GeoMet Announces Reaffirmation of Borrowing Base at $180 Million
GeoMet, Inc. (NASDAQ:GMET) today announced that the company’s bank syndicate, led by Bank of America, reaffirmed the Company’s borrowing base of $180 million after completing its mid-year borrowing base determination. The next regular borrowing base determination, which will be based on the December 31, 2008 reserve report as prepared by the Company’s independent reserve engineers, is scheduled to be complete on or before June 30, 2009. Commitments under the credit agreement expire in January 2011 and total borrowings are currently $107 million.
Commenting on the reaffirmation of the borrowing base, William C. Rankin, Executive Vice President and CFO, said, “In today’s fragile credit markets we believe it is more important than ever to communicate with our investors on the Company’s capital availability and liquidity. We have strong relationships with each participant in our five-member bank group and appreciate their continued support. Our 2009 capital and operating budget process is underway and this reaffirmation of our borrowing base ensures we will have the financial resources to execute our growth plan. It is also important to point out the Company’s reserves are very long lived and approximately 75% are classified as proved developed, establishing a long-term base for production and cash flow. We replaced our production in 2007 using only 34% of our operating cash flow and expect to do as well in 2008. Accordingly, a reduction in capital expenditures over the short-term, although not anticipated, would not materially impact production or reserve quantities.”
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.
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 email@example.com or visit our website at www.geometinc.com.