As filed with the Securities and Exchange Commission on October 17, 2001
Registration No. 333-71496
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
CHENIERE ENERGY, INC.
(Exact Name of Registrant as specified in its charter)
Delaware 95-4352386
(State or other jurisdiction of incorporation or (I.R.S. Employer
organization) Identification No.)
333 Clay Street, Suite 3400
Houston, Texas 77002-4102
(713) 659-1361
(Address, including zip
code, and telephone number, including area code, of
registrant's principal executive offices)
Charles M. Reimer
President and Chief Executive Officer
Cheniere Energy, Inc.
333 Clay Street, Suite 3400
Houston, Texas 77002-4102
(713) 659-1361
(Name, address, including zip
code, and telephone number, including area code,
of agent for service)
Copies to:
Diana M. Hudson
Andrews & Kurth
Mayor, Day, Caldwell & Keeton,
L.L.P.
700 Louisiana, Suite 1900
Houston, Texas 77002-2778
(713) 225-7000
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this registration statement becomes effective.
If the only securities being registered on this form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [_]
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in this prospectus is not complete and may be changed. The
selling stockholder may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
Prospectus Subject to Completion
----------
October 17, 2001
CHENIERE ENERGY, INC.
500,000 SHARES OF COMMON STOCK
Par Value $0.003 per Share
This prospectus relates to offers and sales from time to time by Crest
Financial Limited of up to 500,000 shares of common stock of Cheniere Energy,
Inc. The securities offered by this prospectus were issued to the selling
stockholder in a transaction exempt from registration under the Securities Act
of 1933, as amended. We will not receive any proceeds from such sales by the
selling stockholder.
Our common stock is traded on The American Stock Exchange under the
symbol "CXY." The last reported sales price of the common stock on The American
Stock Exchange on October 10, 2001 was $1.00 per share.
Crest Financial Limited has informed Cheniere that it may sell shares
from time to time in ordinary broker's transactions or at negotiated prices.
Crest Financial Limited may effect these transactions with or through brokers or
dealers who may receive compensation in the form of commissions or discounts.
The principal executive offices of Cheniere are located at 333 Clay
Street, Suite 3400, Houston, Texas 77002-4102.
------------------------
See "Risk Factors" beginning on page 7 for information
that should be considered by prospective investors.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is October __, 2001
TABLE OF CONTENTS
Cheniere Energy, Inc. ............................................... 3
Risk Factors ........................................................ 7
Where you can Find More Information ................................. 13
Cautionary Statement Regarding Forward Looking Statements ........... 14
Use of Proceeds ..................................................... 14
Selling Stockholder ................................................. 15
Description of Securities ........................................... 15
Plan of Distribution ................................................ 17
Legal Matters ....................................................... 18
Experts ............................................................. 18
2
CHENIERE ENERGY, INC.
SUMMARY
Cheniere is a Houston-based company engaged in oil and gas exploration,
development and exploitation and in the development of sites for liquefied
natural gas ("LNG") receiving terminals along the Texas Gulf Coast. We evaluate
and generate drilling prospects using a regional and integrated approach with a
large 3D seismic database as a platform.
Cheniere was formed in 1996 to fund the acquisition of a proprietary 3D
seismic database along the transition zone in Cameron Parish, Louisiana. The
228-square-mile survey was acquired jointly by Cheniere and an industry partner
and processing was completed during 1997. Interpretation of the data yielded
drilling prospects located onshore and in the state and federal waters of
offshore Louisiana. Leasing activity occurred over identified prospects
throughout these three jurisdictions from 1998 to 2000 and continues today. We
recently purchased all rights to the database and subsequently entered into an
agreement to sell the database to a seismic data marketing firm which will sell
licenses to the data and share the proceeds of such sales with us. We have
retained a license to the entire database and will continue to utilize it in our
exploration program.
To ensure continued access to high quality drilling prospects, we
expanded beyond the Cameron area and into the shallow waters of the Gulf of
Mexico. We hired additional management and technical expertise and licensed
8,800 square miles of 3D seismic data. We also made the commitment to reprocess
the entire seismic database, and the resulting new data set will provide us with
a higher resolution image of the subsurface than has previously been available.
On September 15, 2000 we reached an agreement with Warburg, Pincus
Equity Partners, L.P., a global private equity fund based in New York, to fund
exploration and development in the shallow waters offshore Louisiana through a
newly formed private corporation, Gryphon Exploration Company. We contributed to
Gryphon: (i) our license to 3D seismic data covering the shallow waters offshore
Louisiana in the Gulf of Mexico; (ii) our interest in a Joint Exploration
Agreement with Samson Offshore Company; (iii) certain offshore leases, including
a prospect we were drilling offshore Louisiana, and (iv) certain other assets,
in exchange for all of the common stock of Gryphon and cash. Warburg invested
$25,000,000 and received voting preferred stock, with an 8% accruing dividend,
convertible into 63.2% of Gryphon's common stock. We have also agreed, under
certain circumstances, to contribute to Gryphon our proportionate share of an
additional $75,000,000 investment. Warburg made additional investments in
Gryphon of $10,000,000 in May 2001 and $10,000,000 in July 2001. We have chosen
not to participate in such subsequent investments to date. Our present ownership
in Gryphon represents 23.6% of its common stock on an as-converted basis.
We also conduct our own exploration efforts. In November 2000, we
acquired licenses to approximately 6,750 miles of 3D seismic data in the shallow
waters offshore Texas in the Gulf of Mexico in separate transactions with Seitel
Data Ltd. and with JEBCO Seismic, L.P. The data is currently being reprocessed.
We have generated nine prospects in 2001, seven of which we have sold to
industry partners. We have retained varying interests in the wells and plan to
begin drilling them by year-end.
We have assembled a team of professionals with experience in the LNG
business. We have identified three sites along the Texas Gulf Coast which we
believe would serve as good locations for LNG receiving terminals and we have
secured two of the sites through long-term lease option agreements. We are
presently working to obtain the appropriate permits, environmental and other
regulatory clearance to proceed with the construction of LNG receiving terminals
at one or more of these sites.
