Cheniere Energy Reports Third Quarter 2012 Results

              Cheniere Energy Reports Third Quarter 2012 Results

PR Newswire

HOUSTON, Nov. 2, 2012

HOUSTON, Nov. 2, 2012 /PRNewswire/ -- Cheniere Energy, Inc. ("Cheniere") (NYSE
MKT: LNG) reported a net loss of $109.0 million, or $0.52 per share (basic and
diluted), for the three months ended September30, 2012, compared to a net
loss of $53.9 million, or $0.67 per share (basic and diluted), for the
comparable 2011 period. For the nine months ended September30, 2012,
Cheniere reported a net loss of $238.5 million, or $1.40 per share (basic and
diluted), compared to a net loss of $140.9 million, or $1.94 per share (basic
and diluted), during the comparable 2011 period. For the three months ended
September30, 2012, results include significant items of $23.8 million, or
$0.11 per share, related to other expenses that primarily consisted of the
write-down of a royalty interest and to liquefied natural gas ("LNG") terminal
and pipeline development expenses primarily for the liquefaction facilities
Cheniere Energy Partners, L.P. ("Cheniere Partners") is developing and
constructing adjacent to the Sabine Pass LNG terminal (the "Sabine Pass
Liquefaction Project"). For the nine months ended September30, 2012,
results include significant items of $81.2 million, or $0.48 per share,
related to LNG terminal and pipeline development expenses for the Sabine Pass
Liquefaction Project, losses due to the early extinguishment of debt, and
other expenses that primarily consisted of the write-down of a royalty
interest.

(Logo: http://photos.prnewswire.com/prnh/20090611/AQ31545LOGO)

Results for the three and nine months ended September 30, 2012 were also
impacted by increases in general and administrative expenses of $63.2 million
and $63.1 million, respectively, compared to the comparable 2011 periods
primarily due to the August 2012 vesting of awards under the long-term
incentive plan related to LNG trains 1 and 2 of the Sabine Pass Liquefaction
Project. Cheniere recorded non-cash compensation expense of $49.8 million and
$54.0 million, respectively, for the three and nine months ended September30,
2012, compared to $2.3 million and $16.6 million for the comparable periods in
2011. These increases were partially offset by a decrease in interest expense
of $19.6 million and $34.1 million, respectively, as compared to the
comparable 2011 periods.

Results are reported on a consolidated basis and include our ownership
interest in Cheniere Partners, which was 66.4% as of September30, 2012.

Overview of Recent Significant Events

  oIn July 2012, we sold 28.0 million shares of Cheniere common stock in an
    underwritten public offering for net cash proceeds of $380.3 million. A
    portion of the proceeds were used to repay the entire outstanding
    principal balance plus accrued interest payable totaling $206.9 million
    under the Convertible Senior Unsecured Notes due August 1, 2012. As a
    result, Cheniere no longer has any debt outstanding on a standalone basis.
  oCheniere Partners made significant progress on the Sabine Pass
    Liquefaction Project, including the following:

       oIn July 2012, Sabine Pass Liquefaction, LLC, a wholly owned
         subsidiary of Cheniere Partners, closed on a $3.6 billion senior
         secured credit facility that will be used to fund a portion of the
         costs of developing, constructing and placing into service LNG trains
         1 and 2 of the Sabine Pass Liquefaction Project. We also purchased
         the remaining $333 million of our $500 million equity commitment in
         Class B Units from Cheniere Partners.
       oIn August 2012, Blackstone CQP Holdco LP ("Blackstone") purchased its
         initial $500 million of Class B Units from Cheniere Partners, and
         Cheniere Partners issued a full notice to proceed to Bechtel to
         construct LNG trains 1 and 2 of the Sabine Pass Liquefaction
         Project. As of October 31, 2012, Blackstone purchased $800 million
         additional Class B Units for an aggregate investment of $1.3 billion.

  oIn August 2012, we filed an application with the Federal Energy Regulatory
    Commission ("FERC") to site, construct and operate an LNG terminal to be
    located near Corpus Christi, Texas (the "Corpus Christi Liquefaction
    Project") and an application with the U.S. Department of Energy ("DOE")
    requesting multi-contract authorization to export up to 767 Bcf of LNG per
    year (equivalent to 15 million tonnes per annum ("mtpa")) from the Corpus
    Christi Liquefaction Project to all current and future countries with
    which the U.S. has a Free Trade Agreement ("FTA") as well as to any
    country with which the U.S. does not have an FTA in effect.
  oIn October 2012, Sabine Pass LNG, L.P. ("Sabine Pass LNG"), a wholly owned
    subsidiary of Cheniere Partners, repurchased approximately 97% of the
    outstanding $550 million 7.25% Senior Secured Notes due 2013 through a
    tender offer. The repurchase was funded from an equity contribution from
    Cheniere Partners and from newly issued $420 million 6.50% Senior Secured
    Notes due in 2020.
  oIn October 2012, we received authorization from the DOE to export up to
    767 Bcf per year of domestically produced LNG from the Corpus Christi
    Liquefaction Project to FTA countries.

