Exhibit 99.1 Cheniere Energy Reports Second Quarter 2005 Results HOUSTON--(BUSINESS WIRE)--Aug. 5, 2005--Cheniere Energy, Inc. (AMEX:LNG) reported a net loss of $9.8 million, or $0.18 per share (basic and diluted) for the second quarter of 2005 compared with a net loss of $8.1 million, or $0.21 per share (basic and diluted), during the corresponding period in 2004. The major factors contributing to the net loss of $9.8 million during the second quarter of 2005 were liquefied natural gas (LNG) receiving terminal development expenses of $5.4 million and general and administrative expenses of $5.6 million. For the second quarter of 2004, the major factors contributing to the net loss of $8.1 million were LNG receiving terminal development expenses of $5.6 million (which were offset by a $752,000 minority interest in the operations of Corpus Christi LNG, L.P.), general and administrative expenses of $1.9 million and the Company's equity share of the net loss of Freeport LNG Development, L.P. of $1.5 million. Cheniere's working capital at June 30, 2005 was $150.8 million, a decrease of $155.0 million from $305.8 million at December 31, 2004. The decrease in working capital was primarily attributable to construction-in-progress expenditures related to Cheniere's Sabine Pass LNG receiving terminal and debt issuance costs related to project financing of the terminal. As previously announced, subsequent to the second quarter Cheniere closed a private offering on July 27, 2005 of $325 million aggregate principal amount of convertible senior unsecured notes due 2012 which will bear interest at a rate of 2.25% per year. Concurrent with the issuance of the notes, the Company also entered into hedge transactions (consisting of a purchase and a sale of call options) for a net cost of approximately $76 million. These hedge transactions are expected to offset potential dilution from conversion of the notes up to a market price of $70.00 per share of Cheniere common stock. Net proceeds from the offering were approximately $240 million, after deducting the cost of the hedge transactions, the underwriting discount and related fees. The pro forma effect as of June 30, 2005 of these transactions would have increased working capital to approximately $391 million. Note: On April 8, 2005, Cheniere's Board of Directors declared a two-for-one stock split effective April 22, 2005. Accordingly, all references to weighted average shares outstanding and per share amounts in this press release have been retroactively adjusted to reflect this stock split. Cheniere Energy, Inc. is a Houston based energy company engaged in developing LNG Receiving Terminals and Gulf of Mexico Exploration & Production. Cheniere is building a 100% owned Gulf Coast LNG receiving terminal near Sabine Pass in Cameron Parish, LA. It is also developing 100% owned Gulf Coast LNG receiving terminals near Corpus Christi, TX, which received its authorization from the FERC in March 2005, and another near the Creole Trail in Cameron Parish, LA, for which Cheniere filed its application with the FERC in May 2005. Cheniere is also a 30% limited partner in Freeport LNG Development, L.P., which is building an LNG receiving terminal in Freeport, Texas. Cheniere explores for oil and gas in the Gulf of Mexico using a regional database of 7,000 square miles of PSTM 3D seismic data. Cheniere owns 9% of Gryphon Exploration Company, along with Warburg, Pincus Equity Partners, L.P., which owns 91%. Additional information about Cheniere Energy, Inc. may be found on its web site at www.cheniere.com. This press release contains certain statements that may include "forward-looking statements" within the meaning 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. Cheniere Energy, Inc. Selected Financial Information (in thousands) Three Months Ended Six Months Ended June 30, June 30, ----------------------- ----------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- (Unaudited) (Unaudited) ----------- ----------- ----------- ----------- Revenues $689 $335 $1,425 $667 ----------- ----------- ----------- ----------- Operating Costs and Expenses LNG Terminal Development Expenses 5,350 5,566 10,775 9,967 Production Costs 34 7 89 14 Depreciation, Depletion and Amortization 528 161 1,055 366 General and Administrative Expenses 5,600 1,928 10,590 4,865 ----------- ----------- ----------- ----------- Total Operating Costs and Expenses 11,512 7,662 22,509 15,212 ----------- ----------- ----------- ----------- Loss from Operations (10,823) (7,327) (21,084) (14,545) Equity in Net (Loss) Income of Limited Partnership (127) (1,488) (971) 667 Reimbursement from Limited Partnership Investment - - - 2,500 Unrealized Derivative Loss (642) - (667) - Interest Income 1,755 10 3,572 17 Minority Interest - 752 97 2,233 ----------- ----------- ----------- ----------- Net Loss $(9,837) $(8,053) $(19,053) $(9,128) =========== =========== =========== =========== Net Loss Per Share - Basic and Diluted $(0.18) $(0.21) $(0.36) $(0.25) =========== =========== =========== =========== Weighted Average Shares Outstanding - Basic and Diluted 53,757 37,833 53,063 37,026 =========== =========== =========== =========== Pro Forma June 30, June 30, Dec. 31, 2005 (a) 2005 2004 ----------- ----------- ----------- (Unaudited) (Unaudited) Cash and Cash Equivalents $411,817 $171,817 $308,443 Advances to EPC Contractor 24,260 24,260 - Other Current Assets 3,554 3,554 2,838 Property, Plant and Equipment, Net 155,886 155,886 20,880 Debt Issuance Costs, Net 29,948 20,648 1,302 Goodwill 76,845 76,845 - Other Assets 310 310 104 ----------- ----------- ----------- Total Assets $702,620 $453,320 $333,567 =========== =========== =========== Current Liabilities $48,831 $48,831 $5,529 Notes Payable 325,000 - - Deferred Revenue 38,000 38,000 23,000 Other Liabilities and Minority Interest 15,606 15,606 437 Stockholders' Equity 275,183 350,883 304,601 ----------- ----------- ----------- Total Liabilities and Stockholders' Equity $702,620 $453,320 $333,567 =========== =========== =========== (a) includes the pro forma effect as of June 30, 2005 of Cheniere's private offering of $325 million aggregate principal amount of convertible senior unsecured notes due 2012 closed on July 27, 2005. Also, includes the net costs of the related hedge transactions, underwriting discount and related fees. CONTACT: Cheniere Energy, Inc., Houston David Castaneda, 713-265-0202