GeoMet Announces Financial and Operating Results for the

GeoMet Announces Financial and Operating Results for the Quarter
Ended March 31, 2009 
HOUSTON, TX -- (MARKET WIRE) -- 05/08/09 --  GeoMet, Inc. (NASDAQ:
GMET) ("GeoMet" or the "Company") today announced its financial and
operating results for the quarter ended March 31, 2009. 
J. Darby Sere, GeoMet's Chairman and Chief Executive Officer, had the
following comments, "In response to the significant decline in
natural gas prices since July 2008 and the tight bank credit markets,
we have reduced our capital expenditure plans for 2009 and intend to
fund them with our internally generated cash flows. In addition, we
have taken aggressive steps to lower capital, operating and overhead
costs to align them with current natural gas prices and protect our
operating margins. The results of these actions will be evidenced in
the second quarter and the remainder of 2009. Furthermore, we intend
to deleverage our capital structure through a sale of a non-operating
interest in one or more of our projects, a long-term gas prepayment
arrangement or the sale of a volumetric production payment. Our
long-lived, shallow decline reserves and the upward-sloping futures
market for natural gas prices should allow us to achieve our debt
reduction objective.  Despite the challenges that the downturn in the
natural gas industry and tight credit markets create, we are
confident that we will emerge stronger and positioned to take
advantage of the opportunities that exist in our projects as natural
gas prices recover." 
First Quarter 2009 Financial and Operating Results 
For the quarter ended March 31, 2009, GeoMet reported a net loss of
$87.7 million, or a loss of $2.25 per diluted share. Included in the
net loss was a $139.7 million, or $3.59 per fully diluted share,
pre-tax non-cash impairment to the Company's natural gas properties
and a $0.2 million, or $0.01 per fully diluted share, pre-tax,
non-cash, mark-to-market gain on derivative contracts. The Company
received net cash payments of $2.7 million from derivative contracts
during the period. For the quarter ended March 31, 2008, GeoMet
reported a net loss of $2.1 million, or $0.05 per diluted share.
Included in the net loss for the quarter ended March 31, 2008 was an
$8.6 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 $0.9 million from derivative contracts during the
period. 
Adjusted Net Loss for the first quarter of 2009 was $1.0 million as
compared to Adjusted Net Income of $3.2 million in the first quarter
of 2008. Adjusted Net (Loss) Income is a non-GAAP measure. See the
accompanying table for a reconciliation of Adjusted Net (Loss) Income
to Net Loss. 
Adjusted EBITDA for the quarter decreased to $3.3 million from $9.3
million in the prior year period. Adjusted EBITDA is a non-GAAP
measure. See the accompanying table for a reconciliation of Adjusted
EBITDA to net loss. 
Gas sales for the quarter were $9.5 million as compared to gas sales
of $15.6 million in the first quarter of 2008. The average natural gas
price during the quarter was $5.01 per Mcf as compared to the prior
year period average of $8.33 per Mcf. The average natural gas price,
adjusted for realized gains and losses on derivative contracts, was
$6.45 per Mcf during the first quarter of 2009 versus $8.79 per Mcf
for the same period in 2008. 
Average net gas sales volumes for the quarter ended March 31, 2009
were 21.0 MMcf per day, a 2% increase from the same period in 2008.
The increase in net gas sales volumes for the quarter ended March 31,
2009 over the same period in 2008 was 5% when the net gas sales
volumes for the quarter ended March 31, 2008 exclude volumes from an
overriding royalty interest that was sold effective July 1, 2008. 
Accrued capital expenditures incurred for the quarter ended March 31,
2009 were $3.3 million, compared to $7.5 million for the same period
in the prior year. 
Forward-Looking Statements Notice 
This press release may contain "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.
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 March 31, 2009 on May 11, 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
93618518. 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 May 11, 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 Baldissera with BPC Financial at
(800) 368-1217, or visit our website at www.geometinc.com. 