Liquefaction Project Update

Sabine Pass Liquefaction Project

Cheniere Partners continues to make progress on the Sabine Pass Liquefaction
Project, which is being developed for up to four LNG trains, each with a
nominal production capability of approximately 4.5 mtpa.

In July 2012, Cheniere Partners secured financing of approximately $5.6
billion, including $2.0 billion of equity and $3.6 billion of debt
commitments, for developing, constructing and placing into service LNG trains
1 and 2. Cheniere Partners has issued a full notice to proceed to Bechtel and
construction has commenced for LNG trains 1 and 2. LNG exports from the
Sabine Pass LNG terminal are anticipated to commence in late 2015, with LNG
train 2 commencing operations approximately six to nine months thereafter.

Commencement of construction for LNG trains 3 and 4 is subject, but not
limited to, entering into an engineering, procurement and construction ("EPC")
agreement, reaching a positive final investment decision and obtaining
financing. Cheniere Partners has engaged Bechtel to complete front-end
engineering and design work for LNG trains 3 and 4 and has begun negotiating a
lump sum turnkey EPC contract, which is expected to be finalized by the end of
the fourth quarter of 2012. Construction of LNG trains 3 and 4 is expected to
begin in 2013.

Corpus Christi Liquefaction Project

In August 2012, we filed applications with the FERC for authorization to site,
construct and operate an LNG terminal to be located near Corpus Christi, Texas
and with the DOE requesting multi-contract authorization to export up to 767
Bcf per year (equivalent to 15 mtpa) of LNG from the proposed Corpus Christi
Liquefaction Project to all current and future FTA countries as well as to any
non-FTA countries. In October 2012, the DOE granted us authority to export up
to 767 Bcf per year of domestically produced LNG to FTA countries.

As currently contemplated, the Corpus Christi Liquefaction Project is being
designed for up to three LNG trains with an aggregate peak capacity of 15
mtpa. We have engaged Bechtel to complete front-end engineering and design
work. Commencement of construction for the Corpus Christi Liquefaction
Project is subject, but not limited to, receiving regulatory approvals,
entering into an EPC agreement, reaching a positive final investment decision
and obtaining financing.



Timelines for Liquefaction Projects
                          Target Date
                          Sabine Pass Liquefaction           Corpus Christi
                                                             Liquefaction
  Milestone               Trains 1 & 2        Trains 3 & 4   Trains 1 - 3
• DOE export              Received            Received       Received - FTA
  authorization                                              Pending - Non-FTA
 Definitive commercial                       Completed 8.3
  agreements              Completed 7.7 mtpa  mtpa           3Q13
•
  - BG Gulf Coast LNG,    4.2 mtpa            1.3 mtpa
  LLC
  - Gas Natural Fenosa    3.5 mtpa
  - KOGAS                                     3.5 mtpa
  - GAIL (India) Ltd.                         3.5 mtpa
• EPC contract            Completed           4Q12           4Q13
• Financing commitments                       1Q13           1Q14
  - Equity                Received
  - Debt                  Received
• FERC authorization      Received            Received       1Q14
  - Certificate to        Received            2013
  commence construction
• Commence construction   Completed           2013           1Q14
• Commence operations     2015/2016           2016/2017      2017



Cheniere Energy, Inc. is a Houston-based energy company primarily engaged in
LNG related businesses, and owns and operates the Sabine Pass LNG terminal and
Creole Trail Pipeline in Louisiana. Cheniere is pursuing related business
opportunities both upstream and downstream of the Sabine Pass LNG terminal.
Through its subsidiary, Cheniere Energy Partners, L.P., Cheniere is developing
a liquefaction project adjacent to the Sabine Pass LNG terminal for up to four
LNG trains with aggregate capacity of approximately 18 mtpa. Construction has
begun on LNG trains 1 and 2 at the Sabine Pass LNG terminal. Cheniere has also
initiated a project to develop an LNG terminal near Corpus Christi, Texas. The
Corpus Christi LNG terminal is being designed and permitted for up to three
modular LNG trains, with aggregate peak capacity of up to 15 mtpa and which
would include three 160,000 m3 full containment storage tanks and two LNG
carrier docks. Commencement of construction for the Corpus Christi LNG
terminal is subject, but not limited to, obtaining regulatory approvals,
entering into long-term customer contracts sufficient to underpin financing of
the project, entering into an engineering, procurement and construction
contract, and Cheniere making a final investment decision. We believe LNG
exports from the Corpus Christi LNG terminal could commence as early as 2017.

