HOUSTON, May 7 /PRNewswire-FirstCall/ -- Cheniere Energy,
Inc. ("Cheniere") (NYSE Amex: LNG) reported a net loss of
$35.2 million, or $0.64 per share (basic and diluted), for the
first quarter 2010 compared with a net loss of $82.7 million, or $1.70 per share (basic and diluted), for the
comparable 2009 period. 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)
Overview of Significant 2010 Events:
- In March 2010, Cheniere
Marketing, LLC ("Cheniere Marketing"), a subsidiary of Cheniere,
entered into an arrangement with JPMorgan LNG Co. ("LNGCo") that
will allow us to source liquefied natural gas ("LNG") and provide
LNGCo access to our capacity at the Sabine Pass LNG receiving
terminal.
- In April 2010, we agreed to sell
our 30% interest in Freeport LNG Development, L.P. ("Freeport LNG")
for net proceeds of approximately $104
million. This transaction is expected to close during
the second quarter of 2010, subject to certain approvals, and
proceeds will be used to pay down a portion of the $400 million, 9.75% term loan ("2007 term
loan").
Results
Cheniere reported income from operations of $31.0 million for the quarter ended March 31, 2010 compared to a loss from operations
of $37.4 million for the comparable
period in 2009. Total revenues were $79.5 million in the first quarter of 2010, an
increase of $78.3 million compared to
the comparable 2009 period. LNG receiving terminal revenues
increased $66.8 million compared to
the comparable 2009 period 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.
Marketing and trading revenues for the first quarter 2010
increased $11.6 million compared to
the first quarter of 2009 due to an increase in physical gas sales
and gains on derivative instruments.
Total operating costs and expenses were $48.5 million for the first quarter 2010, an
increase of $9.8 million compared to
the comparable 2009 period. LNG receiving terminal and pipeline
operating expenses increased $4.1
million as compared to the comparable 2009 period due to
increased commercial activities at the Sabine Pass LNG receiving
terminal during the second quarter of 2009. Depreciation, depletion
and amortization expense increased $3.6
million in the first quarter of 2010 compared to the
comparable 2009 period due to the achievement of full operability
of the Sabine Pass LNG receiving terminal. Included in general and
administrative expenses were non-cash compensation expenses of
approximately $6.3 million for the
first quarter 2010 and $3.9 million
in the comparable 2009 period.
Interest expense, net increased $13.9
million in the first quarter of 2010 compared to the first
quarter of 2009 primarily due to less interest subject to
capitalization. Derivative gains decreased $2.1 million to $0.5 million in the first quarter
2010 compared to the comparable 2009 period due to the change in
the fair value of derivatives instruments tied to our LNG
inventory.
Unrestricted cash and cash equivalents held by Cheniere at
March 31, 2010 were $95.1 million. In addition, as of March 31, 2010, we expected to receive
approximately $18 million as a result
of monetizing our LNG inventory and hedging activities.
Restricted cash and cash equivalents at March 31, 2010 were $259.0
million, which were designated for the following purposes:
$85.4 million and $33.0 million for Sabine Pass LNG, L.P. ("Sabine
Pass LNG") and Cheniere Partners working capital, respectively;
$137.3 million for interest payments
related to the Sabine Pass LNG senior notes indenture and
$3.3 million for other restricted
purposes.
LNG Marketing and Trading
During 2009, Cheniere Marketing began successfully trading in
the LNG markets. Cheniere Marketing purchases LNG and enters
into derivative contracts to hedge the cash flows from future sales
of the LNG inventory. Due to the nature of the hedging
strategy, earnings are 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 at the Sabine Pass
LNG receiving terminal 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.
Net revenues from marketing and trading for the first quarter of
2010 were $12.1 million compared to
$0.5 million in the comparable 2009
period. The increase in revenues period over period was
related to physical sales of inventory and roll off of hedges.
As of March 31, 2010 and
December 31, 2009, Cheniere Marketing
and Sabine Pass LNG had approximately 2,725,000 million British
thermal units ("MMBtu") and 7,778,000 MMBtu of LNG inventory,
respectively. As of March 31,
2010, there were a total of approximately 2,635,000 MMBtu of
natural gas swaps through January 31,
2011 for which we will receive fixed prices of $3.93 to $7.15 per MMBtu.
Strategic Outlook
Our strategic focus is to safely manage and operate the Sabine
Pass LNG receiving terminal and Creole Trail pipeline, serve our
customers and monetize the 2.0 Bcf/d of regasification capacity we
have reserved through Cheniere Marketing at the Sabine Pass LNG
receiving terminal. We are also in various stages of developing our
other LNG receiving terminal and pipeline related projects.
Our strategy to monetize our TUA capacity includes entering into
long-term TUAs with third parties, developing a portfolio of
long-term, short-term and spot LNG purchase agreements and entering
into business relationships for the domestic marketing of natural
gas that is imported by Cheniere Marketing into the Sabine Pass LNG
receiving terminal. During the first quarter of 2010, Cheniere
Marketing entered into a multi-year services agreement with LNGCo.
