<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1943
For the transition period from _______ to ________
Commission File No. 0-9092
CHENIERE ENERGY, INC.
(Exact name as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
95-4352386
(I. R. S. Identification No.)
1200 Smith Street, Suite 1710
Houston, 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 January 10, 1997, there were 11,942,515 shares of Cheniere Energy, Inc.
Common Stock, $.003 par value, issued and outstanding.
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<PAGE>
CHENIERE ENERGY, INC.
INDEX TO FORM 10-Q
Page
----
Part I. Financial Information
Item 1. Consolidated Financial Statements.............................. 3
Consolidated Balance Sheets.................................. 3
Consolidated Statements of Operations........................ 4
Consolidated Statements of Stockholders' Equity.............. 5
Consolidated Statements of Cash Flows........................ 6
Notes to Consolidated Financial Statements........................ 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................ 11
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K............................... 13
Signatures.................................................................. 14
2
<PAGE>
CHENIERE ENERGY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
Nov. 30, 1996 Aug. 31, 1996
------------- -------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 324,550 $ 1,093,180
Prepaid Expenses And Other Current Assets 6,622 4,800
----------- -----------
TOTAL CURRENT ASSETS 331,172 1,097,980
----------- -----------
PROPERTY AND EQUIPMENT, NET 50,988 46,830
----------- -----------
OTHER ASSETS
Investment in 3-D Exploration Program 6,000,000 4,000,000
Security Deposit 500 500
----------- -----------
TOTAL OTHER ASSETS 6,000,500 4,000,500
----------- -----------
TOTAL ASSETS $ 6,382,660 $ 5,145,310
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 374,184 $ 292,894
Loans Payable 215,000 425,000
Advances for Issuance of Common Stock 384,985 -
Advance from Officers 961 961
----------- -----------
TOTAL LIABILITIES 975,130 718,855
----------- -----------
STOCKHOLDERS' EQUITY
Common Stock - $.003 Par Value
Authorized 20,000,000 shares;
10,624,794 and 9,931,767 Issued and
Outstanding at November 30, 1996 and
August 31, 1996, respectively 31,875 29,795
Preferred Stock - Authorized
1,000,000 shares; None Issued
and Outstanding - -
Additional Paid-in-Capital 5,655,618 4,518,507
Deficit Accumulated During the
Development Stage (279,963) (121,847)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 5,407,530 4,426,455
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,382,660 $ 5,145,310
=========== ===========
</TABLE>
See Accompanying Notes to Financial Statements
3
<PAGE>
CHENIERE ENERGY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
For the Three
Months Ended Cumulative
November 30, from Date of
1996 Inception
----------- -----------
<S> <C> <C>
Revenue $ - $ -
----------- ----------
General and Administrative Expenses 145,928 249,742
Interest Expense 13,689 33,522
----------- ----------
159,617 283,264
----------- ----------
Loss from Operations Before Other
Income ( 159,617) ( 283,264)
Interest Income 1,501 3,301
----------- ----------
Loss From Operations Before
Income Taxes ( 158,116) ( 279,963)
Provision for Income Taxes - -
----------- ----------
Net Loss $( 158,116) $( 279,963)
=========== ==========
Loss Per Share $( .015) $( .030)
=========== ==========
Weighted Average Number of Shares
Outstanding 10,310,670 9,256,075
========== =========
</TABLE>
See Accompanying Notes to Financial Statements.
4
<PAGE>
CHENIERE ENERGY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock Additional Total
Per ------------ Paid-in Retained Stockholders'
Share Shares Par Value Capital Deficit Equity
------------ ------------ ---------------------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Sale of Founders Shares on
April 9, 1996 $ 0.012 6,242,422 18,727 56,276 - 75,003
Sale of Shares on May 3, 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 - 1,000,000
Expenses Related to Offering - - - (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
Sales of Shares on
September 12, 1996 2.00 50,000 150 99,850 - 100,000
Sales of Shares on
September 16, 1996 2.00 80,250 241 160,259 - 160,500
Conversion of Debt 2.00 105,000 315 209,685 - 210,000
Sale of Shares on
October 30, 1996 2.25 457,777 1,374 1,028,627 - 1,030,001
Expenses Related to Offering - - - (367,760) - (367,760)
Issuance of Warrants - - - 6,450 - 6,450
Net Loss - - - - (158,116) (158,116)
---------- ------- ---------- ------------- ----------
Balance - November 30, 1996 10,624,794 $31,875 $5,655,618 $ (279,963) $5,407,530
========== ======= ========== ============= ==========
</TABLE>
All of the Sales of Shares indicated above were made pursuant to private
placement transactions.
