Brought down by the company’s increased LNG terminal development expenses, Cheniere Energy Inc. posted a net loss of $2,387,021, or $0.16 per share, for the third quarter of 2003 compared with a net loss of $1,474,972, or $0.11 per share, a year earlier.
Cheniere noted that during the quarter, LNG related expenses were $1,807,011, compared with $1,015,058 for the comparable quarter of 2002. Cheniere is currently involved in three LNG terminal projects. The company holds a share in the proposed Freeport, TX terminal and is a majority owner in both the Corpus Christi, TX and Sabine Pass, LA projects.
In addition to the development of LNG receiving terminals, Cheniere is also involved in its investment in its exploration affiliate, Gryphon, and the exploitation of its own 3D seismic database through prospect generation.
Cheniere owns 100% of Gryphon’s outstanding common stock. Warburg, Pincus Equity Partners L.P. has invested $85 million to date in Gryphon preferred stock which is convertible into 91% of Gryphon and accrues dividends at 8% per annum. Upon the conversion of Gryphon’s preferred stock into common stock, Cheniere said its interest would be diluted to 9%.
During the third quarter, Gryphon drilled five wells, bringing its total wells drilled from inception in October 2000 through Sept. 30, 2003, to 31 wells, of which 16 have been successful. Gryphon uses an extensive, 18,500-square-mile 3D seismic database to explore in the shallow waters of the Gulf. Cheniere said the company expects to drill 14 exploratory wells and one or two development wells in 2003. Gryphon acquired 19 blocks in the March 2003 Louisiana Federal Offshore Lease Sale, five tracts in the July 2003 State of Texas Lease Sale and 17 leases in the August 2003 Western Gulf Federal Lease Sale. Gryphon’s net production in September 2003 averaged 26 MMcfe/d.
After forming Gryphon in October 2000, Cheniere re-established its own exploration capability. To date, Cheniere’s exploration group has captured and sold 19 prospects over its 7,000-square-mile 3D seismic database. The drilling of these prospects has to date resulted in twelve discoveries and four dry holes. Six wells were on production as of Sept. 30, 2003. At the August 2003 Western Gulf Federal Lease Sale, the company noted that it acquired leases on three offshore Texas blocks. Currently, Cheniere is marketing four offshore prospects on which it owns 100% of the leasehold interests.
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