Attached files
| file | filename |
|---|---|
| 8-K - 8-K - GeoMet, Inc. | a14-9392_18k.htm |
Exhibit 99.1
GeoMet Announces Financial and Operating Results for the Quarter and Year ended December 31, 2013
Houston, Texas—April 1, 2014—GeoMet, Inc. (OTCQ: GMET; NASDAQ: GMETP) (“GeoMet” or the “Company”) today announced its financial and operating results for the quarter and year ended December 31, 2013.
Financial and Operating Results
On June 14, 2013, the Company closed the sale of all of its coal bed methane properties located in the state of Alabama (the “Asset Sale”). The Asset Sale resulted in a $36.9 million gain. The properties sold represented approximately 29% of GeoMet’s total production. As such, the current year results are not comparable to the prior year as presented below.
Fourth Quarter 2013 Financial and Operating Results
For the quarter ended December 31, 2013, GeoMet reported a net loss of $2.1 million. Included in the net loss was a $1.1 million loss on natural gas derivatives. For the quarter ended December 31, 2012, GeoMet reported a net loss of $8.7 million. Included in the net loss was a $12.3 million impairment to the Company’s gas properties and a $0.8 million asset impairment, offset by a $4.1 million gain on natural gas derivatives.
For the quarter ended December 31, 2013, GeoMet reported net loss available to common stockholders of $4.3 million, or $0.11 per fully diluted share. Included in net income available to common stockholders for the quarter ended December 31, 2013 were non-cash charges of $0.6 million for accretion of preferred stock and $1.6 million for paid-in-kind (“PIK”) dividends paid on preferred stock. For the quarter ended December 31, 2012, GeoMet reported a net loss available to common stockholders of $10.4 million, or $0.26 per fully diluted share. Included in the net loss available to common stockholders for the quarter ended December 31, 2012 were charges of $0.5 million for accretion of preferred stock and $1.2 million for PIK dividends on preferred stock.
Revenues for the quarter ended December 31, 2013 were $7.8 million, as compared to $11.7 million for the prior year quarter. The average natural gas price for the quarter ended December 31, 2013 was $3.71 per Mcf as compared to the prior year quarter average of $3.50 per Mcf.
Average net gas sales volumes for the quarter ended December 31, 2013 were 22.7 MMcf per day, a 37% decrease from the same quarter in 2012 of which 29% resulted from the Asset Sale and 8% resulted from decreased production related to our horizontal Pinnate wells in our remaining properties.
Year ended December 31, 2013 Financial and Operating Results
For the year ended December 31, 2013, GeoMet reported net income of $35.3 million. Included in net income was a $36.9 million non-recurring gain on the sale of our Alabama properties offset by a $1.8 million loss on natural gas derivatives. For the year ended December 31, 2012, GeoMet reported a net loss of $150.0 million. Included in the net loss was a $95.7 million impairment of gas properties, a $44.0 million write off of our deferred tax asset, a $1.4 million write off of debt issuance costs, a $1.1 million charge for restructuring costs, a $0.8 million asset impairment and a $0.7 million loss on the 2012 disposal of our Canadian operations.
For the year ended December 31, 2013, GeoMet reported net income available to common stockholders of $27.8 million, or $0.42 per fully diluted share. Included in net income available to common stockholders for the year ended December 31, 2013 were non-cash charges of $2.3 million for accretion of preferred stock and $5.3 million for PIK dividends paid on preferred stock. For the year ended December 31, 2012, GeoMet reported a net loss available to common stockholders of $155.8 million, or $3.88 per fully diluted share. Included in the
net loss available to common stockholders for the year ended December 31, 2012 were charges of $1.9 million for accretion of preferred stock and $3.9 million for PIK dividends on preferred stock.
Revenues for the year ended December 31, 2013 were $38.2 million, as compared to $39.4 million for the prior year period. The average natural gas price for the year ended December 31, 2013 was $3.74 per Mcf as compared to the prior year period average of $2.83 per Mcf.