The accompanying notes are an integral part of this report.
5
<PAGE>
CHENIERE ENERGY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Cumulative
Three Months Ended From Date of
November 30, 1996 Inception
----------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $( 158,116) $( 279,963)
Adjustments to Reconcile Net Loss to
Net Cash Used by Operating Activities:
Depreciation 2,023 5,626
Compensation Paid in Common Stock - 30,000
(Increase) in Prepaid Expenses and Other Current Assets ( 1,822) ( 6,622)
(Increase) in Security Deposit - ( 500)
Increase in Accounts Payable and Accrued Expenses 81,290 374,194
Increase in Advance from Officers - 961
----------- -----------
NET CASH USED BY OPERATING ACTIVITIES ( 76,625) 123,696
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Furniture, Fixtures and Equipment ( 6,180) (56,623)
Investment in 3-D Exploration Program (2,000,000) (6,000,000)
---------- -----------
NET CASH USED BY INVESTING ACTIVITIES (2,006,180) (6,056,623)
----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of Common Stock 1,290,500 6,482,303
Issuance of Warrants 6,450 19,200
Offering Costs ( 367,760) (1,054,011)
Proceeds of Loan - 425,000
Advances for Issuance of Common Stock 384,985 384,985
---------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,314,175 6,257,477
---------- -----------
NET (DECREASE) INCREASE IN CASH ( 768,630) 324,550
CASH - BEGINNING 1,093,180 -
---------- -----------
CASH - NOVEMBER 30, 1996 $ 324,550 $ 324,550
========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash Paid for Interest $ 8,570 $ 8,750
========== ===========
Cash Paid for Income Taxes $ - $ -
========== ===========
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCIAL ACTIVITIES:
Common stock totaling 105,000 shares was issued upon the conversion of
$210,000 of debt.
See Accompanying Notes to Financial Statements.
6
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CHENIERE ENERGY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
a) Basis of Presentation
---------------------
The accompanying financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q.
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 only of normal recurring adjustments)
considered necessary for a fair presentation have been included.
Certain reclassifications have been made to the prior period to
conform to the current period's presentation.
For further information refer to the financial statements and
footnotes included in the Registrant's Annual Report on form 10-K
for the period ended August 31, 1996.
The results of operations for any interim period are not necessarily
indicative of the results to be expected for the full fiscal year
ended August 31, 1997.
The accompanying consolidated financial statements include the
accounts of Cheniere Energy, Inc. ("The Company") and its 100% owned
subsidiary, Cheniere Energy Operating Co., Inc. ("Cheniere
Operating"). Accordingly, all references herein to Cheniere Energy,
Inc. or the "Company" include the consolidated results of its
subsidiary. All significant intercompany accounts and transactions
have been eliminated in consolidation.
On July 3, 1996, Cheniere Energy, Inc. ("Cheniere"), formerly Bexy
Communications, Inc., acquired all of the outstanding capital stock
of Cheniere Energy Operating Co., Inc. ("Cheniere Operating"). For
accounting purposes, this acquisition has been treated as a
recapitalization of Cheniere Operating.
The financial statements presented include only the accounts of
Cheniere Operating since Cheniere Operating's inception (February
21, 1996). While Cheniere Operating did obtain a presence in the
public market through the recapitalization, it did not succeed to
the business or assets of Bexy. For this reason, the value of the
shares issued to the former Bexy shareholders has been deemed to be
de minimus and, accordingly, no value has been assigned to those
shares.
The Company is currently a development stage enterprise under the
provisions of SFAS No. 7. The Company's future business will be in
the field of oil and gas exploration and exploitation.
b) Loss Per Share
--------------
Loss per share is based on the weighted average number of shares of
common stock outstanding during the period.
c) Offering Costs
--------------
Offering costs consist primarily of placement fees, professional
fees and printing costs. These costs are charged against the
proceeds of the sale of common stock in the periods in which they
occur.
NOTE 2 - WARRANTS
The Company has issued and outstanding certain warrants described
herein.
