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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,WASHINGTON, D.C. 20549
------------------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31,September 30, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to ________
Commission File No.COMMISSION FILE NO. 0-9092
CHENIERE ENERGY, INC.
(Exact name as specified in its charter)
DelawareDELAWARE
(State or other jurisdiction of incorporation or organization)
95-4352386
(I. R. S. Identification No.)
1200 Smith Street, SuiteSMITH STREET, SUITE 1740
Houston, TexasHOUSTON, TEXAS
(Address or principal place of business)
77002-4312
(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 [X] NO [_].[ ].
As of May 14,November 12, 1999, there were 22,670,75229,198,351 shares of Cheniere Energy, Inc.
Common Stock, $.003 par value, issued and outstanding.
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CHENIERE ENERGY, INC.
INDEX TO FORM 10-Q
Page
----
PartPART I. Financial InformationFINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheet.................................................Sheet..................................... 3
Consolidated Statement of Operations.......................................Operations........................... 4
Consolidated Statement of Stockholders' Equity.............................Equity................. 5
Consolidated Statement of Cash Flows....................................... 7Flows........................... 6
Notes to Consolidated Financial Statements................................. 8Statements..................... 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations......................................................Operations.......................................... 11
Item 3.3 Quantitative and Qualitative Disclosures About Market Risk................. 13
PartRisk..... 14
PART II. Other InformationOTHER INFORMATION
Item 2. Changes in Securities...................................................... 13
Item 5. Other Information.......................................................... 13Securities and Use of Proceeds...................... 12
Item 6. Exhibits and Reports on Form 8-K........................................... 14
Signatures..................................................................................8-K............................... 15
SIGNATURES...................................................................... 16
2
CHENIERE ENERGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
(Unaudited)
March 31,September 30, December 31,
ASSETS 1999 1998
------------ ----------------------------- -----------------
ASSETS
------
CURRENT ASSETS
Cash $ 83,732325,784 $ 143,868
Accounts Receivable 288,012449,731 97,837
Subscriptions Receivable -110,000 500,000
Prepaid Expenses and Other Current Assets 151,6701,357,975 8,833
------------ ------------
TOTAL CURRENT ASSETS 523,414----------- -----------
Total current assets 2,243,490 750,538
OIL AND GAS PROPERTIES, full cost method, Unevaluated 20,737,609net 29,410,901 20,000,425
FIXED ASSETS, net 79,167520,863 89,511
------------ ------------
TOTAL ASSETS $ 21,340,190 $ 20,840,474----------- -----------
Total Assets $32,175,254 $20,840,474
============ =======================
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts Payable and Accrued Liabilities $ 916,2633,523,985 $ 523,144
Notes Payable 3,930,060 1,974,980
1,974,980
------------ ----------------------- -----------
Total Current Liabilities 2,891,243current liabilities 7,454,045 2,498,124
------------ ----------------------- -----------
LONG-TERM NOTES PAYABLE
Related Party - 2,000,000
Other - 25,020
------------ ----------------------- -----------
Total long-term liabilities - 2,025,020
------------ ------------
PRODUCTION PAYMENT 400,000 -
------------ ----------------------- -----------
STOCKHOLDERS' EQUITY
Common Stock, $.003 par value
Authorized: 45,000,00060,000,000 and 40,000,000 shares, respectively
Issued and Outstanding: 21,786,277 and 18,973,74929,198,351 shares at March 31, 1999 andSeptember 30, 1999;
18,973,749 at December 31, 1998 respectively 65,35987,595 56,922
Preferred Stock, $.0001 par value
Authorized: 5,000,000 shares
Issued and Outstanding: none - -
Additional Paid-in-Capital 22,137,21329,476,123 20,084,928
Deficit Accumulated During the Development Stage (4,153,625)(4,842,509) (3,824,520)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 18,048,947----------- -----------
Total Stockholders' Equity 24,721,209 16,317,330
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 21,340,190 $ 20,840,474----------- -----------
Total Liabilities and Stockholders' Equity $32,175,254 $20,840,474
============ =======================
The accompanying notes are an integral part of the financial statements.
3
CHENIERE ENERGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
For the Three Months For the Nine Months
Ended March 31, Cumulative
------------------------------- from the DateSeptember 30, Ended September 30,
---------------------------- -----------------------------
1999 1998 of Inception1999 1998
----------- ----------- ----------------------- ------------ ------------
Revenue
Oil and Gas Revenues $ 421,268 $ - $ -421,268 $ -
---------- ---------- ----------- -----------
-----------Production Costs 33,088 - 33,088 -
Depreciation, Depletion and Amortization 254,033 13,455 275,359 31,676
General and Administrative Expenses 334,043 195,394 4,256,819481,669 518,817 1,154,525 1,132,423
---------- ---------- ----------- -----------
Total Operating Costs and Expenses 768,790 532,272 1,462,972 1,164,099
---------- ---------- ----------- -----------
Loss from Operations Before OtherInterest Income
and Income Taxes (334,043) (195,394) (4,256,819)(347,522) (532,272) (1,041,704) (1,164,099)
Interest Income 4,938 5,894 142,195
Interest Expense - - (39,001)
-----------13,523 4,157 23,715 16,670
---------- ---------- ----------- -----------
Loss From Operations Before Income Taxes (329,105) (189,500) (4,153,625)(333,999) (528,115) (1,017,989) (1,147,429)
Provision for Income Taxes - - - ----------- ------------
---------- ---------- ------------ -----------
Net Loss $ (329,105)(333,999) $ (189,500) $(4,153,625)
===========(528,115) $(1,017,989) $(1,147,429)
========== ========== =========== ===========
Net Loss Per Share (basic and diluted) $ (0.02) $ (0.01) $ (0.30)
===========(0.03) $ (0.04) $ (0.07)
========== ========== =========== ===========
Weighted Average Number of Shares
Outstanding 19,508,942 14,457,866 13,785,646
===========28,105,458 16,507,625 23,728,372 15,436,103
========== ========== =========== ===========
The accompanying notes are an integral part of the financial statements.
