- Sabine Pass LNG receiving terminal fully operational - Cheniere
Marketing successfully acquired commercial LNG HOUSTON, Nov. 6
/PRNewswire-FirstCall/ -- Cheniere Energy, Inc. ("Cheniere") (NYSE
Amex: LNG) reported a net loss of $42.5 million, or $0.80 per share
(basic and diluted), for the third quarter 2009 compared with a net
loss of $71.6 million, or $1.51 per share (basic and diluted),
during the corresponding 2008 period. For the nine months ended
September 30, 2009, Cheniere reported a net loss of $138.3 million,
or $2.71 per share (basic and diluted), compared with a net loss of
$261.9 million, or $5.55 per share (basic and diluted), during the
corresponding 2008 period. Included in the nine months ended
September 30, 2009 is a gain on the early extinguishment of debt of
$45.4 million, or $0.89 per share (basic and diluted). Included in
the nine months ended September 30, 2008 is a loss on the early
extinguishment of debt of $10.7 million, or $0.23 per share (basic
and diluted), and restructuring charges of $78.9 million, or $1.67
per share (basic and diluted). Results are reported on a
consolidated basis and include our 90.6 percent ownership interest
in Cheniere Energy Partners, L.P. ("Cheniere Partners"). (Logo:
http://www.newscom.com/cgi-bin/prnh/20090611/AQ31545LOGO) From
operations, Cheniere reported income of $18.3 million and a loss of
$18.8 million for the third quarter and nine months ended September
30, 2009, respectively, compared to a loss of $39.1 million and
$181.0 million for the corresponding periods in 2008. For the third
quarter and nine months ended September 30, 2009, total revenues
increased $52.2 million and $89.0 million, respectively. LNG
receiving terminal revenues increased $65.1 million and $103.3
million for the quarter and nine months ended September 30, 2009,
largely as a result of the commencement of capacity payments under
two third-party terminal use agreements ("TUAs") that became
effective on April 1, 2009 and July 1, 2009. The decrease in
marketing and trading revenues for the quarter and nine months
ended September 30, 2009 of $12.3 million and $13.1 million,
respectively, was due to lower of cost or market adjustments of
$15.8 million and $17.0 million for LNG inventory held at the
Sabine Pass LNG receiving terminal. These losses were partially
offset by gains from physical natural gas sales, derivative
settlements and changes in the fair value of derivatives that
occurred during the third quarter and nine months ended September
30, 2009. LNG receiving terminal and pipeline operating expenses
increased $3.8 million and $21.5 million, respectively, for the
quarter and nine months ended September 30, 2009 and depreciation,
depletion and amortization expense increased $7.0 million and $26.3
million, respectively, for the third quarter and nine months ended
September 30, 2009 due to the placement into service of the Sabine
Pass LNG receiving terminal and the Creole Trail pipeline during
the second half of 2008. General and administrative expenses
decreased $14.4 million and $31.2 million for the third quarter and
nine months ended September 30, 2009 primarily due to the
restructuring initiatives implemented during 2008. General and
administrative expenses included non-cash compensation expenses of
approximately $4.7 million and $13.5 million for the third quarter
and nine months ended September 30, 2009 and $9.8 million and $23.8
million in the corresponding 2008 periods. Interest expense
increased $20.6 million in the third quarter 2009 compared to the
third quarter 2008 and increased $86.5 million for the nine months
ended September 30, 2009 compared to the corresponding 2008 period
due to less interest subject to capitalization related to
construction and an increase in the average debt balances
outstanding for both periods. Significant events during the nine
months ended September 30, 2009 include the following: -- the
receipt of capacity reservation fee payments at Sabine Pass LNG
from Cheniere Marketing, LLC ("Cheniere Marketing"), our wholly