The Company has issued and outstanding 141,666 and 2/3 warrants
(collectively, the "June Warrants"), each of which entitles the
registered holder thereof to purchase one share of Common Stock. The
June Warrants are exercisable at any time on or before June 14,
1999, at an exercise price of $3.00 per share (subject to customary
anti-dilution adjustments). The exercise price was determined at a
100% premium to the sale price of Cheniere Operating Stock by
private placement during May, 1996. The June Warrants were
originally issued by
7
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CHENIERE ENERGY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 1996
Cheniere Operating and were converted to warrants of Cheniere
following the Reorganization. The June Warrants were issued to a
group of 11 investors in connection with a private placement of
unsecured promissory notes. Pursuant to APB 14, the warrants issued
have been valued at the differential rate between the initial
interest rate (8%) and the estimated market rate (20%), applied to
the principal balance. This value, $12,750, has been credited to
additional paid-in capital.
Effective September 14, 1996, the Company failed to pay all amounts
due and payable under the Notes by the Maturity Date. Certain of the
noteholders converted their notes into 105,000 shares of common
stock.
An individual note holder has purchased the promissory notes of the
remaining note holders. As per the terms of the notes, the holder is
also entitled to receive up to an aggregate of 21,500 additional
warrants for each month, or partial month, any amounts remain due
and payable after September 14, 1996, up to a maximum aggregate
number of 86,000 such additional warrants. (See Note 6). Pursuant to
APB 14, these additional warrants will be valued at the differential
rate between the interest rate charged (13%) and the then estimated
market rate (25%), applied to the principal balance for each month
outstanding after September 14, 1996. This value, $6,450, has been
credited to additional paid-in capital.
In consideration of certain investment advisory and other services
to the Company, pursuant to warrant agreements each dated as of
August 21, 1996, the Company issued warrants to purchase 13,600 and
54,400 shares of Common Stock, (collectively the "Adviser
Warrants"). The Adviser Warrants are exercisable at any time on or
before May 15, 1999 at an exercise price of $3.00 per share (subject
to customary anti-dilution adjustments). The exercise price
represents the approximate market price of the underlying Common
Stock at the time of the transaction.
In connection with the July and August 1996 placement of 508,400
shares of Common Stock, the Company agreed to issue warrants to
purchase 12,500 shares of Common Stock to one of two distributors
who placed the shares. Such warrants are exercisable on or before
the second anniversary of the sale of the shares of Common Stock at
an exercise price of $3.125 per share (subject to customary anti-
dilution adjustments). The exercise price represents the approximate
market price of the underlying Common Stock at the time of the
transaction.
In late August 1996, the Company sold 100,000 units, each such unit
consisting of 5 shares of Common Stock and a warrant to purchase one
share of Common Stock. Each such warrant is exercisable on or before
September 1, 1999 at an exercise price of $3.125 per share (subject
to customary anti-dilution adjustments). The exercise price
represents the approximate market price of the underlying Common
Stock at the time of the transaction.
The Warrants do not confer upon the holders thereof any voting or
other rights of a stockholder of the Company.
NOTE 3 - STOCK OPTIONS
The Company has granted certain options to purchase shares of Common
Stock to 2 executives. Such options aggregate 300,000 shares at an
exercise price of $3.00 per share. The options vest and are
exercisable as follows:
8
<PAGE>
CHENIERE ENERGY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 1996
1) 75,000 options vest and become exercisable on June 1, 1997 and
expire June 1, 2001.
2) 75,000 options vest and become exercisable on June 1, 1998 and
expire June 1, 2001.
3) 150,000 options vest and become exercisable in equal annual
installments of 25% each on the first through fourth anniversary of
July 16, 1996 and expire July 16, 2001.
In addition, the Company has granted options to the former President
of the Company. The holder has the option to acquire 19,444 and 2/3
shares of Common Stock at an exercise price of $1.80 per share. The
options expire November 11, 2003. The disclosure provisions of SFAS
No. 123 do not have a material effect on the financial statements.
NOTE 4 - COMMON STOCK RESERVED
The Company has reserved 322,166 and 2/3 share of Common Stock for
issuance upon the exercise of outstanding warrants.
The Company has reserved 319,444 and 2/3 shares of Common Shares for
insurance upon the exercise of outstanding options.
NOTE 5 - COMMITMENTS AND CONTINGENCIES
1) The Company subleases its Houston, Texas headquarters from Zydeco
under a month-to-month sublease.
2) On December 19, 1996, Cheniere Energy California, Inc. ("Cheniere
California") was incorporated. Cheniere California is a 100% owned
subsidiary of the Company.
