UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

For the quarterly period ended June 30, 2004

 

OR

 

 

For the transition period from                 to                

 

Commission File No. 001-16383

 

CHENIERE ENERGY, INC.

(Exact name as specified in its charter)

 

Delaware

(State or other jurisdiction of incorporation or organization)

 

95-4352386

(I.R.S. Employer Identification No.)

 

717 Texas Avenue, Suite 3100

Houston, Texas

(Address of principal executive offices)

 

77002

(Zip Code)

 

(713)  659-1361

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ý No o.

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).  Yes o No ý.

 

As of August 5, 2004, there were 19,201,920 shares of Cheniere Energy, Inc. Common Stock, $.003 par value, issued and outstanding.

 

 

CHENIERE ENERGY, INC.

INDEX TO FORM 10-Q

 

Part I.   Financial Information
	Item 1.	Consolidated Financial Statements
		Consolidated Balance Sheet	3
		Consolidated Statement of Operations	4
		Consolidated Statement of Stockholders’ Equity	5
		Consolidated Statement of Cash Flows	6
		Notes to Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
	Item 4.	Disclosure Controls and Procedures	23
Part II.   Other Information			23
	Item 1.	Legal Proceedings	23
	Item 4.	Submission of Matters to a Vote of Security Holders	23
	Item 6.	Exhibits and Reports on Form 8-K	24

 

CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS

 

This quarterly report contains certain statements that may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  All statements, other than statements of historical facts, included herein or incorporated herein by reference are “forward-looking statements.”  Included among “forward-looking statements” are, among other things:  statements regarding our business strategy, plans and objectives; statements expressing beliefs and expectations regarding the development of our LNG receiving terminal business; statements expressing beliefs and expectations regarding our ability to successfully raise the additional capital necessary to meet our obligations under our current exploration agreements; statements expressing beliefs and expectations regarding our ability to secure the leases necessary to facilitate anticipated drilling activities; statements expressing beliefs and expectations regarding our ability to attract additional working interest owners to participate in the exploration and development of our exploration areas; and statements about non-historical information.  These forward-looking statements are often identified by the use of terms and phrases such as “expect,” “estimate,” “project,” “plan,” “believe,” “achievable,” “anticipate” and similar terms and phrases.  Although we believe 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.  You should not place undue reliance on these forward-looking statements, which speak only as of the date of this quarterly report.

 

2

 

CHENIERE ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

 

		June 30, 2004			December 31, 2003
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents		$	9,999,359		$	1,257,693
Restricted Certificate of Deposit		1,123,094			—
Accounts Receivable
Affiliates		—			1,000,000
Other		326,862			1,828,065
Prepaid Expenses		303,183			401,594
Total Current Assets		11,752,498			4,487,352
OIL AND GAS PROPERTIES, full cost method
Proved Properties, net		981,795			1,087,152
Unproved Properties, not subject to amortization		18,473,490			18,047,802
Total Oil and Gas Properties		19,455,285			19,134,954
LNG SITE & OTHER RELATED COSTS		585,035			310,500
FIXED ASSETS, net		961,273			578,281
INVESTMENT IN UNCONSOLIDATED AFFILIATE		—			—
INVESTMENT IN LIMITED PARTNERSHIP		667,271			—
INTANGIBLE LNG ASSETS		79,670			79,670
Total Assets		$	33,501,032		$	24,590,757
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts Payable		$	1,478,941		$	1,984,314
Accrued Liabilities		1,827,153			1,347,512
Note Payable		—			1,000,000
Total Current Liabilities		3,306,094			4,331,826
DEFERRED REVENUE		1,000,000			1,000,000
MINORITY INTEREST		72,653			120,032
COMMITMENTS AND CONTINGENCIES		—			—
STOCKHOLDERS’ EQUITY
Preferred Stock, $.0001 par value Authorized: 5,000,000 shares Issued and Outstanding: none		—			—
Common Stock, $.003 par value Authorized: 40,000,000 shares Issued and Outstanding: 19,070,459 shares at June 30, 2004 and 16,488,187 shares at December 31, 2003		57,212			49,465
Additional Paid-in-Capital		70,169,832			48,034,244
Deferred Compensation		(3,032,083		)	—
Accumulated Deficit		(38,072,676		)	(28,944,810		)
Total Stockholders’ Equity		29,122,285			19,138,899
Total Liabilities and Stockholders’ Equity		$	33,501,032		$	24,590,757

 

The accompanying notes are an integral part of these financial statements.

 

3

 

CHENIERE ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

 

		Three Months Ended June 30,						Six Months Ended June 30,
		2004			2003			2004			2003
Revenues
Oil and Gas Sales		$	334,646		$	121,300		$	666,991		$	231,420
Total Revenues		334,646			121,300			666,991			231,420
Operating Costs and Expenses