Cheniere Energy Reports Third Quarter 2007 Results
HOUSTON--(BUSINESS WIRE)--
Cheniere Energy, Inc. (AMEX:LNG) reported a net loss of $53.5 million, or $1.14 per share (basic and diluted), for the third quarter of 2007 compared with a net loss of $33.1 million, or $0.61 per share (basic and diluted), during the corresponding period in 2006. Year to date through September 30, 2007, Cheniere reported a loss of $129.1 million, or $2.48 per share (basic and diluted) compared to a net loss of $52.5 million, or $0.97 per share (basic and diluted), for the comparable period 2006.
During the quarter, progress continued and the construction of the Sabine Pass LNG receiving terminal and Creole Trail pipeline remains on schedule and on budget. The Sabine Pass terminal is expected to commence operations in the second quarter of 2008 with initial send out capacity of 2.6 Bcf/d and storage capacity of 10.1 Bcf. Construction is also underway to expand the terminal to a total send out capacity of 4.0 Bcf/d and storage capacity of 16.8 Bcf by second quarter 2009. Commencement of operations of the 2.0 Bcf/d Creole Trail pipeline is expected to coincide with the initial start up of the terminal.
Results for the quarter and nine months ended September 30, 2007 were primarily impacted by costs associated with the development of the infrastructure as well as the continued development of the organization in preparation for operations. The primary reasons for the $20.4 million increase in the net loss between corresponding quarters in 2006 and 2007 included the following: general and administrative expenses increasing by $22.9 million principally related to personnel costs necessary for the expansion of Cheniere's business; LNG terminal and pipeline development expenses increasing by $7.1 million due to the hiring of employees who will ultimately be operating and maintaining the Sabine Pass LNG receiving terminal and the Creole Trail pipeline and an increase in interest expense of $17.1 million primarily related to the Sabine Pass LNG, L.P. senior notes. These increases were partially offset by increased interest income of $9.9 million and by the effect in 2006 of a $15.1 million income tax provision.
At September 30, 2007, Cheniere had unrestricted cash and cash equivalents of $446.6 million compared to $463.0 million at December 31, 2006. The primary sources of cash and cash equivalents during the first nine months of 2007 were the receipt of $203.9 million in net proceeds from the sale of Cheniere Energy Partners, L.P. ("Cheniere Partners") (AMEX:CQP) common units to the public and receipt of $391.7 million in net proceeds from a $400 million term loan in May 2007. The primary use of the proceeds from the term loan was to purchase 9,175,595 shares of the Company's common stock at a cost of $325.0 million, as previously announced. Another significant use of cash was for the construction of the Creole Trail pipeline, with costs incurred through September 30, 2007 of $310.6 million. Estimated costs of the Creole Trail pipeline, before financing costs, are approximately $500 to $550 million.
At September 30, 2007, Cheniere held restricted cash, cash equivalents and treasury securities totaling $930.5 million which was comprised of $513.6 million dedicated to the completion of the construction of the Sabine Pass LNG receiving terminal including the expansion to 4 billion cubic feet per day of throughput capacity, $284.7 million reserved for interest payments on the Sabine Pass LNG, L.P. senior notes and $86.7 million as a reserve for distributions to Cheniere Partners' common unit holders. Estimated costs, before financing costs, for the Sabine Pass terminal are $1.4 to $1.5 billion. Costs incurred through September 30, 2007 were $941.9 million.
Cheniere Energy, Inc. is developing a network of three LNG receiving terminals and related natural gas pipelines along the Gulf Coast of the United States. Cheniere is pursuing related business opportunities both upstream and downstream of the terminals. Cheniere is also the founder and holds a 30% limited partner interest in a fourth LNG receiving terminal. Additional information about Cheniere Energy, Inc. may be found on its web site at www.cheniere.com.
For additional information, please refer to the Cheniere Energy, Inc. Quarterly Report on Form 10-Q for the period ended September 30, 2007, filed with the Securities and Exchange Commission.
This press release contains certain statements that may include "forward-looking statements" within the meanings of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included herein are "forward-looking statements." Included among "forward-looking statements" are, among other things, (i) statements regarding Cheniere's business strategy, plans and objectives and (ii) statements expressing beliefs and expectations regarding the development of Cheniere's LNG receiving terminal business. Although Cheniere believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Cheniere's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in Cheniere's periodic reports that are filed with and available from the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under the securities laws, Cheniere does not assume a duty to update these forward-looking statements.
(Financial Table Follows)
Cheniere Energy, Inc.
Selected Financial Information
(in thousands) (1)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- --------------------
2007 2006 2007 2006
--------- --------- ---------- ---------
Revenues $ 394 $ 737 $ 9 $ 1,572
Operating costs and expenses
LNG receiving terminal
and pipeline development
expenses 10,071 2,923 26,357 6,730
Exploration costs 659 661 1,032 2,089
Oil and gas production
costs 82 61 250 166
Impairment of fixed
assets -- 1,628 18 1,628
Depreciation, depletion
and amortization 1,952 896 4,523 2,080
General and
administrative expenses 34,904 12,044 85,101 37,669
--------- --------- ---------- ---------
Total operating
costs and expenses 47,668 18,213 117,281 50,362
--------- --------- ---------- ---------
Loss from operations (47,274) (17,476) (117,272) (48,790)
Derivative loss -- (966) -- (44)
Interest expense, net (28,027) (10,886) (80,383) (33,120)
Interest income 20,990 11,100 66,695 30,978
Other income (expense) (188) 201 (372) 485
Income tax provision -- (15,079) -- (2,045)
Minority interest 1,045 -- 2,203 --
--------- --------- ---------- ---------
Net loss $(53,454) $(33,106) $(129,129) $(52,536)
========= ========= ========== =========
Net loss per common share--
basic and diluted $ (1.14) $ (0.61) $ (2.48) $ (0.97)
========= ========= ========== =========
Weighted average number of
common shares outstanding--
basic and diluted 46,728 54,496 51,974 54,361
========= ========= ========== =========
September 30, December 31,
2007 2006
------------- -------------
(Unaudited)
Cash and Cash Equivalents $ 446,579 $ 462,963
Restricted Cash and Cash Equivalents 234,546 176,827
Other Current Assets 52,726 10,183
Non-Current Restricted Cash, Cash
Equivalents and Treasury Securities 695,961 1,071,722
Property, Plant and Equipment, Net 1,399,345 748,818
Debt Issuance Costs, Net 45,789 41,545
Goodwill 76,844 76,844
Other Assets 65,144 15,586
------------- -------------
Total Assets $ 3,016,934 $ 2,604,488
============= =============
Current Liabilities $ 184,532 $ 61,939
Long-Term Debt 2,757,000 2,357,000
Deferred Revenue 41,000 41,000
Other Liabilities 7,359 1,302
Minority Interest 293,477 --
Stockholders' (Deficit) Equity (266,434) 143,247
------------- -------------
Total Liabilities and Stockholders'
(Deficit) Equity $ 3,016,934 $ 2,604,488
============= =============
(1) Please refer to the Cheniere Energy, Inc. Quarterly Report on Form
10-Q for the period ended September 30, 2007, filed with the
Securities and Exchange Commission.
Source: Cheniere Energy, Inc.
Released November 6, 2007