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, 2019

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)

	Year Ended December 31,
	2019			2018
ASSETS
Cash and cash equivalents	$	—		$	—
Prepaids and other	214			72
Loan note receivable from a subsidiary	499,504			—
Investments in subsidiaries	—			289,802
Property, plant and equipment, net	—			10,000
Total assets	$	499,718		$	299,874

LIABILITIES AND EQUITY
Liabilities:
Accounts payable	$	939		$	114
Accrued liabilities	1,725			1,826
Payables due to subsidiaries	330,769			—
Total liabilities	333,433			1,940

Equity:
Preferred stock, $0.01 par value, 100,000,000 authorized: 6,123,782 and 6,123,782 shares outstanding, respectively	61			61
Common stock, $0.01 par value, 400,000,000 authorized: 242,207,522 and 240,655,607 shares outstanding, respectively	2,211			2,195
Additional paid-in capital	769,639			749,537
Accumulated deficit	(605,626		)	(453,859		)
Total stockholders’ equity	166,285			297,934
Total liabilities and stockholders’ equity	$	499,718		$	299,874



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

	Year Ended December 31,
	2019			2018			2017
Total revenues	$	—		$	—		$	—

Operating costs and expenses:
Cost of sales	—			93			15
Development expenses	11,047			2,487			320
General and administrative expenses	20,498			4,618			594
Goodwill impairment	—			—			77,592
Total operating costs and expenses	31,545			7,198			78,521

Other income, net	63,090			—			—
Interest expense	—			2			—

Income (Loss) from operations before income taxes and equity in losses of subsidiaries	31,545			(7,200		)	(78,521		)
Income tax benefit (provision)	—			—			(4		)
Net loss from operations before equity in losses of subsidiaries	$	31,545		$	(7,200	)	$	(78,525	)
Equity in losses of subsidiaries, net of tax	$	(183,312	)	$	(118,545	)	$	(152,934	)
Net loss	$	(151,767	)	$	(125,745	)	$	(231,459	)



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

	Year Ended December 31,
	2019			2018			2017
Net cash provided (used) by operating activities	6,686			(123,976		)	(312,553		)

Cash flows from investing activities:
Cash received in acquisition	—			—			56
Net cash received in investing activities	—			—			56

Cash flows from financing activities:
Proceeds from the issuance of common stock	—			133,800			318,204
Tax payments for net share settlement of equity awards	(6,686		)	(5,734		)	—
Equity offering costs	—			(4,090		)	(5,707		)
Net cash provided (used) by financing activities	(6,686		)	123,976			312,497

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

NOTE 1 — BASIS OF PRESENTATION

Tellurian Inc. is a Delaware corporation based in Houston, Texas (“Tellurian”), which wholly owns Tellurian 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. 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.

These condensed parent company financial statements reflect the activity of Tellurian as the parent company to each of Production Holdings and Driftwood Holdings and have been prepared in accordance with Rules 5-04 and 12-04 of Regulation S-X, as the restricted net assets of each of Production Holdings and Driftwood 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 predominantly represent unproved properties in the United Kingdom, 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 — 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 11, Commitments and Contingencies, to Tellurian’s Consolidated Financial Statements included in this report under the caption Item 8, “Financial Statements and Supplementary Data.”