GeoMet Announces Financial and Operating Results for the Quarter ended March 31, 2013
Houston, Texas— May 16, 2013-GeoMet, Inc. (OTCQ: GMET; NASDAQ: GMETP) (“GeoMet” or the “Company”) today announced its financial and operating results for the quarter ended March 31, 2013.
William C. Rankin, GeoMet’s President and Chief Executive Officer, commented, “Operating results for the quarter were generally in line with expectations. Although the prices received for our natural gas were much improved from the lows in 2012, the impact on the quarterly results was minimal due to the high level of hedges the Company had in place. More importantly, the sentiment related to natural gas has improved markedly since 2012.” Mr. Rankin went on to say, “As announced last week, we have executed an agreement for the sale of all of our coalbed methane assets in the State of Alabama for a purchase price of $63.2 million. In connection with this sale, we also executed the Fifth Amendment to our Credit Agreement. Upon the closing of the sale, we expect to eliminate the borrowing base deficiency under our Credit Agreement and alleviate many of the constraints which the non-conforming tranche has placed on the Company; however, the maturity date of April 2, 2014 is unchanged.”
First Quarter 2013 Financial and Operating Results
For the quarter ended March 31, 2013, GeoMet reported a net loss of $5.8 million. Included in the net loss was a $5.5 million loss on natural gas derivatives. For the quarter ended March 31, 2012, GeoMet reported a net loss of $52.9 million. Included in the net loss was a charge of $44.0 million to provide a full valuation allowance for the net deferred tax asset, net of the 2012 income tax benefit, and a $15.8 million impairment to the Company’s gas properties, offset by a $10.0 million gain on natural gas derivatives.
For the quarter ended March 31, 2013, GeoMet reported a net loss available to common stockholders of $7.3 million, or $0.18 per fully diluted share. Included in the net loss available to common stockholders for the quarter ended March 31, 2013 were non-cash charges of $0.5 million for accretion of preferred stock and $1.1 million for paid-in-kind (“PIK”) dividends paid on preferred stock. For the quarter ended March 31, 2012, GeoMet reported a net loss available to common stockholders of $54.7 million, or $1.37 per fully diluted share. Included in the net loss available to common stockholders for the quarter ended March 31, 2012 were non-cash charges of $0.5 million for accretion of preferred stock and $1.2 million for PIK dividends paid on preferred stock.
For the quarter ended March 31, 2013, Adjusted EBITDA decreased to $6.5 million from $6.8 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.
Revenues for the quarter ended March 31, 2013 were $10.9 million, as compared to $10.2 million for the prior year quarter. The average natural gas price for the quarter ended March 31, 2013 was $3.50 per Mcf as compared to the prior year quarter average of $2.79 per Mcf.
Average net gas sales volumes for the quarter ended March 31, 2013 were 34.5 MMcf per day, a 13% decrease from the same quarter in 2012. Production for the quarter was negatively impacted by high line pressure and compression and mechanical downtime in our Pinnate wells in Central Appalachia, as well as mining activities and cost saving initiatives in our non-operated wells in the Black Warrior Basin.
Management’s Current Business Plan
Management’s current business plan is primarily focused on eliminating the borrowing base deficiency, maintaining compliance with the Credit Agreement, as amended, maintaining production levels and controlling costs. In addition, the Company recently executed a purchase and sale agreement for all of the Company’s coalbed methane properties in Alabama that were being marketed for sale by an asset divestiture firm. Management will continue to evaluate the viability of additional asset sales or strategic corporate transactions.
First Quarter 2013 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 GeoMet’s ability to close the sale of the Alabama properties, the amount of net proceeds GeoMet expects to receive after purchase price adjustments, 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 agreement 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 ended March 31, 2013 on May 16, 2013 at 10:30 a.m. Central Time. To participate, dial (888) 539-3678 a few minutes before the call begins. Please reference GeoMet, Inc. conference ID 1303393. 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 May 16, 2013 and will be available through May 31, 2013. To access the conference call replay, please dial (888) 203-1112 and enter replay pass code 1303393 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 (firstname.lastname@example.org) or visit our website at www.geometinc.com.