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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 26, 1996
CHENIERE ENERGY, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
2-63115 95-4352386
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(Commission File Number) (IRS Employer Identification No.)
Two Allen Center
1200 Smith Street Suite 1710
Houston, Texas 77002
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(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: (713) 659-1361
None
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(Former name or former address, if changed since last report)
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Item 5. OTHER EVENTS.
On July 26, 1996, Cheniere Energy, Inc. (the "Registrant") signed a
letter of intent (the "Letter of Intent") to acquire the working interest (the
"Interest") of Poseidon Petroleum, LLC ("Poseidon") in undeveloped reserves in
the Bonito Unit of the Pacific Outer Continental Shelf, off Santa Barbara
County, California. Poseidon has estimated that the net proved undeveloped
reserves attributable to the Interest is 47 million barrels of oil equivalent.
The Letter of Intent provides that as payment for the Interest the
Registrant will (i) issue to Poseidon or its derivatives 1.25 million shares of
the common stock (the "Common Stock") of the Registrant with immediate
registration rights and (ii) make production payments to Poseidon (the
"Production Payments") from time to time out of three percent of the production
from the Interest totaling up to $9,000,000 in the aggregate. The Registrant
will be required to make minimum annual Production Payments of $270,000 with the
first such payment being made upon the closing of the transactions contemplated
by the Letter of Intent (the "Closing").
Prior to the Closing, the aggregate amount of the Production Payments
may be adjusted following the determination by a third party of the volume of
proved undeveloped reserves attributable to the Interest and the number of
shares of the Common Stock issuable to Poseidon may be adjusted in the event
that the average share price of such stock for the thirty days prior to the
Closing falls below $3.00 per share. In addition, either party may terminate the
arrangements contemplated in the Letter of Intent in the event that (i) the
average share price of the Common Stock for the thirty days prior to the Closing
falls below $2.00 per share, or (ii) it is determined prior to the Closing that
the volume of proved undeveloped reserves attributable to the Interest is less
than 30 million barrels of oil equivalent.
The parties are conducting due diligence investigations and are
negotiating definitive agreements and related documentation necessary to effect
the transactions contemplated in the Letter of Intent.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CHENIERE ENERGY, INC.
By /s/ William D. Forster
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Name: William D. Forster
Title: President and Chief Executive
Officer
Date: August 13, 1996
