Cheniere Energy Announces Third Quarter Results.Business/Energy Editors HOUSTON--(BUSINESS WIRE)--Nov. 8, 2001 Cheniere Energy Inc. (AMEX AMEX See: American Stock Exchange :CXY) announced the results of its operations for the third quarter of 2001. Cheniere reported a net loss of $4,632,237, or $0.35 per share, compared with a net loss of $81,131, or $0.01 per share, in the third quarter of 2000. The 2001 results include a $2,966,603 ceiling test write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. , representing a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. equal to the excess of the Company's book basis over the discounted present value of estimated future net revenues from its proved oil and gas properties. Third quarter 2001 results also include $883,408 in non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) related to Cheniere's equity in affiliate Gryphon Exploration Company for the accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. of Gryphon's preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. dividend and $527,451 in development expenses related to Cheniere's LNG LNG (liquefied natural gas): see under natural gas. receiving terminal business. Charif Souki, chairman, said, "The third quarter was very productive for the company as we started receiving the benefits of our early investments. We finished the quarter with no debt, a clean balance sheet Clean Balance Sheet Refers to a company whose balance sheet has very little or no debt. Notes: A company is told to "clean up" its balance sheet if they are exposed to large amounts of debt. and strong assets." Cheniere Exploration Group. Our exploration group generated and captured 10 prospects in its first year of operation and has sold to industry eight of these prospects for cash and carried working interests. These prospects are expected to be drilled in the first half of 2002. The Company will continue to exploit its 7,000 sq. mile 3D database and expects to generate an equal number of opportunities in 2002. During the third quarter, the Company also sold licenses to its non-proprietary database and has substantially reduced its cost basis in the data. As announced previously, the Company sold its proprietary seismic survey to Seismic Exchange Inc. in return for cash and a share of future revenues. Gryphon Exploration Company. Our affiliate, Gryphon Exploration Company, put its second discovery on production in September September: see month. . In its first year as an independent company, it drilled nine exploration wells and had four discoveries. It will soon drill its tenth prospect and expects to drill 12 to 15 prospects next year. Warburg War·burg , Otto Heinrich 1883-1970. German biochemist. He won a 1931 Nobel Prize for research on the respiration of cells. , Pincus Pin·cus , Gregory Goodwin 1903-1967. American physiologist. Through his studies of natural hormones that inhibit ovulation in mammals, he developed the first effective oral contraceptive, which was first tested in 1954. Equity Partners, L.P., our partner in Gryphon, has agreed to fund an additional $10,000,000 on November November: see month. 19, which will bring the total cash invested by Warburg to $55 million. Cheniere, at that point, will own 20 percent of Gryphon. Cheniere LNG. The apparent third quarter sequential decline in domestic gas production in the U.S. strongly supports our view that it will be very difficult to increase domestic supply to meet anticipated demand in the next decade. LNG receiving terminals will become critical to U.S. gas consumption. During the third quarter the Company finalized See finalization. its feasibility study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. with the Port of Freeport, started regulatory filings, initiated a public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most program, and executed non-binding Memoranda of Understanding with large gas purchasers for the sale of 250MMcf per day of natural gas from the proposed Freeport terminal." Additional information on the company may be found on it's Web site at www.cheniere.com, by contacting the company's investor and media relations department toll-free at 888/948-2036 or by writing to: cxy@mdcgroup.com. Except for the historical statements contained herein, this news release presents forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
---------------------- ----------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
Revenues
Oil and Gas Sales $395,540 $1,198,052 $2,142,028 $4,102,735
---------- ---------- ---------- ----------
Total Revenues 395,540 1,198,052 2,142,028 4,102,735
---------- ---------- ---------- ----------
Operating Costs and
Expenses
Production Costs 68,943 120,494 276,006 316,227
Depreciation,
Depletion and
Amortization 332,570 901,084 1,093,202 2,897,431
Ceiling Test
Write-down 2,966,603 -- 5,126,248 --
General and
Administrative
Expenses 1,157,574 262,510 3,479,732 932,274
---------- ---------- ---------- ----------
Total Operating
Costs and
Expenses 4,525,690 1,284,088 9,975,188 4,145,932
---------- ---------- ---------- ----------
Loss from Operations
Before Interest and
Income Taxes and
Equity in Net Loss
of Unconsolidated
Affiliate (4,130,150) (86,036) (7,833,160) (43,197)
Interest Income 1,717 4,905 15,681 17,824
Provision for
Income Taxes -- -- -- --
Equity in Net
Loss of
Unconsolidated
Affiliate (929,482) -- (1,936,912) --
Gain on Sale of
Unconsolidated
Affiliate Stock 425,678 -- 425,678 --
---------- ---------- ---------- ----------
Net Loss $(4,632,237) $(81,131) $(9,328,713) $(25,373)
========== ========== ========== ==========
Net Loss Per
Share - Basic
and Diluted $(0.35) $(0.01) $(0.72) $(0.00)
========== ========== ========== ==========
Weighted Average
Number of Shares
Outstanding -
Basic and
Diluted 13,297,393 10,763,697 12,946,917 10,572,610
========== ========== ========== ==========
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