GeoMet, Inc (Home) Home   |   Contact Us    
Corporate Governance News

GeoMet, Inc (Home)

Investor Relations

GeoMet Announces Financial and Operating Results for the Quarter and Six Months Ended June 30, 2013

Houston, Texas— August 15, 2013-GeoMet, Inc. (OTCQ: GMET; NASDAQ: GMETP) (“GeoMet” or the “Company”) today announced its financial and operating results for the quarter and six months ended June 30, 2013.

William C. Rankin, GeoMet’s President and Chief Executive Officer, commented, “On June 14, the Company closed the sale of all of its coalbed methane assets in the state of Alabama resulting in proceeds of approximately $62 million. The proceeds were used to reduce bank indebtedness by $57 million and $5 million was earmarked for transaction related costs. As a result, the deficiency under the Company’s credit agreement was eliminated; however, the maturity date of April 1, 2014 is unchanged. In connection with the sale, the Company recorded a gain of $37.1 million during the quarter,” Mr. Rankin further stated, “Natural gas prices have continued to recover over the last year and therefore the company was not required to further impair its gas properties during the current quarter.” Lastly, Mr. Rankin stated “The combination of the sale, the elimination of the borrowing deficiency and the recovery of natural gas prices allows the Company, with the assistance and advice of FBR Capital Markets, to continue to evaluate its strategic alternatives.”

Second Quarter 2013 Financial and Operating Results

For the quarter ended June 30, 2013, GeoMet reported net income of $42.4 million. Included in net income was a $37.1 million non-recurring gain on the sale of our Alabama properties and a $4.1 million gain on natural gas derivatives. For the quarter ended June 30, 2012, GeoMet reported a net loss of $53.9 million. Included in the net loss was a $42.3 million impairment to the Company’s gas properties and a $4.9 million loss on natural gas derivatives.

For the quarter ended June 30, 2013, GeoMet reported net income available to common stockholders of $40.5 million, or $0.51 per fully diluted share. Included in net income available to common stockholders for the quarter ended June 30, 2013 were non-cash charges of $0.5 million for accretion of preferred stock and $1.4 million for paid-in-kind (“PIK”) dividends paid on preferred stock. For the quarter ended June 30, 2012, GeoMet reported a net loss available to common stockholders of $55.0 million, or $1.37 per fully diluted share. Included in the net loss available to common stockholders for the quarter ended June 30, 2012 were non-cash charges of $0.5 million for accretion of preferred stock and $0.6 million for PIK dividends paid on preferred stock.
For the quarter ended June 30, 2013, Adjusted EBITDA decreased to $1.7 million from $3.6 million in the prior year quarter which resulted partially from a decrease in daily production volumes and partially from $1.2 million in realized losses from terminated natural gas swap positions. The positions were terminated in order to prevent the Company from being over-hedged after the closing of the sale of its coalbed methane properties in Alabama. Adjusted EBITDA is a non-GAAP measure. See the accompanying table for a reconciliation of Adjusted EBITDA to Net Income (Loss).

Revenues for the quarter ended June 30, 2013 were $12.1 million, as compared to $7.8 million for the prior year quarter. The average natural gas price for the quarter ended June 30, 2013 was $4.14 per Mcf as compared to the prior year quarter average of $2.24 per Mcf.

Average net gas sales volumes for the quarter ended June 30, 2013 were 32.0 MMcf per day, a 16% decrease from the same quarter in 2012 which primarily resulted from 11% lower daily production volumes and 5% lower total volume resulting from the sale of our Alabama properties on June 14, 2013.

Six Months Ended June 30, 2013 Financial and Operating Results

For the six months ended June 30, 2013, GeoMet reported net income of $36.6 million. Included in net income was a $37.1 million non-recurring gain on the sale of our Alabama properties offset by a $1.4 million loss on natural gas derivatives. For the six months ended June 30, 2012, GeoMet reported a net loss of $106.9 million. Included in the net loss was a $58.0 million impairment to the Company’s gas properties and a $44.0 million income tax expense related to the valuation allowance recorded against the Company’s entire deferred tax asset, partially offset by a $5.1 million gain on natural gas derivatives.

For the six months ended June 30, 2013, GeoMet reported net income available to common stockholders of $33.1 million, or $0.45 per fully diluted share. Included in net income available to common stockholders for the six months ended June 30, 2013 were non-cash charges of $1.0 million for accretion of preferred stock and $2.4 million for paid-in-kind (“PIK”) dividends paid on preferred stock. For the six months ended June 30, 2012, GeoMet reported a net loss available to common stockholders of $109.6 million, or $2.75 per fully diluted share. Included in the net loss available to common stockholders for the six months ended June 30, 2012 were non-cash charges of $0.9 million for accretion of preferred stock and $1.9 million for PIK dividends paid on preferred stock.

For the six months ended June 30, 2013, Adjusted EBITDA decreased to $8.2 million from $10.4 million in the prior year period which resulted partially from a decrease in daily production volumes and partially from $1.2 million in realized losses from terminated natural gas swap positions. The positions were terminated in order to prevent the Company from being over-hedged after the closing of the sale of its coalbed methane properties in Alabama. Adjusted EBITDA is a non-GAAP measure. See the accompanying table for a reconciliation of Adjusted EBITDA to Net Income (Loss).

Revenues for the six months ended June 30, 2013 were $23.0 million, as compared to $18.0 million for the prior year period. The average natural gas price for the six months ended June 30, 2013 was $3.81 per Mcf as compared to the prior year period average of $2.52 per Mcf.

Average net gas sales volumes for the six months ended June 30, 2013 were 33.2 MMcf per day, a 15% decrease from the same period in 2012 which primarily resulted from 12% lower daily production volumes and 3% lower total volume resulting from the sale of our Alabama properties on June 14, 2013.

Second Quarter 2013 Financial and Operating Statements

Management’s Current Business Plan

Management’s current business plan is to continue to evaluate its strategic alternatives. Additionally, management is seeking to divest properties with limited value and will consider additional asset sale opportunities as they arise. Management also remains focused on maintaining compliance with the Credit Agreement, as amended, maintaining production levels, and keeping costs under control.

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 and six months ended June 30, 2013 on August 15, 2013 at 10:30 a.m. Central Time. To participate, dial (888) 430-8694 a few minutes before the call begins. Please reference GeoMet, Inc. conference ID 8051971. 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 August 15, 2013 and will be available through August 31, 2013. To access the conference call replay, please dial (888) 203-1112 and enter replay pass code 8051971 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”). Subsequent to the asset sale, our core area of operations is the Central Appalachian Basin of Virginia and West Virginia. We also control additional coalbed methane and oil and gas development rights, principally in Virginia, and West Virginia.
For more information please contact Stephen M. Smith at (713) 287-2251 (ssmith@geometcbm.com) or visit our website at www.geometinc.com.