4
CHENIERE ENERGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
Common Stock Additional Total
---------------------------------------------------- Paid-In Retained Stockholders'
Per Share
Shares Amount Capital Deficit Equity
--------------- ----------- ------------ ---------- ----------- ------------ --------------------------- --------------- ----------------
SaleIssuances of Shares on April 9, 1996 $0.012 6,242,422Stock 9,931,767 $ 18,72729,795 $ 56,2765,192,008 $ - $ 75,003
Sale of Shares on May 5, 1996 1.50 2,000,000 6,000 2,994,000 - 3,000,000
Issuance of Shares to an Employee
on July 1, 1996 1.00 30,000 90 29,910 - 30,000
Issuance of Shares in Reorganization to
Former Bexy Shareholders - 600,945 1,803 (1,803) - -
Sale of Shares on July 30, 1996 2.00 50,000 150 99,850 - 100,000
Sale of Shares on August 1, 1996 2.00 508,400 1,525 1,015,275 - 1,016,800
Sale of Shares on August 30, 1996 2.00 500,000 1,500 998,500 - 1,000,0005,221,803
Expenses Related to Offerings - - - (686,251) - (686,251)
Issuance of Warrants - - - 12,750 - 12,750
Net Loss - - - - (121,847) (121,847)
---------- -------- ----------- ------- ----------- ---------- -----------
Balance - August 31, 1996 9,931,767 29,795 4,518,507 (121,847) 4,426,455
SaleIssuances of Shares on September 12, 1996 2.00 50,000 150 99,850Stock 4,124,099 12,373 11,128,052 - 100,000
Sale of Shares on September 16, 1996 2.00 80,250 241 160,259 - 160,50011,140,425
Conversion of Debt 2.00Notes Payable 105,000 315 209,685 - 210,000
Sale of Shares on October 30, 1996 2.25 457,777 1,373 1,028,627 - 1,030,000
Issuance of Warrants - - - 6,450 - 6,450
Sale of Shares on December 6, 1996 2.25 475,499 1,426 1,068,448 - 1,069,874
Sale of Shares on December 9, 1996 2.50 400,000 1,200 998,800 - 1,000,000
Sale of Shares on December 11, 1996 2.25 22,222 67 49,933 - 50,000
Sale of Shares on December 19, 1996 2.50 200,000 600 499,400 - 500,000
Sale of Shares on December 20, 1996 2.50 220,000 660 549,340 - 550,000
Sale of Shares on February 28, 1997 4.25 352,947 1,059 1,498,967 - 1,500,026
Sale of Shares on March 4, 1997 4.25 352,947 1,059 1,498,966 - 1,500,025
Sale of Shares on May 22, 1997 3.00 535,000 1,605 1,603,395 - 1,605,000
Issuance of Shares to Adjust Prices of
Shares Sold on February 28 and March 4* - 294,124 883 (883) - -
Sale of Shares on June 26, 1997 3.00 33,333 100 99,900 - 100,000
Sale of Shares on July 24, 1997 3.00 250,000 750 749,250 - 750,000
Issuance of Shares in Connection with
Financial Advisory Services 3.125 200,000 600 624,400 - 625,000
Sale of Shares on July 30, 1997 3.00 100,000 300 299,700 - 300,000
Sale of Shares on August 19, 1997 3.00 100,000 300 299,700 - 300,000
Expenses Related to Offerings - - - (1,153,441) - (1,153,441)
Net Loss - - - - (1,676,468) (1,676,468)
---------- -------- ----------- ------- ----------- ---------- -----------
Balance - August 31, 1997 14,160,866 42,483 14,709,253 (1,798,315) 12,953,421
* Additional shares were issuedIssuances of Stock 297,000 891 827,609 - 828,500
Issuance of Warrants - - 101,000 - 101,000
Expenses Related to the purchasersOfferings - - (74,532) - (74,532)
Net Loss - - - (388,361) (388,361)
---------- -------- ----------- ----------- -----------
Balance - December 31, 1997 14,457,866 43,374 15,563,330 (2,186,676) 13,420,028
Issuances of shares sold on February 28, 1997 and March 4, 1997 pursuantStock 4,515,883 13,548 4,370,104 - 4,383,652
Issuance of Warrants - - 319,494 - 319,494
Expenses Related to the termsOfferings - - (168,000) - (168,000)
Net Loss - - - (1,637,844) (1,637,844)
---------- -------- ----------- ----------- -----------
Balance - December 31, 1998 18,973,749 56,922 20,084,928 (3,824,520) 16,317,330
Issuances of those sales.
AllStock 6,683,465 20,051 7,152,160 - 7,172,211
Conversion of the salesNotes Payable 2,956,662 8,869 2,174,698 - 2,183,567
Repricing of shares indicated above were made pursuantWarrants to private placement transactions.Extend Bridge Notes - - 35,702 - 35,702
Conversion of Production Payment 584,475 1,753 398,247 - 400,000
Expenses Related to Offerings - - (369,612) - (369,612)
Net Loss - - - (1,017,989) (1,017,989)
---------- -------- ----------- ----------- -----------
Balance - September 30, 1999 29,198,351 $ 87,595 $ 29,476,123 $(4,842,509) $24,721,209
========== ======== ============ =========== ===========
The accompanying notes are an integral part of the financial statements.
