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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): October 11, 2000
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)
0-9092 95-4352386
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(Commission File Number) (IRS Employer Identification No.)
Two Allen Center
1200 Smith Street, Suite 1740
Houston, Texas 77002-4312
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(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: (713) 659-1361
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None
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS AND ITEM 5. OTHER EVENTS.
On October 11, 2000, Cheniere consummated an agreement with Warburg, Pincus
Equity Partners, L.P., a private equity fund based in New York ("Warburg"), to
fund the exploration program on the Company's 3-D seismic database covering
approximately 8,800 square miles in the shallow water of the Gulf of Mexico
licensed from Fairfield Industries. Pursuant to the Contribution and
Subscription Agreement, Cheniere and Warburg formed and funded a newly formed
corporation, Gryphon Exploration Company ("Gryphon"). Cheniere contributed the
3-D seismic database licensed from Fairfield Industries, the prospects generated
thereon, certain offshore leases, its prospect currently being drilled in the
West Cameron area of Louisiana, its Joint Exploration Agreement with Samson
Offshore Company and certain other assets in exchange for 100 percent of the
common stock of Gryphon and $2 million in cash. The Company's interest in
Gryphon will be held by a wholly-owned subsidiary. Warburg contributed
approximately $25,000,000 in cash in exchange for preferred stock of Gryphon
with an 8 percent accrued dividend that is convertible into 63.2% of Gryphon's
common stock. Warburg's shares of preferred stock will vote on an as converted
basis. Cheniere and Gryphon also agreed under certain circumstances to
contribute to Gryphon their pro rata portion of an additional $75 million. The
consideration paid by the Company and Warburg for the shares of common stock and
preferred stock, respectively, was negotiated at arm's length between the
parties on the basis of the Company's and Warburg's assessment of the value of
the assets contributed by the Company.
In connection with the consummation of the contributions to Gryphon,
Cheniere, Gryphon and the other stockholders of Gryphon entered into a
Stockholders Agreement related to the voting and transfer of shares of Gryphon
common stock and preferred stock. Pursuant to the terms of the Shareholder's
Agreement, the Company has the right to nominate two members of Gryphon's five-
person board of directors.
Also in connection with this transaction, Michael L. Harvey became a
director, chairman and chief executive officer of Gryphon and resigned as
director, president and chief executive officer of Cheniere.
In addition to a 36.8% interest in Gryphon, Cheniere will maintain
ownership of its currently producing oil and gas properties with reserves valued
at $12.1 million as of June 30, 2000, its proprietary 3-D seismic data set in
the Cameron area of Louisiana, a license to 1,900 square miles of 3-D seismic
data recently acquired from Seitel Data Ltd. and the option to license an
additional 3,100 square miles of data from Seitel.
Attached hereto as Exhibit 99.1 and incorporated by reference herein is
certain information regarding the above described transaction as presented in a
press release dated October 12, 2000.
ITEM 5. OTHER EVENTS
The Company elected Charles M. Reimer to serve as president and chief
executive officer of the Company. Mr. Reimer has most recently served as
president of British-Borneo USA Inc.
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in Houston. 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 gas and oil
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 in 1985, Mr.
Reimer was named president of Phoenix Resources Company and relocated to Cairo,
Egypt, to begin eight years of international assignments. Attached hereto as
Exhibit 99.2 and incorporated herein is certain information regarding Mr. Reimer
and his election as presented in a press release dated October 17, 2000.
On October 16, 2000, the Company's shareholders approved, and the Company
effected a 1-for-4 reverse stock split. Attached hereto as Exhibit 99.3 and
incorporated by reference herein is certain information regarding such reverse
stock split as presented in a press release dated October 17, 2000.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
c) Exhibits.
10.1 Contribution and Subscription Agreement dated October 11, 2000, by
and among the Company, Gryphon Exploration Company and the other
investors listed therein
10.2 Stockholders Agreement dated October 11, 2000
10.3 Certificate of Designations, Preferences and Rights of Series A
Convertible Preferred Stock of Gryphon Exploration Company
99.1 Press Release entitled "Cheniere Energy Closes $25,000,000 Funding
With Warburg Pincus" dated October 12, 2000
99.2 Press Release entitled "Cheniere Energy Inc. Names New President"
dated September 19, 2000
99.3 Press Release entitled "Cheniere Energy Shareholders Approve 1-for-4
Reverse Stock Split" dated October 17, 2000
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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.
(Registrant)
By: /s/ Don A. Turkleson
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Don A. Turkleson
Chief Financial Officer, Treasurer and
Secretary
Date: October 20, 2000