Average net gas sales volumes for the year ended December 31, 2013 were 27.9 MMcf per day, a 26% decrease from the same period in 2012 of which 18% resulted from the Asset Sale and 8% resulted from decreased production related to our horizontal Pinnate wells in our remaining properties.
Forward-Looking Statements Notice
This press release contains “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. Except for statements of historical facts, all statements included in the document, including those preceded by, followed by or that otherwise include the words “believe,” “expects,” “anticipates,” “intends,” “estimates,” “projects,” “target,” “goal,” “plans,” “objective,” “should” or similar expressions or variations on such words, are forward-looking statements. 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 volatility of future natural gas prices, 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 natural gas reserves, reductions in the borrowing base under our credit agreement made by our lenders, the sale of all or substantially all of our assets, 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. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company’s SEC filings, which may be obtained by contacting the Company or the SEC. These filings are also available through the Company’s web site at http://www.geometinc.com or through the SEC’s Electronic Data Gathering and Analysis Retrieval System (EDGAR) at http://www.sec.gov. GeoMet undertakes no duty to update or revise these forward-looking statements.
About GeoMet, Inc.
GeoMet, Inc. is engaged in the production of natural gas from coal seams (“coalbed methane”). Our core area of operations is the Central Appalachian Basin of Virginia and West Virginia. We also control additional coalbed methane and oil and gas development rights, principally in Virginia, and West Virginia.
For more information please contact Stephen M. Smith at (713) 287-2251 (ssmith@geometcbm.com) or visit our website at www.geometinc.com.
GEOMET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
|
|
|
Three Months Ended |
|
Year Ended |
| ||||||||
|
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Total revenues |
|
$ |
7,780 |
|
$ |
11,728 |
|
$ |
38,209 |
|
$ |
39,383 |
|
|
Expenses: |
|
|
|
|
|
|
|
|
| ||||
|
Total production expenses |
|
5,227 |
|
6,410 |
|
22,945 |
|
27,795 |
| ||||
|
Depreciation, depletion and amortization |
|
847 |
|
2,071 |
|
4,594 |
|
11,532 |
| ||||
|
Impairment of gas properties and other |
|
— |
|
13,044 |
|
— |
|
96,511 |
| ||||
|
General and administrative |
|
1,555 |
|
1,216 |
|
5,105 |
|
5,934 |
| ||||
|
Losses (gains) on derivative contracts |
|
1,051 |
|
(4,074 |
) |
1,811 |
|
(4,416 |
) | ||||
|
Total operating expenses |
|
8,680 |
|
18,667 |
|
34,455 |
|
137,356 |
| ||||
|
Gain on the sale of gas properties |
|
— |
|
— |
|
36,948 |
|
— |
| ||||
|
Operating (loss) income |
|
(900 |
) |
(6,939 |
) |
40,702 |
|
(97,973 |
) | ||||
|
Other income (expense): |
|
|
|
|
|
|
|
|
| ||||
|
Write off of debt issuance costs |
|
— |
|
— |
|
— |
|
(1,378 |
) | ||||
|
Other expenses & interest, net |
|
(1,221 |
) |
(1,768 |
) |
(5,358 |
) |
(5,823 |
) | ||||
|
(Loss) income before income taxes from continuing operations |
|
(2,121 |
) |
(8,707 |
) |
35,344 |
|
(105,174 |
) | ||||
|
Income tax expense |
|
(6 |
) |
(6 |
) |
(25 |
) |
(44,043 |
) | ||||
|
(Loss) income from continuing operations |
|
(2,127 |
) |
(8,713 |
) |
35,319 |
|
(149,217 |
) | ||||
|
Discontinued operations, net of tax |
|
— |
|
(14 |
) |
— |
|
(736 |
