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 October 30, 2015 - 8:00 AM EDT
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Cheniere Energy, Inc. Reports Third Quarter 2015 Results

HOUSTON, Oct. 30, 2015 /PRNewswire/ -- Cheniere Energy, Inc. ("Cheniere") (NYSE MKT: LNG) reported a net loss attributable to common stockholders of $297.8 million, or $1.31 per share (basic and diluted), for the three months ended September 30, 2015, compared to a net loss attributable to common stockholders of $89.6 million, or $0.40 per share (basic and diluted), for the comparable 2014 period. For the nine months ended September 30, 2015, Cheniere reported a net loss attributable to common stockholders of $684.0 million, or $3.02 per share (basic and diluted), compared to a net loss attributable to common stockholders of $389.3 million, or $1.74 per share (basic and diluted), during the corresponding period of 2014.

Significant items for the three months ended September 30, 2015 resulted in a loss of $134.2 million and are related to derivative loss primarily associated with the changes in long-term LIBOR during the period, and development expense, partially offset by changes in operating and maintenance expense associated with the increase in fair value of certain natural gas purchase agreements related to gas procurement for the liquefaction project currently under construction at the Sabine Pass LNG terminal adjacent to the existing regasification facilities (the "Sabine Pass Liquefaction Project"). Significant items for the nine months ended September 30, 2015 resulted in a loss of $343.8 million and are related to derivative loss, loss on early extinguishment of debt, and development expense, partially offset by changes in operating and maintenance expense described above.

Included in general and administrative expense were non-cash compensation expenses of $27.1 million and $85.2 million for the three and nine months ended September 30, 2015, respectively, compared to $21.2 million and $80.4 million for the comparable 2014 periods, respectively.

Results are reported on a consolidated basis and include our ownership interest in Cheniere Energy Partners, L.P. ("Cheniere Partners") (NYSE MKT: CQP), which is based on our 100% ownership of the general partner of Cheniere Partners and 80.1% ownership interest in Cheniere Energy Partners LP Holdings, LLC (NYSE MKT: CQH) which owns a 55.9% limited partner interest in Cheniere Partners.

Recent Significant Events

  • In July 2015, we entered into a liquefied natural gas ("LNG") Sale and Purchase Agreement ("SPA") with Central El Campesino for approximately 0.6 million tonnes per annum ("mtpa") through our subsidiary, Cheniere Marketing International LLP ("Cheniere Marketing"). Volumes are to be delivered ex-ship ("DES") for 20 years beginning in 2019 from the liquefaction project currently under construction near Corpus Christi, Texas (the "Corpus Christi Liquefaction Project").
  • Cheniere Marketing entered into LNG sales arrangements with Électricité de France, S.A. ("EDF") for the delivery of LNG cargoes on a DES basis. The sales arrangements with EDF cover the delivery of up to approximately 189 million MMBtus total through 2018.
  • Sabine Pass Liquefaction, LLC ("SPL") entered into a $1.2 billion working capital facility that will be used primarily for certain working capital requirements related to developing and placing into operation the Sabine Pass Liquefaction Project.

Liquefaction Projects Update

Sabine Pass Liquefaction Project

Through Cheniere Partners, we are developing up to six natural gas liquefaction trains ("Trains"), each with an expected nominal production capacity of approximately 4.5 mtpa of LNG, at the Sabine Pass LNG terminal adjacent to the existing regasification facilities.

The Trains are in various stages of development:

  • Construction on Trains 1 and 2 began in August 2012, and as of September 30, 2015, the overall project completion percentage for Trains 1 and 2 was approximately 95.2%, which is ahead of the contractual schedule. Based on our current construction schedule, we anticipate that Train 1 will produce LNG as early as late 2015.
  • Construction on Trains 3 and 4 began in May 2013, and as of September 30, 2015, the overall project completion percentage for Trains 3 and 4 was approximately 73.6%, which is ahead of the contractual schedule. We expect Trains 3 and 4 to become operational in late 2016 and 2017, respectively.
  • The permitting process for Trains 5 and 6 has been completed. In April 2015, Cheniere Partners received U.S. Federal Energy Regulatory Commission ("FERC") authorization to site, construct, and operate Trains 5 and 6. In June 2015, Cheniere Partners received authorization from the U.S. Department of Energy ("DOE") to export LNG to non-free trade agreement ("non-FTA") countries.
  • Construction on Train 5 began on June 30, 2015, and we expect Train 5 to commence operations as early as 2018. We expect to commence construction on Train 6 upon entering into acceptable commercial arrangements and obtaining adequate financing.

Corpus Christi Liquefaction Project

We are developing up to five Trains, each with an expected nominal production capacity of approximately 4.5 mtpa of LNG, as part of the Corpus Christi Liquefaction Project.