Cheniere has been publicly traded since July 3, 1996 under the name
Cheniere Energy, Inc. Our corporate offices are located at 333 Clay Street,
Suite 3400, Houston, Texas 77002, and our telephone number is (713) 659-1361.
3
Business Strategy
The key to success in the exploration and production business is
ensuring that dollars invested add incremental reserve value. Simply put, the
cost of finding oil and gas must be less than the value received from the sale
of those reserves. In the current environment, we believe we can best add
reserve value by exploring for new reserves, as opposed to buying existing
reserves.
We operate in the Gulf of Mexico region, including the coastal areas
onshore and state and federal waters offshore Texas and Louisiana. We believe
that the current industry environment presents a window of opportunity whereby
oil and gas pricing is relatively weak, causing the costs of drilling and
completing wells to be relatively low. We believe that oil and gas prices will
be stronger when the wells begin production.
We are attempting to acquire and drill prospects during this period of
opportunity. We employ a technical approach in the prospect generation and
evaluation process to manage the risk of exploration drilling. That approach
integrates 3D seismic, geologic and engineering data over large areas. Our
technical understanding is translated into prospect capture in three ways:
participation in industry prospects, farm-ins on industry acreage and purchase
of open leases.
We operate on the Gulf of Mexico shelf (less than 300 feet of water
depth) and in adjacent onshore coastal regions. We have elected to operate in
this area because the Gulf is a proven producing area where improved technology
can help find previously undiscovered fields.
Technical Approach
To be successful we must drill prospects with favorable risk/reward
characteristics. The technical approach we use to generate and evaluate drilling
prospects distinguishes us from many of our competitors. The approach is
regional and integrated, and it utilizes newly reprocessed 3D seismic data.
A regional 3D seismic approach to prospecting is distinguished from a
"postage stamp" approach, whereby a company owns scattered patches of 3D data
coincident with its leases. The understanding gained from each postage stamp
cannot be extended laterally as a means of identifying prospective drilling
areas. Regional 3D coverage, however, provides a blanket coverage that permits
the study of all of the successes (producing fields) and all of the failures
(dry holes) as a means of determining what works and what does not in a given
area.
An interdisciplinary approach is critical in reducing the risk of dry
holes. Subsurface geology and field engineering data must be integrated together
with 3D data interpretations to develop as complete a picture as is possible.
This approach is time consuming, but we have made a commitment to perform the
necessary technical work up front as a means of reducing dry hole expenditures.
Drilling Activities
In 1999, we drilled and completed two natural gas discovery wells
located in offshore Louisiana. Both wells were tied into a common platform and
began production during September 1999. We own a 30% working interest and a 45%
working interest in the two wells. During 2000, we drilled an additional
exploration well in the waters of offshore Louisiana. We assigned our interest
in this well to Gryphon, which completed the well.
LNG Receiving Terminals
We believe that the demand for natural gas in the United States over
the next five to ten years will grow at a rate that domestic exploration
activities will not be able to satisfy and that the resulting imbalance will
necessitate the importation of natural gas into the United States in the form of
LNG. The LNG receiving capacity in the United States at present is quite
limited. We believe that additional LNG receiving capacity will be required, and
we have undertaken to secure sites which we believe will be optimal locations
for such facilities considering such factors as deep water access, existing
pipeline infrastructure and governmental and regulatory environments. We have
4
identified three such sites and have secured two of them through long-term lease
options. We are presently working on permitting and regulatory clearance to
allow for construction of terminals at one or more of these sites.
Officers and Directors
Nuno Brandolini is currently a director and a member of the audit
committee and the compensation committee. Mr. Brandolini has served as chairman
and chief executive officer of Scorpion Holdings, Inc. since 1995. Prior to
forming Scorpion Holdings, Mr. Brandolini served as managing director of
Rosecliff, Inc., a leveraged buyout fund co-founded by Mr. Brandolini in 1993.
Before joining Rosecliff, Mr. Brandolini was a vice president at Salomon
Brothers, Inc. where he was an investment banker involved in mergers and
acquisitions in the Financial Entrepreneurial Group. Mr. Brandolini has also
worked for Lazard Freres in New York and was president of The Baltheus Group, a
merchant banking firm, and executive vice president of Logic Capital Corp., a
venture capital firm. He currently serves on the board of private and public
companies such as Arabella, Pac Pizza LLC, Sonex Research, The Original San
Francisco Toymakers and WalkAbout Computers. Mr. Brandolini was awarded a law
degree by the University of Paris, and received an M.B.A. from the Wharton
School.
Keith F. Carney is currently a director of the Company. In September
2001, he formed an energy stock investment fund which he manages. Prior to that
time, he served as executive vice president-corporate development for Cheniere.
He served as chief financial officer and treasurer of the company from July 1996
through November 1997. Prior to joining Cheniere, Mr. Carney was a securities
analyst in the oil & gas exploration/production sector with Smith Barney, Inc.
from 1992-1996. From 1982-1990 he was employed by Shell Oil as an exploration
geologist, with assignments in the Gulf of Mexico, the Middle East and other
areas. He received an M.S. degree in geology from Lehigh University in 1982 and
an M.B.A./Finance degree from the University of Denver in 1992. Mr. Carney
currently serves as a director of Pyr Energy Corporation.
Jonathan S. Gross is current vice president of exploration. Prior to
joining Cheniere, Mr. Gross served as geophysicist, economist and project
manager for Zydeco Energy Inc. from January 1998 through May 1999. From 1981 to
1998 he was employed as a geophysicist and exploration team leader by Amoco
Production Company with assignments in the Gulf of Mexico, Texas Gulf Coast
Onshore, North Africa, Trinidad, the Michigan Basin, the Arkoma basin and other
areas. He received a B.A. degree in geology from the University of Chicago in
1981. Mr. Gross is a certified petroleum geologist through the American
Association of Petroleum Geologists and he is a member of the Society of
Exploration Geophysicists. He is a director of the Jewish Community Center of
Houston, a United Way agency.
John K. Howie is currently a director of the Company. Mr. Howie has
served as a vice president of EnCap Investments, LLC, since July 1999. Prior to
this position he was a senior investment associate at Range Resources
Corporation (previously Domain Energy Corporation), an acquisition coordinator
with Domain Energy Corporation (previously Tenneco Ventures), and senior
petroleum engineer with Amoco Production Company and Apache Corporation. Mr.
