Exhibit 99.1 Cheniere Energy Reports Second Quarter 2006 Results HOUSTON--(BUSINESS WIRE)--Aug. 4, 2006--Cheniere Energy, Inc. (AMEX:LNG) reported a net loss of $3.6 million, or $0.07 per basic and diluted share, for the second quarter of 2006, compared to a net loss of $9.7 million, or $0.18 per basic and diluted share, during the corresponding period in 2005. The major factors contributing to the net loss during the second quarter of 2006 were charges for general and administrative expenses of $12.4 million and interest expense of $11.1 million. These were partially offset by interest income of $10.3 million, an income tax benefit of $5.6 million and a $4.5 million credit in LNG receiving terminal and pipeline development expenses from application of Statement of Financial Accounting Standards ("SFAS") No. 71, Accounting for Effects of Certain Types of Regulation whereby $12.3 million of natural gas pipeline development costs previously charged to expense were capitalized as a regulatory asset. Cheniere's net loss for the second quarter of 2006 excluding the $12.3 million expense recapture was $15.9 million or $0.30 per basic and diluted share. Results for the corresponding period in 2005 included LNG receiving terminal and pipeline development expenses of $5.4 million, general and administrative expenses of $5.6 million and interest income of $1.8 million. Cheniere's working capital at June 30, 2006 was $756.1 million, compared with $810.1 million at December 31, 2005. The change was primarily the result of working capital used for the construction of Phase 1 of the Sabine Pass LNG receiving terminal and working capital used in operating activities. These uses were partially offset by $149.0 million borrowed under the Sabine Pass Credit Facility. For additional information please refer to the Cheniere Energy, Inc. Quarterly Report on Form 10-Q for the period ended June 30, 2006, filed with the Securities and Exchange Commission. Cheniere Energy, Inc. Cheniere is developing a network of three, 100% owned LNG receiving terminals and related natural gas pipelines along the Gulf Coast of the United States. The three terminals will have an aggregate send-out capacity of 9.9 billion cubic feet per day. Cheniere is pursuing related LNG business opportunities both upstream and downstream of the terminals and developing a business to market LNG and natural gas. Cheniere is also the founder and holds a 30% limited partner interest in a fourth LNG receiving terminal, owns a minority interest in an LNG shipping venture, and engages in oil and gas exploration in the shallow waters of the U.S. Gulf of Mexico. Cheniere is based in Houston, Texas, with offices in Johnson Bayou, Louisiana, and Paris, France. Additional information about Cheniere may be found on the company's 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. (Financial Table Follows) Cheniere Energy, Inc. Selected Financial Information (in thousands) (1) Three Months Ended Six Months Ended June 30, June 30, -------------------- -------------------- 2006 2005 2006 2005 --------- ---------- --------- ---------- (as adjusted)(2) (as adjusted)(2) Revenues $413 $689 $835 $1,425 Operating costs and expenses LNG receiving terminal and pipeline development expenses (4,506) 5,350 3,807 10,775 Exploration costs 590 560 1,428 1,102 Oil and gas production costs 55 34 105 89 Depreciation, depletion and amortization 579 249 1,185 453 General and administrative expenses 12,444 5,600 25,625 10,590 --------- ---------- --------- ---------- Total operating costs and expenses 9,162 11,793 32,150 23,009 --------- ---------- --------- ---------- Loss from operations (8,749) (11,104) (31,315) (21,584) Equity in net loss of limited partnership -- (127) -- (971) Derivative gain (loss) 162 (642) 923 (667) Interest expense (11,096) -- (22,234) -- Interest income 10,335 1,755 19,879 3,573 Other income 108 426 284 426 Income tax benefit 5,621 -- 13,033 -- Minority interest -- -- -- 97 --------- ---------- --------- ---------- Net loss $(3,619) $(9,692) $(19,430) $(19,126) ========= ========== ========= ========== Net loss per common share--basic and diluted $(0.07) $(0.18) $(0.36) $(0.36) ========= ========== ========= ========== Weighted average number of common shares outstanding--basic and diluted 54,369 53,757 54,293 53,063 ========= ========== ========= ========== June 30, December 31, 2006 2005 -------------- -------------- (unaudited) (as adjusted) Cash and cash equivalents $657,608 $692,592 Restricted cash and cash equivalents 136,860 160,885 Restricted certificate of deposit 688 676 Advances to EPC contractor -- 8,087 Other current assets 20,617 9,223 Non-current restricted cash and cash equivalents 13,744 16,500 Property, plant and equipment, net 469,686 280,106 Debt issuance costs, net 40,288 43,008 Goodwill 76,844 76,844 Other assets 33,461 2,226 -------------- -------------- Total assets $1,449,796 $1,290,147 ============== ============== Current liabilities $59,690 $61,322 Long-term debt 1,063,500 917,500 Deferred revenue 41,000 41,000 Other liabilities 59 1,784 Stockholders' equity 285,547 268,541 -------------- -------------- Total liabilities and stockholders' equity $1,449,796 $1,290,147 ============== ============== (1) Please refer to Cheniere Energy, Inc. Quarterly Report on Form 10-Q for the period ended June 30, 2006, filed with the Securities and Exchange Commission. (2) Effective January 1, 2006, Cheniere converted from the full cost method of accounting to the successful efforts method of accounting for its investment in oil and gas properties. The change in accounting methods constitutes a "Change in Accounting Principle," requiring that all prior period financial statements be adjusted to reflect the results and balances that would have been reported had the company been following the successful efforts method of accounting from its inception. The cumulative effect of the change in accounting method as of December 31, 2005 was to reduce the balance of our net investment in oil and gas properties and retained earnings by $18.0 million. The change in accounting methods resulted in a decrease in the net loss of $145,000 and an increase in the net loss of $73,000 for the three and six months ended June 30, 2005, respectively, and had no significant impact on earnings per share (basic and diluted) for these respective periods. The change in method of accounting has no impact on cash or working capital. CONTACT: Cheniere Energy, Inc., Houston David Castaneda, 713-265-0202 or Christina Cavarretta, 713-265-0208