Cheniere Energy Releases First Quarter Results.Business/Energy Editors HOUSTON--(BUSINESS WIRE)--May 15, 2002 Cheniere Energy Inc. (AMEX AMEX See: American Stock Exchange :CXY) announced the results of its operations for the first quarter of 2002. Cheniere reported a net loss for the first quarter of $2,530,967, or $0.19 per share, compared with a net loss of $910,851, or $0.07 per share, a year earlier. Cheniere reported 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) attributable to charges from its 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 totaling $1,164,877 in 2002 compared to $508,791 in the 2001 quarter. Cheniere's oil and gas operating results declined to $38,307 from $570,493 a year earlier due to depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able of currently producing zones as well as a decrease in average gas prices to $2.33 per mcf in 2002 from $7.49 per mcf in the 2001 quarter. In April Cheniere closed the sale of these properties for $2,350,000, effective Jan. 1, 2002. Cheniere also incurred start-up Start-up The earliest stage of a new business venture. expenses related to its development of LNG terminals Liquefied natural gas is used to transport natural gas over long distances, often by sea. In most cases, LNG terminals are purpose built ports used exclusively to export or import LNG. of $727,407 in 2002 compared to $314,038 in the first quarter of 2001. Cheniere's business is focused in three components: the development of LNG LNG (liquefied natural gas): see under natural gas. receiving terminals, the investment in its exploration affiliate, Gryphon, and the exploitation of its own 3D seismic data base through prospect generation. LNG Receiving Terminal - During the first quarter of 2002, Cheniere made significant progress in the development of its first LNG terminal at Freeport, Texas Freeport is a city in Brazoria County, Texas within the Houston–Sugar Land–Baytown Metropolitan Area and is situated in Southeast Texas. As of the 2000 U.S. Census, the city population was 12,708 and is about sixteen miles away from Angleton. . Engineering and environmental work are underway to make regulatory filings by mid-year for the siting, construction and operation of an LNG receiving terminal. Discussions are being held with suppliers of LNG concerning the future use of Cheniere's Freeport Freeport, city, Bahamas Freeport, city (1990 pop. 25,115), Grand Bahama Island, Bahamas. A popular resort area, it developed out of a 1955 agreement between the Bahamian colonial government and a private development company to create a free port and terminal. Memoranda of understanding have been signed with several large purchasers of natural gas for the off-take of 650 mmcf per day from the terminal. Discussions are also underway with potential equity participants in the project. To date, Cheniere has invested approximately $4,400,000 in its LNG effort. Investment in Gryphon Exploration Company - Cheniere owns 100% of Gryphon's outstanding common stock. 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. has invested $60,000,000 to date in Gryphon preferred stock which is convertible into 87% of Gryphon and accrues dividends at 8% per annum Per annum Yearly. . Upon the conversion of Gryphon's preferred stock into common stock, Cheniere's interest would be diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. to 13%. Cheniere has an option to acquire an additional 6% of Gryphon's common stock for $2,570,000. Since its inception in October October: see month. 2000, Gryphon has made six discoveries in 11 attempts. It uses an extensive, 16,000-square-mile 3D seismic database to explore in the shallow waters See:
Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east . In 2002, Gryphon plans to drill 12-14 exploratory wells. Cheniere Exploration - Subsequent to its forming Gryphon in October 2000, Cheniere re-established its own exploration capability. So far, Cheniere's exploration group has generated 12 prospects over its 7,000-square-mile 3D seismic database. Ten of the prospects have been sold to industry partners and two are presently being marketed. The drilling of these prospects has begun, and preliminary results are encouraging.
Financial table follows:
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.
Cheniere Energy Inc.
Selected Financial Information
(Unaudited)
1st Qtr 2002 1st Qtr 2001
------------ ------------
Revenues $161,604 $971,656
------------ ------------
Operating Costs and Expenses
Production Costs 65,336 120,510
Depreciation, Depletion and
Amortization 114,691 327,898
General and Administrative
Expenses
LNG Terminal Development 727,407 314,038
Other 572,671 711,584
------------ ------------
Total General and
Administrative Expenses 1,300,078 1,025,622
------------ ------------
Total Operating Costs and Expenses 1,480,105 1,474,030
------------ ------------
Loss from Operations (1,318,501) (502,374)
Equity in Net Loss of
Unconsolidated Affiliate (1,213,909) (418,541)
Interest Income 1,443 10,064
------------ ------------
Net Loss $(2,530,967) $(910,851)
============ ============
Net Loss Per Share - Basic
and Diluted $(0.19) $(0.07)
============ ============
Weighted Average Number of Shares
Outstanding - Basic and Diluted 13,297,393 12,645,393
============ ============
3/31/02 12/31/01
------------ ------------
Current Assets $1,046,956 $1,344,159
Oil and Gas Properties, net, full
cost method 19,569,023 18,166,086
LNG Site Costs 1,475,000 1,350,000
Fixed Assets 340,747 416,232
Investment in Unconsolidated
Affiliate (Gryphon) 970,938 3,747,199
------------ ------------
Total Assets $23,402,664 $25,023,676
============ ============
Current Liabilities $2,621,311 $1,874,401
Stockholders' Equity 20,781,353 23,149,275
------------ ------------
Total Liabilities and
Stockholders' Equity $23,402,664 $25,023,676
============ ============
Gryphon Summary (unaudited): 1st Qtr 2002 1st Qtr 2001
------------ ------------
Gryphon Revenues $1,864,699 $211,389
Gryphon Depreciation, Depletion
and Amortization 1,149,444 222,410
Gryphon Net Income (Loss) (49,032) 90,250
3/31/02 12/31/01
------------ ------------
Gryphon Stockholders' Equity $65,237,087 $62,848,866
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