Howie received a B.S. in Chemical Engineering from New Mexico State in December
1981.
Charles M. Reimer is currently president and chief executive officer of
the Company and a director. Through May 2000, he served as president of
British-Borneo Exploration Inc. Prior to joining British Borneo in November
1998, Mr. Reimer served as chairman and CEO of Virginia Indonesia Company
(VICO), the operator on behalf of Union Texas Petroleum Holdings, Inc. and LASMO
plc, of major oil and gas reserves and production located in East Kalimantan,
Indonesia. Mr. Reimer began his career with Exxon Company USA in 1967 and held
various professional and management positions in Texas and Louisiana. After
leaving Exxon, Mr. Reimer was named president of Phoenix Resources Company in
1985 and relocated to Cairo, Egypt to begin eight years of international
assignments.
Charif Souki, a co-founder of Cheniere, is currently chairman of the
board of directors of the company. Mr. Souki is an independent investment banker
with twenty years of experience in the industry. In the past few years he has
specialized in providing financing for microcap and small capitalization
companies with an emphasis on the oil and gas industry. Mr. Souki received his
B.A. from Colgate University and his M.B.A. from Columbia University.
5
Don A. Turkleson is currently vice president, chief financial officer,
secretary and treasurer of Cheniere. Prior to joining the company, Mr. Turkleson
was employed by PetroCorp Incorporated from 1983 to 1996, as controller until
1986, then as vice president-finance, secretary and treasurer. From 1975 to 1983
he worked as a certified public accountant in the audit division of Arthur
Andersen & Co. Mr. Turkleson received a B.S. degree in accounting from Louisiana
State University in 1975. He is a director and past chairman of the board of
Neighborhood Centers, Inc.
Walter L. Williams is currently vice chairman of the board of directors
of the company. Prior to joining the company, Mr. Williams spent 32 years with
Texoil, Inc., a publicly held Gulf Coast exploration and production company,
initially as a founder and later as its chairman and chief executive officer.
Prior to that time he was an independent petroleum consultant. Mr. Williams
received a B.S. in petroleum engineering from Texas A&M University and is a
registered engineer in Louisiana and Texas. He served on the board of directors
of Texoil, and has served as a director and member of the executive committee of
the board of the Houston Museum of Natural Science.
6
RISK FACTORS
We have a limited operating history during which we have continually incurred
losses and we may continue to incur losses.
We have a limited operating history with respect to our oil and gas
exploration activities, which were commenced in April 1996, and with respect to
operating LNG receiving facilities. From our inception until the quarter ended
June 30, 2000 and subsequently, we have incurred losses and may continue to
incur losses, depending on whether we generate sufficient revenue from producing
reserves acquired either through acquisitions or drilling activities.
We have limited current oil and gas production and limited proved reserves,
which means that our success is highly dependent on the success of our
exploration program.
We have limited oil and gas production. Through our drilling in 1999
and 2000, we have established "proved reserves," which means that we have
identified oil and gas reserves that geological and engineering data demonstrate
with reasonable certainty to be recoverable in future years from known
reservoirs under existing economic and operating conditions. The focus of our
business is exploratory drilling. Because almost all of our assets are
represented by investments to date in our exploration program, and we anticipate
investing additional amounts in the program, we are highly dependent on the
success of our exploration program.
The viability of our LNG project depends upon gaining approvals and permits from
governmental and regulatory agencies, which means failure to obtain these
approvals and permits could have a detrimental effect on the project and on our
company.
There are very few LNG facilities which are presently operational in
the United States. The transportation of LNG is highly regulated. We estimate
that it may take two to three years of work to obtain the approvals and permits
necessary to proceed with the construction of an LNG receiving terminal. We have
no control over the outcome of the review and approval process. If we are unable
to obtain the required approvals and permits we may not be able to recover our
investment in the project.
We may need additional financing and may not be able to obtain it on terms that
are acceptable to us, which could harm our ability to conduct our business.
We presently have limited operating revenues. As of June 30, 2001, we
had $1,667,175 of current assets and a working capital deficit of $784,426.
Because of our low level of current assets, we may need additional capital for a
number of purposes, and if we were unable to obtain additional financing it
could significantly harm our ability to conduct our business, including our
ability to take advantage of opportunities that come from our exploration
program and our ability to construct LNG terminals. Our need for additional
financing might include the following:
- Additional capital will be required to pay for our share of costs
relating to the drilling of prospects and development of those that
are successful, to exercise lease options, and to acquire
additional oil and gas leases. The total amount of our capital
needs will be determined in part by the number of prospects
generated within our exploration program and by the working
interest that we retain in those prospects.
- We will need funds for the payment of approximately $1,061,000
related to future deliveries of reprocessed seismic data through
February 2002
- We may need capital to fund our pro-rata share of the capital calls
by Gryphon that are approved by Gryphon's board of directors. Our
share of such future capital calls could total up to $12,980,000.
If we elect not to fund our pro-rata portion of such capital calls,
and Warburg funds its portion, as they
7
would be entitled to do and as they have since the formation of
Gryphon, we will suffer dilution of our holdings in Gryphon. If we
subscribe to our pro-rata portion of such capital calls but fail to
fund, then we would lose our ability to subscribe to any future
capital calls and would suffer dilution of our holdings in Gryphon.
Gryphon made cash calls in the aggregate amount of $20,000,000,
which were funded by Warburg in May and July 2001. We declined to
participate in these cash calls and our interest in Gryphon has been
reduced from 36.8% to 23.6% on an as-converted basis. It is
anticipated that Gryphon may make additional cash calls for funds
during 2001 and 2002.
- We will need funds for the payment of a transfer fee related to the
assignment to Gryphon of its seismic license over the Offshore
Louisiana Project Area. We are obligated to pay a transfer fee of up
to $2,500,000, in ten installments of $250,000, which would become
payable after one month of production from each of ten separate
successful wells completed by Gryphon within its 8,800-square-mile
data set. The first such payment is due in October 2001.
- Should we choose to make an acquisition of producing oil and gas
properties, it is likely that such an acquisition would require that
some portion of the purchase price be paid in cash, thereby creating
the need for additional capital.
