What is the company's current financial performance trend?

Cheniere Energy reported a net loss of $53.5 million for the third quarter of 2007, which is wider than the $33.1 million net loss reported in the same quarter of 2006. This indicates a worsening loss on a quarter-over-quarter basis, largely due to increased operating and interest expenses related to ongoing development projects.

How is the company funding its significant capital expenditures for LNG projects?

Cheniere is utilizing a combination of sources. This includes its substantial unrestricted cash and cash equivalents ($446.6 million as of September 30, 2007), restricted cash reserves, proceeds from debt financing such as the $400 million 2007 Term Loan, and capital raised through its interest in Cheniere Energy Partners, L.P. The company states it believes it has adequate financial resources to complete its approved projects.

What are the key milestones expected for the LNG receiving terminals and pipelines?

The Sabine Pass LNG receiving terminal is anticipated to commence commercial operation in the second quarter of 2008. The Creole Trail Pipeline expects a portion to be operational in the fourth quarter of 2007, with the remainder in the second quarter of 2008. Decisions on Corpus Christi and Creole Trail LNG receiving terminals are contingent on commercial arrangements and financing.

What is the company's debt situation?

Cheniere's long-term debt increased to $2.76 billion as of September 30, 2007. This includes the significant Sabine Pass LNG notes ($2.03 billion) and the recently issued 2007 Term Loan ($400 million). The company also has $325 million in Convertible Senior Unsecured Notes. While debt levels are high, they are financing major infrastructure development.

LNG 10-Q Quarterly Report Q3 FY2007 — Revenue, Net Income, EPS

Summary

Cheniere Energy, Inc. reported a net loss of $53.5 million for the third quarter ended September 30, 2007, or $1.14 per share, a widening from the $33.1 million net loss in the same period of the prior year. This increased loss was primarily driven by higher LNG terminal and pipeline development expenses, increased general and administrative costs, and significant interest expenses, partially offset by interest income. Despite the reported loss, the company continues to make substantial investments in its core LNG receiving terminal and natural gas pipeline projects. Significant capital expenditures are evident in the increase of Property, Plant, and Equipment by over $650 million compared to the previous year, largely for the Sabine Pass LNG receiving terminal and pipeline construction. The company highlighted its belief in having adequate financial resources to complete its approved projects, supported by substantial unrestricted cash and restricted cash reserves. Key developments during the quarter include the continued progress on the Sabine Pass LNG terminal and the Creole Trail Pipeline, with anticipated commercial operations beginning in mid-2008 and late 2007, respectively. The company also addressed its capital structure, including its long-term debt and its interest in Cheniere Energy Partners, L.P.

Key Highlights

1Net loss for the quarter widened to $53.5 million ($1.14/share) from $33.1 million ($0.61/share) in the prior year's quarter.
2Total assets grew significantly to $3.02 billion from $2.60 billion, primarily driven by increased investment in Property, Plant, and Equipment ($1.40 billion from $748.8 million).
3Significant capital expenditures are ongoing, with $547.7 million invested in LNG terminal and pipeline construction-in-progress during the nine months ended September 30, 2007.
4The company has a substantial unrestricted cash balance of $446.6 million, along with significant restricted cash and equivalents.
5Construction on the Sabine Pass LNG receiving terminal is progressing, with expected commercial operation in Q2 2008.
6The Creole Trail Pipeline construction is underway, with a portion expected to be operational in Q4 2007.
7Long-term debt increased to $2.76 billion, mainly due to the $400 million 2007 Term Loan.

Cheniere Energy, Inc. Quarterly Report for Q3 Ended Sep 30, 2007

Summary

Key Highlights

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