For additional information, please refer to the Cheniere Energy, Inc. website
at www.cheniere.com and Quarterly Report on Form 10-Q for the period ended
September 30, 2012, 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 fact, 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, including the construction and operation of liquefaction
facilities, (ii) statements regarding our expectations regarding regulatory
authorizations and approvals, (iii) statements expressing beliefs and
expectations regarding the development of Cheniere's LNG terminal and pipeline
businesses, including liquefaction facilities, (iv) statements regarding the
business operations and prospects of third parties, (v) statements regarding
potential financing arrangements and (vi) statements regarding future
discussions and entry into contracts. 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      Nine Months Ended
                   September 30,           September 30,
                   2012         2011        2012         2011
Revenues
LNG terminal       $ 65,939     $ 68,375    $ 199,269    $ 205,678
revenues
Marketing and      (292)        (2,999)     (1,641)      10,055
trading
Oil and gas sales  350          426         1,165        2,079
Other              1            11          6            42
Total revenues     65,998       65,813      198,799      217,854
Operating costs
and expenses
General and
administrative     79,427       16,227      120,236      57,116
expense
Depreciation,
depletion and      15,233       15,271      47,001       46,282
amortization
LNG terminal and
pipeline operating 14,056       10,976      36,606       29,023
expense
LNG terminal and
pipeline           11,721       11,143      54,629       32,936
development
expense
Oil and gas
production and     78           1,841       244          2,117
exploration costs
Total operating    120,515      55,458      258,716      167,474
costs and expenses
Income (loss) from (54,517)     10,355      (59,917)     50,380
operations
Other income
(expense)
Interest expense,  (45,504)     (65,125)    (159,719)    (193,867)
net
Loss on early
extinguishment of  —            —           (15,098)     —
debt
Derivative gain    287          (716)       (288)        (1,164)
(loss), net
Other income       (12,081)     17          (11,500)     245
(expense)
Total other        (57,298)     (65,824)    (186,605)    (194,786)
expense
Loss before income
taxes and          (111,815)    (55,469)    (246,522)    (144,406)
non-controlling
interest
Income tax         (61)                     (211)
provision
Loss before
non-controlling    (111,876)    (55,469)    (246,733)    (144,406)
interest
Non-controlling    2,875        1,533       8,277        3,459
interest
Net loss           $ (109,001)  $ (53,936)  $ (238,456)  $ (140,947)
Net loss per share
attributable to
common             $ (0.52)     $ (0.67)    $ (1.40)     $ (1.94)
stockholders—basic
and diluted
Weighted average
number of common
shares             208,712      80,473      170,414      72,739
outstanding—basic
and diluted



                                       As of September 30,  As of December 31,
                                       2012                 2011
Cash and cash equivalents              $      214,995       $     459,160
Restricted cash and cash equivalents   500,711              102,165
Accounts and interest receivable       29,200               6,562
LNG inventory                          6,597                3,043
Prepaid expenses and other             15,911               20,522
Non-current restricted cash and cash   267,700              82,892
equivalents
Property, plant and equipment, net     2,995,052            2,107,129
Debt issuance costs, net               222,144              33,356
Goodwill                               76,819               76,819
Other assets                           54,596               23,677
Total assets                           $      4,383,725     $     2,915,325
Current liabilities                    $      168,122       $     584,960
Long-term debt (including related      2,295,939            2,474,711
party debt), net of discount
Long-term deferred revenue             22,500               25,500
Long-term derivative liabilities       29,384               —
Other non-current liabilities          2,882                3,146
Non-controlling interest               1,268,004            208,575
Stockholders' equity (deficit)         596,894              (381,567)
Total liabilities and deficit          $      4,383,725     $     2,915,325



                     Sabine          Cheniere        Other   Consolidated
                                     Partners        Cheniere     Cheniere
                     Pass LNG
Cash and cash        $  —            $  —            $  214,995   $    214,995
equivalents
Restricted cash and  142,217     (2) 617,382     (3) 8,812        768,411
cash equivalents
Total                $  142,217      $  617,382      $  223,807   $    983,406



As of September30, 2012, we had unrestricted cash and cash equivalents of
approximately $215 million available to Cheniere. In addition, we had
consolidated restricted cash and cash equivalents of $768.4 million (which
included cash and cash equivalents and other working capital available to
Cheniere Partners, in which we own a 66.4% interest, and Sabine Pass LNG)
designated for the following purposes: $137.3 million for interest payments
related to the Senior Notes; $4.9 million for Sabine Pass LNG's working
capital; $617.4 million for the Sabine Pass Liquefaction Project and for
Cheniere Partners' working capital; and $8.8 million for other restricted
purposes.



    Please refer to the Cheniere Energy, Inc. Quarterly Report of Form 10-Q
(1) for the period ended September 30, 2012, filed with the Securities and
    Exchange Commission.
    All cash and cash equivalents presented above for Sabine Pass LNG are
(2) considered restricted to us, but $4.9 million is considered unrestricted
    for Sabine Pass LNG.
    All cash and cash equivalents presented above for Cheniere Partners are
(3) considered restricted to us, but $369.1 million is considered unrestricted
    for Cheniere Partners, including the $4.9 million considered unrestricted
    for Sabine Pass LNG.



SOURCE Cheniere Energy, Inc.

Website: http://www.cheniere.com
Contact: Investors; Christina Burke, +1-713-375-5104, or Nancy Bui,
+1-713-375-5280, or Media; Diane Haggard, +1-713-375-5259
 
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