- We will need to make a substantial investment in order for our LNG
project to be viable; we will need funds to pay for renewals of our
lease options on potential LNG facility sites, which presently total
$320,000 per year, funds for environmental and regulatory work to
continue the permitting process presently underway for these sites
and, eventually, funds for the construction phase of the project.
Additional capital could be obtained from a combination of funding
sources. These potential funding sources include:
- Cash flow from operating activities,
- borrowings from financial institutions,
- debt offerings, which would increase our leverage and add to our
need for cash to service such debt,
- additional offerings of our equity securities, which could cause
substantial dilution of our common stock,
- sales of portions of our working interest in the prospects
within our exploration program, which would reduce future
revenues from our exploration program,
- sale to an industry partner of a participation in our
exploration program, which would reduce future revenues from our
exploration program,
- sale of all or a portion of our producing oil and gas
properties, which would reduce future revenues and
- sale to an industry partner of a participation in our LNG
project.
Our ability to raise additional capital will depend on the results of
our operations and the status of various capital and industry markets at the
time such additional capital is sought. Accordingly, there can be no assurances
that capital will be available to us from any source or that, if available, it
will be on terms acceptable to us.
8
Because of our lack of diversification, factors harming the oil and gas industry
in general, including downturns in prices for oil and gas, would be especially
harmful to us.
As an independent energy company, our revenues and profits will be
substantially dependent on the oil and gas industry in general and the
prevailing prices for oil and gas in particular. Circumstances that harm the oil
and gas industry in general will have an especially harmful effect on us. Oil
and gas prices have been and are likely to continue to be volatile and subject
to wide fluctuations in response to any of the following factors:
- relatively minor changes in the supply of and demand for oil and
gas;
- political conditions in international oil producing regions;
- the extent of domestic production and importation of oil in
relevant markets;
- the level of consumer demand;
- weather conditions;
- the competitive position of oil or gas as a source of energy as
compared with other energy sources;
- the refining capacity of oil purchasers; and
- the effect of federal and state regulation on the production,
transportation and sale of oil and gas.
It is likely that adverse changes in the oil market or the regulatory
environment would have an adverse effect on our ability to obtain capital from
lending institutions, industry participants, private or public investors or
other sources.
We experience intense competition in the oil and gas industry, which may make it
difficult for us to succeed.
The oil and gas industry is highly competitive. If we are not able to
compete effectively, we will not succeed. A number of factors may give our
competitors advantages over us. For example, most of our current and potential
competitors have significantly greater financial resources and a significantly
greater number of experienced and trained managerial and technical personnel
than we do. There can be no assurance that we will be able to compete
effectively with such companies. Moreover, the oil and gas industry competes
with other industries in supplying the energy and fuel needs of industrial,
commercial and other consumers. Increased competition causing over supply and
depressed prices could greatly affect our operating revenues.
We are subject to significant operating hazards and uninsured risks, one or more
of which may create significant liabilities for us.
Our oil and gas operations are subject to all of the risks and hazards
typically associated with the exploration for, and the development and
production of, oil and gas. In accordance with customary industry practices, we
intend to maintain insurance against some, but not all, of these risks and
losses. The occurrence of a significant event not fully insured or indemnified
against could seriously harm us. Moreover, no assurance can be given that we
will be able to maintain adequate insurance in the future at rates we consider
reasonable. Risks in drilling operations include cratering, explosions,
uncontrollable flows of oil, gas or well fluids, fires, pollution and other
environmental risks. Our activities are also subject to perils specific to
marine operations, such as capsizing, collision and damage or loss from severe
weather. These hazards can cause personal injury and loss of life, severe damage
to and destruction of property and equipment, pollution or environmental damage
and suspension of operations.
9
We are subject to significant exploration risks, including the risk that we may
not be able to find or produce enough oil and gas to generate any profits.
Our exploration activities involve significant risks, including the risk
that we may not be able to find or produce enough oil and gas to generate any
profits. There can be no assurance that the use of technical expertise as
applied to geophysical or geological data will ensure that any well we drill
will discover oil or gas. Further, there is no way to know in advance of
drilling and testing whether any prospect will yield oil or gas in sufficient
quantities to make money for us. In addition, we are highly dependent on seismic
activity and the related application of new technology as a primary exploration
methodology. This methodology, however, requires greater pre-drilling
expenditures than traditional drilling strategies. Even when fully used and
properly interpreted, 3D seismic data can only assist us in identifying
subsurface structures and hydrocarbon indicators, and will not allow us to
determine conclusively if hydrocarbons will in fact be present and recoverable
in such structures. There can be no assurance that our exploration efforts will
be successful.
We may not be able to acquire the oil and gas leases we need to sustain
profitable operations.
There can be no assurance that we will be successful in acquiring
farmouts, seismic permits, lease options, leases or other rights to explore for
or recover oil and gas. Consequently, the area covered by our 3D seismic data
that could be explored through drilling could be reduced if these leases,
permits, options and the like are not acquired. Both the United States
Department of the Interior and the States of Louisiana and Texas award oil and
gas leases on a competitive bidding basis. Further, non-governmental owners of
the onshore mineral interests within the area covered by our exploration program
are not obligated to lease their mineral rights to us except where we have
already obtained lease options. Other major and independent oil and gas
companies with financial resources significantly greater than ours may bid
against us for the purchase of oil and gas leases.
If we are unable to obtain satisfactory turnkey contracts, we may have to assume
additional risks and expenses when drilling wells.
We anticipate that any wells drilled in which we have an interest will
be drilled by established industry contractors under turnkey contracts that
limit our financial and legal exposure. Circumstances may arise, however, where
a turnkey contract is not economically beneficial to us or is otherwise
unobtainable from proven industry contractors. In such instances, we may decide
to drill wells on a day-rate basis, subjecting us to the usual drilling hazards
such as cratering, explosions, uncontrollable flows of oil, gas or well fluids,
fires, pollution and other environmental risks. We would also be liable for any
cost overruns attributable to drilling problems that otherwise would have been
covered by a turnkey contract.