) | ||||
|
Net (loss) income |
|
$ |
(2,127 |
) |
$ |
(8,727 |
) |
$ |
35,319 |
|
$ |
(149,953 |
) |
|
Accretion of Preferred Stock |
|
(633 |
) |
(495 |
) |
(2,258 |
) |
(1,913 |
) | ||||
|
Dividends on Preferred Stock |
|
(1,576 |
) |
(1,171 |
) |
(5,298 |
) |
(3,937 |
) | ||||
|
Net (loss) income available to common stockholders |
|
$ |
(4,336 |
) |
$ |
(10,393 |
) |
$ |
27,763 |
|
$ |
(155,803 |
) |
|
Net (loss) income per common share: |
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
$ |
(0.11 |
) |
$ |
(0.26 |
) |
$ |
0.69 |
|
$ |
(3.88 |
) |
|
Diluted |
|
$ |
(0.11 |
) |
$ |
(0.26 |
) |
$ |
0.42 |
|
$ |
(3.88 |
) |
|
Weighted average number of common shares: |
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
40,505 |
|
40,436 |
|
40,481 |
|
40,124 |
| ||||
|
Diluted |
|
40,505 |
|
40,436 |
|
83,385 |
|
40,124 |
| ||||
GEOMET, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
|
|
|
December 31, 2013 |
|
December 31, 2012 |
| ||
|
ASSETS |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Current Assets: |
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ |
8,108 |
|
$ |
7,234 |
|
|
Accounts receivable, net |
|
2,901 |
|
6,249 |
| ||
|
Derivative asset—natural gas contracts |
|
— |
|
3,930 |
| ||
|
Other current assets |
|
693 |
|
1,701 |
| ||
|
Total current assets |
|
11,702 |
|
19,114 |
| ||
|
Property and equipment—net |
|
42,329 |
|
75,125 |
| ||
|
Deferred income taxes |
|
— |
|
1,126 |
| ||
|
Total other noncurrent assets |
|
769 |
|
961 |
| ||
|
|
|
|
|
|
| ||
|
TOTAL ASSETS |
|
$ |
54,800 |
|
$ |
96,326 |
|
|
|
|
|
|
|
| ||
|
LIABILITIES, MEZZANINE AND STOCKHOLDERS’ DEFICIT |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Current Liabilities: |
|
|
|
|
| ||
|
Current portion of long-term debt |
|
$ |
71,550 |
|
$ |
10,300 |
|
|
Deferred income taxes |
|
— |
|
1,126 |
| ||
|
Derivative liability—natural gas contracts |
|
834 |
|
920 |
| ||
|
Other current liabilities |
|
8,537 |
|
11,427 |
| ||
|
Total current liabilities |
|
80,921 |
|
23,773 |
| ||
|
Long-term debt |
|
— |
|
129,000 |
| ||
|
Asset retirement obligations |
|
8,915 |
|
13,235 |
| ||
|
Derivative liability—natural gas contracts |
|
710 |
|
1,636 |
| ||
|
Other long-term accrued liabilities |
|
113 |
|
144 |
| ||
|
TOTAL LIABILITIES |
|
90,659 |
|
167,788 |
| ||
|
Series A Convertible Redeemable Preferred Stock |
|
43,405 |
|
35,852 |
| ||
|
Total stockholders’ deficit |
|
(79,264 |
) |
(107,314 |
) | ||
|
TOTAL LIABILITIES, MEZZANINE AND STOCKHOLDERS’ DEFICIT |
|
$ |
54,800 |
|
$ |
96,326 |
|
GEOMET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
|
|
|
Year Ended |
| ||||
|
|
|
|
2013 |
|
2012 |
| ||
|
Net cash provided by operating activities |
|
|
$ |
8,798 |
|
$ |
18,361 |
|
|
Net cash provided by investing activities (1) |
|
|
59,833 |
|
8,036 |
| ||
|
Net cash used in financing activities (2) |
|
|
(67,757 |
) |
(19,626 |
) | ||
|
Effect of exchange rates changes on cash |
|
|
— |
|
5 |
| ||
|
Increase in cash and cash equivalents |
|
|
874 |
|
6,776 |
| ||
|
Cash and cash equivalents at beginning of period |
|
|
7,234 |
|
458 |
| ||
|
Cash and cash equivalents at end of period |
|
|
$ |
8,108 |
|
$ |
7,234 |
|
(1) Net cash provided by investing activities for the year ended December 31, 2013 primarily
consisted of the net proceeds from the sale of Properties in Alabama. Net cash provided by investing activities for the year ended December 31, 2012 primarily consisted of return of basis in the settlement of natural gas derivative contracts acquired in a November 2011 asset purchase.