The Trains are in various stages of development:

  • Construction on Trains 1 and 2 began in May 2015. As of September 30, 2015, the overall project completion percentage for Trains 1 and 2 was approximately 22.8%, with engineering, procurement and construction approximately 82.0%, 32.0% and less than 1% complete, respectively. The construction of the Corpus Christi Pipeline is planned to commence in 2016.
  • We have entered into an SPA for approximately 0.8 mtpa of LNG volumes that commence with Train 3 and will contemplate making an FID to commence construction upon entering into additional SPAs. To date, we have obtained sufficient financing commitments and all necessary regulatory permits required to support the development of Trains 1 through 3.
  • Trains 4 and 5 are under development. We have initiated the regulatory process by filing the NEPA pre-filing request with the FERC and requesting authorization from the DOE to export LNG to both FTA and non-FTA countries. In August, the DOE granted authorization to export LNG from Trains 4 and 5 to FTA countries.

Timelines for Liquefaction Projects



Target Date





SPL


CCL

Milestone


Trains
1 - 4


Trains
5 & 6


Trains
1 - 3


Trains
4 & 5

DOE export authorization


Received


Received


Received


2017

Definitive commercial agreements


Completed

 16.0 mtpa


T5: Completed
T6: 2015/2016


T1-T2:
Completed

T3: 2015/2016



- BG Gulf Coast LNG, LLC


5.5 mtpa







- Gas Natural Fenosa


3.5 mtpa







- KOGAS


 3.5 mtpa







- GAIL (India) Ltd.


 3.5 mtpa







- Total Gas & Power N.A.




2.0 mtpa





- Centrica plc




1.75 mtpa





- PT Pertamina (Persero)






1.52 mtpa



- Endesa, S.A.






2.25 mtpa



- Iberdrola, S.A.






0.76 mtpa



- Gas Natural Fenosa LNG SL






1.50 mtpa



- Woodside Energy Trading Singapore






0.85 mtpa



- Électricité de France, S.A.






0.77 mtpa



- EDP Energias de Portugal S.A.






0.77 mtpa



EPC contracts


Completed


T5: Completed
T6: 2015/2016


Completed



Financing


Completed


T5: Completed
T6: 2015/2016


Completed



FERC authorization


Completed


Completed


Completed


2017

Issue Notice to Proceed


Completed


T5: Completed
T6: 2015/2016


T1-T2:
Completed
T3: 2015/2016


2017

Commence operations


2015 - 2017


2018/2019


2018/2019


2021

Cheniere Energy, Inc. is a Houston-based energy company primarily engaged in LNG-related businesses and owns and operates the Sabine Pass LNG terminal and Creole Trail Pipeline in Louisiana. Cheniere is pursuing related business opportunities both upstream and downstream of the Sabine Pass LNG terminal. Through its subsidiary, Cheniere Partners, Cheniere is developing a liquefaction project at the Sabine Pass LNG terminal adjacent to the existing regasification facilities for up to six Trains, each of which is expected to have a nominal production capacity of approximately 4.5 mtpa of LNG. Construction has begun on Trains 1 through 5 of the Sabine Pass Liquefaction Project. Cheniere is also developing liquefaction facilities near Corpus Christi, Texas. The Corpus Christi Liquefaction Project is being designed for up to five Trains, with expected aggregate nominal production capacity of approximately 22.5 mtpa of LNG, four LNG storage tanks with capacity of approximately 13.5 Bcfe and two LNG carrier docks. Construction has begun on the first two Trains of the Corpus Christi Liquefaction Project. Cheniere has agreed in principle to partner with Parallax Enterprises, LLC for the development of up to 11 mtpa of LNG production capacity through Parallax's two mid-scale natural gas liquefaction projects, Live Oak LNG and Louisiana LNG.

For additional information, please refer to the Cheniere website at www.cheniere.com and Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, filed with the Securities and Exchange Commission.

This press release contains certain statements that may include "forward-looking statements" within the meanings of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included herein are "forward-looking statements." Included among "forward-looking statements" are, among other things, (i) statements regarding Cheniere's business strategy, plans and objectives, including the development, construction and operation of liquefaction facilities, (ii) statements regarding expectations regarding regulatory authorizations and approvals, (iii) statements expressing beliefs and expectations regarding the development of Cheniere's LNG terminal and pipeline businesses, including liquefaction facilities, (iv) statements regarding the business operations and prospects of third parties, (v) statements regarding potential financing arrangements and (vi) statements regarding future discussions and entry into contracts. Although Cheniere believes 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. Cheniere's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in Cheniere's periodic reports that are filed with and available from the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under the securities laws, Cheniere does not assume a duty to update these forward-looking statements.

 (Financial Tables Follow)

Cheniere Energy, Inc.