Under a turnkey drilling contract, a negotiated price is agreed upon and
the money placed in escrow. The contractor then assumes all of the risk and
expense, including any cost overruns, of drilling a well to contract depth and
completing any agreed upon evaluation of the wellbore. Upon performance of all
these items, the escrowed money is released to the contractor. On a non-turnkey
basis, all risk and expense, including cost overruns, of drilling a well to
total depths lies with the operator.
Existing and future United States governmental regulation, taxation and price
controls could seriously harm us.
Oil and gas production and exploration are subject to comprehensive
federal, state and local laws and regulations controlling the exploration for
and production and sale of oil and gas and the possible effects of such
activities on the environment. Failure to comply with such rules and regulations
can result in substantial penalties and may harm us. Present, as well as future,
legislation and regulations could cause additional expenditures, restrictions
and delays in our business, the extent of which cannot be predicted and which
may require us to limit substantially, delay or cease operations in some
circumstances. In most areas where we plan to conduct activities, there are
statutory provisions regulating the production of oil and natural gas which may
restrict the rate of production and adversely affect revenues. We plan to
acquire oil and gas leases in the Gulf of Mexico, which will
10
be granted by the federal government and administered by the U.S. Department of
Interior Minerals Management Service. The Department strictly regulates the
exploration, development and production of oil and gas reserves in the Gulf of
Mexico. Such regulations could seriously harm our operations in the Gulf of
Mexico. The federal government regulates the interstate transportation of oil
and natural gas, through the Federal Energy and Regulatory Commission. The FERC
has in the past regulated the prices at which oil and gas could be sold. Federal
reenactment of price controls or increased regulation of the transport of oil
and natural gas could seriously harm us. In addition, our operations are subject
to numerous laws and regulations governing the discharge of oil and hazardous
materials into the environment or otherwise relating to environmental
protection, including the Oil Pollution Act of 1990. These laws and regulations
have continually imposed increasingly strict requirements for water and air
pollution control, solid waste management, and strict financial responsibility
and remedial response obligations relating to oil spill protection. The cost of
complying with such environmental legislation could have a general harmful
effect on our operations.
There is only limited trading in our common stock, which makes our stock more
difficult to sell than the stock of companies with more active markets.
There is only limited trading in our common stock, which makes our
stock more difficult to sell than the stock of companies with more active
markets. Between March 5, 2001 and September 30, 2001, the average daily trading
volume of our common stock on The American Stock Exchange was approximately
13,000 shares. The completion of this offering of the common stock provides no
assurance that the trading market for the common stock will become more active.
We have not paid dividends and do not expect to pay dividends in the foreseeable
future, so our stockholders will not be able to receive a return on their
investment without selling their shares.
We have not paid dividends since our inception and do not expect to pay
dividends in the foreseeable future, so our stockholders will not be able to
receive a return on their investments without selling their shares. We presently
anticipate that all earnings, if any, will be retained for development of our
business. Any future dividends will be subject to the discretion of our board of
directors and will depend on, among other things, future earnings, our operating
and financial condition, our capital requirements and general business
conditions.
Our stockholders could experience dilution in the value of their shares because
of additional issuances of shares.
Any issuance of common stock by us may result in a reduction in the
book value per share or market price per share of our outstanding shares of
common stock and will reduce the proportionate ownership and voting power of
such shares. We have 45,000,000 authorized shares of stock, consisting of
40,000,000 shares of the common stock, and 5,000,000 shares of preferred stock.
As of September 30, 2001, approximately 67% of the shares of the common stock
remained unissued. The board of directors has the power to issue any and all of
such shares without shareholder approval. It is likely that we will issue shares
of the common stock, among other reasons, in order to raise capital to sustain
operations and/or to finance future oil and gas exploration projects. In
addition, we have reserved 2,850,288 shares of the common stock for issuance
upon the exercise of outstanding warrants and 1,500,000 shares of the common
stock for issuance upon the exercise of stock options. As of September 30, 2001,
there were 862,361 issued and outstanding options to purchase common stock. To
the extent that outstanding warrants and options are exercised, the percentage
ownership of common stock of our stockholders will be diluted. Moreover, the
terms upon which we will be able to obtain additional equity capital may be
adversely affected because the holders of outstanding warrants and options can
be expected to exercise them at a time when we would, in all likelihood, be able
to obtain any needed capital on terms more favorable than the exercise terms
provided by such outstanding securities. In the event of the exercise of a
substantial number of warrants and options, within a reasonably short period of
time after the right to exercise commences, the resulting increase in the amount
of the common stock in the trading market could substantially adversely affect
the market price of the common stock or our ability to raise money through the
sale of equity securities.
11
We depend on key personnel and could be seriously harmed if we lost their
services.
We depend on our executive officers for our various activities. We do
not maintain "key person" life insurance policies on any of our personnel nor do
we have employment agreements with any of our personnel. The loss of the
services of any of these individuals could seriously harm us. In addition, our
future success will depend in part upon our ability to attract and retain
additional qualified personnel. We currently have 11 full-time employees.
We depend on industry partners and could be seriously harmed if they do not
perform satisfactorily, which is usually not within our control.
Because we have few employees and limited operating revenues, we will
be largely dependent upon industry partners for the success of our oil and gas
exploration projects for the foreseeable future. We could be seriously harmed if
our industry partners do not perform satisfactorily on projects that affect us.
We may often have no control over factors that would influence their
performance.
We are controlled by a small number of principal stockholders who may exercise a
proportionately larger influence on Cheniere than our stockholders with smaller
holdings.
We are controlled by a small number of principal stockholders who may
do things that are not in the interests of our stockholders with smaller
holdings. BSR Investments, Ltd. ("BSR") is an entity controlled by the mother of
Charif Souki, our chairman. BSR owns approximately 11% of our outstanding common
stock. Accordingly, it is likely that BSR will have a significant influence on
the election of directors and on our management, operations and affairs,
including the ability to prevent or cause a change in control of our company.
Anti-takeover provisions of our certificate of incorporation, bylaws and
Delaware law could adversely impact a potential acquisition by third parties
that may ultimately be in the financial interests of our stockholders.