On December 20, 1996, Cheniere California signed a Purchase and Sale
Agreement with Poseidon Petroleum, LLC ("Poseidon") to acquire
Poseidon's 60% working interest in six undeveloped leases in the
Bonito Unit of the Pacific Outer Continental Shelf (OCS) off Santa
Barbara County, California. The combined working interest of the six
leases are equal to a 47% working interest in the Bonito Unit, which
includes a seventh lease that Poseidon has no interest in. Poseidon
estimates that the net proved undeveloped reserves attributable to
its interest are approximately 47 million barrels of oil equivalent.
As payment for this interest, Poseidon will receive production
payments aggregating $18,000,000 to be paid as three percent of the
production revenue from the leases being assigned. Minimum
prepayments from the annual production payment shall be made at the
rate of $540,000 per year, payable in advance. Poseidon will receive
the first minmum prepayment of $540,000 at closing. Poseidon has
prepared a reserve report with respect to the leases which is
subject to Cheniere California's acceptance. The principal amount of
the production payment and the required minimum yearly payments are
subject to adjustment based on the reserve report. Closing of the
transaction is subject to the satisfaction of certain conditions by
Poseidon and Cheniere California.
3) As of November 30, 1996, the Company has an investment of $6,000,000
in a joint exploration program.
9
<PAGE>
CHENIERE ENERGY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 1996
Under the terms of the joint venture agreement, the Company is
required to make additional monthly payments aggregating, at least,
$7.5 million. The Company's potential participation in the joint
exploration program could be significantly reduced in the event of a
failure by the Company to make such required monthly payments when
due.
NOTE 6 - SUBSEQUENT EVENTS
During the month of December 1996, the Company issued 1,317,721
shares of common stock for gross proceeds of $3,169,872. Proceeds
received are intended to fund future commitments to the 3-D
joint exploration program.
Also, on December 14, 1996, the Company repaid the $215,000 loan
payable and related accrued interest. Upon repaying the loan, the
Company issued 64,500 warrants in accordance with the loan
agreement.
On December 19, 1996, Cheniere Energy California, Inc. ("Cheniere
California") was incorporated. Cheniere California is a 100% owned
subsidiary of the Company.
As previously disclosed, Cheniere California signed a Purchase and
Sale Agreement with Poseidon Petroleum, LLC ("Poseidon") to acquire
Poseidon's 60% working interest in the Bonito Unit of the Pacific
Outer Continental Shelf offshore Santa Barbara County, California.
Cheniere California and Poseidon have mutually agreed to terminate
the Purchase and Sale Agreement pursuant to the terms thereof, and
that upon termination, neither party thereto shall have any
liability thereunder. The Company has decided that it is in its best
interests at this time to concentrate its resources on the 3-D
Exploration Program.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following is a discussion of the Company's financial operations for the
three month periods ended November 30, 1996 and 1995. The Company's
accompanying unaudited financial statements and notes thereto and the
consolidated financial statements included in the Company's Annual Report of
Form 10-K for the year ended August 31, 1996 contain detailed information that
should be referred to in conjunction with the following discussion.
General. On July 3, 1996, the Company changed its name to Cheniere Energy,
Inc. and its principal business became oil and gas exploration. The assets and
liabilities relating to its former business were distributed to the previous
shareholders as of that same date. The comparative financial results for the
period ended November 30, 1995 relate to those discontinued operations.
Private Placement of Common Shares. In September and October 1996,
pursuant to Regulation D promulgated under the Securities Act of 1933
("Regulation D"), the Company sold an aggregate of 352,472 shares of Common
Stock to twelve "accredited investors" pursuant to Rule 506 of Regulation D and
received proceeds of $760,500 net of placement fees from such sales.
Information regarding the sales is set forth in the table below.
<TABLE>
<CAPTION>
Date Shares Price Proceeds Fee/Commission Net Proceeds
- ---- ------- ----- -------- -------------- ------------
<S> <C> <C> <C> <C> <C>
9/12 50,000 $2.00 $100,000 $0 $100,000
9/16 80,250 $2.00 $160,500 $0 $160,500
10/30 222,222 $2.25 $500,000 $0 $500,000
------- -------- -- --------
352,472 $760,500 $0 $760,500
</TABLE>
In October 1996, pursuant to Regulation S promulgated under the
Securities Act of 1933, the Company sold an aggregate of 235,555 shares of
Common Stock to one offshore investor and received proceeds of $477,000 net of
placement fees from such sales. Information regarding each sale is set forth in
the table below.
