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GeoMet, Inc. Announces Financial and Operating Results for the Quarter and Year Ended December 31, 2008; Borrowing Base set at $140 Million

Houston, Texas—March 13, 2009-GeoMet, Inc. (NASDAQ: GMET) (“GeoMet” or the “Company”) today announced its financial and operating results for the quarter and year ended December31, 2008 and a $140 million borrowing base.

J. Darby Seré, GeoMet’s Chairman and Chief Executive Officer, commented on the Company’s results for the year ended December31, 2008, “GeoMet achieved record gas sales volumes, revenues, Adjusted Net Income and Adjusted EBITDA in 2008.  A unanimous favorable decision by the Virginia Supreme Court in September eliminated a significant risk associated with the Company’s ability to deliver gas to market through its Virginia pipeline. In spite of the tight credit markets, low natural gas prices and a significantly reduced capital budget, the Company currently projects growth in 2009 in both gas sales volumes and reserves.” Mr. Seré added, “We are pleased that our bank group has approved a $140 million borrowing base which provides us with sufficient liquidity to execute our 2009 business plan.”

Year-End 2008 Financial and Operating Results

For the year ended December 31, 2008, GeoMet reported a net loss of $22.5 million, or a loss of $0.58 per diluted share. Included in the net loss was a $50.7 million, or $1.31 per fully diluted share, pre-tax non-cash impairment to the Company’s natural gas properties and a $5.0 million, or $0.13 per fully diluted share, pre-tax, non-cash, mark-to-market gain on derivative contracts. The Company made net cash payments of $0.5 million on derivative contracts during the period. For the year ended December 31, 2007, GeoMet reported net income of $5.2 million, or $0.13 per diluted share. Included in net income for the year ended December 31, 2007 was a $3.0 million, or $0.08 per fully diluted share, pre-tax, non-cash, mark-to-market loss on derivative contracts. The Company received net cash payments of $3.9 million from derivative contracts in 2007.

If natural gas prices at March 31, 2009 are below those prices that existed at December 31, 2008, GeoMet expects to record a non-cash impairment to the Company’s natural gas properties for the quarter then ended.

Adjusted Net Income for 2008 was $13.1 million up 87% from Adjusted Net Income of $7.0 million in 2007. Adjusted Net Income is a non-GAAP measure. See the accompanying table for a reconciliation of net (loss) income to Adjusted Net Income.

Adjusted EBITDA for the year ended December 31, 2008 increased 49% to $38.8 million from $26.1 million in 2007. Adjusted EBITDA is a non-GAAP measure. See the accompanying table for reconciliations of net (loss) income to Adjusted EBITDA.

Gas sales for the year ended December 31, 2008 were $68.3 million, a 37% increase from gas sales of $49.7 million for the same period of 2007. The average natural gas price during the year ended December 31, 2008 was $9.17 per Mcf as compared to $6.97 per Mcf in 2007. The average natural gas price, adjusted for realized gains and losses on derivative contracts, was $9.10 per Mcf during year ended December 31, 2008 versus $7.52 per Mcf in 2007.

Average net gas sales volumes for the year ended December 31, 2008 were 20.4 MMcf per day, a 4% increase from the same period in 2007. The increase in 2008 net gas sales volumes over 2007 was 8% when the net gas sales volumes for the years ended December 31, 2008 and 2007 exclude volumes from an overriding royalty interest that was sold effective July 1, 2008.

Capital expenditures for the year ended December31, 2008 were $57.8 million, compared to $53.9 million in 2007.


Fourth Quarter 2008 Financial and Operating Results

For the quarter ended December 31, 2008, GeoMet reported a net loss of $34.6 million, or a loss of $0.89 per diluted share. Included in the net loss was a $50.7 million, or $1.30 per fully diluted share, pre-tax non-cash impairment to the Company’s natural gas properties and a $4.2 million, or $0.11 per fully diluted share, pre-tax, non-cash, mark-to-market gain on derivative contracts. The Company received net cash payments of $1.5 million from derivative contracts during the period. For the quarter ended December 31, 2007, GeoMet reported net income of $1.6 million, or $0.04 per diluted share. Included in net income for the quarter ended December 31, 2007 was a $0.8 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 $1.4 million from derivative contracts during the period.

Adjusted Net Income for the quarter was $1.4 million down 33% from Adjusted Net Income of $2.1 million in the fourth quarter of 2007. Adjusted Net Income is a non-GAAP measure. See the accompanying table for a reconciliation of net (loss) income to Adjusted Net Income.

Adjusted EBITDA for the quarter increased 1% to $7.62 million from $7.57 million in the prior year period. Adjusted EBITDA is a non-GAAP measure. See the accompanying table for reconciliations of net (loss) income Adjusted EBITDA.

Gas sales for the quarter were $13.4 million, a 2% increase from gas sales of $13.1 million in the fourth quarter of 2007. The average natural gas price during the quarter was $7.01 per Mcf as compared to the prior year period average of $7.07 per Mcf. The average natural gas price, adjusted for realized gains and losses on derivative contracts, was $7.81 per Mcf during the fourth quarter of 2008 versus $7.80 per Mcf for the same period in 2007.

Average net gas sales volumes for the quarter ended December 31, 2008 were 20.7 MMcf per day, a 3% increase from the same period in 2007. The increase in net gas sales volumes for the quarter ended December 31, 2008 over the same period in 2007 was 8% when the net gas sales volumes for the quarter ended December 31, 2007 exclude volumes from an overriding royalty interest that was sold effective July 1, 2008.

Capital expenditures for the quarter ended December 31, 2008 were $14.6 million, compared to $9.0 million for the same period in the prior year.

The Company’s bank syndicate, led by Bank of America, has approved a borrowing base of $140 million after completing its year-end borrowing base determination. The next regular borrowing base determination, which will be based on a June 30, 2009 reserve report prepared by the Company, is scheduled to be complete on or before December 16, 2009. Commitments under the credit agreement expire in January 2011 and total borrowings are currently $119 million.

Fourth Quarter and Year Ended December 31, 2008Financial 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 and year ended December 31, 2008 on March 13, 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 83609326. 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 March 13, 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 (ssmith@geometcbm.com); John Baldissers with BPC Financial at (800) 667-0938; or visit our website at www.geometinc.com.