GeoMet, Inc. Announces Financial and Operating Results for the Quarter Ended MArch 31, 2009
Houston, Texas—May 8, 2009-GeoMet, Inc. (NASDAQ: GMET) (“GeoMet” or the “Company”) today announced its financial and operating results for the quarter ended March31, 2009.
J. Darby Seré, GeoMet’s Chairman and Chief Executive Officer, had the following comments, “In response to the significant decline in natural gas prices since July 2008 and the tight bank credit markets, we have reduced our capital expenditure plans for 2009 and intend to fund them with our internally generated cash flows. In addition, we have taken aggressive steps to lower capital, operating and overhead costs to align them with current natural gas prices and protect our operating margins. The results of these actions will be evidenced in the second quarter and the remainder of 2009. Furthermore, we intend to deleverage our capital structure through a sale of a non-operating interest in one or more of our projects, a long-term gas prepayment arrangement or the sale of a volumetric production payment. Our long-lived, shallow decline reserves and the upward-sloping futures market for natural gas prices should allow us to achieve our debt reduction objective. Despite the challenges that the downturn in the natural gas industry and tight credit markets create, we are confident that we will emerge stronger and positioned to take advantage of the opportunities that exist in our projects as natural gas prices recover. ”
First Quarter 2009 Financial and Operating Results
For the quarter ended March31, 2009, GeoMet reported a net loss of $87.7 million, or a loss of $2.25 per diluted share. Included in the net loss was a $139.7 million, or $3.59 per fully diluted share, pre-tax non-cash impairment to the Company’s natural gas properties and a $0.2 million, or $0.01 per fully diluted share, pre-tax, non-cash, mark-to-market gain on derivative contracts. The Company received net cash payments of $2.7 million from derivative contracts during the period. For the quarter ended March31, 2008, GeoMet reported a net loss of $2.1 million, or $0.05 per diluted share. Included in the net loss for the quarter ended March31, 2008 was an $8.6 million, or $0.02 per fully diluted share, pre-tax non-cash mark-to-market loss on derivative contracts. The Company received net cash payments of $0.9 million from derivative contracts during the period.
Adjusted Net Loss for the first quarter of 2009 was $1.0 million as compared to Adjusted Net Income of $3.2 million in the first quarter of 2008. Adjusted Net (Loss) Income is a non-GAAP measure. See the accompanying table for a reconciliation of Adjusted Net (Loss) Income to Net Loss.
Adjusted EBITDA for the quarter decreased to $3.3 million from $9.3 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.
Gas sales for the quarter were $9.5 million as compared to gas sales of $15.6 million in the first quarter of 2008. The average natural gas price during the quarter was $5.01 per Mcf as compared to the prior year period average of $8.33 per Mcf. The average natural gas price, adjusted for realized gains and losses on derivative contracts, was $6.45 per Mcf during the first quarter of 2009 versus $8.79 per Mcf for the same period in 2008.
Average net gas sales volumes for the quarter ended March31, 2009 were 21.0 MMcf per day, a 2% increase from the same period in 2008. The increase in net gas sales volumes for the quarter ended March31, 2009 over the same period in 2008 was 5% when the net gas sales volumes for the quarter ended March31, 2008 exclude volumes from an overriding royalty interest that was sold effective July1, 2008.
Accrued capital expenditures incurred for the quarter ended March31, 2009 were $3.3 million, compared to $7.5 million for the same period in the prior year.
FIrst Quarter 2009 Financial Schedules
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. 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 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 oil and natural gas reserves, 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 March31, 2009 on May11, 2009 at 10:30 a.m. Central Time. To participate, dial (888)571-8168 a few minutes before the call begins. Please reference GeoMet, Inc. conference ID 93618518. 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 archived on the Company’s website shortly after the end of the call on May11, 2009.
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 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.