5
CHENIERE ENERGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY, CONTINUED
(Unaudited)
Common Stock Additional Total
---------------------- Paid-In Retained Stockholders'
Per Share Shares Amount Capital Deficit Equity
----------- ------------ --------- ----------- ------------ -----------
Balance - August 31, 1997 14,160,866 42,483 14,709,253 (1,798,315) 12,953,421
Sale of Shares on September 15, 1997 3.00 67,000 201 200,799 - 201,000
Sale of Shares on September 16, 1997 3.00 130,000 390 389,610 - 390,000
Expenses Related to Offerings - (74,532) (74,532)
Issuance of Warrants and Shares with
Bridge Notes on December 15, 1997 2.375 100,000 300 338,200 338,500
Net Loss - - - - (388,361) (388,361)
----------- ------ ---------- ---------- ----------
Balance - December 31, 1997 14,457,866 43,374 15,563,330 (2,186,676) 13,420,028
Sale of Shares on April 8, 1998 2.00 530,000 1,590 1,058,410 - 1,060,000
Issuance of Shares in Settlement of
Charges for Previous Legal Services 1.40 70,000 210 97,790 - 98,000
Sale of Shares on May 29, 1998 2.00 22,000 66 43,934 - 44,000
Sale of Shares on June 4, 1998 1.40 890,644 2,672 1,244,230 - 1,246,902
Expenses Related to Offerings - - - (168,000) - (168,000)
Issuance of Shares to Adjust Prices of
Shares Sold on April 8 and May 29** - 236,572 710 (710) - -
Issuance of Warrants with
Bridge Notes on June 4, 1998 - - - 3,661 - 3,661
Issuance of Shares on August 26, 1998
Pursuant to Exercise of Warrants 1.00 100,000 300 99,700 - 100,000
Sale of Shares on August 31, 1998 0.67 750,000 2,250 499,000 - 501,250
Issuance of Warrants and Shares to
Extend Bridge Notes on March 15 and
September 15, 1998 0.67 50,000 150 349,183 - 349,333
Sale of Shares on November 15, 1998 0.67 1,200,000 3,600 796,400 - 800,000
Sale of Shares on December 30, 1998 0.75 666,667 2,000 498,000 - 500,000
Net Loss - - - - (1,637,844) (1,637,844)
----------- ------ ---------- ---------- ----------
Balance - December 31, 1998 18,973,749 56,922 20,084,928 (3,824,520) 16,317,330
Issuance of Shares in Exchange for Notes
on February 2 and March 15, 1999 0.72 2,812,528 8,437 2,016,583 - 2,025,020
Repricing of Warrants to Extend Bridge
Notes on January 15, 1999 - 35,702 35,702
Net Loss - - - - (329,105) (329,105)
----------- ------ ---------- ---------- ----------
Balance - March 31, 1999 21,786,277 65,359 22,137,213 (4,153,625) 18,048,947
=========== ====== ========== ========== ==========
** Additional shares were issued to the purchasers of shares sold on April 8, 1998 and May 29, 1998 at $2.00 per share in order to
adjust the purchase price to the $1.40 per share price offered and received on June 4, 1998.
All of the sales of shares indicated above were made pursuant to private placement transactions.
The accompanying notes are an integral part of the financial statements.
6
CHENIERE ENERGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
ThreeNine Months Ended
March 31, Cumulative
--------------------------------- from the DateSeptember 30,
--------------------------------
1999 1998
of Inception
---------------- --------------- -----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:ACTIVITIES
Net Loss $ (329,105) $ (189,500) $ (4,153,625)$(1,017,989) $(1,147,429)
Adjustments to Reconcile Net Loss to
Net Cash Used by Operating Activities:
Depreciation, Depletion and Amortization 10,344 7,772 64,322
Compensation Paid in Common Stock - - 654,400
(Increase) Decrease275,359 31,676
Increase in Accounts Receivable (190,175) 6,891 (288,012)
(Increase)(351,894) 7,297
Decrease in Subscriptions Receivable 500,000 -390,000 -
Increase in Prepaid Expenses and Other Current Assets (142,837) (73,372) (151,670)(195,052) (24,880)
Increase (Decrease) in Accounts Payable and Accrued Liabilities 393,119 (85,014) 1,014,263
Non-Cash Interest Expense (Issuance of Warrants) - - 19,200
---------- ---------- ------------3,000,840 53,526
----------- -----------
NET CASH USED IN(USED IN) PROVIDED BY OPERATING ACTIVITIES $ 241,346 (333,223) (2,841,122)
---------- ---------- ------------2,101,264 (1,079,810)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of Fixed Assets - (70,279) (143,488)
Proceeds from Sales of Oil and Gas Seismic Data - - 46,000(498,219) (81,810)
Oil and Gas Property Additions (701,482) (427,903) (20,056,412)
---------- ---------- ------------(7,909,495) (2,462,648)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (701,482) (498,182) (20,153,900)
---------- ---------- ------------(8,407,714) (2,544,458)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuance of Notes with Detachable Warrants - - 4,605,000180,000
Proceeds from Issuance of Notes Payable or Advances - - 1,197,0003,100,000 592,000
Repayment of Notes Payable or Advances - - (1,592,000)(987,490) (772,000)
Sale of Production Payment 400,000 400,000
Issuance of Common Stock - 720,000 20,550,9804,745,468 3,050,152
Offering Costs - - (2,082,224)
---------- ---------- ------------(369,612) (138,000)
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 400,000 720,000 23,078,756
---------- ---------- ------------6,488,366 2,912,152
----------- -----------
NET INCREASE (DECREASE) IN CASH (60,136) (111,405) 83,732181,916 (712,116)
CASH - BEGINNING OF PERIOD 143,868 787,523
-
---------- ---------- ----------------------- -----------
CASH - END OF PERIOD $ 83,732325,784 $ 676,118 $ 83,732
========== ========== ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash Paid for Interest $ - $ - $ 22,353
========== ========== ============
Cash Paid for Income Taxes $ - $ - $ -
========== ========== ============75,407
=========== ===========
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
The Company issued 105,000 shares of common stock upon the conversion of
$210,000 of notes payable in September 1996.
