GeoMet, Inc (Home) Home   |   Contact Us    
Corporate Governance News

GeoMet, Inc (Home)

Investor Relations

GeoMet Announces Financial and Operating Results for the Quarter and Year ended December 31, 2012

Houston, Texas— March 29, 2013-GeoMet, Inc. (OTCQ: GMET; NASDAQ: GMETP) (“GeoMet” or the “Company”) today announced its financial and operating results for the quarter and year ended December 31, 2012.

William C. Rankin, GeoMet’s President and Chief Executive Officer, commented, “2012 was a challenging year for the Company. The precipitous and significant decline in both our realized natural gas prices and the forward curve for natural gas during the year put the Company under distress and had material adverse consequences on our business. Our borrowing base under our credit facility was reduced by more than a third resulting in a borrowing base deficiency requiring the credit facility to be restructured and substantially all subsequent cash flows dedicated to reducing the deficiency. Further, additional borrowings were prohibited and capital expenditures were significantly limited. The restructured credit facility expires on April 1, 2014. As a result, we were unable to drill new wells and our activities were primarily focused upon maintaining our production levels, reducing costs and seeking a solution to resolve the borrowing base deficiency under our credit facility.” Mr. Rankin added, “We recently announced an initiative in this regard, an effort to sell all of our coalbed methane assets in Alabama.”

Going Concern

Our audited financial statements for the fiscal year ended December 31, 2012 were prepared on a going concern basis in accordance with United States generally accepted accounting principles. The going concern basis of presentation assumes that we will continue in operation for the next twelve months and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from our inability to continue as a going concern. Our credit facility matures on April 1, 2014.  As a result, all borrowings under our credit facility will be classified as current on April 2, 2013.  Our operating and capital plans for the next twelve months call for dedication of substantially all of our excess cash flow to the repayment of indebtedness and the possible sale of assets to reduce indebtedness, with the goal of eliminating our borrowing base deficiency, and refinancing our credit facility.  Therefore, we concluded that due to the uncertainties surrounding our ability to sell assets at acceptable prices, to reduce our indebtedness to an amount less than the borrowing base and to refinance our credit facility before its maturity date, substantial doubt exists as to our ability to continue as a going concern. If we were unable to continue as a going concern, the values we receive for our assets on liquidation or dissolution could be significantly lower than the values reflected in our financial statements.

Fourth Quarter 2012 Financial and Operating Results

For the quarter ended December 31, 2012, GeoMet reported a net loss of $8.7 million. Included in the net loss was a $12.3 million impairment to the Company’s gas properties and a $0.8 million asset impairment, offset by a $4.1 million gain on natural gas derivatives. For the quarter ended December 31, 2011, GeoMet reported a net loss of $1.1 million. Included in the net loss was a $7.9 million impairment to the Company’s gas properties and $0.6 million in acquisition costs relating to the purchase of certain coalbed methane gas properties, offset by a $7.0 million gain on natural gas derivatives.

For the quarter ended December 31, 2012, GeoMet reported a net loss available to common stockholders of $10.4 million, or $0.26 per fully diluted share. Included in the net loss available to common stockholders for the quarter ended December 31, 2012 were charges of $0.5 million for accretion of preferred stock and $1.2 million for paid-in-kind (“PIK”) dividends on preferred stock. For the quarter ended December 31, 2011, GeoMet reported a net loss available to common stockholders of $3.9 million, or $0.10 per fully diluted share. Included in the net loss available to common stockholders for the quarter ended December 31, 2012 were charges of $0.5 million for accretion of preferred stock and $2.3 million for PIK dividends on preferred stock.

For the quarter ended December 31, 2012, Adjusted EBITDA increased to $7.2 million from $6.5 million in the prior year quarter. Adjusted EBITDA is a non-GAAP measure. See the accompanying table for a reconciliation of Adjusted EBITDA to Net (Loss) Income. 

Revenues for the quarter ended December 31, 2012 were $11.7 million, as compared to $10.7 million for the prior year quarter. The average natural gas price for the quarter ended December 31, 2012 was $3.50 per Mcf as compared to the prior year quarter average of $3.68 per Mcf.

