GeoMet Provides Update to Pending Purchase of Coalbed Methane Assets
Houston, Texas – October 26, 2011...GeoMet, Inc. (NASDAQ: GMET) (the “Company” or “GeoMet”) announced today that it has been advised by the seller that the party holding the preferential purchase right on certain of the coalbed methane (“CBM”) properties in West Virginia, with an allocated value of $23.4 million, has irrevocably waived such right. This preferential purchase right was scheduled to expire on or about December 3, 2011, if not earlier exercised or waived.
A portion of the CBM properties being acquired in Alabama remain subject to two preferential rights to purchase by a single party and have an allocated value of $30.8 million. These preferential rights to purchase will expire October 29, 2011 if not earlier exercised or waived.
As a result of the early waiver of the preferential purchase right on certain of the West Virginia CBM properties, the Company now anticipates the transaction will close in the first half of November, 2011.
As previously disclosed in the Company’s press release of October 17, 2011, total consideration for the acquired assets, which include CBM properties in Alabama and West Virginia, certain natural gas hedge positions and a license to use a certain drilling technology, is $90.2 million, subject to adjustment for net proceeds of production after July 1, 2011 (the “Effective Date”), realized hedge gains subsequent to the Effective Date, the exercise of the preferential purchase rights on certain of the Alabama CBM properties and other customary price adjustments.
Forward-Looking Statements Notice
This press release may contain “forward-looking statements” within the meaning of Section27A of the Securities Act of 1933, as amended, and Section21E of the Securities Exchange Act of 1934, as amended. The anticipated final purchase price, the closing of the acquisition, the closing date, financing of the transaction and other statements that express anticipated events are all forward-looking statements. These forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are the results of our continuing due diligence, our continued compliance with our existing credit facility, other financing alternatives available to the Company, reserve estimates, future prices and production costs, and actions by holders of preferential rights. In particular, careful consideration should be given to cautionary statements made in the various reports the Company has filed with the SEC, including its Form 10-K for fiscal year 2010. GeoMet undertakes no duty to update or revise these forward-looking statements.
About GeoMet, Inc.
GeoMet, Inc. is an independent energy company primarily engaged in the exploration for and development and production of natural gas from coal seams (“coalbed methane”) and non-conventional shallow gas. Our principal operations and producing properties are located in the Cahaba Basin in Alabama and the Central Appalachian Basin in West Virginia and Virginia. We also control additional coalbed methane and oil and gas development rights, principally in Alabama, British Columbia, Virginia, and West Virginia. For more information please contact Steve Smith at (713)287-2251 (email@example.com) or visit our website at www.geometinc.com.