Date Shares Price Proceeds Fee/Commission Net Proceeds
---- ------ ----- -------- -------------- ------------
10/30 235,555 $2.25 $530,000 $53,000 $477,000
The proceeds of the sales of Common Stock during September and October 1996
tabulated above, together with cash balances, were used to fund $2 million in
payments to the 3-D Joint Venture.
Amendment to Exploration Agreement. On November 27, 1996, the Company and
Zydeco Exploration, Inc. amended the Exploration Agreement between the two
entities relating to the 3-D Joint Venture whereby the schedule for payment of
Seismic Funds defined by the Exploration Agreement and its amendments from
Cheniere to Zydeco is suspended. The new amendment calls for Cheniere to
furnish funds to maintain a $1,000,000 balance in the Seismic Fund account and
for Cheniere to resume the payment schedule within thirty days of Zydeco's
notification. The suspension of payment of Seismic Funds is intended to better
align the payment schedule with Zydeco's need for such funds. Under the revised
agreement, Cheniere
11
<PAGE>
expects to fund an additional $7.5 million of Seismic Fund payments during the
final three quarters of its fiscal year.
Results of Operations; Three Months ended November 30, 1996
The Company's operating results for the three months ended November 30,
1996 reflect a loss of $158,116, or $0.015 per share, as there were no operating
revenues. General and administrative expenses of $145,927 and interest expense
of $13,689 were offset partially by interest income of $1,501. General and
administrative expenses consisted primarily of the costs of salary, occupancy,
office expense and insurance. Interest expense was incurred with respect to a
short term promissory note that was repaid on December 14, 1996, and to the
issuance of certain warrants during the period. Interest income was generated on
the company's cash balances.
Results of Operations - Period from Inception (February 21, 1996) to November
30, 1996
The Company's operating results for the period from inception (February 21,
1996) to November 30, 1996 reflect a loss of $297,963, or $0.030 per share, as
there were no operating revenues. General and administrative expenses of
$249,742 and interest expense of $33,522 were offset partially by interest
income of $3,301. General and administrative expenses consisted primarily of the
costs of salary, occupancy, office expense and insurance. Interest expense was
incurred with respect to a short term promissory note that was repaid on
December 14, 1996, and to the issuance of certain warrants during the period.
Interest income was generated on the Company's cash balances.
Liquidity and Capital Resources
At November 30, 1996, total assets were $6,382,660 compared to $5,145,310
at August 31, 1996. The increase is due to primarily to an increase in
additional paid-in capital of $1,137,111, from the sale of Common Stock. Current
assets declined to $324,550 from $1,093,180 during the same period. Other assets
reflect an increase in investment to $6 million from $4 million in the Joint
Venture. This increase was funded primarily from equity proceeds and from cash
balances.
The Company's balance sheet reflected current assets of $331,172 and
current liabilities of $975,130. Current liabilities included $384,985
representing funds advanced for the issuance of common stock and $215,000
representing a short term note due January 14, 1997 (see Notes 2 and 6, Notes to
Consolidated Financial Statements). The Company has no long term liabilities.
Other
This document includes "forward looking" statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Act of 1934, as amended. Although the Company believes that the
expectations reflected in such forward looking statements are based upon
reasonable assumptions, it can give no assurance that its expectations will be
achieved. Certain risks and uncertainties inherent in the Company's business
are set forth in the filings of the Company with the Securities and Exchange
Commission.
12
<PAGE>
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Each of the following exhibits is filed herewith:
10.12 --Fourth Amendment to the Exploration Agreement between FX Energy, Inc.
(now known as Cheniere Energy Operating Co., Inc. ("Cheniere Operating") and
Zydeco Exploration, Inc.
27.1 --Financial Data Schedule
(b) There were no reports on Form 8-K filed for the three months ended November
30, 1996.
13
<PAGE>
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, thereto duly authorized.
CHENIERE ENERGY, INC.
/s/ William D. Forster
-------------------------------------------
William D. Forster
President and Chief Executive Officer
Date: June 25, 1997
14
<PAGE>
EXHIBIT 10.12
[LETTERHEAD OF ZYDECO ENERGY, INC.]
November 29, 1996
Cheniere Energy Operating Co., Inc.