(2) Net cash used in financing activities for the year ended December 31, 2013 and 2012 primarily consisted of the net repayment of amounts outstanding under the Credit Agreement.
GEOMET, INC.
OPERATING STATISTICS
(in thousands, except per Mcf amounts)
|
|
|
Three Months Ended |
|
Year Ended |
| ||||||||
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Gas sales |
|
$ |
7,762 |
|
$ |
11,682 |
|
$ |
38,087 |
|
$ |
39,147 |
|
|
Lease operating expenses |
|
$ |
2,517 |
|
$ |
4,132 |
|
$ |
13,132 |
|
$ |
17,483 |
|
|
Compression and transportation expenses |
|
2,231 |
|
1,592 |
|
7,716 |
|
8,349 |
| ||||
|
Production taxes |
|
479 |
|
686 |
|
2,097 |
|
1,962 |
| ||||
|
Total production expenses |
|
$ |
5,227 |
|
$ |
6,410 |
|
$ |
22,945 |
|
$ |
27,794 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net sales volumes (Consolidated) (MMcf) |
|
2,091 |
|
3,340 |
|
10,179 |
|
13,808 |
| ||||
|
Pond Creek field (Central Appalachian Basin) (MMcf) |
|
1,399 |
|
1,458 |
|
5,607 |
|
5,866 |
| ||||
|
Other Central Appalachian Basin fields (MMcf) |
|
692 |
|
915 |
|
2,917 |
|
3,850 |
| ||||
|
Gurnee field (Cahaba Basin) (MMcf) |
|
— |
|
418 |
|
723 |
|
1,743 |
| ||||
|
Black Warrior Basin fields (MMcf) |
|
— |
|
549 |
|
932 |
|
2,349 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Per Mcf data ($/Mcf): |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Average natural gas sales price realized (Consolidated)(1) |
|
$ |
3.85 |
|
$ |
4.33 |
|
$ |
3.85 |
|
$ |
4.02 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Average natural gas sales price (Consolidated) |
|
$ |
3.71 |
|
$ |
3.50 |
|
$ |
3.74 |
|
$ |
2.83 |
|
|
Pond Creek field (Central Appalachian Basin) |
|
$ |
3.80 |
|
$ |
3.59 |
|
$ |
3.79 |
|
$ |
2.92 |
|
|
Other Central Appalachian Basin fields |
|
$ |
3.53 |
|
$ |
3.73 |
|
$ |
3.65 |
|
$ |
2.69 |
|
|
Gurnee field (Cahaba Basin) (2) |
|
$ |
— |
|
$ |
3.47 |
|
$ |
3.77 |
|
$ |
2.83 |
|
|
Black Warrior Basin fields (2) |
|
$ |
— |
|
$ |
3.46 |
|
$ |
3.73 |
|
$ |
2.86 |
|
|
Lease operating expenses (Consolidated) |
|
$ |
1.20 |
|
$ |
1.24 |
|
$ |
1.29 |
|
$ |
1.27 |
|
|
Pond Creek field (Central Appalachian Basin) |
|
$ |
1.11 |
|
$ |
1.01 |
|
$ |
1.12 |
|
$ |
1.06 |
|
|
Other Central Appalachian Basin fields |
|
$ |
1.37 |
|
$ |
1.81 |
|
$ |
1.40 |
|
$ |
1.36 |
|
|
Gurnee field (Cahaba Basin) (2) |
|
$ |
— |
|
$ |
2.73 |
|
$ |
