Exhibit 99.1 CHENIERE ENERGY INC. NEWS RELEASE CONTACT: David Castaneda INVESTOR & MEDIA RELATIONS 1-888-948-2036 E-mail: LNG@MDCGroup.com Cheniere Energy Reports First Quarter Income Houston - May 12, 2003 - Cheniere Energy, Inc. (AMEX: LNG) reported net income of $3,121,309, or $0.23 per share, for the first quarter of 2003 compared with a net loss of $2,530,967, or $0.19 per share, a year earlier. The principal factors contributing to the $5,652,276 swing from prior year quarter's loss to current year quarter's net income were: (1) Cheniere's gain of $4,760,000 recorded on the February 2003 sale of a 60% interest its Freeport, Texas LNG project; (2) its gain of $423,454 recorded on March 2003 sale of an additional 10% limited partner interest Freeport project; and (3) a reduction of $333,346 in LNG related expenses due to the sale of the Freeport LNG project in the 2003 period. Cheniere's business is focused in three components: the development of LNG receiving terminals, the investment in its exploration affiliate, Gryphon, and the exploitation of its own 3D seismic data base through prospect generation. LNG Receiving Terminals In February 2003, Cheniere sold its Freeport LNG project to Freeport LNG Development, L.P. ("Freeport LNG"), in which Cheniere retained a 40% interest. At or prior to closing, Freeport LNG paid Cheniere $2,180,215 in cash and assumed Cheniere liabilities of $560,211. Freeport LNG will pay an additional $4,000,000 to Cheniere over time and will spend up to $9,000,000 to obtain permits and prepare the project for the construction phase with no further contribution by Cheniere. In March 2003, Cheniere sold a 10% limited partnership interest in Freeport LNG to a third party for $2,333,333 payable over time. On March 28, 2003, Freeport LNG submitted its filing with the Federal Energy Regulatory Commission of an application for a permit to construct the Freeport terminal. Investment in Gryphon Exploration Company Cheniere owns 100% of Gryphon's outstanding common stock. Warburg, Pincus Equity Partners L.P. has invested $85,000,000 to date in Gryphon preferred stock which is convertible into 91% of Gryphon and accrues dividends at 8% per annum. Upon the conversion of Gryphon's preferred stock into common stock, Cheniere's interest would be diluted to 9%. From its inception in October 2000 through March 31, 2003, Gryphon has drilled 19 wells, of which nine have been successful. Gryphon uses an extensive, 20,000-square-mile 3D seismic database to explore in the shallow waters of the Gulf of Mexico. The company expects to drill 14 exploratory wells and three to four development wells in 2003. Gryphon was apparent high bidder on 19 blocks in the March 2003 Louisiana Federal Offshore Lease Sale. Gryphon's production in March 2003 averaged 30 Mmcfe/day. Cheniere Exploration Subsequent to its forming Gryphon in October 2000, Cheniere re-established its own exploration capability. To date, Cheniere's exploration group has captured and sold 19 prospects over its 7,000-square-mile 3D seismic database. The drilling of these prospects has begun, and to date has resulted in nine new discoveries and three dry holes. Five wells were on production as of March 31, 2003. Additional information on the company may be found on its website at www.cheniere.com, by contacting the company's investor and media relations department toll-free at (888) 948-2036 or by writing to: LNG@MDCGroup.com. Except for the historical statements contained herein, this news release presents forward-looking statements that involve risks and uncertainties. Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Certain risks and uncertainties inherent in the company's business are set forth in the company's periodic reports that are filed with and available from the Securities and Exchange Commission. (Financial table follows.) Cheniere Energy, Inc. Selected Financial Information (Unaudited)
1st Qtr 2003 1st Qtr 2002 ------------ ------------ Revenues $ 110,120 $ 161,604 ------------ ------------ Operating Costs and Expenses Production Costs - 65,336 Depreciation, Depletion and Amortization 58,692 114,691 General and Administrative Expenses LNG Terminal Development 394,061 727,407 Other 520,111 572,671 ------------ ------------ Total General and Administrative Expenses 914,172 1,300,078 ------------ ------------ Total Operating Costs and Expenses 972,864 1,480,105 ------------ ------------ Loss from Operations (862,744) (1,318,501) Equity in Net Loss of Unconsolidated Affiliate - (1,213,909) Equity in Net Loss of Limited Partnership (1,200,000) - Gain of Sale of LNG Assets 4,760,000 - Gain of Sale of Limited Partnership Interest 423,454 - Interest Income 599 1,443 ------------ ------------ Net Income (Loss) $ 3,121,309 $ (2,530,967) ============ ============ Net Income (Loss) Per Share - Basic $ 0.23 $ (0.19) ============ ============ Net Income (Loss) Per Share - Diluted $ 0.23 $ (0.19) ============ ============ Weighted Average Number of Shares Outstanding - Basic 13,297,393 13,297,393 ============ ============ Weighted Average Number of Shares Outstanding - Diluted 13,500,481 13,297,393 ============ ============ 3/31/03 12/31/02 ------------ ------------ Current Assets $ 2,388,445 $ 1,848,820 Oil and Gas Properties, net, full cost method 17,648,166 17,594,229 LNG Site Costs - 1,400,000 Fixed Assets 195,823 216,341 Investment in Unconsolidated Affiliate - - Investment in Limited Partnership 4,771,529 - ------------ ------------ Total Assets $ 25,003,963 $ 21,059,390 ============ ============ Current Liabilities $ 3,140,270 $ 3,262,055 Stockholders' Equity 21,863,693 17,797,335 ------------ ------------ Total Liabilities and Stockholders' Equity $ 25,003,963 $ 21,059,390 ============ ============