of subsidiaries	$	(7,200	)	$	(78,525	)	$	(28,243	)
Equity in losses of subsidiaries, net of tax	$	(118,545	)	$	(152,934	)	$	(68,412	)
Net loss	$	(125,745	)	$	(231,459	)	$	(96,655	)



SCHEDULE I (Continued)
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
TELLURIAN INC.
PARENT COMPANY STATEMENTS OF CASH FLOWS
(in thousands)

	Year Ended December 31,
	2018			2017			2016
Net cash used in operating activities	(123,976		)	(312,553		)	(60,532		)

Cash flows from investing activities:
Cash received in acquisition	—			56			210
Cash used for acquisition	—			—			(1,190		)
Net cash received (used) in investing activities	—			56			(980		)

Cash flows from financing activities:
Proceeds from the issuance of common stock	133,800			318,204			59,015
Tax payments for net share settlement of equity awards	(5,734		)	—			—
Proceeds from the issuance of preferred stock	—			—			25,000
Equity offering costs	(4,090		)	(5,707		)	(1,681		)
Net cash provided by financing activities	123,976			312,497			82,334

Net increase (decrease) in cash and cash equivalents	—			—			20,822
Cash and cash equivalents, beginning of period	—			—			—
Cash and cash equivalents, end of period	$	—		$	—		$	20,822

NOTE 1 — BASIS OF PRESENTATION

Tellurian Inc. is a Delaware corporation based in Houston, Texas (“Tellurian”), which wholly owns Tellurain Investments Inc. (“Tellurian Investments”), which in turn wholly owns Tellurian Production Holdings LLC (“Production Holdings”), Tellurian Investment’s primary operating company.

On February 10, 2017 (the “Merger Date”), Tellurian Investments Inc. (“Tellurian Investments”) completed a merger (the “Merger”) with a subsidiary of Magellan Petroleum Corporation (“Magellan”). Magellan changed its corporate name to Tellurian Inc. shortly after completing the Merger. The Merger was accounted for as a “reverse acquisition,” with Tellurian Investments being treated as the accounting acquirer. As such, the historical consolidated comparative information as of and for all periods in 2016 in this Schedule I relates to Tellurian Investments. Subsequent to the Merger Date, the information relates to the consolidated entities of Tellurian Inc., with Magellan reflected as the accounting acquiree. In connection with the Merger, each issued and outstanding share of Tellurian Investments common stock was exchanged for 1.3 shares of Magellan common stock. All share amounts in the Condensed Financial Information and related notes have been retroactively adjusted for all periods presented to give effect to this exchange, including reclassifying an amount equal to the change in par value of common stock from additional paid-in capital.

On April 9, 2016, Tellurian Investments acquired Tellurian Services LLC (“Tellurian Services”), formerly known as Parallax Services LLC (“Parallax Services”). Under the financial reporting rules of the SEC, Parallax Services (“Predecessor”) has been deemed to be the predecessor to Tellurian (“Successor”) for financial reporting purposes. Predecessor financial statements have been included in Tellurian’s Consolidated Financial Statements in this report.

These condensed parent company financial statements reflect the activity of Tellurian as the parent company to Production Holdings and have been prepared in accordance with Rule 12-04, Schedule 1 of Regulation S-X, as the restricted net assets of Production Holdings exceed 25% of the consolidated net assets of Tellurian. This information should be read in conjunction with the consolidated financial statements of Tellurian included in this report under the caption Item 8, “Financial Statements and Supplementary Data.”

NOTE 2 — PROPERTY, PLANT AND EQUIPMENT

The amounts included in Tellurian’s parent-only financial statements related to property, plant and equipment represent unproved properties in the United Kingdom and Australia, as disclosed in Note 5, Property, Plant and Equipment, to Tellurian’s Consolidated Financial Statements included in this report under the caption Item 8, “Financial Statements and Supplementary Data.”

NOTE 3 — GOODWILL IMPAIRMENT

For details regarding the goodwill impairment included in Tellurian’s parent-only financial statements, refer to Note 2, Merger and Acquisition — The Merger, to Tellurian’s Consolidated Financial Statements included in this report under the caption Item 8, “Financial Statements and Supplementary Data.”

NOTE 4 — CONTINGENCIES

For details regarding the contingencies related to Tellurian Investments litigation, refer to Note 8, Commitments and Contingencies, to Tellurian’s Consolidated Financial Statements included in this report under the caption Item 8, “Financial Statements and Supplementary Data.”