owned subsidiary, Total Gas & Power North America, Inc. (Total)
and Chevron U.S.A., Inc. (Chevron); -- the substantial completion
of construction and achievement of full operability of the Sabine
Pass LNG receiving terminal; -- a reduction of $120.4 million of
convertible debt; -- the receipt of limited partner distributions
from Freeport LNG Development; and -- the purchase by Cheniere
Marketing of LNG inventory held at the Sabine Pass LNG receiving
terminal for future sales of natural gas. As of September 30, 2009,
the Sabine Pass LNG receiving terminal received capacity
reservation fee payments from all of its TUA customers. The TUAs
became effective in October 2008, April 2009 and July 2009 from
Cheniere Marketing, Total and Chevron, respectively. Construction
at the Sabine Pass LNG receiving terminal was substantially
complete as of the end of the third quarter 2009 and the terminal
is now fully operational with sendout capacity of 4.0 Bcf/d and
storage capacity of 16.9 Bcfe. Our estimated aggregate
construction, commissioning and operating cost budget through
achievement of full operability is approximately $1.559 billion,
excluding financing costs. Costs are anticipated to be funded with
available cash held by Sabine Pass LNG, L.P. ("Sabine Pass"). As of
September 30, 2009, Cheniere retired $120.4 million aggregate
principal amount of its 2.25% Convertible Senior Unsecured Notes
due 2012 in exchange for a combination of $30.0 million cash and
4.0 million common shares through a series of transactions. During
the second and third quarters of 2009, Cheniere Marketing
purchased, transported and successfully unloaded LNG at the Sabine
Pass receiving terminal and entered into derivative contracts to
hedge the cash flows from the future sales of this LNG inventory.
As of September 30, 2009, Cheniere Marketing had entered into a
total of approximately 7,412 BBtu of natural gas swaps through
January 31, 2011 for which it will receive fixed prices of $4.37 to
$7.64 per MMBtu. Due to the nature of the hedging strategy,
earnings will be recognized in operating results as physical sales
occur, derivatives are settled or the fair value of the derivatives
change due to changes in natural gas prices. In the interim, the
LNG held in the storage tanks is recorded at the lower of cost or
market based on the NYMEX natural gas index price for the last day
of the period less basis differentials. Liquidity and Capital
Resources Unrestricted cash and cash equivalents held by Cheniere
at September 30, 2009 were $87.4 million. During the third quarter
of 2009, $34.9 million was distributed from Cheniere Partner's
distribution reserve account to Cheniere's unrestricted cash and
cash equivalents. Restricted cash and cash equivalents at September
30, 2009 were $266.2 million of which $259.0 million were held at
Cheniere Partners and $7.2 million were held at Cheniere.
Restricted cash held by Cheniere Partners included approximately
$82.4 million in a permanent debt service reserve and $54.9 million
for four months of interest as required by the Sabine Pass senior
notes indenture, and $121.7 million for construction, working
capital and general purposes at Sabine Pass. Cheniere believes that
it has sufficient cash and other working capital to fund operations
and other cash requirements until at least the earliest date when
principal payments may be required on existing indebtedness, which
is August 2011. Our strategies to enhance near-term liquidity are
focused on efforts to exploit the TUA capacity we have reserved
through Cheniere Marketing at the Sabine Pass LNG receiving
terminal. Our strategies to improve our capital structure and
address maturities of our existing indebtedness may include
entering into long-term TUAs or LNG purchase and sales agreements
that allow us to refinance debt, issuing equity or other securities
or selling assets. 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 http://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, 2009, 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 and