In conjunction with its December 1997 Bridge Financing, the Company issued
at closing 100,000 shares of common stock (valued at $237,500), and upon
extension of the maturity date 50,000 shares (valued at $33,500), which were
recorded as debt issuance costs. In the same financing, the Company issued
1,333,334 warrants (valued at $101,000) and 1,987,500 warrants (valued at
$315,833) related to extensions of the maturity dates. In conjunction with a
short-term bridge financing in June 1998, the Company issued 83,334 warrants
(valued at $3,661). In conjunction with a 1999 extension of the maturity dates
of the December 1997 notes, the exercise price was reduced by $0.25 per share
for warrants related to the extended notes. This repricing of warrants was
valued at $35,702. The amortization of such warrant costs was included in
interest expense which was capitalized as a cost of oil and gas properties.
In 1998, the Company issued 70,000 shares of common stock (valued at
$98,000) in settlement of invoices for previously rendered legal services.
In 1999, the Company issued 2,812,528 shares of common stock in exchange
for the cancellation of long-term notes payable totaling $2,025,000.
The accompanying notes are an integral part of the financial statements.
7
CHENIERE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The unaudited consolidated financial statements of Cheniere Energy, Inc.
("Cheniere" or the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments, consisting of normal recurring
adjustments necessary for a fair presentation, have been included.
For further information, refer to the financial statements and footnotes
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1998. Interim results are not necessarily indicative of results to be
expected for the full fiscal year ended December 31, 1999.
The Company is currently a development stage enterprise and reports as such
under the provisions ofintends to adopt Statement of Financial Accounting StandardsStandard
("SFAS") No.
7, "Accounting and Reporting by Development Stage Enterprises." The Company's
future business will be in the field of oil and gas exploration and
exploitation.
The Company intends to adopt SFAS 133, "Accounting for Derivative Instruments and Hedging Activities,"
issued in June 1998 effective with its fiscal year beginning January 1, 20002001 as required by the
Statement.Statement, as amended by SFAS 137. Due to the Company's current and anticipated
limited use of derivative instruments, management anticipates that adoption of
SFAS 133 will not have any significant impact on the Company's financial
position or results of operations.
NOTE 2 - NOTES PAYABLE
In December 1997, Cheniere completed the private placement of a $4,000,000
bridge financing (the "December 1997 Bridge Financing"). The notes payable
issued by Cheniere had an initial maturity date of March 15, 1998, which was
extended to September 15, 1998 and further extended to January 15, 1999. In
December 1998, Cheniere received commitments from certain noteholders to
exchange notes payable for an aggregate of 2,812,528 shares of Cheniere common
stock at a price of $0.72 per share. Accordingly, the $2,025,020 face amount of
the exchanged notes was classified as a long-term obligation as of December 31,
1998. For those notes which were not exchanged for common stock, the maturity
date has been extended to July 15, 1999.was extended. The notes bear interest at a rate of LIBOR plus 4%. The
securities purchase agreements which govern such bridge financing specify that,
during the term of the notes, capital raised by the Company in excess of
$5,000,000$12,000,000 must be directed to repayment of the notes.
In connection with the December 1997 Bridge Financing, Cheniere issued
100,000 shares of common stock and four-year warrants to purchase 1,333,334
shares of common stock at $2-3/8 per share. Additional warrants to purchase
1,600,000 shares of Cheniere common stock were issued on September 15, 1998 in
consideration for the extension to that date. In connection with the extension
to January 15, 1999, the Company offered two alternatives of consideration.
8
CHENIERE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Holders of $3,000,000 of the notes elected to reduce the exercise price of their
warrants to $1.50 per share. The holder of $1,000,000 of the notes elected to
reduce the exercise price of its warrants to $2.00 per share, to extend the term
of such warrants to five years from the latter of September 15, 1998 or the date
of issue, to receive additional warrants to purchase 387,500 shares of common
stock and to receive 50,000 shares of common stock. In January 1999, the
maturity
7
CHENIERE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
date was extended to March 15, 1999. In March 1999, the maturity date
was extended to April 15, 1999. As consideration for the extension to April 15,
1999, the Company reduced the exercise price by $0.25 per share for all warrants
issued in connection with the issuance or extensions of the notes. In April
1999, the maturity date was extended to July 15, 1999, at which time 50% of the
outstanding balance was repaid, the maturity date for the remainder was extended
to October 15, 1999 and the interest rate was increased by 2% to LIBOR plus 6%.
In September 1999, certain noteholders exchanged notes payable and accrued
interest totaling $158,548 for units of common stock and warrants to purchase
common stock at a price of $1.10 per unit. In October 1999, the maturity date
of the remaining notes was extended to December 15, 1999. (See Note 8 -
Subsequent Events.)
On September 1, 1999, Cheniere established a $3.1 million financing
facility to fund a production platform and other exploration and development
costs in the West Cameron Block 49 area. Borrowings under the facility are to
be repaid from 75% of Cheniere's share of net cash flow from production through
the West Cameron Block 49. The notes have a two-year term. Financing costs
include interest at 12% per annum and a 5% net profit interest in the two wells
currently producing through the platform.
NOTE 3 - PRODUCTION PAYMENT-COMMON STOCK ISSUANCES
In MarchApril 1999, the Company soldcompleted the private placement of 300,000
units, each unit representing one share of Cheniere common stock and a warrant
to purchase one share of common stock at a share price equal to the lesser of
$1.00 or an amount calculated as 65% times the lowest trading price of Cheniere
common stock during the 30-day period ending June 12, 1999. Net proceeds were
$270,000 after payment of $30,000 in selling commissions. In July 1999,
Cheniere issued an additional 150,000 units pursuant to the price adjustment
provision of the original April 1999 private placement, reducing the average
price to $0.67 per unit. These issuances were made in reliance on the exemption
from registration provided by Section 506 of Regulation D.