                               GEOMET, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands, except per share amounts)

                                                 Three Months Ended
                                                      March 31,
                                          -------------------------------
                                               2009            2008
                                          ---------------  ---------------
Revenues:
Gas sales                                 $         9,453  $        15,581
Operating fees and other                               98              298
                                          ---------------  ---------------
Total revenues                                      9,551           15,879
Expenses:
Total production expenses                           6,386            5,216
Depreciation, depletion and amortization            3,037            2,459
Impairment of gas properties                      139,713               --
General and administrative                          2,973            2,493
Realized gains on derivative contracts             (2,723)            (862)
Unrealized (gains) losses on derivative
 contracts                                           (186)           8,647
                                          ---------------  ---------------
Total operating expenses                          149,200           17,953
                                          ---------------  ---------------
Operating loss                                   (139,649)          (2,074)
Other expenses & interest, net                       (974)          (1,302)
                                          ---------------  ---------------
Loss before income taxes                         (140,623)          (3,376)
Income tax (benefit) expense                      (52,897)           1,234
                                          ---------------  ---------------
Net loss                                  $       (87,726) $        (2,142)
                                          ===============  ===============
Loss per share:
   Net loss
     Basic                                $         (2.25) $         (0.05)
                                          ===============  ===============
     Diluted                              $         (2.25) $         (0.05)
                                          ===============  ===============
   Weighted average number of common
    shares:
     Basic                                         38,924           39,004
                                          ===============  ===============
     Diluted                                       38,924           39,004
                                          ===============  ===============

                               GEOMET, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                              (In thousands)

                                                   March 31, December 31,
                                                     2009        2008
                                                   ---------  ---------
Assets:
Current assets                                     $  15,142  $  17,938
Properties and equipment, net of accumulated
 depreciation, depletion, amortization and
 impairment of gas properties                        218,827    358,299
Other assets                                           9,809      1,363
                                                   ---------  ---------
Total assets                                       $ 243,778  $ 377,600
                                                   =========  =========
Liabilities and stockholders' equity:
Current liabilities                                $  12,428  $  19,379
Long-term debt                                       121,554    117,118
Other long-term liabilities                            4,808     48,671
                                                   ---------  ---------
Total liabilities                                    138,790    185,168
                                                   ---------  ---------
Total stockholders' equity                           104,988    192,432
                                                   ---------  ---------
Total liabilities and stockholders' equity         $ 243,778  $ 377,600
                                                   =========  =========

                               GEOMET, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (In thousands)

                                                     Three Months Ended
                                                          March 31,
                                                    ---------------------
                                                      2009        2008
                                                    ----------  ----------
Net cash provided by operating activities           $    2,193  $    3,846
Net cash used in investing activities                   (7,131)     (7,210)
Net cash provided by financing activities                4,441       4,514
Effect of exchange rates changes on cash                   (56)        144
                                                    ----------  ----------
(Decrease) increase in cash and cash equivalents          (553)      1,294
Cash and cash equivalents at beginning of period         2,097       1,541
                                                    ----------  ----------
Cash and cash equivalents at end of period          $    1,544  $    2,835
                                                    ==========  ==========

                               GEOMET, INC.
                           OPERATING STATISTICS

                                                           Three Months
                                                              Ended
                                                          --------------
                                                           2009     2008
                                                          ------  ------
Net sales volumes (MMcf)                                   1,887   1,871
Per Mcf data ($/Mcf):
Average natural gas sales price                           $ 5.01  $ 8.33
Differential to NYMEX (1)                                 $ 0.11  $ 0.30
Average natural gas sales price realized (2)              $ 6.45  $ 8.79
Adjusted lease operating expense (3)                      $ 2.37  $ 1.85
Compression expenses                                      $ 0.44  $ 0.37
Transportation expense                                    $ 0.33  $ 0.19
Production taxes                                          $ 0.19  $ 0.23
Total production expenses, as adjusted (3)                $ 3.33  $ 2.64
Depreciation, depletion and amortization                  $ 1.61  $ 1.31