2.85 |
|
$ |
2.68 |
|
|
Black Warrior Basin fields (2) |
|
$ |
— |
|
$ |
0.70 |
|
$ |
0.73 |
|
$ |
0.57 |
|
|
Compression and transportation expenses (Consolidated) |
|
$ |
1.07 |
|
$ |
0.47 |
|
$ |
0.75 |
|
$ |
0.60 |
|
|
Pond Creek field (Central Appalachian Basin) |
|
$ |
0.64 |
|
$ |
0.54 |
|
$ |
0.66 |
|
$ |
0.57 |
|
|
Other Central Appalachian Basin fields |
|
$ |
1.94 |
|
$ |
0.98 |
|
$ |
1.25 |
|
$ |
1.05 |
|
|
Gurnee field (Cahaba Basin) (2) |
|
$ |
— |
|
$ |
0.23 |
|
$ |
0.28 |
|
$ |
0.26 |
|
|
Black Warrior Basin fields (2) |
|
$ |
— |
|
$ |
0.20 |
|
$ |
0.19 |
|
$ |
0.19 |
|
|
Production taxes (Consolidated) |
|
$ |
0.23 |
|
$ |
0.21 |
|
$ |
0.21 |
|
$ |
0.14 |
|
|
Pond Creek field (Central Appalachian Basin) |
|
$ |
0.22 |
|
$ |
0.19 |
|
$ |
0.21 |
|
$ |
0.16 |
|
|
Other Central Appalachian Basin fields |
|
$ |
0.24 |
|
$ |
0.16 |
|
$ |
0.20 |
|
$ |
0.11 |
|
|
Gurnee field (Cahaba Basin) (2) |
|
$ |
— |
|
$ |
0.16 |
|
$ |
0.18 |
|
$ |
0.12 |
|
|
Black Warrior Basin fields (2) |
|
$ |
— |
|
$ |
0.19 |
|
$ |
0.21 |
|
$ |
0.17 |
|
|
Total production expenses (Consolidated) |
|
$ |
2.50 |
|
$ |
1.92 |
|
$ |
2.25 |
|
$ |
2.01 |
|
|
Pond Creek field (Central Appalachian Basin) |
|
$ |
1.97 |
|
$ |
1.74 |
|
$ |
1.99 |
|
$ |
1.79 |
|
|
Other Central Appalachian Basin fields |
|
$ |
3.55 |
|
$ |
2.95 |
|
$ |
2.85 |
|
$ |
2.52 |
|
|
Gurnee field (Cahaba Basin) (2) |
|
$ |
— |
|
$ |
3.12 |
|
$ |
3.31 |
|
$ |
3.06 |
|
|
Black Warrior Basin fields (2) |
|
$ |
— |
|
$ |
1.09 |
|
$ |
1.13 |
|
$ |
0.93 |
|
|
Depletion (Consolidated) |
|
$ |
0.39 |
|
$ |
0.59 |
|
$ |
0.44 |
|
$ |
0.81 |
|
(1) Average natural gas sales price realized includes the effects of realized gains and losses on derivative contracts.
(2) On June 14, 2013, the Company closed the sale of all of its coal bed methane properties located in the state of Alabama.
GEOMET, INC.
CONSOLIDATED DERIVATIVE CONTRACT POSITIONS
At December 31, 2013, we had the following natural gas swap position:
|
Period |
|
Volume |
|
Average |
| |
|
First Quarter of 2014 |
|
360,000 |
|
$ |
3.82 |
|
At December 31, 2013, we had the following natural gas collar positions:
|
Period |
|
Volume |
|
Sold |
|
Bought |
| ||
|
January 2014 through December 2015 |
|
3,650,000 |
|
$ |
4.30 |
|
$ |
3.60 |
|
|
January 2014 through December 2015 |
|
3,650,000 |
|
$ |
4.20 |
|
$ |
3.50 |
|
|
|
|
7,300,000 |
|
|
|
|
| ||