Carl Icahn Believes Cheniere Energy Inc. (LNG) Is Undervalued and Acquires 8.18% Stake

It is believed that the energy company will become the first exporter of a bounty of gas from the U.S. shale formations. Cheniere has attained federal permits to export U.S. natural gas all around the world by chilling the gas into a liquid so that it can be loaded on tankers and delivered to customers overseas. Cheniere Energy is currently building a second export terminal in Texas, which will allow the company to export plenty of gas abroad. On July 30, Cheniere Energy announced an important deal with a buyer from Chile to purchase gas over a time span of 20 years. Specifically, Cheniere has entered into a liquefied natural gas (LNG) sale and purchase agreement with Central El Campesino, under which the latter would purchase roughly 0.6 million tonnes per annum of LNG delivered ex-ship for 20 years starting from 2019. In addition to that, the company has also signed other deals with different buyers and expects to ship its first cargoes by the end of 2015.

Just a few days ago, Cheniere Energy posted its financial results for the second quarter of this year, which reveals some blurry signs of improvement. The company posted a total revenue of $68.03 million for the quarter, compared to $67.65 million reported a year ago. At the same time, the energy company reported a net loss of $118.5 million or $0.52 per share, versus a loss of $201.9 million or $0.90 per share delivered in the second quarter of 2014.

Considering the fact that the reputable activist investor Carl Icahn has initiated an activist stake in Cheniere Energy and declared his intentions to discuss with the management of the company and its Board of Directors on some issues that might unlock shareholder value, the stock represents a great buying opportunity as of now. Cheniere Energy Inc. (NYSE:LNG) was among the billionaires’ favorite energy stocks at the end of Q1, with 11 funds holding around $4.10 billion worth of stock. Among them, Andreas Halvorsen’s Viking Global was one of the largest shareholders in the company from our database with a stake of 15.45 million shares.

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