What is Cheniere's current financial position and profitability?

Cheniere reported a net loss of $49.9 million for the quarter ended March 31, 2008, an increase from the $34.6 million loss in the same period of 2007. This widening loss is primarily due to increased operating expenses, including personnel costs and depreciation, as the company prepares its Sabine Pass LNG terminal for commercial operations. The company has substantial long-term debt of $2.76 billion.

What is the status of the Sabine Pass LNG receiving terminal?

The Sabine Pass LNG receiving terminal is nearing completion, with 99% of the initial phase constructed. Commissioning activities began in April 2008, and commercial operations are expected to commence in the second quarter of 2008. Full operational capacity is anticipated by the third quarter of 2009. The total estimated cost for the terminal is approximately $1.4 billion.

What strategic initiatives is Cheniere pursuing?

Cheniere announced in February 2008 that it is exploring strategic options to enhance shareholder value, which may include optimizing the value of the Sabine Pass LNG terminal. The company has also initiated a cost-saving program that involves downsizing its natural gas marketing business and reducing personnel by approximately 200 employees. A new $95 million bridge loan was secured in May 2008 to provide liquidity.

How is Cheniere managing its liquidity and debt?

As of March 31, 2008, Cheniere had $141.5 million in unrestricted cash and cash equivalents. The company has significant restricted cash balances to cover construction costs and debt service. To bolster liquidity, Cheniere secured an $82.3 million net proceeds bridge loan in early May 2008, which matures in November 2009. The company will need additional funding in early 2009 if it does not enter into a strategic transaction or secure sufficient LNG cargos.

LNG 10-Q Quarterly Report Q1 FY2008 — Revenue, Net Income, EPS

Summary

Cheniere Energy, Inc. (LNG) reported a net loss of $49.9 million for the quarter ended March 31, 2008, an increase from the $34.6 million loss in the same period of the previous year. This widened loss is largely attributed to increased operating expenses, including higher salaries and benefits related to anticipated commencement of operations at the Sabine Pass LNG receiving terminal, as well as increased depreciation and amortization costs. The company is actively exploring strategic options to enhance shareholder value and has initiated a cost-saving program involving personnel reductions and downsizing of its natural gas marketing business. Operationally, the Sabine Pass LNG receiving terminal is nearing completion, with 99% of the initial phase constructed and commissioning activities underway. Commercial operations are expected to begin in the second quarter of 2008, with full operability anticipated in the third quarter of 2009. The company also reported its Creole Trail Pipeline had substantially completed Phase 1 and commenced commercial operations in April 2008. Despite the ongoing operational developments and cost-saving measures, Cheniere faces significant debt obligations and has secured an $82.3 million bridge loan to provide liquidity until a strategic transaction is finalized or operations generate sufficient revenue.

Key Highlights

1Net loss increased to $49.9 million in Q1 2008 from $34.6 million in Q1 2007, driven by higher operating expenses and share-based compensation.
2Sabine Pass LNG receiving terminal is 99% complete, with commercial operations expected in Q2 2008.
3Creole Trail Pipeline Phase 1 commenced commercial operations in April 2008.
4Cheniere is exploring strategic options to enhance shareholder value and has implemented a cost-saving program.
5Total assets remained relatively stable at $2.96 billion, but cash and cash equivalents decreased significantly from $296.5 million to $141.5 million.
6The company has $2.76 billion in long-term debt, primarily from Senior Notes related to the Sabine Pass LNG project.
7A new $95 million bridge loan with Credit Suisse was secured in early May 2008 to provide additional liquidity.

Cheniere Energy, Inc. Quarterly Report for Q1 Ended Mar 31, 2008

Summary

Key Highlights

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