We believe this arrangement strengthens our ability to
participate in the LNG markets by allowing us to source LNG and
utilize our capacity at the Sabine Pass LNG receiving terminal and
our network of relationships in the most effective way. This
arrangement reduces our working capital requirements to purchase
and hedge LNG.
Our strategy to improve our capital structure and address
maturities of our existing indebtedness may include entering into
long-term TUAs or LNG purchase agreements, refinancing our existing
debt, issuing equity or other securities, selling assets or a
combination of the foregoing. During the first quarter of
2010, we agreed to sell our 30 percent interest in Freeport LNG
which allows us to pay down a portion of our 2007 term loan.
Cheniere Energy, Inc. is a Houston-based energy company primarily engaged
in LNG related businesses, and owns and operates the Sabine Pass
LNG receiving terminal and Creole Trail pipeline in Louisiana. Cheniere is pursuing related
business opportunities both upstream and downstream of the Sabine
Pass LNG receiving terminal. Cheniere is also the founder and holds
a 30% limited partner interest in another 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
March 31, 2010, 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, except per share data) (1)
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2010
|
|
2009
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
LNG
receiving terminal revenues
|
$
66,827
|
|
$
—
|
|
Oil
and gas sales
|
537
|
|
734
|
|
Marketing and trading
|
12,142
|
|
501
|
|
Other
|
11
|
|
—
|
|
Total
revenues
|
79,517
|
|
1,235
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
LNG
receiving terminal and pipeline development expense
|
718
|
|
—
|
|
LNG
receiving terminal and pipeline operating expense
|
12,813
|
|
8,687
|
|
Oil
and gas production and exploration costs
|
99
|
|
87
|
|
Depreciation, depletion and
amortization
|
15,624
|
|
12,062
|
|
General and administrative
expense
|
19,217
|
|
17,797
|
|
Total
operating costs and expenses
|
48,471
|
|
38,633
|
|
|
|
|
|
|
Income
(Loss) from operations
|
31,046
|
|
(37,398)
|
|
|
|
|
|
|
Derivative gain, net
|
505
|
|
2,562
|
|
Interest expense, net
|
(67,194)
|
|
(53,250)
|
|
Interest income
|
97
|
|
811
|
|
Other
loss
|
(103)
|
|
(64)
|
|
Non-controlling interest
|
482
|
|
4,597
|
|
Net
loss
|
$
(35,167)
|
|
$
(82,742)
|
|
|
|
|
|
|
Net
loss per common share—basic and diluted
|
$
(0.64)
|
|
$
(1.70)
|
|
|
|
|
|
Weighted average number of common
shares outstanding—basic and diluted
|
54,870
|
|
48,650
|
|
|
|
|
|
|
|
|
|
|
March 31, 2010
(Unaudited)
|
|
December 31,
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
95,106
|
|
$
|
88,372
|
|
|
Restricted cash and cash
equivalents
|
|
176,098
|
|
|
138,309
|
|
|
LNG inventory
|
|
11,140
|
|
|
32,602
|
|
|
Other current assets
|
|
22,427
|
|
|
26,992
|
|
|
Non-current restricted cash and cash
equivalents
|
|
82,892
|
|
|
82,892
|
|
|
Property, plant and equipment,
net
|
|
2,202,216
|
|
|
2,216,855
|
|
|
Debt issuance costs, net
|
|
44,978
|
|
|
47,043
|
|
|
Goodwill
|
|
76,819
|
|
|
76,819
|
|
|
Other assets
|
|
24,967
|
|
|
22,738
|
|
|
Total
assets
|
$
|
2,736,643
|
|
$
|
2,732,622
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
$
|
92,018
|
|
$
|
66,212
|
|
|
Long-term debt, net of
discount
|
|
3,055,021
|
|
|
3,041,875
|
|
|
Deferred revenue
|
|
32,500
|
|
|
33,500
|
|
|
Other liabilities
|
|
25,793
|
|
|
23,162
|
|
|
Non-controlling interest
|
|
210,525
|
|
|
217,605
|
|
|
Stockholders' deficit
|
|
(679,214)
|
|
|
(649,732)
|
|
|
Total liabilities
and stockholders' deficit
|
$
|
2,736,643
|
|
$
|
2,732,622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2010
(unaudited)
|
|
Sabine Pass LNG,
L.P.
|
|
Cheniere Energy
Partners, L.P.
|
|
Other Cheniere
Energy, Inc.
|
|
Consolidated
Cheniere Energy, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
—
|
|
$
|
—
|
|
$
|
95,106
|
|
$
|
95,106
|
|
|
Restricted cash and cash
equivalents
|
|
|
222,749
|
|
|
32,979
|
|
|
3,262
|
|
|
258,990
|
|
|
Total
|
|
$
|
222,749
|
|
$
|
32,979
|
|
$
|
98,368
|
|
$
|
354,096
|
|
|
|
|
(1) Please refer to the Cheniere
Energy, Inc. Quarterly Report on Form 10-Q for the period ended
March 31, 2010,
filed
with the Securities and Exchange Commission.
|
|
|
|
|
|
|
|
|
|
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SOURCE Cheniere Energy