237 Park Avenue, Suite 2100
New York, NY 10017
Re: Fourth Amendment
Gentlemen:
I am writing with respect to that certain Exploration Agreement dated April
4, 1996, by and between FX Energy, Inc. and Zydeco Exploration, Inc., as amended
by that certain First Amendment dated May 15, 1996, and that certain Second
Amendment dated August 5, 1996, and that certain Third Amendment dated October
31, 1996 (as amended, the "Agreement"). For convenience, terms defined therein
shall have the same meaning when used herein. FX Energy, Inc. ("FX") has
changed its name to Cheniere Energy Operating Co., Inc. ("Cheniere").
Section 2 of the Agreement originally provided:
FX shall pay the Seismic Funds to ZEI for deposit in the segregated
account described in Section 12.a on the following schedule.
Date Amount
---- ------
1996-05-15 $3,000,000.00
1996-06-30 1,000,000.00
1996-07-30 1,000,000.00
1996-08-30 1,000,000.00
1996-09-30 2,000,000.00
1996-10-30 1,000,000.00
1996-11-30 1,000,000.00
1996-12-30 1,000,000.00
1997-01-30 1,000,000.00
1997-02-28 1,500,000.00
Through yesterday, November 28, 1996, Cheniere had paid $6,000,00.00.
Under the Third Amendment to the Agreement, we substituted an alternate schedule
for the remaining payments, which provided for payments as follows:
<PAGE>
Date Amount
---- ------
1996-11-30 2,000,000.00
1997-01-31 2,000,000.00
1997-02-28 2,000,000.00
1997-03-31 1,500,000.00
Funds in the Seismic Funds Account, an account set up at Bank One Texas,
N.A. styled "Zydeco Exploration Inc. Seismic Joint Venture Account," are
approximately $895,000 at present.
The parties anticipate that field data acquisition will be temporarily
suspended due to weather. Assuming a suspension, a minimum balance of
$1,000,000 in the Seismic Fund Account is adequate.
According, ZEI and Cheniere agree as follows:
1. Payments by Cheniere of additional Seismic Funds shall be suspended;
provided, however, Cheniere shall from time to time furnish additional
Seismic Funds sufficient to maintain the balance of the Seismic Fund
Account at approximately $1,000,000. Such funds shall be forwarded
within 10 days of request by ZEI. Should such funds not be forwarded
within 20 days of a reminder notice, the default shall be treated as a
Discontinuance under Section 5.
2. At any time before December 1, 1997, ZEI may direct Cheniere to resume
payment of the Seismic Funds. Such notice shall stipulate the date
the first resumed installment payment (that due on November 30, 1996
under the Third Amendment) is due. The date so specified shall be at
least 30 days after delivery of notice to Cheniere.
3. The first resumed payment shall be reduced from its $2,000,000 amount
by payments Cheniere has made to replenish the Seismic Fund Account.
4. Unless longer periods between payments are specified by ZEI:
a) the second resumed payment (that of $2,000,000 due January 31,
1996 under the Third Amendment) shall be due 60 days after the
first resumed payment;
b) the third resumed payment (that of $2,000,000 due February 28,
1997 under the Third Amendment) shall be due 90 days after the
first resumed payment; and
c) the fourth resumed payment (that of $1,500,000 due March 31, 1997
under the Third Amendment) shall be due 120 days after the first
resumed payment.
5. The normal grace period shall apply to each resumed payment.
6. Should Zydeco not direct that installment payment of Seismic Funds be
resumed by December 1, 1997, absent an agreement of the parties to the
contrary, no further Seismic Funds shall be required under the
Agreement.
<PAGE>
7. The parties agree that the agreements by Zydeco to defer payments
under Section 2 do not obligate Zydeco to grant further waivers nor
waive the rights of Zydeco to have payments made at the times provided
in the Agreement, as modified hereby.
If I have correctly set forth our agreements, kindly so indicate by
executing one counterpart of this letter and returning it to the undersigned.
Yours very truly,
ZYDECO EXPLORATION, INC.
By: /s/ W. Kyle Willis
-------------------------------
Its: Vice President & Treasurer
-------------------------------
ACCEPTED AND AGREED TO THIS
29TH DAY OF NOVEMBER, 1996.
CHENIERE ENERGY OPERATING CO., INC.
By: /s/ William D. Forster
---------------------------
Its: President
--------------------------
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