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GeoMet, Inc. Announces Financial and Operating Results for the Quarter Ended June 30, 2010

Houston, Texas—July 28, 2010-GeoMet, Inc. (NASDAQ: GMET) (“GeoMet” or the “Company”) today announced its financial and operating results for the quarter ended June 30, 2010.

J. Darby Seré, GeoMet’s Chairman and Chief Executive Officer, had the following comments, “In the first half of 2010, after five very difficult quarters which included the collapse of natural gas prices, uncertain credit markets, downward revisions in proved natural gas reserves and asset impairments that reduced our stockholders’ equity by almost $200 million, we have returned to profitability, on an adjusted basis, and our operating cash flows have grown. We have slashed our costs, settled costly and distracting litigation and expect to have improved our financial position and liquidity by the end of the third quarter.”

Second Quarter 2010 Financial and Operating Results

For the quarter ended June 30, 2010, GeoMet reported a net loss of $1.8 million, or $0.04 per fully diluted share. Included in the net loss was a $3.0 million, or $0.08 per fully diluted share, pre-tax, non-cash, mark-to-market loss on derivative contracts. Also included in the net loss was a $1.4 million non-recurring charge related to a terminated financing transaction and a terminated effort to sell certain gas properties.  The Company received net cash payments of $2.2 million from derivative contracts during the current quarter. For the quarter ended June 30, 2009, GeoMet reported a net loss of $19.4 million, or a loss of $0.50 per fully diluted share. Included in the net loss for the quarter ended June 30, 2009 was a $27.6 million, or $0.71 per fully diluted share, pre-tax, non-cash impairment to the Company’s gas properties and a $2.1 million, or $0.05 per fully diluted share, pre-tax, non-cash, mark-to-market loss on derivative contracts. The Company received net cash payments of $2.7 million on derivative contracts during the prior year quarter.

Adjusted Net Income for the quarter was $0.9 million as compared to Adjusted Net Loss of $0.8 million in the prior year quarter. The primary drivers for improved operating results were lower production and general and administrative expenses and increased revenues. Adjusted Net Income (Loss) is a non-GAAP measure. See the accompanying table for a reconciliation of Adjusted Net Income (Loss) to Net (Loss) Income.

Adjusted EBITDA for the quarter increased to $3.3 million from $2.8 million in the prior year quarter. Adjusted EBITDA is a non-GAAP measure. Adjusted EBITDA for the quarter was reduced by a $1.4 million non-recurring charge related to a terminated financing transaction and a terminated effort to sell certain gas properties. See the accompanying table for a reconciliation of Adjusted EBITDA to Net (Loss) Income.

Gas sales for the quarter were $7.7 million as compared to gas sales of $6.8 million in the second quarter of 2009. The average natural gas price during the quarter was $4.20 per Mcf as compared to $3.59 per Mcf in the prior year quarter. The average natural gas price, adjusted for realized gains and losses on derivative contracts, was $5.41 per Mcf during the second quarter of 2010 versus $5.03 per Mcf for the same period in 2009.

Average net gas sales volumes for the quarter ended June 30, 2010 were 20.0 MMcf per day, a 4% decrease from the same quarter in 2009 with no wells drilled in all of 2009 and only three new wells added to production during the current quarter.

Capital expenditures for the quarter ended June 30, 2010 were $3.2 million as compared to $2.2 million for the same quarter in the prior year.

Six Months Ended June 30, 2010 Financial and Operating Results

For the six months ended June 30, 2010, GeoMet reported net income of $4.3 million, or $0.11 per fully diluted share. Included in net income was a $4.7 million, or $0.12 per fully diluted share, pre-tax, non-cash, mark-to-market gain on derivative contracts. Net income for the period was reduced by a $1.4 million non-recurring charge relating to a terminated financing transaction and a terminated effort to sell certain gas properties.  The Company received net cash payments of $3.7 million on derivative contracts during the current period. For the six months ended June 30, 2009, GeoMet reported a net loss of $107.1 million, or $2.75 per fully diluted share. Included in the net loss for the six months ended June 30, 2009 was a $167.3 million, or $4.29 per fully diluted share, pre-tax, non-cash impairment to the Company’s gas properties and a $2.0 million, or $0.05 per fully diluted share, pre-tax, non-cash, mark-to-market loss on derivative contracts. The Company received net cash payments of $5.5 million on derivative contracts during the prior year period.

Adjusted Net Income for the six months ended June 30, 2010 was $2.2 million as compared to Adjusted Net Loss of $1.8 million in the prior year period. The primary drivers for improved operating results were lower production and general and administrative expenses and increased revenues. Adjusted Net Income (Loss) is a non-GAAP measure. See the accompanying table for a reconciliation of Adjusted Net Income (Loss) to Net (Loss) Income.

Adjusted EBITDA for the six months ended June 30, 2010 increased to $9.0 million from $6.1 million in the prior year period. Adjusted EBITDA for the period was reduced by a $1.4 million non-recurring charge related to a terminated financing transaction and a terminated effort to sell certain gas properties. Adjusted EBITDA is a non-GAAP measure. See the accompanying table for a reconciliation of Adjusted EBITDA to Net (Loss) Income.

Gas sales for the six months ended June 30, 2010 were $17.5 million as compared to gas sales of $16.3 million in the second quarter of 2009. The average natural gas price during the six months ended June 30, 2010 was $4.81 per Mcf as compared to $4.30 per Mcf in the prior year period. The average natural gas price, adjusted for realized gains and losses on derivative contracts, was $5.82 per Mcf during the six months ended June 30, 2010 versus $5.74 per Mcf for the same period in 2009.

Average net gas sales volumes for the six months ended June 30, 2010 were 20.1 MMcf per day, a 4% decrease from the same period in 2009 with no wells drilled in all of 2009 and only three new wells added to production during the current period.

Capital expenditures for the six months ended June 30, 2010 were $4.8 million as compared to $5.5 million for the same period in 2009.

Financial Schedules for the Quarter Ended June 30, 2010

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 June 30, 2010 on July 28, 2010 at 10:30 a.m. Central Time. To participate, dial (888) 690-2874 a few minutes before the call begins. Please reference GeoMet, Inc. conference ID 6233604. 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 July 28, 2010.

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 (ssmith@geometcbm.com), John Baldissera with BPC Financial at (800)368-1217, or visit our website at www.geometinc.com.