Also in April 1999, the Company issued 584,475 shares of common stock at
$0.68 per share in exchange for the cancellation of a production payment and stock option for
$400,000. Under thewhich
it had sold in March 1999. The terms of the production payment and stock option
agreement provided for the per share price of the exchange to be an amount equal
to 75% times the average closing bid price for the five-day period preceding
notice of the exchange. The balance of the production payment could be exchangedat the time of
the exchange was $400,000. These issuances were made in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act of
1933.
In May 1999, Cheniere issued 600,000 shares of common stock in exchange for
$900,000 of prepaid drilling services. In addition, the Company issued 41,225
shares as partial payment of drilling services previously provided at a cost of
$53,850. These issuances were made in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933.
In June 1999, the Company completed three private placements of common
stock. On June 2, 1999, Cheniere issued 1,200,000 shares of common stock at a
price of $0.83 per share for proceeds of $1,000,000. These issuances were made
in reliance on the electionexemption from registration provided by Section 506 of
Regulation D. On June 9, 1999, Cheniere issued 500,000 shares of common stock
to acquire a license to use 3-D seismic data covering 8,700 square miles
8
CHENIERE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
in the shallow waters of the holder.Gulf of Mexico. These issuances were made in
reliance on the exemption from registration provided by Section 4(2) of the
Securities Act of 1933. On June 30, 1999, Cheniere issued 2,296,000 shares of
common stock at a price of $1.00 per share, resulting in net proceeds of
$2,082,000 after payment of $214,000 in selling commissions. These issuances
were made in reliance on the exemption from registration provided by Section 506
of Regulation D.
On July 1, 1999, Cheniere issued 116,240 shares of common stock in exchange
for $174,360 of drilling services and equipment. In Apriladdition, on August 1,
1999, Cheniere issued 800,000 shares of common stock in exchange for $1,200,000
of prepaid drilling services. These issuance were made in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act of
1933.
In September 1999, the production paymentCompany sold 824,134 units to nine investors at a
price of $1.10 per unit pursuant to Section 506 of Regulation D adopted by the
Securities and Exchange Commission. Each unit was exchanged for 584,475comprised of one share of
common stock and one half warrant to purchase one share of common stock, adding
up to 824,134 shares of common stock and warrants to purchase 412,067 shares of
common stock. Included among the participants in the private placement of units
were holders of the Company's notes payable who exchanged notes and accrued
interest totaling $158,548. Net proceeds were $1,364,148, including the effect
of the exchange of notes and $64,900 in selling commissions. These issuances
were made in reliance on the exemption from registration provided by Section 506
of Regulation D.
NOTE 4 - STOCK OPTIONS
On March 18, 1999, the Company granted options to certain employees under
the Cheniere Energy, Inc. 1997 Stock Option Plan. Options covering a total of
218,500 shares of common stock were granted to employees, exercisable at $1.50
per share, which is above the quoted market price of the stock at the time of
the grant. The options vest 25% at each of the first four anniversaries of the
date of grant and expire on the fifth anniversary date of the grants.
Also on March 18, 1999, the Company's Board of Directors elected a new
outside director. This director was granted options to purchase 35,000 shares of the
Company's common stock at an exercise price of $3.00 per share, which is above
the quoted market price at the time of the grant. These options vest on 22,500
shares on March 18, 2000, and on 12,500 shares on March 18, 2001, and will
expire on March 17, 2004.
Effective July 1, 1999, the Company issued an option to purchase 600,000
shares of common stock on or before May 31, 2004 at an exercise price of $1.50
per share. Such option vests fully for 300,000 shares as of the date of grant
and for 75,000 shares at each of the first four anniversaries of the grant date.
On July 1, 1999, the Company issued additional options to purchase 425,000
shares of common stock on or before June 30, 2004 at an exercise price of $1.50
per share. Such options vest annually in quarterly increments beginning on July
1, 2000.
On September 1, 1999 the Company issued to an employee an option to
purchase 30,000 shares of common stock on or before August 31, 2004 at an
exercise price of $1.50 per share. Such options vest annually in quarterly
increments beginning on September 1, 2000. Effective September 1, 1999 options
to purchase 15,000 shares of common stock were terminated. In
9
CHENIERE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
addition, effective September 30, 1999, the term of all stock options issued and
outstanding to employees was extended to September 30, 2004. On October 1, 1999
the Company issued to a consultant an option to purchase on or before September
30, 2004, 200,000 shares of common stock at an exercise price of $1.50 per
share, vesting on 50,000 shares one year after the date of grant, 50,000 shares
two years after the date of grant and on 100,000 shares at the earlier of the
date of employment or 3 years after the date of grant.
NOTE 5 - WARRANTS
In April 1999, Cheniere sold 300,000 units to three investors at a price of
$1.00 per share, resulting in net proceeds of $270,000 after payment of $30,000
in selling commissions. Each unit was comprised of one share of common stock
and one warrant to purchase one share of common stock, adding up to 300,000
shares of common stock and warrants to purchase 300,000 shares of common stock.
Warrants issued in connection with these sales of units are exercisable on or
before the second anniversary date of the date the units were sold at an
exercise price of $1.00 per share. These issuances were made in reliance on the
exemption from registration provided by Section 506 of Regulation D.
In June 1999, the Company issued 1,000,000 warrants to its president and
chief executive officer and 200,000 warrants to another member of its board of
directors, both of whom were instrumental in negotiating the Company's license
of 8,700 square miles of 3-D seismic data in the Gulf of Mexico. Warrants
issued in connection with this transaction are exercisable on or before the
fifth anniversary of the date the transaction closed at an exercise price of
$1.50 per share. These issuances were made in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933.
Effective in July 1999, the Company issued 50,000 warrants exercisable at
$1.50 per share on or before June 30, 2002 as consideration for assistance in
the private placement of securities. Cheniere also issued 150,000 warrants
exercisable at $1.00 per share on or before July 5, 2004 in connection with a
pricing adjustment to the number of units sold in April 1999.