                               POND CREEK FIELD

                                                           Three Months
                                                              Ended
                                                          --------------
                                                           2009     2008
                                                          ------  ------
Net sales volumes (MMcf)                                   1,291   1,223
Per Mcf data ($/Mcf):
Lease operating expense                                   $ 1.76  $ 1.61
Compression expense                                       $ 0.31  $ 0.35
Transportation expense                                    $ 0.46  $ 0.28
Production taxes                                          $ 0.15  $ 0.08
Total production expenses                                 $ 2.68  $ 2.32

                                 GURNEE FIELD

                                                           Three Months
                                                              Ended
                                                          --------------
                                                           2009     2008
                                                          ------  ------
Net sales volumes (MMcf)                                     557     559
Per Mcf data ($/Mcf):
Adjusted lease operating expense (3)                      $ 2.98  $ 2.65
Compression expense                                       $ 0.59  $ 0.48
Production taxes                                          $ 0.31  $ 0.51
Total production expenses, as adjusted (3)                $ 3.88  $ 3.64

(1)   The difference between the average natural gas price for the
      period, before the impact of gain and losses on derivative contract,
      and the final average settlement price for natural gas contracts on
      the New York Mercantile Exchange ("NYMEX") for each month during the
      applicable period weighted by gas sales volumes.
(2)   Average realized price includes the effects of realized gains on
      derivative contracts.
(3)   Produced water disposal fees are recorded as operating fees and other
      on the Statement of Operations. Lease operating expense per Mcf has
      been adjusted for produced water disposal fees because the fees are
      not reflected in the net gas sales volumes. See Reconciliation of
      Adjusted Lease Operating Expense.

                               GEOMET, INC.
                CONSOLIDATED DERIVATIVE CONTRACT POSITIONS

At March 31, 2009, the Company had the following natural gas collar
 positions:

                                   Volume     Sold      Bought   Sold
Period                             (MMBtu)   Ceiling     Floor   Floor
                                  ---------  -------    ------   ------
April through October 2009        1,284,000  $ 10.00(1) $ 7.50   $ 5.25
April through October 2009        1,284,000  $ 10.00(1) $ 8.50   $ 6.50
November 2009 through March 2010    906,000  $ 11.20    $ 9.50   $ 7.00
November 2009 through March 2010    604,000  $  6.65    $ 5.50   $ 3.50
April through October 2010          856,000  $  6.80    $ 5.50   $ 3.50

On May 6, 2009, the Company entered into the following natural gas collar
position:

                                   Volume     Sold      Bought
Period                             (MMBtu)   Ceiling     Floor
                                  ---------  -------    ------
June through October 2009 (1)     1,836,000  $  4.50    $ 3.70

(1)   In connection with the natural gas collar entered into on May 6,
      2009, the Company eliminated the existing $10.00 sold ceilings with
      respect to all three-way-colla
rs for the period April through October
      2009.

At March 31, 2009, the Company had the following natural gas swap position:

                                                          Volume
Period                                                    (MMBtu)   Price
                                                          -------  -------
April through October 2009                                856,000  $  4.47

At March 31, 2009, the Company had the following interest rate swap
positions:

                                         Designate     Fixed    Notational
Description            Effective date  maturity date  rate (2)     amount
                       --------------  -------------  -------   -----------
Floating-to-fixed swap     12/14/2007     12/14/2010     3.86%  $15,000,000
Floating-to-fixed swap       1/3/2008       1/4/2010     3.95%  $10,000,000
Floating-to-fixed swap      3/25/2008      3/25/2010     2.38%  $10,000,000
Floating-to-fixed swap      5/13/2008      5/13/2010     3.07%  $ 5,000,000
Floating-to-fixed swap       1/6/2009       1/6/2011     1.38%  $ 5,000,000

(2)   The floating rate paid by the counterparty is the British Bankers'
      Association LIBOR rate.

