GeoMet, Inc. Announces Extended Maturity of Bank Credit Facility
Houston, Texas – April 1, 2010 - GeoMet, Inc. (NASDAQ: GMET) (the “Company”) announced today that its lenders have unanimously agreed to extend the maturity date of the Company's bank credit facility to May 6, 2011. Prior to this extension, the bank credit facility was scheduled to mature on January 6, 2011. At the request of the Company, the borrowing base available under the facility was reduced to $123 million, and the lenders agreed that the next borrowing base determination would be as of June 15, 2010 and that they would not call for a determination of the borrowing base prior to that date. Bank debt, net of cash, at March 31, 2010 totaled approximately $116 million. The Company believes the available borrowing capacity of approximately $7 million combined with its internally generated cash flows will be adequate to meet its working capital needs.
This extension also allows the Company to begin discussions with its lenders to amend the existing bank credit agreement to provide for a multi-year extension of the maturity date. The Company expects this process to be completed in the next several weeks, although there can be no assurance that a new agreement will be reached. The fee for this extension was $307,500.
The lenders agreed to extend the maturity date following the Company’s receipt of commitment letters from two parties to provide additional financing for the Company. The proposed financing transaction is described in a separate announcement released by the Company today.
For more information regarding the commitment letters and the amendment to our bank credit agreement, please refer to our most recent annual report on Form 10-K filed with the Securities and Exchange Commission.
Forward-Looking Statements Notice
This press release contains “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. These forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements. In addition, the Company cannot assure that it will be successful in obtaining additional financing or further extending the maturity of its senior credit facility on the terms outlined in this press release or otherwise. Careful consideration should be given to the risk factors and other cautionary statements included in our most recent annual report on Form 10-K filed with the Securities and Exchange Commission. 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 coalbed methane and oil and gas development rights, principally in Alabama, British Columbia, Virginia, and West Virginia.
For more information please contact Stephen M. Smith at (713)287-2251 (email@example.com), John Baldissera with BPC Financial at (800)368-1217, or visit our website at www.geometinc.com.