In September 1999, the Company sold 824,134 units to nine investors at a
price of $1.10 per unit. Each unit was comprised of one share of common stock
and one half warrant to purchase one share of common stock, adding up to 824,134
shares of common stock and warrants to purchase 412,067 shares of common stock.
Warrants issued in connection with these sales of units are exercisable on or
before the third anniversary date of the date the units were sold at an exercise
price of $1.50 per share. Also in September 1999, the Company issued to a
consultant warrants to purchase 200,000 shares of common stock on or before
September 27, 2004 at exercise prices per share of $1.375 for 50,000 shares,
$1.875 for 50,000 shares, $2.375 for 50,000 shares and $2.875 for 50,000 shares.
These issuances were made in reliance on the exemption from registration
provided by Section 4(2) of the Securities Act of 1933.
NOTE 6 - RELATED PARTY TRANSACTIONS
In conjunction with certain of the Company's private placements of equity
securities, placement fees have been paid to Investors Administration Services,
Limited ("IAS"), a company
in which the brother of the Company's Co-Chairman, Charif
Souki, is a principal. Placement fees totaling $30,000 were paid to IAS related
to the April 1999 private placement of units described in Note 6.
NOTE 6 - SUBSEQUENT EVENTS
In April 1999, the Company completed the private placement of 300,000
units, each unit representing one share of Cheniere common stock and a warrant
to purchase one share of common stock at a share price equal to the lesser of
$1.00 or an amount calculated as 65% times the lowest trading price of Cheniere
common stock during the 30-day period ending June 12, 1999.
Also in April 1999, the Company issued 584,475 shares of common stock in
exchange for the cancellation of a production payment which it had sold in March
1999. The terms of the production payment and stock option agreement provided
for the per share price of the exchange
910
CHENIERE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
in which the brother of Cheniere's Chairman is a principal. Placement fees
totaling $288,900 were paid to IAS related to Cheniere's 1999 private placements
of equity securities.
During May 1999, the Company received and repaid $240,000 in short-term
advances from a major stockholder, BSR Investments, Ltd., whose president is the
mother of Cheniere's Chairman. Interest totaling $584 was paid on the advances
at a rate of LIBOR plus 4%, the same rate then payable on the Company's notes
payable.
NOTE 7 - CONTINGENT LIABILITIES
On June 9, 1999 Cheniere entered into a master license agreement covering
the license of approximately 8,700 square miles of 3-D seismic data in the Gulf
of Mexico. In connection with the license agreement, the Company has made a
commitment to reprocess certain of the seismic data and to pay a fee for such
reprocessing as the reprocessed data is delivered. If reprocessed seismic data
are delivered to Cheniere on the schedule specified in the agreement, Cheniere
will be obligated to make processing payments of approximately $200,000 per
month from December 1999 through December 2001.
NOTE 8 - SUBSEQUENT EVENTS
In October 1999, the Company extended the maturity dates on its $830,060
short-term notes payable from October 15, 1999 to December 15, 1999. As
consideration for these extensions, the Company issued 69,167 shares of common
stock, valued at $1.20 per share, to the noteholders.
In October and November 1999, the Company privately placed 250,000 units at
a price of $1.10 per unit, each unit representing one share of common stock and
one half warrant to purchase a share of common stock at an exercise price of
$1.50 per share. Net proceeds to the Company were $247,500.
Subsequent to September 30, 1999, the Company reached total depth on the
drilling of two wells, both of which were it determined to be an amount equalnonproductive and
has plugged and abandoned.
The Company is currently in breach of two financial covenants with respect
to 75% timesits $3,100,000 financing facility: (1) it has not completed the average closing bid price for"September
1999 Issuance" to raise $2,000,000 through the five-
day period preceding noticesale of equity by September 30,
1999 as initially required nor by October 29, 1999 as previously amended (it has
raised only $1,181,548 toward that commitment) and (2) it has not repaid short-
term notes payable of $830,000 by their maturity date of October 15, 1999 (it
has extended the maturity dates of the exchange. The balancenotes). Although the Company is in
discussion with the lenders to obtain waivers, there can be no assurance such
waivers will be received. If such waivers are not obtained, the lender could
accelerate the maturity of the production
payment at the time of the exchange was $400,000.
10
Item 2. Management's Discussionnote and Analysis of Financial Condition
and Results of Operations
General - Cheniere Energy, Inc. is currently a development stage company,
which has not yet begun generating revenues, and reports as suchexercise its rights under the provisions of SFAS No. 7.related
mortgage instruments.
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL - The Company's unaudited consolidated financial statements and
notes thereto relate to the three-month and nine-month periods ended March 31,September
30, 1999 and 1998. These statements, the notes thereto and the consolidated
financial statements included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1998 contain detailed information that should be
referred to in conjunction with the following discussion.
Results of Operations
Comparison of Three-Month Periods Ended March 31,RESULTS OF OPERATIONS
COMPARISON OF THREE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 andAND 1998 -
The Company's operating results for the three months ended March 31,September 30, 1999
reflect a loss of $329,105,$333,999, or $0.02$0.01 per share, compared to a loss of $189,500$528,115
or $0.01$0.03 per share a year earlier. The Company has not yet begun to generatebegan producing oil and gas on
September 9, 1999. Oil and gas revenues of $421,268 and related operating
revenues.expenses of $33,088 represent the results of Cheniere's first partial month of
production. Depreciation, depletion and amortization of oil and gas property
costs commenced in September 1999 and totaled $208,491.
General and administrative expenses of $334,043$481,669 in the three months
ended March 31,September 30, 1999 were higherlower than the $195,394$518,817 reported for the
comparable period a year earlier. The 1999 quarter includednet decrease in expenses results
principally from the inclusion in 1998 of legal expenses related to arbitration
proceedings. Partially offsetting the decrease in legal expenses is an increase
in personnel and office costs resulting from the Company's increased level of
activity relatedsince commencing drilling operations in February 1999 and expanding the
management and exploration teams beginning in June 1999.