Our certificate of incorporation and bylaws and the Delaware General
Corporation Law contain provisions that may discourage unsolicited takeover
proposals. These provisions could have the effect of inhibiting fluctuations in
the market price of our shares that could result from actual or rumored takeover
attempts, preventing changes in our management or limiting the price that
investors may be willing to pay for shares of common stock. These provisions,
among other things, authorize the board of directors to designate the terms of
and issue new series of preferred stock, limit the personal liability of
directors, require us to indemnify directors and officers to the fullest extent
permitted by applicable law and impose restrictions on business combinations
with some interested parties.
A significant portion of our value is derived from our ownership interest in
Gryphon, over which we exercise no day-to-day control.
We own 100% of the common stock of Gryphon (23.6% effective ownership
after conversion of Gryphon's preferred stock), and a significant portion of our
value is derived from this investment. However, we are a passive investor; we do
not participate in the day-to-day management of Gryphon and have no ability to
effect a change of control of Gryphon. Accordingly, Gryphon's management team
could make business decisions without our consent that could impair the value of
our investment in Gryphon.
We may have to take actions that are disruptive to our business strategy to
avoid registration under the Investment Company Act of 1940.
The Investment Company Act of 1940 requires registration for companies
that are engaged primarily in the business of investing, reinvesting, owning,
holding or trading in securities. A company may be deemed to be an investment
company if it owns "investment securities" with a value exceeding 40% of the
value of its total assets (excluding government securities and cash items) on an
unconsolidated basis, unless an exemption or safe harbor
12
applies. Securities issued by companies other than majority-owned subsidiaries
are generally counted as investment securities for purposes of the Investment
Company Act. Our equity interests in Gryphon could be counted as investment
securities. Therefore, we could be considered an investment company in the
future if we do not obtain an exemption or qualify for a safe harbor. As a
result, fluctuations in the value, or the income and revenues attributable to us
from our ownership, of interests in companies we do not control could cause us
to be deemed an investment company. Registration as an investment company would
subject us to restrictions that are inconsistent with our fundamental business
strategy. We may have to take actions, including buying, refraining from buying,
selling or refraining from selling securities or other assets, contrary to what
we otherwise deem to be in our best interest in order to continue to avoid
registration under the Investment Company Act.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy any of these documents at the public reference rooms maintained by the
Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the following regional offices of the Securities and Exchange
Commission: New York Regional Office, 233 Broadway, New York, New York 10048,
and Central Regional Office, 1801 California Street, Suite 4800, Denver,
Colorado 80202. Please call the Securities and Exchange Commission at
1-800-SEC-0330 for further information on the public reference rooms. Our
filings are also available to the public from commercial documents retrieval
services and at the Internet website maintained by the Securities and Exchange
Commission at http://www.sec.gov.
Our common stock is quoted on The American Stock Exchange. You may also
read our reports, proxy and information statements and other information at the
American Stock Exchange, 86 Trinity Place, New York, New York 10006.
This prospectus is part of the registration statement that we filed
with the Securities and Exchange Commission to register the shares of common
stock referred to above being offered. This prospectus does not contain
important information that you can find in our registration statement and in the
annual, quarterly and special reports, proxy statements and other documents that
we file with the Securities and Exchange Commission.
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with it, which means that we can disclose in
this prospectus important information to you by referring you to other documents
that have been or will be filed with the Securities and Exchange Commission. The
information below is incorporated in this prospectus by reference and is an
important part of this prospectus, except where any of the information has been
modified or superseded by the information in this prospectus or in information
incorporated by reference in this prospectus. Also, information that we file
after the date of this prospectus with the Securities and Exchange Commission
will automatically be incorporated in this prospectus and update and supersede
this information. We incorporate by reference the documents listed below and any
future filings made with the Securities and Exchange Commission under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until all of
the securities offered by this prospectus are sold:
- Our Annual Report on Form 10-K for the fiscal year ended December
31, 2000;
- Our Quarterly Reports on Form 10-Q for the periods ended March 31,
2001, and June 30, 2001, and
- Our definitive proxy statement on Schedule 14A dated April 30,
2001.
We will provide you, without charge, a copy of the documents incorporated by
reference in this prospectus. We will not provide a copy of the exhibits to
documents incorporated by reference, unless those exhibits are specifically
incorporated by reference into those documents. You may obtain documents
incorporated by reference in this prospectus by requesting them in writing or by
telephone from:
Cheniere Energy, Inc.
333 Clay Street, Suite 3400
Houston, Texas 77002-4102
Attn: Don A. Turkleson, Chief Financial Officer
(713) 659-1361
13
You should rely only on the information provided or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
different information. We are not making an offer of the shares in any state
where the offer is not permitted. You should not assume that the information in
this prospectus, in any prospectus supplement or in any document incorporated by
reference herein is accurate as of any date other than the date on the front of
those documents.
CAUTIONARY STATEMENT
REGARDING FORWARD LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a safe
harbor for forward-looking statements made by us or on our behalf. We and our
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 our stockholders.
All statements, other than statements of historical facts, included in
this prospectus that address activities, events or developments that we intend,
expect, project, believe or anticipate will or may occur in the future are
forward-looking statements. These statements include, among others:
- statements regarding our business strategy, plans and objectives;
- 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 year 2001 information.
These forward-looking statements are, and will be, based on
management's then current views and assumptions regarding future events.
Actual results could differ materially from estimates and other forward-looking
statements. Important factors that could affect us and cause materially
different results are discussed under the heading "Risk Factors."
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares offered by
this prospectus.
14
SELLING STOCKHOLDER
The following table sets forth information known to us with respect to
beneficial ownership of our common stock as of October 11, 2001 by the selling
stockholder. Beneficial ownership is determined in accordance with the rules and
regulations of the Securities and Exchange Commission and generally includes
voting or investment power with respect to securities. Information with respect
to beneficial ownership is based on information as of October 11, 2001, on which
we date we had outstanding an aggregate of 13,297,393 shares of common stock. We
believe based on information furnished by the selling stockholder that the
person named in the table below has sole voting and investment power with
respect to all shares of common stock shown as beneficially owned by it. The
table assumes the sale of all shares offered hereby and no other purchases or
sales of Cheniere's common stock by the selling stockholder.
