Cheniere Reports Fourth Quarter and 2005 Results

Cheniere Energy, a Houston-based independent that is involved in the development of four liquefied natural gas (LNG) terminals on the Texas and Louisiana coasts, reported a net loss of $18.4 million, or $0.34 per share (basic and diluted), for the fourth quarter of 2005. During the corresponding period in 2004, the company saw a net loss of $9.8 million, or $0.23 per share (basic and diluted).

The company attributes the fourth quarter net loss in 2005 primarily to LNG receiving terminal development expenses of $7.1 million and general and administrative expenses of $12 million.

Financial results for the year ended December 31, 2005 reflect a net loss of $29.8 million, or $0.56 per share (basic and diluted), compared to a net loss of $24.6 million, or $0.63 per share (basic and diluted), in 2004. The major factors contributing to the $29.8 million net loss were LNG receiving terminal development expenses of $22 million and general and administrative expenses of $29.1 million. These expenses were offset by the $20.2 million gain on the sale of Cheniere's investment in Gryphon Exploration.

Cheniere's working capital at December 31, 2005, was $810.1 million, an increase of $504.3 million from $305.8 million at December 31, 2004. The company attributes this increase primarily to the completion of a $600 million term loan and the issuance of $325 million of Convertible Senior Unsecured notes in 2005. These sources of funds were partially offset by construction costs at Cheniere's Sabine Pass LNG receiving terminal, the cost of hedging the potential dilution from the conversion of the convertible notes up to a market price of $70.00 per share of Cheniere common stock, funds used in operations, and debt issuance costs.

In addition to building the LNG terminal near Sabine Pass in Cameron Parish, La., Cheniere is developing LNG receiving terminals near Corpus Christi, Texas, and near the Creole Trail in Cameron Parish. All three of these terminals will be 100-owned by the company. Cheniere is also a 30-percent limited partner in the LNG receiving terminal that Freeport LNG Development is building near Freeport, Texas.

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