COMPARISON OF NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998 -The
Company's operating results for the nine months ended September 30, 1999 reflect
a loss of $1,017,989, or $0.04 per share, compared to the commencementa loss of the Company's drilling operations. This activity
included additional personnel and office costs as well as legal expenses related
to$1,147,429 or
$0.07 per share a year earlier. The Company began producing oil and gas contract matters. Expenseson
September 9, 1999. Oil and gas revenues of $421,268 and related operating
expenses of $33,088 represent the results of its first partial month of
production. Depreciation, depletion and amortization of oil and gas property
costs totaled $208,491.
General and administrative expenses of $1,154,525 in the first quarter ofnine months
ended September 30, 1999 also
included legal and professional fees related to year-end financial reportingwere about the same as the $1,132,423 reported for the
fiscalcomparable period a year ended December 31, 1998. The comparable three months of 1998
did not include such expenses. At that time, the Company's fiscal year ended on
August 31 rather than December 31.
Liquidity and Capital Resourcesearlier.
LIQUIDITY AND CAPITAL RESOURCES
Since Cheniere's inception in February 1996, the business plan of the
Company has included a lengthy start-up period before revenues would begin.
Some ofThroughout 1996 and 1997 the prerequisite activities to be accomplished before the commencement
of operating revenues were: the acquisition ofCompany acquired and processed proprietary 3-D
seismic data over a 228-square-mile area in the processing
of that seismicLouisiana Transition Zone. In
1998 and 1999, the Company interpreted the data, the interpretation of that seismic data to identify
prospects, the leasing of thosegenerated prospects and
the drilling of those prospects
to prove up oil and gas reserves for production and sale to generate operating
revenues.acquired leases. Beginning in February 1999, Cheniere has completed the acquisition of proprietary data over a
230-square-mile 3-D seismic survey in Cameron Parish, Louisiana, and the
adjacent offshore area. It has processed and is interpreting the seismic data.
It has identified 15 prospects to date and has acquired leases over the majority
of those prospects. Cheniere has just beguncommenced the drilling
phase of its exploration project.
Drilling operations commenced in February 1999. A completion attempt wasprogram. Through September 1999, the Company had
drilled four prospects and had made ontwo discoveries. Subsequent to September
30, 1999 the Company's initial well (at the Cobra Prospect) but the well was not
productive in commercial quantities. Cheniere then commenced drilling a test
well on its second prospect, Redfish, where completion operations and testing
are presently underway. The Company has drilled a welltwo additional nonproductive wells. Beginning
on September 9, 1999 Cheniere commenced producing oil and gas from its third prospect,
Shark, and determined thattwo
discoveries at West Cameron Block 49. Revenues from the indicated reserves found present were not
adequatefirst three weeks of
12
production, though September 30, 1999, are estimated at $421,268.
Prior to justify a completionthe commencement of revenues in an offshore environment.September 1999, Cheniere
is
presently making plans for the drilling of its fourth and fifth prospects.
To fundfunded all its activities to date, Cheniere has raised $22,125,000 through private placements of its equity securities
and $1,974,980 (net) through the issuance of bridge notes payable. The
11
Company has raised these funds
through a series of private placements of moderate amounts of its securities.
The Company has consistently issued its common stock in amounts necessary to
meet financial needs when required. It has not been the strategy of the Company
to raise a significant amount of capital in excess of its current needs, but
rather, to sell stock as funds are required.
The Company anticipates that future liquidity requirements, including
repayment of $1,974,980$830,000 in short-term notes payable maturing on JulyDecember 15, 1999,
exploration and development activities withinpayment of trade accounts payable of approximately $3,360,000 as of September
30, 1999, obligations of approximately $200,000 per month under the 3-D Exploration Program,Company's
seismic reprocessing agreement, other oil and gas exploration and development
activities, and general corporate requirements will be met by a combination of:
cash balances, the sale of equity, further borrowings, and/or the sale of
portions of its interest in the 3-D Exploration Program or in the
prospects generated thereunder.oil and gas prospects. At this time, no assurance
can be given that such further sales of equity, future borrowings, or sales of
portions of its interest in the 3-D Exploration Program or in theoil and gas prospects generated thereunder will be accomplished.
SubsequentThe Company is currently in breach of two financial covenants with
respect to December 31, 1998, however, Cheniereits $3,100,000 financing facility: (1) it has raised funds fromnot completed the
following sources: $658,000"September 1999 Issuance" to raise $2,000,000 through the sale of interests in three wells,
$275,000 through the sale of a seismic option on three additional prospects,
$2,025,020 through the issuance of common stock in exchange for the cancellation
ofequity by
September 30, 1999 as initially required nor by October 29, 1999 as previously
amended (it has raised only $1,181,548 toward that commitment) and (2) it has
not repaid short-term notes payable $400,000 throughof $830,000 by their maturity date of
October 15, 1999 (it has extended the salematurity dates of a production paymentthe notes). Although the
Company is in discussion with the lenders to obtain waivers, there can be no
assurance such waivers will be received. If such waivers are not obtained, the
lender could accelerate the maturity of the note and $300,000
throughexercise its rights under
the issuance of units comprised of common stock and warrants.
Yearrelated mortgage instruments.
YEAR 2000
The Year 2000 presents significant issues for many computer systems.
Much of the software in use today may not be able to accurately process data
beyond the year 1999. The vast majority of computer systems process transactions
using two digits for the year of the transaction, rather than the full four
digits, making such systems unable to distinguish January 1, 2000 from January
1, 1900. Such systems may encounter significant processing inaccuracies or
become inoperable when Year 2000 transactions are processed. Such matters could
impact not only the Company in its day-to-day operations but also the Company's
financial institutions, customers and vendors as well as state, provincial and
federal governments with jurisdictions where the Company maintains operations.