Shares Beneficially Number of Shares Beneficially
Owned Prior Shares of Owned After
to Offering Common Stock the Offering
---------------------------- --------------------------
Name of Selling Stockholder Number Percent Offered Number Percent
------------------------------------------------ -------------- ------------ --------------- ---------- -------------
Crest Financial Limited 500,000 3.8% 500,000 - *
---------------
500,000
===============
__________________
* - Less than 1%.
ISSUANCE OF SECURITIES TO SELLING STOCKHOLDERS
The 500,000 shares of common stock being registered pursuant to the
registration statement of which this prospectus is a part represent shares we
issued to the selling stockholder on June 14, 2001 in conjunction with our
purchase of Freeport LNG Terminal, LLC, a Delaware limited liability company
which holds a lease option on a site for an LNG receiving terminal in Freeport,
Texas.
DESCRIPTION OF SECURITIES
We have 45,000,000 authorized shares of capital stock, consisting of
40,000,000 shares of common stock, having a par value of $0.003 per share, and
5,000,000 shares of preferred stock, having a par value of $0.0001 per share.
COMMON STOCK
As of October 11, 2001, there were 13,297,393 shares of the common
stock outstanding. All of such outstanding shares of common stock are fully paid
and nonassessable. Each share of the common stock has an equal and ratable right
to receive dividends when, as and if declared by the board of directors out of
assets legally available therefor and subject to the dividend obligations to the
holders of any preferred stock then outstanding.
In the event of our liquidation, dissolution or winding up, the holders
of common stock are entitled to share equally and ratably in the assets
available for distribution after payment of all liabilities, and subject to any
prior rights of any holders of preferred stock that at the time may be
outstanding.
The holders of common stock have no preemptive, subscription,
conversion or redemption rights, and are not subject to further calls or
assessments of Cheniere. There are no sinking fund provisions applicable to the
common stock. Each share of common stock is entitled to one vote in the election
of directors and on all other matters submitted to a vote of stockholders.
Holders of common stock have no right to cumulate their votes in the election of
directors.
15
PREFERRED STOCK
As of the date of this prospectus, there are no shares of preferred
stock outstanding. Preferred stock may be issued from time to time in one or
more series, and the board of directors, without further approval of the
stockholders, is authorized to fix the dividend rates and terms, conversion
rights, voting rights, redemption rights and terms, liquidation preferences and
any other rights, preferences, privileges and restrictions applicable to each
series of preferred stock. The purpose of authorizing the board of directors to
determine such rights, preferences, privileges and restrictions is to eliminate
delays associated with a stockholder vote on specific issuances. The issuance of
preferred stock, while providing flexibility in connection with possible
acquisitions and other corporate purposes, could, among other things, adversely
affect the voting power of the holders of common stock and, under some
circumstances, make it more difficult for a third party to gain control of
Cheniere.
WARRANTS
As of October 11, 2001, we have issued and outstanding warrants to
purchase 2,850,288 shares of common stock.
POSSIBLE ANTI-TAKEOVER PROVISIONS
Our amended and restated certificate of incorporation contains
provisions that might be characterized as anti-takeover provisions. Such
provisions may render more difficult possible takeover proposals to acquire
control of Cheniere and make removal of our management more difficult.
As described above, our certificate of incorporation authorizes a class
of undesignated preferred stock consisting of 5,000,000 shares. Preferred stock
may be issued from time to time in one or more series, and our board of
directors, without further approval of the stockholders, is authorized to fix
the rights, preferences, privileges and restrictions applicable to each series
of preferred stock. The purpose of authorizing the board of directors to
determine such rights, preferences, privileges and restrictions is to eliminate
delays associated with a stockholder vote on specific issuances. The issuance of
preferred stock, while providing flexibility in connection with possible
acquisitions and other corporate purposes, could, among other things, adversely
affect the voting power of the holders of common stock and, under some
circumstances, make it more difficult for a third party to gain control of
Cheniere.
We are incorporated under the laws of the State of Delaware. Section
203 of the Delaware General Corporation Law prevents an interested stockholder
from engaging in a business combination with such corporation for a period of
three years from the time such stockholder became an interested stockholder
unless at least one of the following conditions is met:
. the corporation's board of directors had earlier approved either
the business combination or the transaction by which the
stockholder became an interested stockholder,
. upon attaining such status, the interested stockholder had acquired
at least 85 percent of the corporation's voting stock, not counting
shares owned by persons who are directors and also officers and
certain employee stock plans, or
. the business combination is later approved by the board of
directors and authorized by a vote of two-thirds of the
stockholders, not including the shares held by the interested
stockholder.
The Delaware General Corporation Law defines an interested stockholder
as a stockholder owning 15 percent or more of a corporation's outstanding voting
stock. Cheniere is currently subject to Section 203.
In addition, BSR Investments, Ltd., an entity controlled by the mother
of Charif Souki, the chairman of our board of directors, owns approximately 11%
of the outstanding shares of our common stock. Accordingly, it is likely that
BSR Investments will have the ability to effectively prevent or cause a change
in control of Cheniere.
16
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock is U.S. Stock
Transfer Corporation.
PLAN OF DISTRIBUTION
We have agreed to bear some expenses of registering of the shares
offered by this prospectus under federal and state securities laws.
Shares of common stock covered hereby may be offered and sold from time
to time by the selling stockholder. The selling stockholder will act
independently of Cheniere in making decisions with respect to the timing, manner
and size of each sale. The selling stockholder may sell the shares being offered
by this prospectus:
. on The American Stock Exchange, or otherwise at prices and at terms
then prevailing or at prices related to the then-current market
price; or
. in private sales at negotiated prices directly or through one or
more brokers, who may act as agent or as principal, or by a
combination of such methods of sale.
The selling stockholder and any underwriter, dealer or agent who
participate in the distribution of such shares may be deemed to be an
"underwriter" under the Securities Act, and any discount, commission or
concession received by such persons might be deemed to be an underwriting
discount or commission under the Securities Act. We have agreed to indemnify the
selling stockholder against some liabilities arising under the Securities Act.
