Announces Financial and Operating Results for the Quarter Ended March31, 2011
Houston, Texas—May 9, 2011-GeoMet, Inc. (NASDAQ: GMET) (“GeoMet” or the “Company”) today announced its financial and operating results for the quarter ended March31, 2011.
J. Darby Seré, GeoMet’s Chairman and Chief Executive Officer, had the following comments, “GeoMet realized Adjusted Net Income of $2.2 million for the first quarter of 2011, the fifth consecutive quarter of Adjusted Net Income achieved during a period of low natural gas prices. These results reflect continued focus on our cost structure as well as a return to growth in gas sales volumes after an extended period of minimal development activities.” Mr. Seré added, “In addition, we are excited by the early results of our new hydraulic fracturing program in the Gurnee field and have decided to reallocate an additional $2 million of our capital budget to these efforts during the remainder of the year.”
First Quarter 2011 Financial and Operating Results
For the quarter ended March31, 2011, GeoMet reported net income of $0.5 million. Included in net income for the quarter ended March31, 2011 was a $2.9 million, pre-tax, non-cash, mark-to-market loss on derivative contracts. The Company also received net cash payments of $3.5 million from derivative contracts during the quarter ended March31, 2011. For the quarter ended March31, 2010, GeoMet reported net income of $6.0 million. Included in net income for the quarter ended March31, 2010 was a $7.6 million, pre-tax, non-cash, mark-to-market gain on derivative contracts. The Company also received net cash payments of $1.5 million from derivative contracts during the quarter ended March31, 2010.
For the quarter ended March31, 2011, GeoMet reported a net loss available to common stockholders of $1.3 million, or $0.03 per fully diluted share. Included in net loss available to common stockholders for the quarter ended March31, 2011 were non-cash charges of $0.4 million for accretion of preferred stock and $1.3 million for PIK dividends paid on preferred stock. For the quarter ended March31, 2010, GeoMet reported net income available to common stockholders of $6.0 million, or $0.15 per fully diluted share. No adjustments to net income were required to arrive at net income available to common stockholders as there were no preferred shares outstanding during the quarter ended March31, 2010.
Adjusted Net Income, which excludes the unrealized loss on derivative contracts and the related tax effect, was $2.2 million for the quarter ended March 31, 2011 as compared to $1.3 million for the prior year quarter. Adjusted Net Income is a non-GAAP measure. See the accompanying table for a reconciliation of Adjusted Net Income to Net Income.
Adjusted EBITDA for the quarter ended March 31, 2011 increased to $6.0 million from $5.7 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 Income.
Revenues, including the effects of realized gains from gas derivative contracts, remained constant at $11.4 million for the quarter ended March 31, 2011 as compared to the prior year quarter. The average natural gas price, adjusted for realized gains on derivative contracts, was $6.17 per Mcf during the quarter ended March 31, 2011 versus $6.23 per Mcf for the prior year quarter. Revenues, as reported for the quarter ended March 31, 2011 were $7.9 million, as compared to $10.0 million for the prior year quarter. The average natural gas price, unadjusted for hedging activity, for the quarter ended March 31, 2011 was $4.27 per Mcf as compared to the prior year quarter average of $5.43 per Mcf.
Average net gas sales volumes for the quarter ended March31, 2011 were 20.4 MMcf per day, a 1.1% increase from the prior year quarter.
Capital expenditures for the quarter ended March31, 2011 were $3.1 million as compared to $1.7 million for the prior year quarter, reflecting the increase in our development activities at our two major fields.
First Quarter 2011 Operational and Financial Results
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, which have been depressed recently, 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, 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, 2011 on May 9, 2011 at 10:30 a.m. Central Time. To participate, dial 888-204-4517 a few minutes before the call begins. Please reference GeoMet, Inc. Passcode 9917001. 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 May 9, 2011. The replay dial in number is 888- 203-1112 Passcode 9917001.
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) or visit our website at www.geometinc.com.