Cheniere Energy Establishes Financing Facility and Initial Production.

HOUSTON--(BUSINESS WIRE)--Sept. 9, 1999--

Cheniere Energy Inc. (Nasdaq:CHEX) announced that it has established a $3.1 million financing facility with EnCap Energy Capital Fund III, L.P. Cheniere will use the proceeds to fund its share of platform and pipeline costs at West Cameron Block 49 as well as other exploration and development costs in the area.

Cheniere began production today from its two recent natural gas discoveries at West Cameron Block 49. Both wells are producing from the same platform. Initial combined rates are expected to be 25 mmcf per day. Cheniere owns a 35% working interest in the Redfish Prospect well and a 45% working interest in the Stingray Prospect well. Other interest owners in the wells and the platform are IP Petroleum Company, the operator, and Beta Oil & Gas.

Cheniere also announced that it has completed site preparation work at its Heron prospect and expects to begin drilling later this week. The well is located onshore in Cameron Parish, La., and targets the Cris R and Planulina sands at depths estimated from 9,900 feet to 11,000 feet. Cheniere is the operator and owns a 56.5% working interest in the well. Nabors Drilling USA will drill the well under a turnkey agreement.

Michael L. Harvey, president and CEO of Cheniere, said, "These are significant events in Cheniere's history. We initiated our drilling program in February of this year. So far, we have drilled four exploratory wells and made two discoveries. Our first production marks the culmination of the initial phase of our business plan and the beginning of the second phase, involving production and continued exploration. The EnCap relationship is one we are pleased to have established and we look forward to building upon it."

Houston-based Cheniere Energy Inc. is an independent oil and gas company focusing in the Transition Zone and shallow waters offshore Louisiana. The Company relies extensively on the use of 3-D seismic technology in its exploration.

This news release includes forward-looking statements that are based on assumptions which in the future may prove not to be accurate. 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.