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

Annual report pursuant to Section 13 and 15(d)

Fair Value Measurements (Tables)

Fair Value Measurements (Tables)

12 Months Ended

Jun. 30, 2013

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis



	June 30, 2013
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Cash equivalents ⁽¹⁾	$	26,270	$	—	$	—	$	26,270
Securities available for sale ⁽²⁾	44		—		—		44
	$	26,314	$	—	$	—	$	26,314
Liabilities:
Contingent consideration payable	$	—	$	—	$	3,940	$	3,940

	June 30, 2012
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Cash equivalents ⁽¹⁾	$	38,565	$	—	$	—	$	38,565
Securities available for sale ⁽²⁾	155		—		—		155
	$	38,720	$	—	$	—	$	38,720
Liabilities:
Contingent consideration payable	$	—	$	—	$	4,072	$	4,072

Fair Value Inputs, Assets, Quantitative Information



			June 30,
Description	Valuation technique	Significant unobservable inputs	2013	2012
Contingent consideration payable	Discounted cash flow model	Discount rate	8.0%	8.0%
		First production payout	December 31, 2015	December 31, 2013
		Second production payout	December 31, 2016	December 31, 2015

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following table presents a roll forward of the contingent consideration payable for the fiscal years ended:



	June 30,
	2013			2012
	(In thousands)
Fiscal year beginning balance	$	4,072		$	—
Liability assumed	—			4,151
Accretion expense	326			247
Revision to estimate	(458		)	(326		)
Fiscal year closing balance	$	3,940		$	4,072

Schedule of Fair Value, Asssets and Liabilities, Measured on Nonrecurring Basis, Unobservable Inputs

The following table presents information about significant unobservable inputs to the Company's Level 3 financial assets and liabilities measured at fair value on a nonrecurring basis: fiscal years ended:



Description	Fair value		Valuation technique	Significant unobservable inputs	Range of inputs
	(In thousands)
Acquisition of oil and gas properties under the Nautilus PSA	$	2,141	Combination of discounted cash flow model and market value approach	Adjusted oil price	$95/bbl
	$	2,141		Discount rate	10.0%

Palm Valley oil and gas properties acquired in Santos SA	$	3,403	Discounted cash flow model	Contract period	17 to 19 years
Palm Valley oil and gas properties acquired in Santos SA	$	3,403	Discounted cash flow model	Discount rate	10.0% to 11.5%

Issuance of preferred stock to One Stone	$	23,502	Market value approach	Issuance price	$1.22149381

- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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