Average net gas sales volumes for the quarter ended December 31, 2012 were 36.3 MMcf per day, a 16% increase from the same quarter in 2011 primarily due to the properties acquired in the November 2011 asset purchase.

Year Ended December 31, 2012 Financial and Operating Results

For the year ended December 31, 2012, GeoMet reported a net loss of $150.0 million. Included in the net loss was a $95.7 million impairment of gas properties, a $44.0 million write off of our deferred tax asset, a $1.4 million write off of debt issuance costs, a $1.1 million charge for restructuring costs, a $0.8 million asset impairment and a $0.7 million loss on the disposal of our Canadian operations. For the year ended December 31, 2011, GeoMet reported net income of $2.8 million. Included in net income was a $7.9 million impairment of gas properties and $1.0 million in acquisition costs relating to the purchase of certain coalbed methane gas properties, offset by a $13.6 million gain on natural gas derivatives.

For the year ended December 31, 2012, GeoMet reported a net loss available to common stockholders of $155.8 million, or $3.88 per fully diluted share. Included in the net loss available to common stockholders for the year ended December 31, 2012 were charges of $1.9 million for accretion of preferred stock and $3.9 million for PIK dividends on preferred stock. For the year ended December 31, 2011, GeoMet reported a net loss available to common stockholders of $5.2 million, or $0.13 per fully diluted share. Included in net loss available to common stockholders for the year ended December 31, 2011 were non-cash charges of $1.8 million for accretion of preferred stock and $6.3 million for PIK dividends paid on preferred stock.

For the year ended December 31, 2012, Adjusted EBITDA increased to $23.4 million from $21.8 million in the prior year period. Adjusted EBITDA is a non-GAAP measure. See the accompanying table for a reconciliation of Adjusted EBITDA to Net (Loss) Income. 

Revenues for the year ended December 31, 2012, were $39.4 million, as compared to $35.6 million for the prior year period. The average natural gas price for the year ended December 31, 2012 was $2.83 per Mcf as compared to the prior year period average of $4.15 per Mcf.

Average net gas sales volumes for the year ended December 31, 2012 were 37.7 MMcf per day, a 62% increase from the same period in 2011 primarily due to the properties acquired in the November 2011 asset purchase.

Q4 and Fiscal Year 2012 Financial and Operating Statements

Forward-Looking Statements Notice

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Except for statements of historical facts, all statements included in the document, including those preceded by, followed by or that otherwise include the words “believe,” “expects,” “anticipates,” “intends,” “estimates,” “projects,” “target,” “goal,” “plans,” “objective,” “should” or similar expressions or variations on such words are 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 volatility of future natural gas prices, our estimate of the sufficiency of our existing capital sources, our ability to raise additional capital to fund cash requirements for future operations, the uncertainties involved in estimating quantities of proved natural gas reserves, reductions in the borrowing base under our credit facility made by our lenders, in prospect development and property acquisitions and in projecting future rates of production, the timing of development expenditures and drilling of wells, and the operating hazards attendant to the oil and gas business. In particular, careful consideration should be given to cautionary statements made in the various reports the Company has filed with the SEC. GeoMet undertakes no duty to update or revise these forward-looking statements.

Conference Call Information

GeoMet will hold its quarterly conference call to discuss the results for the quarter and year ended December 31, 2012 on April 1, 2013 at 10:30 a.m. Central Time. To participate, dial (888) 455-2263 a few minutes before the call begins. Please reference GeoMet, Inc. conference ID 5349212. The call will also be broadcast live over the Internet from the Company’s website at www.geometinc.com. A replay of the conference call will be accessible shortly after the end of the call on April 1, 2013 and will be available through April 15, 2013. To access the conference call replay, please dial 888-203-1112 and enter replay pass code 5349212 when prompted.

About GeoMet, Inc.

GeoMet, Inc. is engaged in the exploration for and development and production of natural gas from coal seams (“coalbed methane”). Our principal operations and producing properties are located in the Cahaba and Black Warrior Basins in Alabama and the Central Appalachian Basin in Virginia and West Virginia. We also control additional coalbed methane and oil and gas development rights, principally in Alabama, Virginia, and West Virginia.

For more information please contact Stephen M. Smith at (713) 287-2251 (ssmith@geometcbm.com) or visit our website at www.geometinc.com.