GeoMet, Inc. Announces Second Quarter 2006 Results
Houston, Texas – August 9, 2006...GeoMet, Inc. (NASDAQ: GMET) today announced financial and operating results for the quarter and six months ended June 30, 2006. Performance highlights for the second quarter of 2006 as compared to the same period in 2005 include:
- Average daily gas sales of 16.4 MMcf, up 38% over second quarter 2005 levels
- Net income of $2.3 million, up 10% from the same period in 2005
- Adjusted EBITDA of $5.1 million, up 52% from the same period in 2005
For the quarter ended June 30, 2006, GeoMet’s net income increased 10% to $2.3 million or $0.07 per fully diluted share, compared to $2.1 million, or $0.07 per fully diluted share, for the same period in 2005. EBITDA, defined as net income before net interest expense, other non-operating income or losses, income taxes and depreciation, depletion and amortization (a non-GAAP measure, see reconciliation of net income to EBITDA attached) was $6.4 million for the quarter as compared to $5.5 million in the same period of 2005. Adjusted EBITDA, defined as EBITDA before non-cash charges (a non-GAAP measure, see reconciliation of EBITDA to Adjusted EBITDA attached) for the quarter increased 52% to $5.1 million compared to $3.4 million for the prior year period. Net sales volumes for the quarter increased 38% to 1.5 Bcf compared to 1.1 Bcf for the same period in 2005. Average natural gas prices, adjusted for realized hedging gains or losses, were $7.10 per Mcf during the quarter versus $6.52 for the same period in 2005. Excluding the impact of hedging, average natural gas prices were $6.81 per Mcf during the quarter, unchanged from the prior year period. During the quarter, GeoMet recorded an unrealized gain from the change in the market value of its derivative contracts of $1.4 million compared to a $2.2 million unrealized gain for the same period in 2005. Capital expenditures incurred during the quarter were $23.6 million compared to $17.6 million for the prior year period.
For the six months ended June 30, 2006, GeoMet’s net income increased to $9.5 million or $0.28 per fully diluted share, compared to $0.4 million, or $0.01 per fully diluted share, for the same period in 2005. EBITDA of $21.9 million for the six months ended June 30, 2006, increased more than five fold from the $4.2 million in the prior year. Adjusted EBITDA of $11.7 million for the six months ended June 30, 2006 increased 70% as compared to $6.9 million for the same period in 2005. Net sales volumes for the six months ended June 30, 2006 increased 37% to 2.8 Bcf compared to 2.1 Bcf for the same period in 2005. Average natural gas prices, adjusted for realized hedging gains or losses, were $7.84 per Mcf during the six months ended June 30, 2006 versus $6.54 for the same period in 2005. Excluding the impact of hedging, average natural gas prices were $7.89 per Mcf during the six months ended June 30, 2006 versus $6.61 for the same period in 2005. During the six months ended June 30, 2006, GeoMet recorded an unrealized gain from the change in market value of its derivative contracts of $10.4 million compared to a $2.7 million unrealized loss for the prior year period. Capital expenditures incurred during the six months ended June 30, 2006 were $37.8 million compared to $35.3 million for the same period in 2005.
Commenting on the quarter, Darby Seré, Chairman, President and Chief Executive Officer of GeoMet stated, “We are very pleased with the continued improvement in the Company’s operations. The continued development drilling program in our two principal coalbed methane projects have resulted in significant increases in production.” Mr. Seré added, “Since the beginning of the year, GeoMet enhanced its capital, liquidity and financial flexibility through the sale of 2,317,023 primary shares of common stock in a private transaction in January and an additional 5,750,000 primary shares in our initial public offering completed in July. As a result of these transactions the Company received approximately $97.8 million in offering proceeds after offering expenses (including $17.5 million from the repayment of certain stockholder loans and from the exercise of stock options by certain employees). All of the proceeds were used to reduce outstanding borrowings under our bank credit facility and for general corporate purposes.”
Conference Call Information
GeoMet will hold its quarterly conference call to discuss second quarter 2006 results on Thursday, August 10, 2006 at 10:00 a.m. Central Time. To participate, dial (888) 571-8168 a few minutes before the call begins. Please reference GeoMet Inc. conference ID 4005153. The call will also be broadcast live over the Internet from the Company’s web site at www.geometinc.com. A replay of the conference call will be available approximately two hours after the end of the call until Thursday, August 17, 2006. To access the replay, dial (800) 642-1687 and reference conference ID 4005153. In addition, the web cast will also be archived on the Company’s web site.
About GeoMet, Inc.
GeoMet, Inc. is an independent energy company engaged in the exploration for and development and production of natural gas from coal seams (“coalbed methane” or “CBM”). 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 development rights, principally in Alabama, British Columbia, Colorado, Louisiana, Virginia, and West Virginia.
For more information please contact Stephen M. Smith at (713) 287-2251 or email@example.com or visit our website at www.geometinc.com.
Forward Looking Statements Notice
This press release contains “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 Securities and Exchange Commission. GeoMet undertakes no duty to update or revise these forward looking statements.
Second Quarter 2006 Financial Attachements