Cheniere Energy Reports Second Quarter 2006 Results.HOUSTON Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; -- Cheniere Energy, Inc. (AMEX AMEX See: American Stock Exchange :LNG LNG (liquefied natural gas): see under natural gas. ) reported a net loss of $3.6 million, or $0.07 per basic and 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. share, for the second quarter of 2006, compared to a net loss of $9.7 million, or $0.18 per basic and diluted share, during the corresponding period in 2005. The major factors contributing to the net loss during the second quarter of 2006 were charges for general and administrative expenses of $12.4 million and interest expense of $11.1 million. These were partially offset by interest income of $10.3 million, an income tax benefit of $5.6 million and a $4.5 million credit in LNG receiving terminal and pipeline development expenses from application of Statement of Financial Accounting Standards ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ") No. 71, Accounting for Effects of Certain Types of Regulation whereby $12.3 million of natural gas pipeline development costs previously charged to expense were capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. as a regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. asset. Cheniere's net loss for the second quarter of 2006 excluding the $12.3 million expense recapture recapture n. in income tax, the requirement that the taxpayer pay the amount of tax savings from past years due to accelerated depreciation or deferred capital gains upon sale of property. (See: income tax) RECAPTURE, war. was $15.9 million or $0.30 per basic and diluted share. Results for the corresponding period in 2005 included LNG receiving terminal and pipeline development expenses of $5.4 million, general and administrative expenses of $5.6 million and interest income of $1.8 million. Cheniere's working capital at June June: see month. 30, 2006 was $756.1 million, compared with $810.1 million at December December: see month. 31, 2005. The change was primarily the result of working capital used for the construction of Phase 1 of the Sabine Pass Sabine Pass is the natural outlet of Sabine Lake into the Gulf of Mexico. It borders Jefferson County, Texas, and Cameron Parish, Louisiana. The First Battle of Sabine Pass, and the second Battle of Sabine Pass took place at Sabine Pass during the American Civil War. LNG receiving terminal and working capital used in operating activities. These uses were partially offset by $149.0 million borrowed under the Sabine Pass Credit Facility. For additional information please refer to the Cheniere Energy, Inc. Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the period ended June 30, 2006, filed with the Securities and Exchange Commission. Cheniere Energy, Inc. Cheniere is developing a network of three, 100% owned LNG receiving terminals and related natural gas pipelines along the Gulf Coast of the United States The Gulf Coast region of the United States comprises the coasts of states which border the Gulf of Mexico. The states of Texas, Louisiana, Mississippi, Alabama, and Florida are known as the Gulf States. All Gulf States are located in the Southern region of the United States. . The three terminals will have an aggregate send-out capacity of 9.9 billion cubic feet per day. Cheniere is pursuing related LNG business opportunities both upstream From the consumer to the provider. See downstream. (networking) upstream - Fewer network hops away from a backbone or hub. For example, a small ISP that connects to the Internet through a larger ISP that has their own connection to the backbone is downstream from the larger and downstream From the provider to the customer. Downloading files and Web pages from the Internet is the downstream side. The upstream is from the customer to the provider (requesting a Web page, sending e-mail, etc.). of the terminals and developing a business to market LNG and natural gas. Cheniere is also the founder and holds a 30% limited partner interest in a fourth LNG receiving terminal, owns a minority interest in an LNG shipping venture, and engages in oil and gas exploration 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 . Cheniere is based in Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation). Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the , with offices in Johnson Bayou, Louisiana Johnson Bayou is a small community on the Gulf Coast in Cameron Parish, Louisiana, United States, named after Daniel Johnson, who came to the area in around 1790. It is located on Louisiana Highway 82, 12 miles west of Holly Beach, and 28 miles southeast, across the Sabine Pass , and Paris, France. Additional information about Cheniere may be found on the company's web site at www.cheniere.com. This press release contains certain statements that may include "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. " within the meaning 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 business. 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 Incorrect means to not be correct and may also refer to:
(Financial Table Follows)
Cheniere Energy, Inc.
Selected Financial Information
(in thousands) (1)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2006 2005 2006 2005
--------- ---------- --------- ----------
(as adjusted)(2) (as adjusted)(2)
Revenues $413 $689 $835 $1,425
Operating costs and
expenses
LNG receiving terminal
and pipeline
development expenses (4,506) 5,350 3,807 10,775
Exploration costs 590 560 1,428 1,102
Oil and gas production
costs 55 34 105 89
Depreciation,
depletion and
amortization 579 249 1,185 453
General and
administrative
expenses 12,444 5,600 25,625 10,590
--------- ---------- --------- ----------
Total operating
costs and expenses 9,162 11,793 32,150 23,009
--------- ---------- --------- ----------
Loss from operations (8,749) (11,104) (31,315) (21,584)
Equity in net loss of
limited partnership -- (127) -- (971)
Derivative gain (loss) 162 (642) 923 (667)
Interest expense (11,096) -- (22,234) --
Interest income 10,335 1,755 19,879 3,573
Other income 108 426 284 426
Income tax benefit 5,621 -- 13,033 --
Minority interest -- -- -- 97
--------- ---------- --------- ----------
Net loss $(3,619) $(9,692) $(19,430) $(19,126)
========= ========== ========= ==========
Net loss per common
share--basic and
diluted $(0.07) $(0.18) $(0.36) $(0.36)
========= ========== ========= ==========
Weighted average number
of common shares
outstanding--basic and
diluted 54,369 53,757 54,293 53,063
========= ========== ========= ==========
June 30, December 31,
2006 2005
-------------- --------------
(unaudited) (as adjusted)
Cash and cash equivalents $657,608 $692,592
Restricted cash and cash equivalents 136,860 160,885
Restricted certificate of deposit 688 676
Advances to EPC contractor -- 8,087
Other current assets 20,617 9,223
Non-current restricted cash and cash
equivalents 13,744 16,500
Property, plant and equipment, net 469,686 280,106
Debt issuance costs, net 40,288 43,008
Goodwill 76,844 76,844
Other assets 33,461 2,226
-------------- --------------
Total assets $1,449,796 $1,290,147
============== ==============
Current liabilities $59,690 $61,322
Long-term debt 1,063,500 917,500
Deferred revenue 41,000 41,000
Other liabilities 59 1,784
Stockholders' equity 285,547 268,541
-------------- --------------
Total liabilities and stockholders'
equity $1,449,796 $1,290,147
============== ==============
(1) Please refer to Cheniere Energy, Inc. Quarterly Report on Form
10-Q for the period ended June 30, 2006, filed with the Securities
and Exchange Commission.
(2) Effective January 1, 2006, Cheniere converted from the full cost
method of accounting to the successful efforts method of
accounting for its investment in oil and gas properties. The
change in accounting methods constitutes a "Change in Accounting
Principle," requiring that all prior period financial statements
be adjusted to reflect the results and balances that would have
been reported had the company been following the successful
efforts method of accounting from its inception. The cumulative
effect of the change in accounting method as of December 31, 2005
was to reduce the balance of our net investment in oil and gas
properties and retained earnings by $18.0 million. The change in
accounting methods resulted in a decrease in the net loss of
$145,000 and an increase in the net loss of $73,000 for the three
and six months ended June 30, 2005, respectively, and had no
significant impact on earnings per share (basic and diluted) for
these respective periods. The change in method of accounting has
no impact on cash or working capital.
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