Any broker-dealer participating in such transactions as agent may
receive commissions from the selling stockholder and, if acting as agent for the
purchaser of such shares, from such purchaser. Usual and customary brokerage
fees will be paid by the selling stockholder. Broker-dealers may agree with the
selling stockholder to sell a specified number of shares at a stipulated price
per share, and, to the extent such a broker-dealer is unable to do so acting as
agent for the selling stockholder, to purchase as principal any unsold shares at
the price required to fulfill the broker-dealer commitment to the selling
stockholder. Broker-dealers who acquire shares as principal may thereafter
resell such shares from time to time in transactions in the over-the-counter
market, on a public stock exchange, in negotiated transactions or by a
combination of such methods of sale or otherwise. These transactions would be
either at market prices prevailing at the time of sale or at negotiated prices.
These transactions may involve crosses and block transactions and may involve
sales to and through other broker-dealers, including transactions of the nature
described above. In connection with such re-sales, the broker-dealers may pay to
or receive from the purchasers of the shares commissions computed as described
above.
Under the rules and regulations of the Securities Exchange Act of 1934,
the selling stockholder may be a person engaged in the distribution of the
common stock and may not simultaneously engage in market making activities with
respect to Cheniere for a period of five business days prior to the commencement
of the distribution. In addition, the selling stockholder will be subject to
applicable provisions, rules and regulations under the Securities Exchange Act
of 1934, including Regulation M, which may limit the timing of purchases and
sales of shares of common stock by the selling stockholder.
The selling stockholder may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against some
liabilities, including liabilities arising under the Securities Act. Any
commissions paid or any discounts or concessions allowed to any such
broker-dealer, and any profits received on the resale of such shares, may be
deemed to be underwriting discounts and commissions under the Securities Act if
any such broker-dealer purchases shares as principal.
To comply with the securities laws of some states, if applicable, the
common stock will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, some states prevent the common stock
from being sold unless such shares have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
17
Cheniere will keep this registration statement or a similar
registration statement effective until the earlier to occur of:
. the date that all securities registered under this registration
statement have been disposed of in accordance with the plan of
disposition indicated above; or
. the date that all securities registered under this registration
statement have become eligible for sale under Rule 144(k) of the
Securities Act.
No sales may be made pursuant to this prospectus after the earlier of
these two dates unless Cheniere amends or supplements this prospectus to
indicate that it has agreed to extend such period of effectiveness.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be
passed upon for us by Andrews & Kurth Mayor, Day, Caldwell & Keeton L.L.P.,
Houston, Texas.
EXPERTS
The consolidated financial statements incorporated in this prospectus
by reference to Cheniere's Annual Report on Form 10-K and the Gryphon
Exploration Company audited financial statements included in Cheniere's Form
10-K for the fiscal year ended December 31, 2000 have been so incorporated in
reliance on the reports of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
18
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
We will bear no expenses in connection with any sale or other
distribution by the selling stockholders of the shares being registered other
than the expenses of preparation and distribution of this registration statement
and the prospectus included in this registration statement. Such expenses are
set forth in the following table. All of the amounts shown are estimates except
the Securities and Exchange Commission registration fee.
SEC registration fee $ 125
Legal fees and expenses 10,000
Accounting fees and expenses 10,000
Miscellaneous expenses 4,875
-------
Total $25,000
=======
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law allows for the
indemnification of officers, directors, and other corporate agents in terms
sufficiently broad to indemnify such persons under some circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act of 1933. Cheniere's certificate of incorporation and by-laws
provide for indemnification of Cheniere's directors, officers, employees and
other agents to the extent and under the circumstances permitted by the Delaware
General Corporation Law. We have also entered into agreements with our directors
and officers that will require Cheniere, among other things, to indemnify them
against some liabilities that may arise by reason of their status or service as
directors to the fullest extent not prohibited by law. In addition, we carry
director and officer liability insurance.
In connection with this offering, the selling stockholder has agreed to
indemnify Cheniere, its directors and officers and each such person who controls
Cheniere, against any and all liability arising from inaccurate information
provided to Cheniere by the selling stockholder and contained herein.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of Cheniere
pursuant to the foregoing provisions, or otherwise, Cheniere has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Cheniere of expenses
incurred or paid by a director, officer or controlling person of Cheniere in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Cheniere will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
Item 16. Exhibits.
Exhibits.
3.1 Amended and Restated Certificate of Incorporation of
Cheniere Energy, Inc. ("Cheniere")(Incorporated by
reference to Exhibit 3.1 of the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1999 (File No.
0-9092))
3.2 By-laws of Cheniere as amended through April 7, 1997
(Incorporated by reference to Exhibit 3.2 of the Company's
Annual Report on Form 10-K for the year ended December 31,
1998 (File No. 0-9092))
II-1
4.1 Specimen Common Stock Certificate of Cheniere
(Incorporated by reference to Exhibit 4.1 of Cheniere's
registration statement under the Securities Act of 1933
on Form S-1 filed on August 27, 1996 (File No. 333-10905))
5.1 Opinion of Andrews & Kurth Mayor, Day, Caldwell & Keeton
L.L.P.
23.1 Consent of Andrews & Kurth Mayor, Day, Caldwell & Keeton
L.L.P. (included in Exhibit 5.1)
23.2 Consent of PricewaterhouseCoopers LLP
24.1* Power of attorney (see signature page to the original
registration statement filing)
* Previously filed
Item 17. Undertakings.
Cheniere hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
this offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of Cheniere's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Cheniere
Energy, Inc. certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Houston, State of Texas, on October 17, 2001.
CHENIERE ENERGY, INC.
By: /s/ CHARLES M. REIMER
Charles M. Reimer
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ * Chairman of the Board October 17, 2001
----------------------
Charif Souki
/s/ * Vice Chairman of the Board and Director October 17, 2001
----------------------
Walter L. Williams
/s/ * President, Chief Executive October 17, 2001
---------------------
Charles M. Reimer Officer and Director
(Principal Executive Officer)
/s/ DON A. TURKLESON Chief Financial Officer October 17, 2001
---------------------
Don A. Turkleson (Principal Financial and
Accounting Officer)
/s/ * Director October 17, 2001
-------------------
Nuno Brandolini
/s/ * Director October 17, 2001
------------------
Keith F. Carney
/s/ * Director October 17, 2001
-----------------
John K. Howie
* /s/ Don A. Turkleson
-------------------------
Don A. Turkleson October 17, 2001
attorney-in-fact
II-3