Consolidated Statements of Operations

(in thousands, except per share data)(1)

(unaudited)



Three Months Ended


Nine Months Ended


September 30,


September 30,


2015


2014


2015


2014

Revenues








LNG terminal revenues

$

67,212



$

66,983



$

202,698



$

200,243


Marketing and trading revenues (losses)

(1,557)



(499)



(1,601)



482


Other

404



323



1,356



1,277


Total revenues

66,059



66,807



202,453



202,002










Operating costs and expenses








Operating and maintenance expense (income)

(6,251)



25,908



49,319



69,262


Depreciation expense

21,638



16,189



59,561



48,962


Development expense

4,935



11,544



37,640



38,919


General and administrative expense

97,332



74,255



263,205



215,783


Other

479



75



920



245


Total operating costs and expenses

118,133



127,971



410,645



373,171










Loss from operations

(52,074)



(61,164)



(208,192)



(171,169)










Other income (expense)








Interest expense, net of capitalized interest

(93,566)



(46,884)



(238,664)



(130,943)


Loss on early extinguishment of debt





(96,273)



(114,335)


Derivative gain (loss), net

(161,482)



5,379



(242,123)



(89,222)


Other income (expense)

(39)



(160)



616



(39)


Total other expense

(255,087)



(41,665)



(576,444)



(334,539)










Loss before income taxes and non-controlling interest

(307,161)



(102,829)



(784,636)



(505,708)


Income tax benefit (expense)

69



(1,971)



(102)



(2,147)


Net loss

(307,092)



(104,800)



(784,738)



(507,855)


Less: net loss attributable to non-controlling interest

(9,284)



(15,219)



(100,726)



(118,536)


Net loss attributable to common stockholders

$

(297,808)



$

(89,581)



$

(684,012)



$

(389,319)










Net loss per share attributable to common stockholders—basic and diluted

$

(1.31)



$

(0.40)



$

(3.02)



$

(1.74)










Weighted average number of common shares outstanding—basic and diluted

227,126



224,309



226,648



223,710


_______________________

(1)

Please refer to the Cheniere Energy, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, filed with the Securities and Exchange Commission.

 

Cheniere Energy, Inc.

Consolidated Balance Sheets

(in thousands, except share data)(1)



September 30,


December 31,


2015


2014

ASSETS

(unaudited)



Current assets




Cash and cash equivalents

$

1,340,262



$

1,747,583


Restricted cash

652,225



481,737


Accounts and interest receivable

6,645



4,419


LNG inventory

9,032



4,294


Other current assets

78,108



20,844


Total current assets

2,086,272



2,258,877






Non-current restricted cash

118,909



550,811


Property, plant and equipment, net

15,225,250



9,246,753


Debt issuance costs, net

640,399



242,323


Non-current derivative assets

30,770



11,744


Goodwill

76,819



76,819


Other non-current assets

273,840



186,356


Total assets

$

18,452,259



$

12,573,683






LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities




Accounts payable

$

11,558



$

13,426


Accrued liabilities

457,901



169,129


Deferred revenue

26,653



26,655


Derivative liabilities

33,839



23,247


Other current liabilities

268



18


Total current liabilities

530,219



232,475






Long-term debt, net

15,835,910



9,806,084


Non-current deferred revenue

10,500



13,500


Non-current derivative liabilities

125,473



267


Other non-current liabilities

85,226



19,840






Commitments and contingencies








Stockholders' equity




Preferred stock, $0.0001 par value, 5.0 million shares authorized, none issued




Common stock, $0.003 par value




Authorized: 480.0 million shares at September 30, 2015 and December 31, 2014




Issued and outstanding: 236.0 million shares and 236.7 million shares at September 30, 2015 and December 31, 2014, respectively

708



712


Treasury stock: 11.2 million shares and 10.6 million shares at September 30, 2015 and December 31, 2014, respectively, at cost

(337,057)



(292,752)


Additional paid-in-capital

3,029,317



2,776,702


Accumulated deficit

(3,332,851)



(2,648,839)


Total stockholders' deficit

(639,883)



(164,177)


Non-controlling interest

2,504,814



2,665,694


Total equity

1,864,931



2,501,517


Total liabilities and equity

$

18,452,259



$

12,573,683


__________________________

(1)

Please refer to the Cheniere Energy, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, filed with the Securities and Exchange Commission.

As of September 30, 2015, we had cash and cash equivalents of $1,340.3 million available to Cheniere. In addition, we had current and non-current restricted cash and cash equivalents of $771.1 million (which included current and non-current restricted cash and cash equivalents available to Cheniere Partners, SPL, Sabine Pass LNG, L.P., and Cheniere Corpus Christi Holdings, LLC.) designated for the following purposes: $327.2 million for the Sabine Pass Liquefaction Project, $11.3 million for Cheniere Creole Trail Pipeline, L.P., $129.1 million for interest payments related to the Sabine Pass LNG, L.P. senior secured notes, $71.3 million for the Corpus Christi Liquefaction Project, and $232.2 million for other restricted purposes.

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SOURCE Cheniere Energy, Inc.


Source: PR Newswire (October 30, 2015 - 8:00 AM EDT)

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