What caused the significant increase in net loss for the quarter?

The primary driver for the increased net loss of $132.3 million in the second quarter of 2008 was a substantial $78.6 million in restructuring charges. These charges are related to the company's cost-saving program, which included downsizing its natural gas marketing business, winding down construction activities for its LNG terminals and pipelines, and terminating LNG vessel charter agreements. Additionally, derivative losses and a loss from equity method investments contributed to the widened loss.

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

The Sabine Pass LNG receiving terminal is nearing completion. As of June 30, 2008, the initial 2.6 Bcf/d of send-out capacity and 10.1 Bcf of storage capacity were substantially complete and the terminal was operational and capable of accepting commercial cargoes. The commissioning process, which began in April 2008, was underway and expected to be completed in the third or fourth quarter of 2008. Construction for the remaining capacity was also progressing.

What is the company's outlook regarding future funding and strategic options?

The company anticipates that the closing of the $250 million convertible security financing will provide adequate liquidity for at least three years. However, if this financing does not close, or if the company is unsuccessful in securing another strategic transaction or obtaining sufficient LNG cargos, it will need to find an alternative source of funding during the first quarter of 2009. The exploration of strategic options for the company to enhance stockholder value remains an ongoing process.

LNG 10-Q Quarterly Report Q2 FY2008 — Revenue, Net Income, EPS

Q: How is Cheniere Energy addressing its liquidity needs?

Cheniere Energy has taken steps to bolster its liquidity. This includes entering into an 18-month credit facility with Credit Suisse for approximately $82.3 million in net proceeds in May 2008. More significantly, the company announced on August 6, 2008, that it accepted a commitment for $250 million in convertible security financing, which is expected to replace the existing Credit Suisse facility and provide additional funds. This new financing is anticipated to close in August 2008 and is expected to provide sufficient liquidity for at least three years, assuming successful closing.

Summary

Cheniere Energy, Inc. (LNG) reported a significant net loss of $132.3 million for the quarter ended June 30, 2008, a substantial increase from the $41.1 million loss in the same period last year. This widening loss is primarily attributed to $78.6 million in restructuring charges associated with downsizing its natural gas marketing business and winding down construction activities, as well as derivative losses and a loss from equity method investments. Despite these challenges, the company made progress on its Sabine Pass LNG receiving terminal, which is nearing completion and has begun commissioning activities. The company also secured a commitment for $250 million in convertible security financing to bolster its liquidity, which is expected to provide sufficient funds for at least three years, contingent on closing. Financially, Cheniere Energy saw a decrease in total assets to $2.83 billion from $2.96 billion at the end of 2007, largely due to a significant reduction in restricted cash and cash equivalents. Long-term debt increased to $2.85 billion. The company's operational focus remains on the completion of the Sabine Pass LNG terminal and the development of its natural gas pipeline infrastructure, while it navigates a challenging market and continues to explore strategic options.

Key Highlights

1Significant increase in net loss to $132.3 million in Q2 2008 from $41.1 million in Q2 2007, driven by $78.6 million in restructuring charges.
2Sabine Pass LNG receiving terminal is operating and undergoing commissioning, with initial send-out capacity and storage largely complete.
3Secured a commitment for $250 million in convertible security financing to improve liquidity, expected to close in August 2008.
4Total assets decreased to $2.83 billion, with a notable reduction in restricted cash and cash equivalents.
5Long-term debt increased to $2.85 billion, including a new $95 million Bridge Loan.
6Exploration of strategic options for the company remains a key focus.
7The company is actively managing its business segments, with a primary focus on LNG receiving terminals and natural gas pipelines.

Cheniere Energy, Inc. Quarterly Report for Q2 Ended Jun 30, 2008

Summary

Key Highlights

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