pipeline businesses. 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,
-------------------- ---------------------- 2009 2008 2009 2008
------- ------ -------- ------ (As adjusted)(2) (As adjusted)(2)
Revenues LNG receiving terminal revenues $65,119 $- $103,320 $- Oil
and gas sales 797 1,375 2,370 3,668 Marketing and trading (9,609)
2,725 (10,265) 2,823 Other 25 - 100 - --- --- --- --- Total
revenues 56,332 4,100 95,525 6,491 ------ ----- ------ -----
Operating costs and expenses LNG receiving terminal and pipeline
development expenses 122 1,522 122 10,803 LNG receiving terminal
and pipeline operating expenses 8,004 4,163 26,033 4,579 Oil and
gas production and exploration costs 126 120 290 421 Depreciation,
depletion and amortization 14,269 7,220 39,126 12,837 General and
administrative expenses 15,557 29,933 48,776 79,976 Restructuring
charges - 287 - 78,851 --- --- --- ------ Total operating costs and
expenses 38,078 43,245 114,347 187,467 ------ ------ -------
------- Income (Loss) from operations 18,254 (39,145) (18,822)
(180,976) Derivative gain 1,158 14,692 4,482 2,325 Loss from equity
method investments - - - (4,800) Gain (loss) on early
extinguishment of debt - (10,716) 45,363 (10,716) Interest expense,
net (61,557) (40,977) (176,766) (90,249) Interest income 114 3,535
1,313 17,940 Other income (expense) 124 (33) 107 (103) Income tax
benefit - - - - Non-controlling interest (590) 1,025 6,034 4,694
---- ----- ----- ----- Net loss $(42,497) $(71,619) $(138,289)
$(261,885) ======== ======== ========= ========= Net loss per
common share-basic and diluted $(0.80) $(1.51) $(2.71) $(5.55)
====== ====== ====== ====== Weighted average number of common
shares outstanding-basic and diluted 52,945 47,492 51,073 47,200
====== ====== ====== ====== September 30, December 31, 2009 2008
Unaudited (As adjusted) (2) ----------- ----------------- Cash and
Cash Equivalents $87,354 $102,192 Restricted Cash and Cash
Equivalents 183,273 301,550 LNG Inventory 20,760 - Other Current
Assets 28,880 12,850 Non-Current Restricted Cash, Cash Equivalents
and Treasury Securities 82,892 159,312 Property, Plant and
Equipment, net 2,237,650 2,170,158 Debt Issuance Costs, net 48,971
55,688 Goodwill 76,819 76,844 Other Assets 22,446 41,488 ------
------ Total Assets $2,789,045 $2,920,082 ========== ==========
Current Liabilities $116,244 $66,133 Long-Term Debt, net of
discount 3,028,976 3,082,362 Deferred Revenue 34,500 37,500 Other
Liabilities 16,930 8,141 Non-Controlling Interest 224,334 250,162
Stockholders' (Deficit) Equity (631,939) (524,216) --------
-------- Total Liabilities and Stockholders' (Deficit) Equity
$2,789,045 $2,920,082 ========== ========== Cheniere Sabine Energy
Other Consolidated Pass LNG, Partners, Cheniere Cheniere September
30, 2009 L.P. L.P. Energy, Inc. Energy, Inc. ---------- ----------
------------ ------------ Cash and cash equivalents $- $- $87,354
$87,354 Restricted cash, cash equivalents 258,725 210 7,230 266,165
------- --- ----- ------- Total $258,725 $210 $94,584 $353,519
======== ==== ======= ======== (1) Please refer to the Cheniere
Energy, Inc. Quarterly Report on Form 10-Q for the period ended
September 30, 2009, filed with the Securities and Exchange
Commission. (2) Effective January 1, 2009, Cheniere adopted
Financial Accounting Standards Board Staff Position Accounting
Principles Board No. 14-1, Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion. As such,
the Balance Sheet as of December 31, 2008 and Cheniere's
Consolidated Statements of Operations for the three and nine months
ended September 30, 2008 have been adjusted to reflect this
adoption. http://www.newscom.com/cgi-bin/prnh/20090611/AQ31545LOGO
http://photoarchive.ap.org/ DATASOURCE: Cheniere Energy, Inc.
CONTACT: Investors, Christina Cavarretta, +1-713-375-5100, or
Media, Diane Haggard, +1-713-375-5259, both of Cheniere Energy,
Inc. Web Site: http://www.cheniere.com/
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