The Company is currently addressing Year 2000 issues and is presently
focussing on its internal business systems and processes. To the extent
necessary, the Company will assess the readiness of any key business partners
(financial institutions, customers, vendors, oil and gas operators, etc.).
It has been the
Company's strategy to use, wherever possible, industry prevalent products and
processes with minimal customization. As a result, the Company does not expect
any extensive in-house hardware, software or process conversions in an effort to
be Year 2000 compliant nor does the Company expect its Year 2000 compliance
related costs to be material to its operations.
The Company's goal is to be Year 2000 compliant by June 30, 1999 wherever
possible and to have contingency plans in place where compliance is not possible
in a timely manner.13
While it is the Company's goal to be Year 2000 compliant, there can be
no assurance that there will not be a material adverse effect on the Company as
a result of a Year 2000 related issue. The Company's business partners may
present the area of greatest risk to the Company, in part because of the
Company's limited ability to influence actions of third parties, and in part
because of the Company's inability to estimate the level and impact of
noncompliance of third parties. Additionally, there are many variables and
uncertainties associated with judgments regarding any contingency plans
developed by the Company.
12
Item 3. Quantitative and Qualitative Disclosures About Market Risk
None.
PART II. Other Information
Item 2. Changes in Securities and Use of Proceeds
The information contained in Notes 2, 3 and 4 to the Consolidated Financial
Statements is incorporated herein by reference.
Item 5. Other Information
Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 (the "Act")
provides a safe harbor for forward-looking statements made by or on behalf of
the Company. The Company and its representatives may from time to time make
written or verbal forward-looking statements, including statements contained in
this report and other filings with the Securities and Exchange Commission and in
reports to its stockholders.
All statements, other than statements of historical facts so included
in this report that address activities, events or developments that the Company
intends, expects, projects, believes, or anticipates will or may occur in the
future are forward-looking statements within the meaning of the Act, including,
without limitation: statements regarding the Company's business strategy, plans
and objectives; statements expressing beliefs and expectations regarding the
ability of the Company to successfully raise the additional capital necessary to
meet its obligations under the Exploration Agreement, the ability of the Company
to secure the leases necessary to facilitate anticipated drilling activities and
the ability of the Company to attract additional working interest owners to
participate in the exploration and development within the Survey AMI; and
statements about non-historical Year 2000 information, are forward-looking statements within the meaning of the Act.information. These forward-looking
statements are, and will be, based on management's then current views and
assumptions regarding future events.
Factors That May Impact Forward-Looking Statements or Financial PerformanceFACTORS THAT MAY IMPACT FORWARD-LOOKING STATEMENTS OR FINANCIAL PERFORMANCE
The following are some of the important factors that could affect the
Company's financial performance or could cause actual results to differ
materially from estimates contained in the Company's forward-looking statements.
-- The Company's ability to generate sufficient cash flows to support
capital expansion plans, obligations to repay debt and general
operating activities.
-- The Company's ability to obtain additional financing from lenders,
through debt or equity offerings, or through sales of a portion of
its interest in the 3-D Exploration Program.
13
prospects.
-- The Company's ability to discover hydrocarbons in sufficient
quantities to be economically viable, and its ability to overcome
the operating hazards that are inherent in the oil and gas
industry.
-- Changes in laws and regulations, including changes in accounting
standards, taxation requirements (including tax rate changes, new
tax laws and revised tax law interpretations) and environmental
laws in domestic or foreign jurisdictions.
14
-- The uncertainties of litigation as well as other risks and
uncertainties detailed from time to time in the Company's
Securities and Exchange Commission filings.
-- The Company's ability to replace, modify or upgrade computer
programs in ways that adequately address the Year 2000 issue.
The foregoing list of important factors is not exclusive.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None.
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
The information contained in Notes 2, 3, 4 and 5 to the Consolidated Financial
Statements is incorporated herein by reference.
ITEM 6. Exhibits and Reports on FormEXHIBITS AND REPORTS ON FORM 8-K
(a) Each of the following exhibits is incorporated by reference or filed
herewith:
Exhibit No. Description
----------- -----------
3.1 Amended and Restated Certificate of Incorporation of Cheniere
Energy, Inc. ("Cheniere") (Incorporated(incorporated by reference to
Exhibit 3.1 of the Company's Registration StatementQuarterly Report on Form S-1 filed10-Q
for the three months ended June 30, 1999)
3.2 Certificate of Amendment to the Amended and Restated
Certificate of Incorporation of Cheniere Energy, Inc.
(incorporated by reference to Exhibit 3.2 of the Company's
Quarterly Report on August 27, 1996 (File No. 333-10905))
3.2Form 10-Q for the three months ended
June 30, 1999)
3.3 By-laws of Cheniere as amended through April 7, 1997
(Incorporated by reference to Exhibit 3.1 of the Company's
Annual Report on Form 10-K filed on March 29, 1999
(File No. 0-9092))
10.30 Credit Agreement between Cheniere Energy, Inc. as Borrower
and EnCap Energy Capital Fund III, L.P. as Lender for
$3,100,000 dated as of September 1, 1999
10.31 Conveyance of Net Profits Overriding Royalty Interest from
and by Cheniere Energy, Inc. to and in favor of EnCap Energy
Capital Fund III, L.P. dated as of September 1, 1999
10.32 Mortgage, Assignment, Security Agreement, Fixture Filing and
Financing Statement from Cheniere Energy, Inc. to EnCap
Energy Capital Fund III, L.P.
27.1 Financial Data Schedule
15
(b) Current Reports on Form 8-K: None.
14
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CHENIERE ENERGY, INC.
/s/ Don A. Turkleson
-----------------------------------------
Don A. Turkleson
Chief Financial Officer (on behalf of the
registrant and as principal accounting
officer)
Date: May 14,November 12, 1999
1516