                               GEOMET, INC.
              RECONCILIATION OF ADJUSTED EBITDA TO NET LOSS
                              (In thousands)

                                                  Three Months Ended
                                                       March 31,
                                            -------------------------------
                                                 2009            2008
                                            --------------  --------------
Net loss                                    $      (87,726) $       (2,142)
Add: Interest expense, net of interest
 income and amounts capitalized                        973           1,296
Add: Other expense                                       1               6
(Deduct): Income tax benefit                       (52,897)         (1,234)
Add: Depreciation, depletion and
 amortization                                        3,037           2,459
Add: Impairment of gas properties                  139,713               -
(Deduct) Add: Unrealized (gains) losses on
 derivative contracts                                 (186)          8,647
Add: Stock based compensation                          312             188
Add: Accretion expense                                 107              84
                                            --------------  --------------
Adjusted EBITDA                             $        3,334  $        9,304
                                            ==============  ==============


The table above reconciles net loss to Adjusted EBITDA. Adjusted
EBITDA is defined as net loss before net interest expense, other
non-operating income or losses, income taxes, depreciation, depletion
and amortization, and minority interest before unrealized (gains)
losses on derivative contracts, stock-based compensation and
accretion expense. Although Adjusted EBITDA is not a measure of
performance calculated in accordance with accounting principles
generally accepted in the United States of America (GAAP), management
believes that it is useful to GeoMet and to an investor in evaluating
our company because it is a widely used measure to evaluate a
company's operating performance. 



                               GEOMET, INC.
          RECONCILIATION OF ADJUSTED NET (LOSS) INCOME TO NET LOSS
                             (In thousands)

                                      Three Months Ended
                                           March 31,
                                   --------------------------
                                        2009          2008
                                   ------------    ----------
Net loss                           $    (87,726)   $   (2,142)
Impairment of gas properties            139,713             -
Unrealized (gains) losses on
 derivative contracts, net of tax          (186)        8,647
Effect of income taxes                  (52,787)       (3,303)
                                   ------------    ----------

Adjusted Net (Loss) Income         $       (986)   $    3,202
                                   ============    ==========


The table above reconciles net loss to Adjusted Net (Loss) Income.
Adjusted Net (Loss) Income is calculated by eliminating unrealized
(gains) losses on derivative contracts from net loss, non-cash
impairments to our gas properties, and their related tax effects to
arrive at Adjusted Net (Loss) Income. The tax effects are determined
by calculating the tax provision for GAAP net loss and comparing the
results to the tax provision for Adjusted Net (Loss) Income, which
excludes the adjusting items. The difference in the tax provision
calculations represents the effect of income taxes. The calculation
is performed at the end of each quarter and, as a result, the tax
rates for each discrete period are different. Although Adjusted Net
(Loss) Income is a non-GAAP measure, we believe it is useful
information for investors because the unrealized (gains) losses
relates to derivative contracts that hedge our production in future
months. The (gains) losses associated with derivative contracts that
hedge current production are recognized in net loss and are not
eliminated in determining Adjusted Net (Loss) Income. The adjustment
better matches (gains) losses on derivative contracts with the period
when the underlying hedged production occurs. 



                               GEOMET, INC.
            RECONCILIATION OF ADJUSTED LEASE OPERATING EXPENSE
                              (In thousands)

                                                         Three Months Ended
                                                              March 31,
                                                           ---------------
                                                             2009    2008
                                                           -------  -------
Lease operating expense                                    $ 4,569  $ 3,751
Deduct: Produced water disposal fees                            98      297
                                                           -------  -------

Adjusted lease operating expense                           $ 4,471  $ 3,454
                                                           =======  =======


The table above reconciles lease operating expense to adjusted lease
operating expense. Adjusted lease operating expense is calculated by
eliminating the produced water disposal fees from lease operating
expense to arrive at adjusted lease operating expense. Although
adjusted lease operating expense is a non-GAAP measure, we believe it
is useful information for investors because produced water disposal
fees are recorded as operating fees and other on the Statement of
Operations. Lease operating costs per Mcf are adjusted for produced
water disposal fees because the fees are not reflected in the net gas
sales price. The adjustment better matches lease operating expense
with the natural gas sales revenues it is associated with. 
Contacts: 
Stephen M. Smith
(713) 287-2251
Email Contact 
John Baldissera
BPC Financial
(800) 368-1217 
www.geometinc.com
 
 
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