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GeoMet, Inc. Announces Results for the Quarter and Six Months Ended June 30, 2008 and Increased Capital Budget

Houston, Texas—August 11, 2008-GeoMet, Inc. (NASDAQ: GMET) (“GeoMet” or the “Company”) today announced its financial and operating results for the quarter and six months ended June30, 2008, and an increased capital budget.

J. Darby Seré, GeoMet’s Chairman and Chief Executive Officer, commented on the Company’s financial and operating results for the quarter and six months ended June30, 2008: “We are pleased to report record gas sales, cash flow and adjusted net income.  We have opportunities to increase capital expenditures in all five of our capital projects. Accordingly, we have increased our capital budget by an additional $6 million to $57 million for 2008, which we believe will accelerate growth in reserves, production and cash flow in the second half of 2008 and thereafter.”

Second Quarter 2008 Results

For the quarter ended June 30, 2008, GeoMet recorded:

  • Gas Sales—Gas sales for the quarter were $20.7 million, a 54% increase from gas sales of $13.4 million in the second quarter in 2007. The average natural gas price during the quarter was $11.15 per Mcf as compared to the prior year period average of $7.63 per Mcf. The average natural gas price, adjusted for realized hedging gains, was $10.35 per Mcf during the second quarter of 2008 versus $7.66 per Mcf for the same period in 2007.
  • Adjusted EBITDA—Adjusted EBITDA for the quarter increased 71% to $11.5 million from $6.7 million in the prior year period. EBITDA was $(0.9) million for the quarter as compared to $8.5 million for the same period in 2007. Adjusted EBITDA and EBITDA are non-GAAP measures. See the accompanying table for reconciliations of net loss to EBITDA and of EBITDA to Adjusted EBITDA.
  • Adjusted Net Income—Adjusted net income for the quarter was $5.5 million, up 198% from $1.9 million, in the first quarter of 2007. Adjusted net income is a non-GAAP measure. See the accompanying table for a reconciliation of net loss to adjusted net income.

For the quarter ended June 30, 2008, GeoMet recorded a net loss of $3.2 million, or $0.08 per fully diluted share, as compared to a net income of $3.0 million, or $0.08 per fully diluted share, for the same period in 2007. During these periods, the Company’s earnings were impacted by unrealized losses and gains from the change in the market value of its natural gas derivative contracts. In the most recent quarter, the Company experienced an unrealized loss from such natural gas derivative contracts of $12.1 million ($8.7 million after income taxes) as compared to an unrealized gain of $1.9 million ($1.1 million after income taxes) for the same period in 2007.

Average net gas sales volumes for the quarter ended June 30, 2008 were 20.4 MMcf per day, a 5.4% increase from the same period in 2007.

Capital expenditures for the quarter ended June 30, 2008 were $13.1 million, compared to $11.9 million for the same period in the prior year.

Six Months Ended June 30, 2008 Financial Results  

For the six months ended June 30, 2008, GeoMet recorded:

  • Gas Sales—Gas sales for the six months ended June 30, 2008 were $36.3 million, a 43% increase from gas sales of $25.3 million for the same period in 2007. The average natural gas price during the six months ended June 30, 2008 was $9.73 per Mcf as compared to $7.29 per Mcf for the same period in 2007. The average natural gas price, adjusted for realized hedging gains, was $9.57 per Mcf during six months ended June 30, 2008 versus $7.67 per Mcf for the same period in 2007.
  • Adjusted EBITDA—Adjusted EBITDA for the six months ended June 30, 2008 increased 61% to $20.8 million from $12.9 million for the same period of 2007. EBITDA was $(0.5) million for the six months ended June 30, 2008 as compared to $9.9 million for the same period of 2007. Adjusted EBITDA and EBITDA are non-GAAP measures. See the accompanying table for reconciliations of net loss to EBITDA and of EBITDA to Adjusted EBITDA.
  • Adjusted Net Income—Adjusted net income for the six months ended June 30, 2008 was $8.8 million, up 151% from $3.6 million, in the same period of 2007. Adjusted net income is a non-GAAP measure. See the accompanying table for a reconciliation of net loss to adjusted net income.

For the six months ended June 30, 2008, GeoMet recorded a net loss of $5.3 million, or $0.14 per fully diluted share, as compared to a net income of $2.0 million, or $0.05 per fully diluted share, for the same period in 2007. During these periods, the earnings were impacted by unrealized losses from the change in the market value of its natural gas derivative contracts. For the six months ended June 30, 2008, the Company experienced an unrealized loss from such natural gas derivative contracts of $20.7 million ($14.2 million after income taxes) as compared to an unrealized loss of $2.7 million ($1.6 million after income taxes) for the same period in 2007.

Average net gas sales volumes for the six months ended June 30, 2008 were 20.5 MMcf per day, a 5.5% increase from the same period in 2007.

Capital expenditures for the six months ended June 30, 2008 were $21.2 million, compared to $30.0 million for the same period in the prior year, and are expected to total $57.0 million for the full year.

Second Quarter and Six Months Ended June 30, 2008 Financial Schedules

Conference Call Information

GeoMet will hold its quarterly conference call to discuss second quarter of 2008 results on August 11, 2008 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 55467942. 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 August 11, 2008.

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.

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 or ssmith@geometcbm.com or visit our website at www.geometinc.com.